Study Claims Handheld Game Piracy Losses Top $41 Billion

[Orcus The Ultimate]

Try using another lame excuse, like that one: "it's one of the collateral effects of the recent Crisis's..."

 

[Orcus The Ultimate]

You don't like people shearing media get out of the media business because its a basic human right(as last I check by half the world, the US is not the world BTW), think fair use only not so vague and set in stone that amplifies these words THE PUBLIC CAN NOT STEAL MEDIA. On the other hand a business can, and if you make anything off the share or trade of unlicensed goods then you are a business and IMO you are a criminal who needs to be treated the same as those who sale drugs.

Its alot easier to expand personal rights and fair use to focus on those trying to make a profit off it than everyone and everything because the law is outdated and infective in a real world setting.....

/Incoherent intellectual

Did you just call media a "basic human right"? It's a privilege, not a right.

And you can steal ideas. If I wrote a novel that was word-for-word Harry Potter, maybe with a name changed here and there, do you think I wouldn't get my ass sued so hard - deservedly?

No, if you have a good lawyer cabinet and money.

 

[xyrafhoan]

tl;dr Number is probably inflated but the DS and Wii are especially vulnerable to pirated software and there is a staggering number of people who just don't buy games for their DS anymore.

And the question is if piracy weren't an option, would that friend have purchased a Wii and/or any of the games that he got for free? Do the 40+ games count as lost piracy copies if he never would have bought them anyway?

He was never a customer in the first place, nor would he ever be. Piracy is not a "problem" nor will it ever be. Used games affects game sales more than piracy ever will, as people who buy the used games are actual customers that chose not to buy new, and just bilked the developer out of their hard earned money (if you want to follow the same logic...). Companies need to start pandering to their actual customers to create value within the product they make rather than try to justify lost money on customers that don't exist.

In the case of Wii Fit, where another piece of hardware was required to play the game, these people went out and bought it. So, if there was no means of pirating games, don't you think at least some of those better games like Mario Kart would have been bought? Surely it's not a lost sale for all 40 of those games, but I'm sure that they would have bought at least 5 of the games if the "free" option weren't available to them. When they talk about games, paying for the game is not even a consideration for them because it is *so easy* to obtain a pirated copy for free. This mindset is extremely prevalent in asian communities, where there are so many counterfeit products for sale that it's just too much effort to shut down what could be half a mall or a whole city block. And now, with internet surfing being the preferred pasttime over watching TV, you don't even have to haul your butt into a store ever again after buying a DVD burner, an R4, and some blank DVDs.

This is the same problem the movie industry faces, so their solution is to deluge the market with razzledazzley 3D movies. If there is no gimmick that draws in consumers, whether in the form of 3D glasses or special game controllers, there WILL be a loss of sales from people who fully intend to enjoy your product without paying a dime. If you're not convinced that this is a problem just because most of these companies still churn out a profit, think about all the bandwidth caps imposed on us by our ISPs. The average user will never reach that cap, but the real reason is to cut off the connections of people who run p2p connections day and night and download a couple seasons of their favourite show, a large handful of movies, and throw in a couple of the most popular games to boot.

Used games are a different sort of beast and almost just as painful as game piracy, but the fact is for retailers, ordering brand new games to sell is extremely expensive and the margin of profit is miniscule compared to used games.

I don't support DRM or actions taken by the RIAA against users who do download. Even I download music without any intention to buy the CD (although in this case, the CD might cost a couple hundred dollars because it's out-of-print, low-run, and needs to be imported). However, saying that the damage pirates do is overblown is a bit of a kick in the face to developers and artists big and small. Whereas a singer really makes their money in concert, video games have a pretty static purpose: To be played. And you either pay for that game, or you don't.

 

[Lord_Jaroh]

And now, with internet surfing being the preferred pasttime over watching TV, you don't even have to haul your butt into a store ever again after buying a DVD burner, an R4, and some blank DVDs.

So you change your business model to accept the new form of preferred use of technology. You don't stick with Records when Tapes are better, nor do you stick with Tapes when CDs are a better solution. You grow with the format. Find a new way to sell your product. Right now Big Media is like the church when faced with the Printing Press. Instead of fighting it, they have to accept it and find a new way to do business because the old way isn't going to work anymore.

