201: A Nation of Pirates

[Vert]

PIRACY IS VITAL FOR US

Well, I'd reply, tongue in cheek, by pointing that playing videogames isn't exactly a vital activity to most people. =]

I´m brazillian, and played videogames for about all my life, then my opnion more accurate.
Troughout the 8-16 bit era, pirated cartridges costed about 10% less than the original counterpart, so the little difference didn't pay off. Maybe it's because SEGA had an representative in Brazil at the time, called TecToy.
The arriving of 32 bit era changed about everything. Sony had no representation on Brazil, and piracy became the main form of obtaning a game. The costs of buying an original game far exceeded the possibilities of any person to expend money on entertainment. The main reason of high costs are the taxes. Any game has basically a tax over industrialized product, taxes for procteting the national industry, federal taxes, importing taxes, and so on, resulting in an increase of about 300% over the original price. It's completely insane.

This is pretty much the impression I have of the situation and how it evolved during the 90s. Then, we had official representatives manufacturing games here in Brazil (which also meant they had to pay less taxes) and pirated cartridges themselves weren't all that cheaper.

The change of medium, from cartridges to CDs, the lack of an official company dealing with Sony PlayStation products in Brazil and the necessity of having to import everything (which increased both costs and taxes paid), quickly lead to the downfall of the legal games market in Brazil, in little more than 5 years time...

 

[Vert]

I really hope steam,gog,stardock,... will do enough to get more gamers to buy legitimate copies of games with more good offers.

I don't mention it in my article, but I agree with you there. Steam is quite likely the best thing to come out for PC gaming in the past few years. Its made downloading/buying legal games massively convenient, no small part to the multiple possibilities of payment, that I think it will eventually become The vendor for buying PC games in the near future. And, thanks to its ease of use and convenience, it should help keep the pirate goods market.

Heck, it can even help out in countries like Brazil! Since buying through Steam means you have to pay no taxes to the Brazilian government, which hasn't realized yet whats happening, and its incredibly simple to do. Just 2 weeks ago, I bought Braid through Steam and found the process to be quick, easy and cheap.

 

[Vert]

There´s another side of this story in my opinion.

Piracy here in Brasil is also a Cultural problem. Lets take the Ferrari example, I don´t earn enough money to buy one, and as much I would love to drive a Ferrari, I have simply face the fact that I can´t have one (for now at least).

Games here in Brasil are (sadly) way to expensive for the majoroty of the gamers. But instead of accepting the fact that they can´t buy them (or at least all of them), they turn to piracy instead. And they grow up with this kind of thinking, and when they do grow up and have jobs that can support their hobby, what do they do? They still buy pirate games.

I personally know gamers, who make A LOT of money, and they still buy pirate games.

I´m pretty sure if taxes were to be reduced, and game prices were lower, it wouldn´t reduce piracy as much as we would hope. Take a look at PC games.

I don´t see in a near future anyway to change this scenario. Maybe this new generation of gamers (kids now in age 5 to 10) will be educated in a new way so piracy won´t be a option to get instant satisfaction.

That's exactly what I exactly what I mean when I say that Brazilians have a pirate mentality. If social pressure existed against piracy, it'd be a significant cost to anyone who'd buy a pirated product and that would certainly decrease the levels of piracy, but since the opposite is the truth (i.e., you're expected to buy pirate and may seem a little weird if you buy legal), in most peoples mind, when they have to decide how to buy, there's no contest at all, even if they can easily afford to buy the legal product.

 

[Vert]

As another brazilian citizen who lived through the 16 and 32 bit eras, let me add some points that you missed:

During the 8bit and 16bit eras, people were already buying pirated games for their systems. However, there was a HUGE market for game rental. You could find them everywhere and for a small fraction of the price of even a pirated game, you could rent it for one or two days.


When the change to 32 bit started to happen, this huge market was double-hit:
1. piracy, as you mentioned
2. Sony didn't officially release the PS1 there. Heck, they didn't even have offical partners like Nintendo had.

Factor #2 was critical because that made every rental place IMPORT their games, which skyrocketed the rental prices. Suddenly, instead of paying a small fraction of a pirated game to rent a licensed one, you could basically buy a game for twice the price of the rental.

