Investment and piracy

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4 comments, last by SimonForsman 12 years, 9 months ago

What unambiguous evidence is there to show that piracy negatively influences returns on investment?

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There are none. There are research prongs that will always be ambiguous.


First, there is the issue of sales lost: You need to know how a group of people (pirates) would have acted in the absence of piracy. How many of these people would have acquired and played the game legitimately? Would they have purchased the software legitimately if an illegitimate copy was not available to them? There really isn't a way to make a control group on this.

Second, there is the issue of network effects. You need to know the increase in popularity due to the network effect. How can you possibly know what the popularity would have been without a significant portion of the vocal, social community. Sometimes the presence of high piracy rates translates to a quality game that people will purchase but otherwise would have skipped. If the game is popular and people are talking about it, it must be good enough to purchase, so they do. Like above, there is no way to estimate the popularity of something under an alternate environment.

I'm sure there are more naturally ambiguous items.


There are other items that can be researched with less ambiguity. For example, you can do research to discover how many pirates purchased a legitimate copy of the game at a later date. You can do research to discover how many pirates downloaded but did not actually play the game, how many played but did not progress very far, or how many pirates played the game and later shouted its praises to the world.

EDIT: For some reason I can not see an option to delete posts. Sorry, but I answered my own question.

I, for one, wish the forum didn't allow you to delete anything at all. It's very bad manners to ask a question, get an answer, then delete the question. "I got my answer, now I don't want anybody else to benefit from it." Boo on you, Gerard.

-- Tom Sloper -- sloperama.com

I had no idea that someone was typing a reply by the time I had tried to close things up. Good ol' Tom. I can always count on your quick judgment. Sorry folks, and thanks Frob. Question has been put back.

Sorry folks, and thanks Frob. Question has been put back.

Thumbs up on you, Gerard! ^_^

-- Tom Sloper -- sloperama.com


What unambiguous evidence is there to show that piracy negatively influences returns on investment?


As frob said, there is no solid evidence either way and most likely never will be as it is pretty much impossible to say for certain how people would have acted in a different world.

What we can say for sure however is:

1) If a game is popular it will get pirated alot, regardless of your DRM solution (Even MMOs get pirated alot and they're effectivly selling a service that is extremely difficult to copy)
2) If a game is popular it will also sell alot.
3) DRM can have a positive impact on sales for a few days after release (or after an update if the DRM is modified for it) For indies this is usually irrelevant as it can take weeks or months before the game starts selling.

My belief is that piracy is a distraction, focus on the paying customers instead, try to find ways to add value that isn't easily copied for those who pay for your software rather than attempting to reduce the value for those who don't pay. For multiplayer games this is easy, customers can use the official servers, pirates can't. For single player games its alot harder but a good community site with customer only sections can be a good idea for example.
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