This is the same problem the movie industry faces, so their solution is to deluge the market with razzledazzley 3D movies. If there is no gimmick that draws in consumers, whether in the form of 3D glasses or special game controllers, there WILL be a loss of sales from people who fully intend to enjoy your product without paying a dime. If you're not convinced that this is a problem just because most of these companies still churn out a profit, think about all the bandwidth caps imposed on us by our ISPs. The average user will never reach that cap, but the real reason is to cut off the connections of people who run p2p connections day and night and download a couple seasons of their favourite show, a large handful of movies, and throw in a couple of the most popular games to boot.

I believe the real reason for the bandwidth cap is to keep companies from having to shell out cash to upgrade their systems. There is no need to get better if you limit the use.

Used games are a different sort of beast and almost just as painful as game piracy, but the fact is for retailers, ordering brand new games to sell is extremely expensive and the margin of profit is miniscule compared to used games.

Why is it my problem that games are too expensive new? Does that not say that games should be cheaper to compete with used?

I don't support DRM or actions taken by the RIAA against users who do download. Even I download music without any intention to buy the CD (although in this case, the CD might cost a couple hundred dollars because it's out-of-print, low-run, and needs to be imported). However, saying that the damage pirates do is overblown is a bit of a kick in the face to developers and artists big and small. Whereas a singer really makes their money in concert, video games have a pretty static purpose: To be played. And you either pay for that game, or you don't.

So paintings (whose only purpose is to be viewed) are de-valued because there are bazillions of copies of them on the net for me to view without travelling to art museums to see them? Should I be paying to see these paintings? Is that not a blow to all artists out there? How do they possibly survive? A book gets read, music gets heard and paintings still get stared at. If they didn't make any money, they would stop getting produced.

 

[manaman]

The study also made the interesting observation that the country hosting the most piracy sites is none other than the United States,
So for all the bitching about Canadians, Europeans, Russians and everyone else stealing the food from good honest hardworking American mouths because we won't follow good honest American laws it was them all along.

Well, that's not stereotypically American, not at all.

No actually it's not. I don't recall anyone (but you now) ever saying the US didn't pirate stuff. In fact I don't ever recall hearing anything aside from the US being a country that makes up a sizable chunk of illegal downloads. The surprising part is only that a sizable chunk of the servers are in the US when it was thought they where mostly located outside the US.

Every time someone brings up the US I almost invariably see your avatar next to some kind of derogatory comment about the country. It's enough to make one start to think you might be racist, your not racist are you?

I'm sorry, $41 billion, isn't that more than the entire games industry has made in the history of the world?

They are talking lost sales. Which is still ridiculous becasue the sales figures for the entire video game industry during that time (and this does include hardware, accessories and game sales) totaled around $96.5 billion. They really want use to think that piracy is so rampant on those handhelds that the game industry should be making 150% of what it currently does? I will have to call bullshit on this study.

 

[xyrafhoan]

*trim*

A couple points to address here.

1. A retail store has to compete with people downloading for free online, and thus you're saying they must evolve to compete. True enough. We have Steam, after all, which gives us a decent digital distrobution model with crazy deals from time to time that retail stores just can't compete with. But Steam is owned by Valve, a game developer, and they don't have to order copies of their own games. Which brings us to #2...

2. Used games. I don't think you understand why retailers push used games on us. No matter what the price is when you order a game, it's the margin of profit that the company cares about. When you order a brand new game, the price hovers around $40-50, and you're expected to sell the game for not much more than that. With a used game, you can buy a copy that is probably just as good as new, aside from being opened, for $25 and sell it for $50, rather than ordering a game for $55 and selling it for $60. Or, even better, they get you to trade in games that they deem are worth $15 or more for a brand new, $60 game (ordered for $55), but then they sell those three games you just traded for $40 each. That's a $20 profit for say, Gamestop, and it gives them a wider variety of games to try and sell. So, think about margins rather than the actual price of the game on the shelf and what it means for the company. That's their business, and it hurts the industry, but the industry has fought back anyway by either bundling DLC with new games to add value (EA), or adding nasty DRM so you can't trade the game in (Ubisoft). But it's an independant problem from ROMs and ISOs on the internet.

3. You assert that bandwidth caps exist so companies don't have to upgrade their networks. Yeah, probably. But I have never hit my bandwidth cap even with my addiction to FLAC and overnight connections to a couple MMOs. The only people I know who have ever had their internet cut off downloaded full television series, ROMs for their R4s, and just about every movie they knew of. I'd be more concerned with my connection speed being throttled by my ISP rather than knowing there's a monthly cap in place.