That is not to mention that it also took PS1 games out of the mainstream retail.


Had Sony made an official release AND started printing the games THERE (to bypass most of the taxation), then things could be much much different now.

That's very true and something I forgot to mention in my article. I remember well the rental stores, it was a really big business in Brazil during the early 90s and were responsible for a significant portion of the market. When the PS1 didn't release the console officially here in Brazil, resulting in massive prices for legal games, the prices of rentals did indeed increase, leading to their downfall.

In fact, I even remember a transition period when some rentals started to import, via the 'grey market', games consoles (and even games), in a desperate and doomed attempt to keep alive.

However, I think that even if Sony had released the PS1 officially here in Brazil, with cheaper prices and all, there still would have been huge chance that piracy would have taken hold of the games market. This is because what I believe to be the key problem, the change to CDs, would have occurred in any case.

Still, it does make one wonder...

 

[MalkavianGuy]

Hi, Vert.
I'm brazilian and I read your article. I must say that I was impressed, for it was the first time that I saw someone telling the world about the piracy in São Paulo.
I have a doubt. In the third page of your article you wrote "But the negative consequences of piracy are tremendous. Pirate products are often smuggled and sold by what can only be called organized criminal gangs, with obvious implications. Equally obvious is that government loses out on a potential revenue source, as do legitimate retailers, importers, manufacturers and, of course, the game developers themselves.".
You see, I'm a law student, and I'm actually curious about what facts you could point to say that "pirate produts are sold by what can only be called organized criminal gangs".

No problem! I'm having a little trouble finding news sources in English that talk about pirate goods in Brazil, but here's an good example:

http://www.ifpi.org/content/section_news/20040618.html

It basically speaks about the arrest of Law Kin Chong, a notorious chief smuggler and distributor of pirate goods, who made so much money from piracy that he (allegedly) offered a bribe of over $1.000.000 to a Brazilian member of congress! The article also speaks of his 'several popular shopping centers', which are, in fact, the 'mini-malls' I speak of in my article and where the goods are sold.

He's the most famous case and definitely is/was responsible for a massive part of the piracy market, at least in São Paulo, but most news I read regarding piracy also tends to mention other criminal gangs.

Although its difficult to directly connect Law's gang with increased violence, there can be no doubt that he's a part of organized crime and that his organization actively bribed policeman and the like, resulting in, at least, an significant increase in corruption in Brazilian institutions. And take a look at this story:

http://www.brazzil.com/2004/html/articles/jun04/p156jun04.htm

Again, in summary, the head of the congressional investigations committee on piracy, in 2004, said: "heads of organized crime, like Law Kin Chong" and "Nobody doubts that Chong is the biggest smuggler in Brazil. Clearly he is well-prepared, as was Al Capone". There may be some exaggeration on the comparison with Capone, but its still a pretty accurate description, I'd say.

So, in short, Law Kin Chong remains the best example of why I describe the organizations that sell pirate goods as organized criminal gangs.

Thank you for the answer, Vert.
And congratulations for the article. XD

 

[Zunto]

I don't like the comparision of videogames and Ferrari's! Simply because a Ferrari is unavailable for the majority of the population on Earth, unlike videogames.
Take Nintendo for example: They are trying to reach people that never had contact with games, in other words, they are making videogame more popular, reaching the masses(Lula would love this sentence). But why do we have to pay U$1200 for something that costs only U$250??
There is no point at that. Nintendo Wii is not a Ferrari. It's is a cheap system, that turns to be very expensive here. I've been to Venezuela, and there I would guess something like U$2000, for the same system.
People will turn to other ways in order to have the same kind of entertainment other countries much richer have for much lower prices. If it's within my reach, I'll take the opportunity to do so.

 

[Wyvern_]

Hi! I saw your article in a brazilian games forum (outerspace) and reading the thread i saw some things that are not so true, like the idea of a "pirate mentality".

