201: A Nation of Pirates

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Vert

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A Nation of Pirates

Piracy in the U.S. and Europe usually takes place behind closed doors. But in Brazil, it's wide out in the open for everyone to see. Pedro Franco examines the state of the gaming economy in his home country and how the situation got to be so dire.

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Dracogen

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I'm a Canadian-European dual citizen, and I can report that rampant piracy is also commonplace throughout Europe, even in G8 nations that should "know better".

It is commonplace to see exactly the kind of operations you describe being conducted in the main street in full view of everyone, including police, who walk right by -- or even stop to shop. Most Europeans I know own few (if any) legitimate audio CDs or software, but rather have enormous libraries of pirated works, which they are always proud to show off to guests. It's a different mindset, and one that needs to be changed.

I often these people why they expect the creators of the content to keep making more if people are just going to pirate their works. Their responses generally quantize to three kinds of rationalizations:

1. "I wouldn't be able to afford to purchase software legally. So they are not losing any money." (Untrue: These people would just have to be more discriminating in amassing their collections.)

2. "It doesn't matter, the titles are overpriced and the artists/studios make too much money." (Untrue: Even major studios and artists have trouble breaking even with titles. And small and indie players -- the source of some of the most important creativity -- cannot afford any piracy, period.)

3. "Everybody does it, and I want to do it to , so get off my case." (At least this reason is honest.)
 

_noob_

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Apr 14, 2009
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This is a little late to post here. But. Piracy is wrong. To some extent. Small companies, Indie artists, and some game developers should not be pirated. But you can't tell me that an over paid ass clowns, like MANY of the music artists, will having trouble making ends meat like everyone else. Everyone has their reasons for pirating. It is not my place nor is it yours or anyone elses to judge them. Everyone has pirated in one way or another. No one is innocent. If you say that you never have. You sir or madam, are a liar. This is of course only my opinion.
 

KyleGamgee

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Dec 31, 2008
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Someone has to pay for it, or it'll go away. I don't want it to go away.

The "everyone has pirated something sometime, no one is innocent" argument makes the least sense to me. As if only Jesus can call people out on piracy. It's still wrong, regardless of who's saying so.
 

DrFausty

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May 12, 2009
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I'm sorry, this is sloppy economic analysis, sloppy legal analysis, and sloppy logic.

First, purchasing a "pirated" game is not "illegal" - while the RIAA/MPAA have had a field day talking about "illegal filesharing" and thus managed to poison the well of accurate understanding of intellectual property law worldwide (in the service of increasing content oligopoly profits, naturally), noncommercial sharing of digital content is NOT ILLEGAL in any modern democratic society. Purchasing such content is also not "illegal" - selling content for which the seller does not have verified intellectual property rights is often covered under various criminal statutes, though is very rarely prosecuted. Simply repeating over and over that it is "illegal" to share digital content is lazy and flat-out wrong.

Second, while it's fun to apply the old economic models that were created to describe the creation and exchange of physical goods to non-physical (i.e. digital) goods, it's also dumb. Clearly, a different form of microeconomic optimization is at work when a producer can make unlimited copies of a "product" whose marginal cost is exactly zero. The geniuses of the economic academia are, ever so slowly, awakening to this not-surprising reality (having recently taken time off from showing us how to build a stable, healthy, durable human economic system via global derivatives trading and unregulated credit markets, of course) - the reality, however, has been there all along for anyone to see. The reason that "consumers" aren't shoveling money into the pockets of "content producers" as fast as said content producers demand is that the producers have done a piss-poor job (with few exceptions) of pricing their "product" in a way that maps intelligently to the demand curve.

"Consumers," despite the pejorative name attached to them as merely entities whose job is to mindlessly consume, aren't actually dumb. They understand that the actual physical (i.e. marginal, i.e. non-loaded COGS) cost of a digital product is near zero. So when they see that "product" sold for $50 or so (often with a bunch of cardboard and plastic and other crap wrapped around it to try to make it look "valuable"), they often make an informed decision: nope. Nope, I'm not paying someone $50 for something it costs them $0.25 to create. Yes, "consumers" know there is a fixed cost to making new creative content - they also know that fixed costs is (almost without exception) bloated by useless marketing, sales, executive, administrative, bureaucratic, lobbyist, and who-knows-what-else expenses - and that the actual CREATIVE force behind such "creative content" is likely to get a penny on the dollar (if he or she is fortunate).