4. This just doesn't make sense after I asserted that other industries have alternative ways of making money. You either buy a video game, or you don't. There is no in-between here. Whereas, with music you can legitimately download individual songs, buy full albums, attend a concert, watch advertising-laden music videos, and buy lines of merchandise related to the artist. And NOT every artist can make money like that, usually drifting through live venues until they produce an album with their own manpower. And you asser that "if there was no money to be made, books would not be written and art would not be produced", but sadly there are TONS of artists who simply cannot sell their work. It might not be any good. Or maybe they just don't find the right connections. These people are like the indie developers who develop out of passion, not the pursuit of money. Money is a bonus, seeing as you need money to pay rent and eat food, but these people care less about piracy and more about proliferation and awareness that they're doing anything at all. And you can say that this should be the attitude that a business takes when it comes to piracy, but this is the contrast of individual effort over corporate interests.

Personally when it comes to combatting piracy, I think Nintendo has been rather clever about the whole thing. Whereas their games are easy as hell to emulate and burn onto a CD, Nintendo keeps bundling so much hardware with their 1st party titles that they force the consumer into buying the game with the add-on packaged in. There's still not much they can do about flash cards on the DS, but they can at least assure sales of even the most mundane "games" like Wii Fit and Wii Sports Resort.

edit: This was longer than I ever intended it to be...

 

[Waif]

I usually find myself critical of publications stating an overly inflated number as nothing more than sensationalism. We have to consider that these games don't cost the manufacturer the retail price to make these games. These games cost maybe a fraction of the retail price to make, so as far as losing invested money is concerned the number is actually much smaller. That and I disagree with the method in which they calculate the total losses. Multiplying by four on an already dubious number is stretching the truth for sensationalism. That's almost like saying that 40 billion is a fine number when you consider that the worlds population is around 7 billion people, that's like 5 bucks a person over the course of how many years? The statement pumps out numbers while using a flawed logic. The entire world does not have access to computers, or the devices necessary to pirate these games. When an individual considers that a tiny percentage of the market actually pirates handheld games, the numbers look inflated, indeed.

As it is, I doubt that number is even that high combined with Peer2Peer networks. The number is likely high, but nowhere near the number given.

(emphasis added)

I'm reminded of an exchange from The West Wing. Toby and Josh are discussing the blackmarket for generic HIV medications:

Toby: The pills cost them four cents a unit to make.

Josh: You know that's not true. The second pill cost them four cents; the first pill cost them four hundred million dollars.

The cost of the actual product is relatively limited (the physical cost of creating a disc/cartridge), but that's not really what the "cost" here is. The cost is in the development of the game. Your argument here is like saying that I (as a lawyer) should only consider the physical cost of the paper I use for pleadings when it comes to how much my effort is worth. I swear to you, if a client refuses to pay, I'm going to court for the full value of my time and labor, not just the cost of the physical product I produced.

Spoiler

And the other point would be that your figure of 10% just as justifiable as their figure of 41 billion, ie, not at all. It could be 100%, it could be 0.000000000000000001%, there is no way to know and, instead of claiming knowledge they lack and collectively punishing consumers on that basis, they should maybe do some studies which can produce workable outcomes such as; What can we do to encourage legal purchasing? What demographics actually engage in piracy?

That's a decent point. Though, from a normative standpoint, I'm not sure how much it makes sense to just say "some lawlessness is going to happen, let's accept it". As much as I agree that we should increase legal purchases, I'm not so much into the blithely accepting "some people are going to break the law, so let's just accept it". We don't really do that with much other law. What I'll never comprehend is the objection to games companies basically saying "we're getting screwed here, guys". Imagine if we had the same reaction to burglary:

"I just got robbed, call the police"
"Well, now, some robbery is inevitable. How can we encourage people to legally buy your stuff?"

Meh.

They could also start actually paying attention to the studies which have been done which produced workable outcomes, such as the one which showed that people who pirate music spend MORE than people who don't on legitimate purchases.

You... Mean the studies that show that they're 10 times more likely to buy music digitally than non-pirates? That's... Kind of a "gee, duh" claim, isn't it? Or the ones that are really bad at actually showing causation?

If you read the actual study (which is in Norwegian, and unduplicated elsewhere), they only show a correlation between higher free downloads, and higher paid downloads. "A ha!" I hear you cry "that means people who pirate buy the music they pirate, they're just demoing it". That's one interpretation. Another is that they buy what they can't pirate, and simply download more songs overall (they compare those with high rates of both legal and illegal downloads to those who have low rates of both. Even direct correlation does not imply causation). If we assume that people who pirate more and buy more simply acquire more music, the implication that piracy actually increases sales is dubious.