Look at the PC (not PC game, the Desktop and notebooks). 3 our 4 years ago, the sells was like 70% done by illegal ways. With the taxes reduction for the industry, today is alredy the opposite (http://oglobo.globo.com/economia/ma...s-com-ajuda-da-crise-financeira-754379319.asp.

Today (referring to 2008) the brazilian market for PCs is the 5º of the world, and is expected to be the 3º next year (2010, in sales), the only thing that still find some dificulty are the programs. Nobody wants to pay 400~600Reais (200~300$) for the Windows.

In the case of PC Games, we pay the same as the americans. 99.90Reais(50$). But in the mind of a brazilian, 100R$ is still too much. So is the case that today, games that are a little old like Call of Duty 4 that cost 50R$(25$) are hard to find in the larges on-line stores (Americanas: http://www.americanas.com.br/AcomProd/1858/2429350 ,Saraiva: http://www.livrariasaraiva.com.br/p...e?pro_id=1997130&ID=C94AEC7B7D9050E130E221178 , Fnac http://www.fnac.com.br/pc-dvd-call-of-duty-4-modern-warfare-FNAC,,games-15258-8322.html), simple because they sell to much.

There is a project that includes the consoles and games in the same law of taxes reduction that PCs have, but that is not being discussed in the senate... so... you know... piracy is the way...

And sry for the english!

 

[Kalandar]

hey, why don't you guys come live here in brazil for at least 5 years, get a full time job that pays you US$ 4000/year (i've said US$ 4000.00 each YEAR) and try to buy a nintendo wii for a "ridiculous" US$ 1100.00??? or a XBOX 360 for US$ 1300.00??? 3 years ago, while you guys paid US$ 500 on a PS3, here in Brazil it was "only" US$ 2600.00!!

and about the games??? ah the games!!! pokemon platinum? costs "only" US$ 120.00!

street fighter 4??? "only" US$ 140.00

the best part: who lives in brazil can't use the xbox live, unless give a fake address from a country which have the service. And yes, here in Brazil we have Microsoft, and yes, there is an official brazilian version of xbox 360!!

my point?

I DOUBT if any of you were in my place, you still would buy originals... piracy FTW!!

first, because, like the example i gave to you, MS, Nintendo and others don't care about us here; when they give us some support, is crappy!!!

secondly, our taxes are high, and, to make things worse, this money feeds part of the corruption of our contry...

it's easy to be against piracy when you live in USA, Europe or Canada... come take my place then.. lets see how much time you hold without joining the "piracy club"...


by the way: do you guys know from where we brazilians download games and sell/burn em? just take a look on the torrent and p2p sites... until now, i've NEVER seen any tracker from brazil... europe, russia and USA are the main trackers of, at least, 90% of the games you find to download!!

 

[Vert]

Thank you for the answer, Vert.
And congratulations for the article. XD

And thank you for the compliments and the interest. Always glad to help out!

I don't like the comparision of videogames and Ferrari's! Simply because a Ferrari is unavailable for the majority of the population on Earth, unlike videogames.
Take Nintendo for example: They are trying to reach people that never had contact with games, in other words, they are making videogame more popular, reaching the masses(Lula would love this sentence). But why do we have to pay U$1200 for something that costs only U$250??
There is no point at that. Nintendo Wii is not a Ferrari. It's is a cheap system, that turns to be very expensive here. I've been to Venezuela, and there I would guess something like U$2000, for the same system.
People will turn to other ways in order to have the same kind of entertainment other countries much richer have for much lower prices. If it's within my reach, I'll take the opportunity to do so.

I think you've missed my point completely. Spielberg was making the following argument (condensed): 'games are too expensive, thus I should pirate games'. You may argue like that, if you want, but if don't provide some justification, such as the fact (which I pointed out) that copying a game doesn't deprive it from someone else, then your argument is no different then from mine and the Ferrari. After all, a good is a good, no matter what it is.

Let me put this way: if you have no problems with Spielberg's reasoning, then you have no problems with the Ferrari argument and vice-versa.

I'd also say that your wrong when you claim that videogames are available to the majority of the population of the earth. Considering that the vast majority of the population in countries like India and China certainly don't have the income (yet) that allows them to buy such a thing, I'd wager a guess that at least 2 billion people (from just these two countries) in the world don't. The actual number is certainly much higher, so no, I disagree with you there.