Which brings us to #3: nobody is buying the bullshit party line that "piracy robs artists of their hard-earned money." The "artists" got robbed of their hard-earned money decades ago, when they lost control of the means of production (with all due credit to Karl) of their creativity to oligopolistic market forces that have, since then, invested heavily in political protection and custom-written laws to enforce their economic interests. The actual "artists" who actually create stuff are a rounding error in these industries - yes we all actually know that and - no - we don't believe otherwise just because some well-paid lobbyist says otherwise on Fox News. Few folks have much interest in screwing real artists - whom they actually respect and admire. However, if they know that the parasites in the system will siphon off 99 cents of every dollar they spend to buy the right to use the stuff the artists make. . . well, that's not much of a return on investment - in terms of getting real money to a real "artist" - is it?

Finally, add in the grinding poverty, income inequality, and lack of economic mobility of a country like Brazil today - and guess what? Spending $50 so a mega-corporation in some other country can earn more return on investment for its institutional shareholders just doesn't sound like the highest priority. Is this an "irrational" economic decision? Nope. Does it reflect a lack of respect for content creators? Nope - it reflects a lack of respect for parasites, middlemen, corrupt economic systems, and broken political structures. Oh, and for outdated legal systems who try desperately to treat digital goods as if they were comparable to their physical counterparts - which they aren't.

"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. In capitalism, despite the desire of oligopolies and the politicians who suckle at their ever-welcoming teats, "consumers" still get to actually DECIDE if they want to spend their money to buy stuff. Or not. And when consumers decide they don't want to spend their money, it doesn't make them criminals - or stupid - or careless - or the "victims" of insufficient police enforcement of frayed, unjust, tattered legal systems. It makes them independent, conscious, sentient economic agents who are able to weigh the available data and make intelligent decisions on behalf of themselves and those they respect.

So, please, next time you want to bemoan the causes of "rampant piracy" in this or that country - perhaps start by exploring they long-term systemic breakdowns that set the stage for these individual "consumer" decisions. Like blaming a broken vase on insufficient padding on the floor - rather than on the force we commonly call "gravity" which caused it to fall in the first place - focusing analytic effort on the end stages of a complex, intertwined system which leads there does nothing but confuse effect with cause, and rational economic choice with "bad morals."

Smart companies - and smart "content producers," i.e. artists - are out in front of these systemic trends and are developing new, sustainable, viable, efficient, fair methods for pricing and distributing their work product to markets who want to enjoy them and are willing to pay to do so. Dumb companies are shoveling money into the political system, pushing for more cops to arrest more people and put them in more prisons - so that established companies can make more money, and screw over more artists along the way. For me, I'd much rather read about SMART companies and what they are doing to wisely implement new methods of operation - rather than crybaby dirges about how sad it is that models from 40 years ago don't seem to be work as well any more. Things change - smart folks change with them, or find themselves ground underfoot. . . no matter how many cops and lobbyists and politicians they add to their bloated payrolls.

Tally ho,

Fausty | www.cultureghost.org

{edited for the usual typos -fausty}
 

Kwazimoto

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Oct 2, 2008
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Several years ago my wife and I visited her Grandma, Aunty & Uncle in Shanghai. In Uncle's living room was an almost 2-foot high stack of DVDs in plastic pockets that he'd bought from the fellow who set up shop outside his apartment building. While we were there we bought quite a few DVDs from the same guy, for about $1 US each. We'd take them up to Uncle's and pop them in the DVD player, and just watching a minute or two was enough to let you know if it was a good or bad copy. If it was good, great, if not, that was fine too, because we'd just pop back downstairs and exchange it for another copy.

On our last day in Shanghai we were browsing for some last minute picks before heading back home when the vendor got all agitated and began trying to hurry us. The other customers quickly moved on but not knowing what was going on I continued browsing at a leisurely pace. Finally the vendor must have asked my wife to hurry me up because she counted the DVDs I had and literally threw Yuan notes at the guy as he folded his "store" up and took off running.

Later my wife told me that the anti-counterfeit unit were apparently making their rounds and that's why the fellow had been so anxious to pack up shop. The kicker? My wife said the person who'd tipped off the vendor was a policeman himself.
 

incal11

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Oct 24, 2008
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it's part of a best of of previous article, krakyn.