That'd be a bit like looking at a billionaire art thief, and saying "well, given that he steals a lot of art, and buys a lot of art, as compared to poor people who neither buy nor steal, we've shown that art thievery causes more art purchases. Theft is good for the art industry". A strained example, but an apt one.

Throwing around numbers and screaming "Piracy is bad, mmmkay" will not stop piracy, if they want to make more money maybe they should focus on ways to do that; constantly striving for an unachievable goal will only cost them more.

Again, is there another industry (or group of industries) who we'd look at and say "meh, if people are stealing your stuff, just make better stuff... That'll surely stop thieves". Do we really look at Apple and say (if people were stealing millions or billions of dollars worth of iPads) "well, if you focused on persuading people to buy them, you'd make more money. You should accept that people are going to steal them"?

I doubt it.

We are not talking about the price of the starting game, we are talking about the retail price being added up for each and every single download. So it's like the medication industry quoting the full retail price of all the blackmarket pills, the ones that are worth 4 cents for them to make, and producing a bloated and huge number for sensationalism. Sure it would be fair to say that making the game costs money, but that isn't the point that is being made here.

The point of the article is that individual downloads is where they derive their number of 40 billion dollars from, this does not include costs associated with making the game. Downloads affect the buying of that one game, not the development of it. Therefore this has nothing to do with costs associated with making the game, only downloads. In a more direct case, the 4 cent pills. For the record DS games cost about 800k-1.5 million to make according to one source:

http://vgsales.wikia.com/wiki/Video_game_costs

Not 400 million dollars.

EDITED*

 

[Rack]

Whatever your take on piracy is frankly irrelevant. What we have here is a company using clearly fraudulent statistics in an attempt to influence public opinion and lobby for changes in the law. If you think that's right then argue that point, not whether you think piracy is good or bad.

As a result of these irresponsible studies UK Internet censorship laws are now more restrictive than China's. There's a bigger issue here than if Activision get paid for Tony Hawk's skater 8996343.

 

[Seldon2639]

We are not talking about the price of the starting game, we are talking about the retail price being added up for each and every single download. So it's like the medication industry quoting the full retail price of all the blackmarket pills, including the ones that are worth 4 cents for them to make, and producing a bloated and huge number for sensationalism. Sure it would be fair to say that making the game costs money, but that isn't the point that is being made here. My argument still stands.

Except the cost of developing the game is amortized over each copy of the game sold at retail. The full retail price is the only way they're able to make back the cost of development, much less any kind of profit on the investment. Your argument only stands if we assume (a) that there's some limit to the amount of money a company deserves to make from its investment, and (b) that the actual value of the creation of each copy is somehow important.

Let's deal with each.

A. This is silly. There's nothing moral about saying 'since this only cost you four cents to make, people get to pay only four cents for it'. To come back to my car analogy, that's like saying if I send Porsche the actual value of the parts and labor of a 911 coupe, I'm morally entitled to steal it. The price of the car is set (a) by the amount of money they need to make to recoup expenses and make a profit, and (b) by the supply and demand curve. I'm a lawyer, the things I make are of negligible physical value (paper is cheap, as is ink). I'm charging for my time, my expertise, my overhead, and to make some money for myself.

B. As I mentioned, this is irrelevant. The actual "value" of any pleading I create is next to nothing in and of itself. I'm not charging for the value of the paper, or even the amount of money it took to print it. I'm charging for the amount of effort that went into creating the ideas in it. The value of the physical product isn't of issue.

Your point does not stand.

 

[Waif]

We are not talking about the price of the starting game, we are talking about the retail price being added up for each and every single download. So it's like the medication industry quoting the full retail price of all the blackmarket pills, including the ones that are worth 4 cents for them to make, and producing a bloated and huge number for sensationalism. Sure it would be fair to say that making the game costs money, but that isn't the point that is being made here. My argument still stands.

Except the cost of developing the game is amortized over each copy of the game sold at retail. The full retail price is the only way they're able to make back the cost of development, much less any kind of profit on the investment. Your argument only stands if we assume (a) that there's some limit to the amount of money a company deserves to make from its investment, and (b) that the actual value of the creation of each copy is somehow important.

Let's deal with each.

A. This is silly. There's nothing moral about saying 'since this only cost you four cents to make, people get to pay only four cents for it'. To come back to my car analogy, that's like saying if I send Porsche the actual value of the parts and labor of a 911 coupe, I'm morally entitled to steal it. The price of the car is set (a) by the amount of money they need to make to recoup expenses and make a profit, and (b) by the supply and demand curve. I'm a lawyer, the things I make are of negligible physical value (paper is cheap, as is ink). I'm charging for my time, my expertise, my overhead, and to make some money for myself.