The significant difference between a Ferrari and a videogame software isn't the price, nor the fact that its much more expensive in one place then in the other. Its, and I know I'm repeating myself, that the when you make a copy of a game, you don't deprive it from someone else, which isn't the basis for your reasoning at all.

 

[Vert]

Hi! I saw your article in a brazilian games forum (outerspace) and reading the thread i saw some things that are not so true, like the idea of a "pirate mentality".

Look at the PC (not PC game, the Desktop and notebooks). 3 our 4 years ago, the sells was like 70% done by illegal ways. With the taxes reduction for the industry, today is alredy the opposite (http://oglobo.globo.com/economia/ma...s-com-ajuda-da-crise-financeira-754379319.asp.

Today (referring to 2008) the brazilian market for PCs is the 5º of the world, and is expected to be the 3º next year (2010, in sales), the only thing that still find some dificulty are the programs. Nobody wants to pay 400~600Reais (200~300$) for the Windows.

In the case of PC Games, we pay the same as the americans. 99.90Reais(50$). But in the mind of a brazilian, 100R$ is still too much. So is the case that today, games that are a little old like Call of Duty 4 that cost 50R$(25$) are hard to find in the larges on-line stores (Americanas: http://www.americanas.com.br/AcomProd/1858/2429350 ,Saraiva: http://www.livrariasaraiva.com.br/p...e?pro_id=1997130&ID=C94AEC7B7D9050E130E221178 , Fnac http://www.fnac.com.br/pc-dvd-call-of-duty-4-modern-warfare-FNAC,,games-15258-8322.html), simple because they sell to much.

There is a project that includes the consoles and games in the same law of taxes reduction that PCs have, but that is not being discussed in the senate... so... you know... piracy is the way...

And sry for the english!

Well, let me things clear, to begin with. When I speak of a pirate mentality, I simply mean that people buy pirate goods in a default manner, without even checking the legal alternatives and, more importantly, society does not believe this to be a bad thing. Indeed, amongst gamers, buying pirate is seen as the logical/correct/obvious way of buying.

I'm willing to concede that its difficult to separate the cause and consequence of buying pirates games and this mentality, in the sense that it's difficult to say whether it was the creation of a pirate mentality that lead to greater piracy or if the greater amount of piracy made people rationalize their actions; but the main point is that this mentality exists.

As regards to the extent that lower prices will end piracy, that's something that isn't so easy to extrapolate from the case of computers. This is because computers aren't primarily a 'tool of fun', like videogames, but a tool for work and the use of 'pirated' computers in a company is much more risky, then a person using a pirate game at home. Still, it does give us hope and in no way am I saying that there's no chance of change.

 

[Vert]

my point?

I DOUBT if any of you were in my place, you still would buy originals... piracy FTW!!

first, because, like the example i gave to you, MS, Nintendo and others don't care about us here; when they give us some support, is crappy!!!

secondly, our taxes are high, and, to make things worse, this money feeds part of the corruption of our contry...

it's easy to be against piracy when you live in USA, Europe or Canada... come take my place then.. lets see how much time you hold without joining the "piracy club"...


by the way: do you guys know from where we brazilians download games and sell/burn em? just take a look on the torrent and p2p sites... until now, i've NEVER seen any tracker from brazil... europe, russia and USA are the main trackers of, at least, 90% of the games you find to download!!

Sorry to burst your bubble, but I am Brazilian, live in Brazil, but I do not shirk from admitting that piracy, specially piracy from selling pirated goods, has a significant cost to Brazilian society. Or, if you prefer Portuguese: eu sou brasileiro, moro no Brasil, nem por isso não admito que a pirataria traz custos significativos a sociedade brasileira.

As these costs are spread out among the whole society, its easy to dismiss them as insignificant and believe that its ok to pirate, but at the very least you should recognize they exist and try to minimize them if you opt to go pirate.

Regarding your specific argument, let me put it like this: so what if in other countries there videogames are much cheaper than in Brazil? The same is true for many other things, such as cars, yet I don't see anyone defending that we should import cars and then not pay the other country.

