The rest of us will still be helpless against multimillionaire piracy industry. SOPA and PIPA would be some alternatives, which could give us a chance against these pirate networks, although I'm not sure how well Indie developers would be protected by these acts.[/quote]

Do you really not get it?

"Say, IndiePublisher Ltd., one of users on your website linked a picture of cat that is under our copyright, so we shut you down. Feel free to appeal. Oh, that's right, you can't. Well, send your developers our way, maybe we can milk them a bit".

SOPA and PIPA would be some alternatives, which could give us a chance against these pirate networks, although I'm not sure how well Indie developers would be protected by these acts.[/quote]

Your business failed because of complete misunderstanding of market. Claims like this are simply wrong.

I'm not even addressing the piracy issues but buyer incentives. Reasoning like this is about accepting scraps through various trade agreements, not about being competitive or even being given a chance. As per example above - you'd be (and soon we all will be) in worse position through such regulation.

I remember reading in 2003 discussions by MMO distributors on free-to-play model and how it could never succeed in west. Well, that matter is settled. WoW, as last bastion of traditional models is just about there, everyone else long ago switched.

What killed your business model (not company itself, the $10 per download+serial) was Zynga, free-to-play, app stores, walled gardens, big publishers (Steam/EA/Xbox/PS3) and recently nickleodeon effect (see great depression on why). Not pirates.

Valve recently started hiring economy PhDs. Why? To learn about these issues before they burry them. This is how hard online and techn business became. Unless you strike it rich on first try, better make sure to cover all bases or you won't make it.

The pirates who pirate to save money are not worth the effort to fight, many of them simply can't pay anyway.

This is a common myth. See below why.

What killed your business model (not company itself, the $10 per download+serial) was Zynga, free-to-play, app stores, walled gardens, big publishers (Steam/EA/Xbox/PS3) and recently nickleodeon effect (see great depression on why). Not pirates.

No, we were getting steady sales before the product got pirated and published in such form. The sales declined immediately after that and dropped to zero.

Once the game is available in pirate form, you as a game company have to compete with many other companies, which give *exactly the same product*, YOUR PRODUCT, for FREE. These sites often have higher search engine rank and have much better online advertising than you as an Indie can potentially buy.

Sure, there are *few* people who base their purchases on moral (e.g. see Hodgman's post), but the majority still go the cheapest way. Sure, you can get spyware, viruses or other crap this way, but many users simply don't know or don't care about this.

[quote name='Antheus' timestamp='1327188727' post='4904969']
What killed your business model (not company itself, the $10 per download+serial) was Zynga, free-to-play, app stores, walled gardens, big publishers (Steam/EA/Xbox/PS3) and recently nickleodeon effect (see great depression on why). Not pirates.

No, we were getting steady sales before the product got pirated and published in such form. The sales declined immediately after that and dropped to zero.[/quote]
Yes. Existing business model couldn't cope with changes in the market.

The value proposition of your product was distribution of physical copy - not the product itself. Users were paying for serial number, not the product. The moment alternative appeared, they did that.

In short, you had a game that people wanted. Then you had a serial that you were selling. Nobody needed or wanted that. So demand plumetted. Why would people buy a serial number?

Herein lies the failure of completely misunderstanding the incentives of users. Admittedly, 10 years ago this was an unexplored field, but even back then online tie-ins appeared, shared leaderboards and more. They weren't explored. But at latest with social gaming explosion there isn't an alternative anymore.

Everyone's favorite, Minecraft, is perhaps the best demonstration of this. Free access gives people choice. They will no longer pay for anything they don't perceive as being valuable to them. Minecraft was available for free, on piratebay, and just about everywhere, yet people bought it. Another example are all the social games, but the leaders in this field became notorious for shady deals, even though most are fairly legit.


You may be mad at what happened, but that won't change anything. It's like being angry at rain. Business models come and go and those that don't adapt die off, only to be replaced with alternatives.

Some things do go lost (how many genres of games have died off). But then there's OpenTTD. A better than original open and free replica of a niche game. And now XCom is being remade in true fashion. So certain old ideas do live on, but the sea of all those copycats are forgotten, even if they made good money in their day.

Things that succeed have a value to consumers. Vague, non-technical, but value nonetheless.

Most of the products we build and use during the day however do not. And most business make money on that, the very disposability. Fortunately, or unemployment would be much higher. But there is no point in bemoaning when these bubbles burst. Adapt or die. Protectionism is just worst of all worlds.

----
Same advice applies to developers and jobs. When a technology is new and hot, you can get above norm rates, but that dies off quickly. So the idea is to either jump from one bubble to another, or to use one of them to switch to a more broad or general area (think studio turning publisher).