B. As I mentioned, this is irrelevant. The actual "value" of any pleading I create is next to nothing in and of itself. I'm not charging for the value of the paper, or even the amount of money it took to print it. I'm charging for the amount of effort that went into creating the ideas in it. The value of the physical product isn't of issue.

Your point does not stand.

Please read my revised post, and yes my argument still stands. The problem isn't with my argument, rather the understanding of it...it seems.

 

[Seldon2639]

Also, stop trying to bring cars into this. A real world commodity can only be relevant to this subject if the primary business model is centered around a magical device that creates exact duplicates out of thin air.

Let me try to make my analogy make more sense.

Part of the argument is that there's no (or negligible) actual physical cost to any given unit of a videogame. The cartridge/CD costs cents to create after the original (which cost millions), and so we're not "costing" these companies anything significant. The logic here is simple.

1. Given that there is small (or non-existent) cost to the creation of the unit I'm playing and
2. Given that any loss to the company would be formed by a disparity between what I pay, and the actual cost of production of this specific unit
3. The company does not lose money on this transaction, and therefore I am justified in doing it.

Okay, let's talk cars. The Porsche 9-11 GT2 RS has an MSRP of $245,000. No one in their right mind would claim that the actual value of the parts of that car (including the labor in putting it together) comes close to that value. Let's assume the actual value of parts and labor is $50,000 (I'm making this number up for the sake of argument).

By the pirate logic (only the cost of the unit itself should be considered a "loss"), if I steal a 9-11 GT2 RS, Porsche has only "lost" $50,000. If that's true, then I should be able to send them a check for $50,000, and by your logic (since no "loss" then occurred), I'm morally entitled to the car, right?

Probably not, eh? But, the same logical precepts are in play in both cases. The distinction you make is one without a difference, since there's always a huge part of the cost of a product that's "we want to recoup the design and development costs, and make some profit". Either only the value of the unit itself is a "loss" or the full loss of the retail value (including the recoup and profit) is a "loss".

Either I should be able to pay $50,000 for my new Porsche, or you're a hypocrite.

 

[Seldon2639]

Please read my revised post, and yes my argument still stands. The problem isn't with my argument, rather the understanding of it...it seems.

I understand your point, but it's simply fallacious.

To argue that the company can only count as a loss the physical value of the individual unit is... Wrong. It's simply wrong. The value of the individual unit isn't just "what did it take to make this individual disc", but rather "what do we need to charge to make our money back and some profit". As in my previous post, would you really let me send Porsche a check for $50,000 for a $245,000 car and call it good because the actual cost of making that individual unit was only $50,000?

Either I get to dramatically underpay for everything now (paying only the cost of the goods themselves, not the actual value of the product), or you're being a hypocrite about it.

 

[Waif]

Please read my revised post, and yes my argument still stands. The problem isn't with my argument, rather the understanding of it...it seems.

I understand your point, but it's simply fallacious.

To argue that the company can only count as a loss the physical value of the individual unit is... Wrong. It's simply wrong. The value of the individual unit isn't just "what did it take to make this individual disc", but rather "what do we need to charge to make our money back and some profit". As in my previous post, would you really let me send Porsche a check for $50,000 for a $245,000 car and call it good because the actual cost of making that individual unit was only $50,000?

Either I get to dramatically underpay for everything now (paying only the cost of the goods themselves, not the actual value of the product), or you're being a hypocrite about it.

Now don't get to insults, thats taking this out of context. My statement stated, quite clearly that the number produced was strictly based on the downloads, and did not include the cost of making the games. Surely 40 billion dollars also includes profit. As I previously stated, my statement still stands, just my point is obviously not being understood.

 

[SenseOfTumour]

Irritatingly I can't find the guy who posted about the real issue here, that the big guys are trying to get things changed, including getting laws passed, based on statistics from Narnia.

He was also talking about the crackdown of internet rights in the UK, with the government pretty much kneeling at the entertainment industry's feet and asking what they'd like done to the internet.

I could say that 68% of all murders are commited by strangulation with a HDMI cable, and therefore we should ban HD TVs, but it'd be balls, but 'murder' gets headlines, and gullible people will be at the watercooler tomorrow talking about the rise in hi def chokings.