Worse, food in Brazil tends to be much cheaper than in first world countries; do you believe that they should 'pirate' exported Brazilian food by not paying us? Because that's all your argument presents.

You could make much more compelling argument by saying that making a copy of a game, you're not preventing the person who bought the original from playing, and all sorts of other line of reasoning (that I believe make much more sense), but you don't.

 

[Zunto]

Well, let me things clear, to begin with. When I speak of a pirate mentality, I simply mean that people buy pirate goods in a default manner, without even checking the legal alternatives and, more importantly, society does not believe this to be a bad thing. Indeed, amongst gamers, buying pirate is seen as the logical/correct/obvious way of buying.

You are correct when you say that people buy pirate goods by default, because it became sort of a tradition, carried over from the 32 bit era. But not a 100% correct. People who simply don't have money got used to play videogame, and pirate goods is an alternative for them.
Myself, for example, who have better conditions, turned out to PS3. Many people did. If we all had that pirate mentality, we would all buy X360, not one single PS3 would be selled here, and that not the case.
I don't mind buying originals games, but don't mind buying pirates as well(especially when gaming industry drops all those craps). Is a way to save money. I'll give a reason why I would do that.
Metal Gear Solid 4: I would never buy a pirated copy of this game. It is a masterpiece. And Kojima deserves the profits for delievering us such a good game.
The same goes for Uncharted, Mirrors Edge, Gran Turismo, Killzone 2, etc. All the 15 games that I have, deserved to be bought.
Now, the other side, crap games: All Nintendo Wii games (except for Zelda)? Those are kind of games that you know that sucks, but I want to know for myself. Than I get a pirated copy, play a little bit, and throw away. The companies don't deserve my money for these shit.
But that is my point, my behavior.

Edit: When I said about the Ferrari not being available for the majority, I was talking about 99,9999999999999999999999999999999999999% of the population. Ferrari does not sell you a car if you don't match certain conditions, even if you have the money. That not the case for videogames. It's available for everyone to buy, if they have the money, and it's not U$ 500,000 we are talking about. That why a don't like the comparision over products so far away from each other.

 

[vxicepickxv]

I can almost see where that figure the VG industry came up with in that article I read about yesterday comes from.


Actually, Russia did a good job combating piracy by making it very illegal, and by reducing taxes on the games themselves. They basically forced the penalties of piracy to exceed the potential profits. Once it became cheaper to buy the real deal, people bought the real deal.



Just as an aside Kwil, how much money do you make in a year?

 

[UnSub]

"Piracy" is indicative of many things. Above all else, it is indicative of an informed, sophisticated, and intentional decision on the part of marginalized "consumers" NOT to support systems of economic interchange that are unquestionably necrotic.

... or it is indicative that people will often serve their own self-interest and get for free / below market value if they think they can get away with it. From the OP, it appears that Brazil has a culture that supports (or at least doesn't discourage) huge piracy operations. As a result, they don't get investment into their local industry, meaning that their isn't one (because local developers won't make any money off it since they know other people will just pirate their output).

 

[Therumancer]

Ironically, I'm not a pirate, and am pretty vocal about the risks involved. However I will point out that the bottom line here is of course the cost of games. Basically you've got video game companies conspiring to keep the prices of games high. Things are organized enough where they were able to raise prices by $10 universally not too long ago. What's more the price of new games really does not vary with the development time or game's budget. A cheap to make game using say the latest generation of "Unreal" and "Havoc Physix" sells for as much as a much longer to develop game that created it's own engine from scratch. A well polished AAA title and a second rate title market exactly the same.

Truthfully I'm not going to get into how much of that cost is profit, but it occurs to me that if piracy is a big enough business where it is developing national level criminal syndicates (as described in this article), selling games for like $5 a pop (where they are making copies onto the disks and then distributing them themselveS), then obviously game companies could probably make a similar profit by selling for the same price.

For example, if the game industry was to sell the games for the same price as the pirates in Brazil, would they not then absorb millions of customers that would otherwise not be paying?

