Piracy Steals 95% of Microsoft’s Revenue in China

Software piracy is a problem for most developers, but Microsoft’s CEO has revealed that it’s really bad in China.

There’s a lot of chatter in the software industry about the effect piracy has on companies’ bottom lines, but most spokespeople are pretty vague when comes down to actual numbers. Microsoft CEO Steve Ballmer, however, recently explained that piracy had drastically reduced his company’s earning in China: Microsoft’s revenue in China is 95 percent less than in the United States.

According to Ballmer, the problem isn’t as noticeable in other countries where piracy is widespread. In India, Microsoft apparently earned six times more per PC sold than it did in China. On top of that, Ballmer argued that if intellectual property protection was as strong in China as it is in india, than the latter’s market would be worth “billions of dollars.”

Of course, there’s the counter-argument that PCs are too expensive for most Chinese consumers. Ballmer dismissed this claim by saying, “if you can [afford a PC], you could afford the software” and further argued that the country’s massive amount of piracy was the result of the government’s apathy towards IP protection.

Of course, this isn’t really anything new. Software manufacturers have pretty much always had a contentious relationship with China. Of course, most of the blame tends to be leveled at the government itself, which is claiming that it’s taking steps to reduce piracy within its borders: The Business Software Alliance announced that 78 percent of software installed on PCs in the country last year was pirated. That wounds pretty appalling until you realize that this number is down from the 86 percent reported in 2005.

Source: Wall Street Journal via Ars Technica via GamePolitics