Part of me thinks that all the time they're using crazy made up statistics to 'prove' their point, they're just shooting themselves in the foot, but I hope that people in power, the ones who choose to pass new laws, will have the sense of most of the Escapist and see these numbers for the utter balls that they are.

Then cynically I think, the people in power are going to be talking to the people with big piles of cash, we're all screwed.

On a side note, can we all just agree that piracy is not theft but that it is criminal, morally, if not legally. (I'm pretty sure it is legally, but I just know someone will argue that.) However, just making stuff up isn't a good way to get your legal customers to trust what you say.

 

[fix-the-spade]

It's enough to make one start to think you might be racist, you're not racist are you?

Nah, I'm just blunt and northern.

Actually, I'm very even handed when it comes to derogatory comments, America gets off quite lightly compared to my beloved home. But I see your point, I am maybe a bit quick on the cynicism.

<spoiler=Cut for wall of text, elaborating on that particular derogatory comment> Anyway, what gets me about America (or rather, it's governments and representatives) is the fervency with which they push themselves as moral arbiters of the planet. This one I find specially annoying as for the last couple of years The American Trade representative has been keeping and loudly proclaiming the contents of a list of countries it sees as aiding digital piracy.
Between that and a few veiled threats it's been used as a not especially subtle method of trying to influence other countries' policy on the flow and control of information.

Naturally this method is dressed up as an attempt to protect business by preventing the theft of their work by dishonest foreign powers.

To quote Michael Gallagher (ESA CEO), "Innovators, artists and consumers are all hurt when foreign markets are closed off because their governments fall short in enacting and enforcing meaningful trade protection measures that discourage large-scale piracy."

This would be fine, if America was a leader in the fight against digital piracy. But if this study is accurate it would seem that America is in fact responsible for more of it's distibution than the rest of the planet combined.

There's plenty of irony and hypocrisy there to be getting on with, but both are probably lost on the ESA. It also fits the stereotype of corrupt American business perfectly, fairly or otherwise big business has a reputation for being even nastier than the rest of the world and turning a blind eye on anything provided it profits them to do so. Thanks to it's position in the world that big business is usually (or at least is portrayed as being) American*.

Hence my coment, after several years of loudly proclaiming in short falls of others, the others have looked back and found America to be worse than them all combined. It does rather fit the sterotype of America in European eyes.

*Which is another chance for irony, seeing as it's BP who are currently destroying the American environment through incompetence/corruption, sorry about that.

I need a less distinctive avatar...

 

[Lord_Jaroh]

*trim*

A couple points to address here.

1. A retail store has to compete with people downloading for free online, and thus you're saying they must evolve to compete. True enough. We have Steam, after all, which gives us a decent digital distrobution model with crazy deals from time to time that retail stores just can't compete with. But Steam is owned by Valve, a game developer, and they don't have to order copies of their own games. Which brings us to #2...

2. Used games. I don't think you understand why retailers push used games on us. No matter what the price is when you order a game, it's the margin of profit that the company cares about. When you order a brand new game, the price hovers around $40-50, and you're expected to sell the game for not much more than that. With a used game, you can buy a copy that is probably just as good as new, aside from being opened, for $25 and sell it for $50, rather than ordering a game for $55 and selling it for $60. Or, even better, they get you to trade in games that they deem are worth $15 or more for a brand new, $60 game (ordered for $55), but then they sell those three games you just traded for $40 each. That's a $20 profit for say, Gamestop, and it gives them a wider variety of games to try and sell. So, think about margins rather than the actual price of the game on the shelf and what it means for the company. That's their business, and it hurts the industry, but the industry has fought back anyway by either bundling DLC with new games to add value (EA), or adding nasty DRM so you can't trade the game in (Ubisoft). But it's an independant problem from ROMs and ISOs on the internet.

Oh, I "get" used games. They are all profit. However, the new generation of games is arbitrarily expensive. Too expensive, which is why consumers are choosing used over new and saving that extra few bucks. If games were priced more modestly at the $20-$30 range (you know, impulse buying range and even then $30 might be too expensive), less people would be inclined to buy it used as buying new is now "more" worth it.

3. You assert that bandwidth caps exist so companies don't have to upgrade their networks. Yeah, probably. But I have never hit my bandwidth cap even with my addiction to FLAC and overnight connections to a couple MMOs. The only people I know who have ever had their internet cut off downloaded full television series, ROMs for their R4s, and just about every movie they knew of. I'd be more concerned with my connection speed being throttled by my ISP rather than knowing there's a monthly cap in place.