DrFausty
you're a bit too wordy ,but that's very well put!
 

mark0217

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Mar 17, 2009
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I remember when I lived in Brazil (about 12 years ago now!) of a small place downtown where, as described on the article, "the vast majority of which (stores) consist of little more than a tiny cubicle with a store counter". When I made my jump from the SNES to the PS1, it was the obvious thing to do. A friend of my dad's referred us there after I played RE1 (I was less than 10 years old and playing RE1, it was awesome!), and seeing games in such quantities and so cheap (a FRACTION of what games cost on "official" stores), plus the combination of my parents being rather underpaid (we didn't live in the ghetto but weren't making enough of a fortune to feed my gaming habits at the time :p) just made it the perfect choice.
 

DrFausty

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May 12, 2009
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incal11 said:
you're a bit too wordy ,but that's very well put!
I actually agree re the "too wordy" criticism - the above post is more of a rant than a well-edited work product. Basically I see this same "story" of the poor artist being denied food for his starving children because of those "evil pirates" - the same story, it pops up all over the place. And you can just HEAR the public relations meetings behind these stories: "ok, here's the 'sad-eyed puppy' angle we want to push out to anyone unsuspecting enough to take the bait, so let's get all the PR flaks geared up so we can saturate the airwaves with 'pirates are Eeeevil' messages before we miss this quarter's earnings expectations." Maybe it's just because I've worked in a big ad agency myself (Leo Burnett - helped sell cigarettes to "young adults") and seen this kid of "campaign" from the inside - but the entire thing smells of freshly-printed astroturf.

Too, I'm old enough to remember the same doom-and-gloom bullshit from when floppy disks really were floppy. No future for software, no more games, blah blah blah. And somehow the good companies - the really creative ones - seem to have risen to the top all the same (along with some cleverly-marketed garbage, of course). Remember when the first "trialware" games got released on the web, back in the 90s? If all the crybaby lobbyists had been fired - and money invested in creative folks like Carmack - how many other great distribution ideas would have taken off as well?

I'm not pro-pirate. . . I'm just anti dumb businesses. And any business (or commentator) that swallows the fake lure of "fight the pirates, they go to jail and we get rich(er)" is just dumb. Heck, I'm too lazy to be a pirate myself nowadays - Steam does a great job of making games available to me efficiently, elegantly, and at a reasonable cost - MORE than happy to pay for the great service and convenience, even though of course I could find a CD iso and key someplace with a bit of hunting. But, if I were a kid living in a favela in Brazil, would I have $25 to spend on the latest level releases for Unreal Tournament? Nope - the pricing is obviously not going to work for me, so I'll buy a $2 pirated copy because there's no other viable option. That's called "reality" - and whining about it has reached such a fever pitch, in the media, that it seems only a rant can release the pressure.

There, a post-rant rant. . . probably more than enough for now.

Cheers,

Fausty
 

Spielberg

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May 5, 2009
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Let's face it, games are way too expensive.

No matter what any company does, games will be pirated, but most people (I include myself and most of my friends in this category) pirate games because they can't afford them.

Lower the prices, and more people will buy games. It's that simple.

Brazil, specifically, is a different problem altogether, since games there are priced at 50$, and most people make about 6-8000$ a year, it's stupid to expect anyone to really buy original games there.
 

not a zaar

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Dec 16, 2008
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This happens all over the world, even America. There are place in America where vendors set up shops in malls and sell bootleg "consoles" that are just loaded up with ROM images. It just goes to show that law enforcement doesn't really care about intellectual property that much.
 

Aesthetical Quietus

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Mar 4, 2009
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To tell you the truth, if I could buy pirated games over here, I would, and that's simply because when games retail at $100 a pop, ($60 USD), they are far too expensive to buy normally. I refuse to pay twice what the US pays for the same(or in the case or GTA, a more restricted) game.
It's just plain ridiculous, if developers really want me the consumer to buy the game, then they better start offering a better service than what the internet does(Take the price down to $50 ($30 USD), and drop your DRM, and I will buy your game, or drop the price to $30.00 NZD, and I'll buy it with DRM). The only games I ever buy now are games that are on the bargin bin, and that's simply because I don't mind paying $20-$30 a pop, but anymore with DRM, is too much.
 

