From sneaking under a circus tent to watch a show gratis to slugs in arcade machines to the great and ongoing Bittorrent affair, piracy has long been a part of the picture. How much does the concept of piracy actually cost the gaming industry? With reports running the gamut from “piracy actually helps gaming succeed” to “piracy will doom the industry”, it’s worth looking at some examples and seeing if the answer lies somewhere in the middle of the polar extremes.
One report from August of 2015 goes to the great extreme of piracy being an extinction-level event for the gaming industry as a whole. A report from Arxan Technologies, as presented in Gearnuke, revealed that gamers pirate about as much as they pay for, and this was supplemented by a Tru Optic study showing that the gaming market lost around $74.1 billion in 2014 while the entire industry brought in $83.6 billion as a whole. The Tru Optic study also showed steady gains in piracy amounts, going from just under 15,000 games available for piracy in 2012 to just over 30,000 available in 2015.
Supplementing these projections is a recent Gamespot poll which revealed that 60 percent of respondents never played pirated games. A good number for the industry’s long-term success, but it revealed some other noteworthy points. Ten percent of respondents noted that they “rarely” play pirated games, and 19 percent noted that they only paid for games that “deserve it” while pirating the rest. Eight percent admitted to “often” playing pirated games while two percent played pirated games exclusively. It’s clear that gamers react differently to notions of piracy, and that there are a lot of opinions out there around the morality, legality and implications of piracy.
In fact, dollar values of piracy can be difficult to measure. Recently, reports noted that 3DM—a notorious Chinese cracking / piracy group—decided to shut down its operations for an entire year starting back in February. Why? To get a better handle on how its actions were actually affecting game sales. Indeed, 3DM’s founder actually went so far as to say that, thanks to improving encryption technologies, the entire piracy discussion would be moot as far as gaming went because it would be impossible to break. The group had been working on cracking recent release Just Cause 3, but found it unable to break so far thanks to Denuvo anti-tampering technology put in place. While 3DM out of the action wouldn’t stop the entire piracy industry, reports suggest it would substantially reduce said activity, and that would have a major impact on the totals.
Despite this new technology making gaming piracy next to impossible, there are some elements to suggest that piracy may actually help gaming. A CNN report from 2010 details how the free-to-play phenomenon—a still comparatively recent model—is helping the game industry consider new ways to monetize property, a development that brought about microtransactions fueled by an unexpected notion. That notion: if we give the base game away, we’ll make up for it with selling certain advantages and bonuses.
Consider the rise of games like Farmville, which cost nothing to play, yet for a while represented one of the biggest gaming phenomena ever. The free-to-play machine has carried on ever since; the Dungeons & Dragons line made great moves on free-to-play with Dungeons & Dragons Online and later, Dungeons & Dragons: Neverwinter. Neverwinter even recently brought out an expansion pack, Underdark. The rise of flash gaming, exemplified by sites like Newgrounds, Armor Games and Kongregate, showed us how piracy-proof gaming could draw huge numbers of users and, with ad support, make for some monetization opportunity as well. It’s worth asking, how many of these would exist without gaming piracy? Even Ubisoft, back in 2012, noted that free-to-play gaming was coming into vogue because around 95 percent of PC gamers were pirates.
So how much is piracy killing gaming? The answers vary, and so, the actual answer is probably where the various current answers overlap. The scale used to determine the dollar value impact of piracy isn’t exactly the greatest. Let’s take a game like Call of Duty: Modern Warfare 2, easily one of 2009’s landmark releases. That CNN report also told us that that game sold 11.86 million copies, and saw about 4.1 million illegal downloads for PC. Some here might say that, assuming $50 a copy, the game made around $593 million, and lost about $205 million to piracy.
The problem with that assumption is that it goes too far. Not everyone who pirated a copy would have represented a sale had piracy not existed. That $205 million cannot be reasonably put back into MW2’s coffers, because without piracy, many of them simply would have gone without. Some would have waited for used copies, rented the game, or borrowed it from a friend instead, never actually making the purchase implied lost by piracy.
To say that piracy is killing gaming is a bridge too far because there are so many other options by which people get a game yet neither purchase it nor engage in illegal download. There are even some indications to suggest that piracy may have made the gaming industry consider other means of making money, like DLC and microtransactions. Piracy has done at least some damage to gaming, but it’s far from the market-killing scourge others suggest. We should be working diligently to stop piracy, yet we should also be making material more available and without a constant $60 gatekeeper out front.