Software Piracy Reloaded

Piracy is a subject that I’m still very concerned about, and I’m old enough to be able to recall all of the techniques over the years, starting in the 80s with copy protected floppies and the various hacking tools people used to duplicate them. In those days, floppies were created with bad sectors that the game would magically avoid to get around read errors, but if you tried to copy the disk, the copy would fail. It was pretty ingenious, until someone wrote a tool called Copy2PC that skipped bad sectors rather than stopping.

Today, in my opinion, the best form of copy protection is via the online registration. I don’t think retail will ever go away because many people like to have the physical box and DVD in their hands, and getting a Christmas gift that’s just a card with a download link will never be as fun as opening the real box. But times are changing. If you look at downloadable games like on Xbox Live Arcade, you might notice that most of them are crap, and the good stuff is still sold at retail stores. I personally think Blizzard is cutting edge right now in licensing.

What game studios are going to have to start doing–all of them–is producing downloadable content for their games to encourage players to upgrade or buy the add-ons. I believe a time will come very soon when game demos will go away entirely. How? Because the initial purchase of a game will be very affordable. Players will be able to get by with the minimal purchase. But if they want to really get into the game, they’ll have to purchase all of the additional add-on content.

World of Warcraft still plays fine with the 4-year old retail CD’s. It takes like 5 hours to install all of the patches, and then if you upgrade to Burning Crusade, and/or Lich King, that’s another few hours of downloading and installing. But the game is so compelling that players are willing to put up with that. And, if you have a newer copy, all of those patches are built in so the updating is minimal. Here Blizzard has continued to update a 4-year old game which is unprecedented, and if you think about it, anyone who has been playing for that long actually bought three games instead of just one–WoW for $39, Burning Crusade for $39, and Lich King for $39, and all work in the same game world.

But if we consider non-MMO games, like Diablo III and StarCraft II, both coming out soon, those play for free on battle.net in skirmish-type games of 4-8 players. How do those types of games produce additional income for a publisher and studio? First of all, make the game fun to play, and give it huge replay value so players keep coming back. (Because of this reason, I feel that games like Fable 2 are a dying breed). Next, release add-on expansions to the game that matter. So many studios produce junk that no one really wants to play, and only appeals to the hardcore fans. Some expansions to Sid Meier’s Civilization IV fit this description. I’m a huge Civ fan, but some expansions just aren’t interesting. Now with Civ Revolution, you can download additional stuff on XBLA. Firaxis puts out minor things like new world wonders and technology, and each pack is $5. This is good business because it’s affordable, gives the player something new to play with, and doesn’t cost anything to release. Civ is an oddball game in it’s own genre, a tough example to follow.

What about sports games? EA is missing out on HUGE income with negligible costs by going retail with each new iteration of Madden and similar titles. HOW STUPID! The game never changes, they just update all the player stats and team rosters every season, throw in a few new shader effects, and bam, Madden 07 becomes 08, and 09, and 10. Am I the only one who thinks this is the stupidest delivery strategy in the history of gaming? EA could be selling upgrades to the existing games for $20-30 at zero delivery cost. They could even sell the updated game engine with the new data and pocket the $10/copy it costs to manufacture, deliver, and sell each box.

I do not feel that piracy has dramatically affected video game sales to the extent that the ESRB and ESA have published. Mainly because the vast majority of pirateers are not part of the customer base for the games they’ve stolen. It’s a whole big huge status thing for the groups that rip and crack games, and none of them would have bought the games in the first place. They just do it for notoriety and a name in the hacking circles. Furthermore, the people who consume their cracked products are not part of the customer base either, to a large degree. In my uninformed but intuitive estimation, the actual lost sales are only about 25% of reported losses, because most gamers who are serious, and have the $2000 gaming rigs, are not playing in tournaments and online clans with hacked licenses.

In closing, let me add this much. Requiring a customer to log on and register an offline game in order to play it is just as stupid as EA’s selling of Madden DVDs every year. Maybe even more so because it angers customers. Examples abound, the most notorious being Half-Life 2, etc. If a game doesn’t play online, then customers should not have to register online to play, and publishers are losing a lot more sales from that irritant than from piracy. To resolve the whole issue, in my opinion, every game should be sold in a minimal gameplay format, and all of the extras should be available for purchase online. The publisher can get willing customer registration data that way, and potentially double their sales over the single retail sale alone. Publishers only net about 50% or less of a game’s retail sale price. By reducing that price and moving a lot of content online, the actual studios will reap the lion’s share of each sale rather than stores like GameStop. But going to 100% full download-only is not the answer–a middle ground is needed. And I see the industry going in that direction.

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