Generally speaking I agree with the idea in principle that the creator of an IP (intellectual property) should be able to sell it for whatever they can get. But by the same token when looking at the game industry it seems like we're dealing with a high level of corruption and the producers trying to leverage the market into paying monsterous prices.

Part of the game industry mentality seems to be that they assume all these pirates would have paid $60 a pop for the games if they couldn't have pirated. In reality it means they probably wouldn't have gotten any more sales, and there would just be less gamers. If they want to tap into those millions of pirates, they need to simply lower prices to the point where the temptation to pirate (with the risks involved) pretty much disappears. I mean think about it, the Brazilians can't pay $60 a pop, but they can pay $5 a pop. Obviously production and distribution at that price isn't a problem. People can afford it. The market exists for the game companies. If they were to kill piracy in the region, they wouldn't find Brazlians paying $60 a pop, but rather they would stop gaming. They simply need to learn to regulate their prices/profits with what the market can bear.

Generally speaking I think that the industry itself can do a lot to curb piracy. But it won't.


>>>----Therumancer--->

 

[Zunto]

So in other words, you play the game, and then *after* getting use out of the product you decide whether or not to pay the person who put in the time and effort developing it.

Hey, that's an interesting philosophy.. tell me, what do you do for a living? Why don't you come by and do some of it for me, and after you're done, I'll look at what you did and determine whether I think I should pay you or not?

That's why now we have demo's. There were a lot of games I thought they were good, downloaded the demo, and what I had was shit game.
Imagine if I think the game is good, there is no demo of it, buy it, for U$150,00, then discover it does not worth U$1,00? What should I do? Cry?
Think of buying a pirated copy as acquiring a demo of the game. Is it that hard for you?
Do I have to buy every single piece of shit to discover wheter they were worth buying or not?
Testing a product before buying it is a right that I have.

Let me give one more example of the benefits of a demo: I didnt think that Valkyria Chronicles was a good game at all. Then recently I downloaded the demo, and for my surprise it was damn good. So I'm gonna buy it. If there was no demo, I would never know for sure, and since PS3 has no piracy, I would never buy the game just to make sure.

 

[Vert]

You're missing the forest for the trees. The argument he was making is that if all you're saying is that "Not being able to afford software is a legitimate reason to pirate, then not being able to afford anything is a legitimate reason to just take it." This sidetrack about a ferrari is stupid, mentally replace the term ferrari with cadillac and you've got the exact same argument.

Precisely. Zunto, you're missing the point completely, all I mean is that the argument presented is "X is to expensive for me, thus I should pirate/steal X". And that really doesn't sound like a good reason to pirate, as "X" can be literally anything, from a computer game, to a Ferrari, to Cadillac, to a brick.

That's why now we have demo's. There were a lot of games I thought they were good, downloaded the demo, and what I had was shit game.
Imagine if I think the game is good, there is no demo of it, buy it, for U$150,00, then discover it does not worth U$1,00? What should I do? Cry?
Think of buying a pirated copy as acquiring a demo of the game. Is it that hard for you?
Do I have to buy every single piece of shit to discover wheter they were worth buying or not?
Testing a product before buying it is a right that I have.

Let me give one more example of the benefits of a demo: I didnt think that Valkyria Chronicles was a good game at all. Then recently I downloaded the demo, and for my surprise it was damn good. So I'm gonna buy it. If there was no demo, I would never know for sure, and since PS3 has no piracy, I would never buy the game just to make sure.

Funny that you put it like that, as the very argument you make, that you buy a pirate game as a demo, raises the following question: why not simply download a demo, instead of buying a pirate game? Or, at the very least, download a pirate game, which imbues significantly lower costs on society as a whole, than buying a pirate game?

Still, I can see where you're coming from, as demos can be a really good way of enticing a player. Before I recently bought Braid, I played the demo and that sold me on the game completely, so perhaps for people like you, who buy pirate games to test them before making the purchase, developers and publishers may have been dropping the ball, so to speak, by not releasing more/better/easier to download demos.

 

[Zunto]

But Vert, that ís precisely what I´m doing now. Downloading the demos.