John Funk

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Dec 20, 2005
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DrFausty said:
"Consumers," despite the pejorative name attached to them as merely entities whose job is to mindlessly consume, aren't actually dumb. They understand that the actual physical (i.e. marginal, i.e. non-loaded COGS) cost of a digital product is near zero. So when they see that "product" sold for $50 or so (often with a bunch of cardboard and plastic and other crap wrapped around it to try to make it look "valuable"), they often make an informed decision: nope. Nope, I'm not paying someone $50 for something it costs them $0.25 to create. Yes, "consumers" know there is a fixed cost to making new creative content - they also know that fixed costs is (almost without exception) bloated by useless marketing, sales, executive, administrative, bureaucratic, lobbyist, and who-knows-what-else expenses - and that the actual CREATIVE force behind such "creative content" is likely to get a penny on the dollar (if he or she is fortunate).
You seem to be talking mainly about the music industry.

The marginal value of a DVD-packaged game - as in the physical copy - might as well be 0, but games cost millions and millions of dollars to make. Are you telling me no company should ever expect to see a return on investment? In that case, why not just have every company switch to making <$1million-budget casual games in order to remain profitable?
 

kallisto

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May 13, 2009
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I am brazilian and i live in São Paulo, i can say, that is 100% true, but lets think about. All my games are originals (Sony PS3 and Nintendo Wii) and i need to say, buying original games here in Brazil is very very expansive. I buyed my Wii in the release and i payed in the legal market (converting Real R$ to Dollar US$) US$1000 (dont kidding, one thousand dollars) just for the console and Wii Sports, most recently i buyed Animal Crossing City Folk and paid US$215 (two hundred fifteen dollars) for the game + wii speak. The problem in Brazil is the Import Taxes (in most cases the import taxes are 60%~70%) and we have to pay yet the federal taxes (+18%). So some peoples cant pay that and buy illegal games. I hope some day the brazilian politicians make some changes here and the piracy problem will desaper. Sorry for my bad english!!!
 

obonicus

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May 13, 2009
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Just a note about the revisionism. The idea that last decade games were overwhelmingly legitimate is terribly, well, WRONG. There was a huge business in pirated cartridges, in pirated PC software. Hell, I remember as a kid going to legitimate stores and buying floppy disks with 6 MSX games on them. These almost certainly weren't paying any fees to their license-holders. The prevalence of CD burners just made stuff cheaper.
 

Vert

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Feb 14, 2009
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Dracogen said:
It is commonplace to see exactly the kind of operations you describe being conducted in the main street in full view of everyone, including police, who walk right by -- or even stop to shop. Most Europeans I know own few (if any) legitimate audio CDs or software, but rather have enormous libraries of pirated works, which they are always proud to show off to guests. It's a different mindset, and one that needs to be changed.

1. "I wouldn't be able to afford to purchase software legally. So they are not losing any money." (Untrue: These people would just have to be more discriminating in amassing their collections.)

2. "It doesn't matter, the titles are overpriced and the artists/studios make too much money." (Untrue: Even major studios and artists have trouble breaking even with titles. And small and indie players -- the source of some of the most important creativity -- cannot afford any piracy, period.)

3. "Everybody does it, and I want to do it to , so get off my case." (At least this reason is honest.)
It's interesting that you post this. When my article was my first published, quite a few Europeans also raised the point that piracy was more blatant and explicit than is perceived from the outside. I'm starting to change my opinion on just how prevalent piracy really is in the first world.

Regarding your justifications, they're pretty much spot-on, although I've heard many, many different arguments, including some from the replies from the previous publication! It's very easy to rationalize these sorts of things, specially when everyone else is doing it. Feeling that you're just a drop in the ocean means that you'll feel that even if don't pirate, it won't make a difference.
 

Vert

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Feb 14, 2009
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_noob_ said:
This is a little late to post here. But. Piracy is wrong. To some extent. Small companies, Indie artists, and some game developers should not be pirated. But you can't tell me that an over paid ass clowns, like MANY of the music artists, will having trouble making ends meat like everyone else. Everyone has their reasons for pirating. It is not my place nor is it yours or anyone elses to judge them. Everyone has pirated in one way or another. No one is innocent. If you say that you never have. You sir or madam, are a liar. This is of course only my opinion.
Its funny how many people seem to think that my article is 'judging people' on moral grounds or the like. All I try to do in my article is present the facts, as far I know them, and present my analyzes of said facts. I can honestly say, when I was writing the article, that it wasn't my intention to change the way people act; nor to condemn them.

Lord_Gremlin said:
OMG, I thought in Russia things are bad... But in Brazil it's much worse it seems.
Can't say for sure, but it's possible. Piracy is simply massive here and the pirate mentality is set, like concrete! Heck, the other day I was commenting this article with some of my best friends and they weren't at all convinced... and they were supposed to back me up! =]