I never thought that I would ever need a bigger hard drive than 40 gigs! That was just a few years ago. Before that I couldn't imagine a game bigger than Baldur's Gate! It's huge! I remember when it took hours to download a single song.

Streaming video has made the need for badnwidth to be higher by itself. How about when we want to stream 3D HD movies? Just because there's no need immediately doesn't mean that there won't be in the future. The companies don't want to spend the money to try and stay ahead of the curve...they are settling, and by settling forcing you to settle as well.

4. This just doesn't make sense after I asserted that other industries have alternative ways of making money. You either buy a video game, or you don't. There is no in-between here. Whereas, with music you can legitimately download individual songs, buy full albums, attend a concert, watch advertising-laden music videos, and buy lines of merchandise related to the artist. And NOT every artist can make money like that, usually drifting through live venues until they produce an album with their own manpower. And you asser that "if there was no money to be made, books would not be written and art would not be produced", but sadly there are TONS of artists who simply cannot sell their work. It might not be any good. Or maybe they just don't find the right connections. These people are like the indie developers who develop out of passion, not the pursuit of money. Money is a bonus, seeing as you need money to pay rent and eat food, but these people care less about piracy and more about proliferation and awareness that they're doing anything at all. And you can say that this should be the attitude that a business takes when it comes to piracy, but this is the contrast of individual effort over corporate interests.

I can play tons of video games for free online. I don't need to buy them. Have you heard of Desktop Tower Defense [http://www.handdrawngames.com/DesktopTD/Game.asp]? Great game, produced by an actual indie developer, out of passion and is successful, without selling it. Now it is available at retail on the DS as well, but it is still online to play for free.

You mean I can't buy merchandise related to video games? Or watch advertising-laden trailers for games? Keep in mind music downloading was only made possible because everyone was doing it anyway. They only found a way to adjust a business model with what people were wanting to do anyway. Maybe not every developer can produce a shitty game and make money off it. Give me a way to return a game that's terrible and you can justify your price tag on your game. Otherwise, reduce the price to something more affordable so that it's not as much of a loss when I get burned into buying it through pre-release hype and and pre-order bonuses. The more you try and "force" sales and trick people into buying, the more you will drive people away in droves trying to combat your anti-consumer tactics. Developers need to start actually thinking about the customer and trying to win them over with a reason to support the developer.

Personally when it comes to combatting piracy, I think Nintendo has been rather clever about the whole thing. Whereas their games are easy as hell to emulate and burn onto a CD, Nintendo keeps bundling so much hardware with their 1st party titles that they force the consumer into buying the game with the add-on packaged in. There's still not much they can do about flash cards on the DS, but they can at least assure sales of even the most mundane "games" like Wii Fit and Wii Sports Resort.

edit: This was longer than I ever intended it to be...

Gimmicks will only last for so long. Maybe it's the amount of shovelware and the "milk the customer for as much as possible while doing as little as possible" attitude that makes this generation of gaming the worst I've seen so far, especially considering the possibilities that we have open to us. Or maybe I'm just jaded against all of the companies trying to treat it's customers as second-class citizens, as if we are already guilty of doing something wrong.

The pirates are only a problem when you start thinking of them as customers. They never were and they never will be. They pirated before the advent of the internet, and they will pirate after. They were never sales to begin with.

On a side note, can we all just agree that piracy is not theft but that it is criminal, morally, if not legally. (I'm pretty sure it is legally, but I just know someone will argue that.) However, just making stuff up isn't a good way to get your legal customers to trust what you say.

Actually, I believe "piracy" is just a symptom of people trying to get something that others aren't providing for them. I don't think of it as wrong any more than borrowing a game or movie or book off a friend. What if that were illegal?

 

[Seldon2639]

Please read my revised post, and yes my argument still stands. The problem isn't with my argument, rather the understanding of it...it seems.

I understand your point, but it's simply fallacious.

To argue that the company can only count as a loss the physical value of the individual unit is... Wrong. It's simply wrong. The value of the individual unit isn't just "what did it take to make this individual disc", but rather "what do we need to charge to make our money back and some profit". As in my previous post, would you really let me send Porsche a check for $50,000 for a $245,000 car and call it good because the actual cost of making that individual unit was only $50,000?

Either I get to dramatically underpay for everything now (paying only the cost of the goods themselves, not the actual value of the product), or you're being a hypocrite about it.