These are just facts of life.

Piracy was the mechanism that changed the economies, but that was only possible because existing models were not good value propositions. Piracy is a symptom, not cause.

Same shift can be seen in album vs. studio audio publishing, changes in TV productions, various local retail deals.

The value proposition of your product was distribution of physical copy - not the product itself. Users were paying for serial number, not the product. The moment alternative appeared, they did that.

No, you were paying for a game itself, serial number was a non-intrusive means of protection. Think of it as a receipt. When you buy a bottle of water, you get a receipt; you are not paying for receipt, you are paying for the water. You can argument it however you want, but you are argumenting why people should pirate it in the first place. Piracy is not a legitimate market as you try to put it.

You can't compete with warez web sites because they have powerful advertising schemes so people usually find about your game right from the warez web site and even if they search for it on Internet, they will most likely find another warez web site, as they tend to have higher SE ranking.

Yes, there are different ways of doing business, for instance, service-based. However, I like to have the game physically on my computer and play it whenever I want, even if there is no Internet connection. I try to believe that I'm not the only one. This was our distribution scheme: for $9.9 you get the game and you can install it whenever you want, whatever number of types of want and play it however and whenever you want. Seems like a reasonable trade, but again, downloading it in pirated form is even easier and cheaper as in addition to the above benefits, you get the game for free.

Seems like a reasonable trade, but again, downloading it in pirated form is even easier and cheaper as in addition to the above benefits, you get the game for free.

I think this is the part you are ignoring from the others even though you bring it up. Most people pirate because it is more convenient, not because the price is lower. You made a product that demanded a specific type of customer, and your gamble didn't pay off. Would you rather have a bunch of people pirating your game and playing it, or nobody playing it period.

A high pirate rate is indicative of your product not having the same value for your customers that you attribute to it with both the price and demands you place on the user. Minecraft is the perfect counter example, which you've ignored, that people are happy to pay for games that are ease to pirate because they are worth it.

edit: the MPAA even changed it's path toward fixing piracy a while back to this, "[color=#3F3F3F][font=PTSansRegular, Arial, sans-serif]

to isolate the forms of piracy that compete with legitimate sales, treat those as a proxy for unmet consumer demand, and then find a way to meet that demand."[/font]

I think this is the part you are ignoring from the others even though you bring it up. Most people pirate because it is more convenient, not because the price is lower.

Exactly. It is more convenient to get a product for free with immediate download, than filling forms and getting product for a price. In other words, getting a free product *is more convenient*, then paying for it. Honestly, who will ever want to pay for a cookie if you could get exactly the same cookie for free? This "convenience" argument for piracy is a convenient myth that you can use to keep blinded from the truth: the piracy works because it's a viable business practice with minimal risks involved for all parties and no law sufficiently strong enough to prevent or stop it.

A high pirate rate is indicative of your product not having the same value for your customers that you attribute to it with both the price and demands you place on the user. Minecraft is the perfect counter example, which you've ignored, that people are happy to pay for games that are ease to pirate because they are worth it.

A high pirate rate can also occur when your market penetration is slow. Specifically, when you have few resources for advertising, you make people know about your game slowly, while on warez web sites it gets huge market penetration right away. I think that mentioning Minecraft here is an example of black and white thinking, it's a very different game and its marketing budget and distribution channels are completely different, not to mention the different platforms on which it can run. I'm surprised you didn't even mention Angry Birds, which by the way also used SPAM for its advertising (I've got quite plenty of these spam e-mails).

edit: the MPAA even changed it's path toward fixing piracy a while back to this, "[color=#3F3F3F][font=PTSansRegular, Arial, sans-serif]

to isolate the forms of piracy that compete with legitimate sales, treat those as a proxy for unmet consumer demand, and then find a way to meet that demand."[/font]

That would be true, if you have sufficient resources to provide fast market penetration. Otherwise, your pirated game gets huge market penetration on warez sites and other distribution media (including pirated physical distribution) BEFORE you can reach it yourself. With limited resources spent on advertising, you slowly get traffic increase to your web site; once the game gets pirated, the huge piracy distribution channel quickly overwhelm your own efforts.

I do believe that hosting providers and ISP should be responsible of removing pirated content both by request and by monitoring the content themselves because right now once you find a web site with a pirated version of your game, there is practically nothing you can do: they always reply that posting links to pirated version is okay and no law is violated there.

[quote name='CryoGenesis']The internet was founded and built to share files.[/quote]
Please check Internet history for what it was initially created for. What you said accurately describes a File Sharing Network.