Now don't get to insults, thats taking this out of context. My statement stated, quite clearly that the number produced was strictly based on the downloads, and did not include the cost of making the games. Surely 40 billion dollars also includes profit. As I previously stated, my statement still stands, just my point is obviously not being understood.

In fairness, hypocrite isn't much of an insult. And, in this case, I only apply it in terms of an if/then statement, but I mean no offense by it.

Here's my thing:

If your point is that the $40B includes profit (and recoup of expenses in the development), I agree.

If your point is that the fact that it includes profit and recoup of expenses makes it an over-inflated estimate, I disagree wholecloth. My intention has been to show you why you can't divorce the 'value' of the goods from the necessity to recoup expenses, nor focus solely on the "loss" due to any physical need to replace the unity.

If I misunderstood, and your point was analytical (it's not just the cost of the units, obviously), rather than normative (and they should only count as a 'loss' the cost of the units), then I do apologize. It didn't really sound like that, though.

 

[Seldon2639]

The pirates are only a problem when you start thinking of them as customers. They never were and they never will be. They pirated before the advent of the internet, and they will pirate after. They were never sales to begin with.

I hear that argument here a whole hell of a lot, and frankly it doesn't hold water. If they aren't interested in paying for the game, they shouldn't be playing the game. I don't get to drive a Porsche just because I want to, nor wold me stealing one off the lot (while paying, as I've said before, the actual physical value of the unit in and of itself) be construed as "well, he wasn't going to buy one anyway".

Either pirates are customers who should pay, or thieves who should be punished. There's no real wiggle room that allows for a population which refuses to pay for their product, but still have some entitlement to them.

Actually, I believe "piracy" is just a symptom of people trying to get something that others aren't providing for them. I don't think of it as wrong any more than borrowing a game or movie or book off a friend. What if that were illegal?

Read John Funk's post above. He does a good job explaining the difference.

If I loan you an object (game, movie, CD, book), I'm taking my actual possession and transferring ownership. I am making you the owner of that product for whatever amount of time you have it. If I make a copy, it's a very different dynamic. In order for you to borrow my game, I must necessarily give it up, there's no such thing as a free lunch. Only one instantiation of the product exists. One unit was paid for, one unit is used.

If I make a copy, I now possess two units, only paying for one. Owning a product I didn't pay for would usually be considered stealing. If I now give you the copy, we've now created two units of the game. It's a very simple distinction.

I think it's a symptom of people wanting their money for nothing and their chicks for free, and being greedy bastards. And as long as any significant minority (or majority) of us consumers are defending their actions, we all deserve any crap that Ubisoft throws at us DRM-wise.

 

[ZippyDSMlee]

You don't like people shearing media get out of the media business because its a basic human right(as last I check by half the world, the US is not the world BTW), think fair use only not so vague and set in stone that amplifies these words THE PUBLIC CAN NOT STEAL MEDIA. On the other hand a business can, and if you make anything off the share or trade of unlicensed goods then you are a business and IMO you are a criminal who needs to be treated the same as those who sale drugs.

Its alot easier to expand personal rights and fair use to focus on those trying to make a profit off it than everyone and everything because the law is outdated and infective in a real world setting.....

/Incoherent intellectual

Did you just call media a "basic human right"? It's a privilege, not a right.

In a sense it is a right due to the inspirational and educational values inherit within all media, the human animal needs sustenance for the soul not just the body alone, not to mentin posting blogging,ect the words you right could be copy righted and you could be harassed for daring to distribute(post) them thats a bad direction to go in IMO.

So split the difference protect the licensed money making chain by harshly going after anyone that tries to make money off it and allow all distribution that is not making money or falls under the present status for fair use.

And you can steal ideas. If I wrote a novel that was word-for-word Harry Potter, maybe with a name changed here and there, do you think I wouldn't get my ass sued so hard - deservedly?

Sorry...but I just haz to say

"There, I went and stole your words. Now you no longer have those words because I have stolen them from you. If I had infringed the copyright of your words you'd still have them, I'd just be benefiting from them as well, but because I stole them you can no longer have them."

ahem........
Between how parody and copy right itself works you can duplicate a story up to 70-80% and sale it of course if any established "like story" with lawyers smells blood in the water they will sue and its a 50/50 roll of the dice if you are found to have plagiarized or not.

All media is made from media and or the point of view of the story creator,not much is made in a vacuum so its hard to place absolutes beyond making any kind of money from unlicensed copies.

Edit
If you want to get down to specifics I suppose its more a protected privilege on the edge of being a right than a simple full blown right that you can not question, then again all of rights these days are questioned...