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Comment by lelandbatey | Hacker News Reader

It's not really a claim of moral honesty as it is just one bit of factual data. A large majority of pirates won't buy the game. Ever. If they can't get a pirated copy, then they just won't play, but it's not as if they'll buy it instead. It's a sad but true fact.

I only bring this up because there's often an underlying assumption that every pirate is a lost sale, when in reality there maybe 1% of pirates that would have otherwise bought the game. I'm in no way trying to say pirating has any moral leg to stand on.

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The important figure (for developers) is not what proportion of pirates would buy the game, but what proportion of possible buyers will pirate instead.

My experience with my social group is that this second group is quite high. I know (for example) people who have bought many xbox 360 games (as these are hard to pirate) and have never bought a PC game, despite playing similar number of games on each.

so in other words, they pirated PC games, and used their limited resources to buy the games they couldn't pirate. Thus, the total amount of money they spent had been the same whether they pirated or not (just distributed differently, to different platforms). Had they not been able to pirate PC games, they might've spent a few more coins on PC games, and a few less coins on the xbox games - the industry wouldn't have seen more profit. However, having the ability to pirate meant that they are more enriched culturally, where as had they needed to pay the full price, they would've had less culture to immerse themselves in. I say that's a good result.

Yeah, they rewarded the companies that hose their customers with crippling DRM and release the same old FPS and sport game with prettier graphics year after year, and penalized those that trust their fans and are trying to push the envelope in gameplay and storytelling. That's a fantastic result.

(EDIT: sorry for the rant, but this stuff really gets under my skin. If you are too cheap to spend 8 bucks on an indie game, SAY SO, don't come up with rationalizations about how the world is a better place for it)

I dont buy games with DRM and I make a point of buying ones without it (for instance on GOG).. My rational is that if the games publisher doesn't trust me then I dont trust them! I also make games and I personally dont mind about piracy.. Its free advertising imo

Well, pirates sure aren't making you money. You care about paying customers.

Makes sense to me.

He called them "free advertising", so he does believe they are making him money. And as an indie developer that could very well be the case.

It seems as if his friends buys game that can't be pirated and pirates games that can be pirated. Yet somehow you come to the conclusion that they would still buy for the same amount if pirating wasn't possible?

>they would still buy for the same amount if pirating wasn't possible? //

I thought he simply said they would spend the same amount. So they would consume less games and so have less "cultural" experiences if they couldn't pirate some games:

So, like, if they'd pirated Gears 1 and bought Republic 2 [made up names] then next period they might have bought Gears 2, but then would have pirated Republic 3 and ArmsRace 1.

With stronger anti-piracy measures Gears 1 comes out at the same time as Republic 2 but they can only buy one so they get Republic 2. Next period they get Republic 3 because they don't want to risk the new ArmsRace 1.

In both scenarios they bought 2 games - ie spent/bought the same amount. In the second they played 3 more games than in period 1. The makers of Gears benefited from piracy by winning a convert to their franchise (but notably the industry didn't gain in this scenario).

Well, that sends a signal to the market to produce more Xbox games and less PC games despite the fact that PC games are popular.

and this is indeed the case in reality. Not really sure what to do about it unfortunately, it is quite a sad state of affairs.

However, despite the high piracy rates on PC platforms, good games still do well.

You're overlooking the possibility that some may have eaten less at McDonalds or bought fewer candies in order to save up more money to buy those PC games if piracy weren't such an easy option.

It's not as if kids rigorously budget their money and have a "video game" line item which cannot be exceeded. If they could easily sneak into movie theatres or hockey games and never get caught, they'd do that too and spend the leftover money on something else.

I think most of the video game market are in their 20's+ now. Not sure what proportion of those people have reasonable disposable income or just wasted bills money on a video game.

> The important figure (for developers) is not what proportion of pirates would buy the game, but what proportion of possible buyers will pirate instead.

There is also another important figure that is routinely ignored: the number of honest customers who get screwed by or annoyed with DRM and other forms of copyright protection (20 years ago we had to enter words from the game manual, page X line Y word Z, in the middle of the game) and decide to buy fewer games in the future (and possibly pirate them instead to avoid such annoyances).

Many of the people you mentioned will just get grouped into the "pirate" category when sales slow.

There is also another important figure that is routinely ignored: The number of honest customers who get screwed because game companies can not profitably release a big game anymore, so they won't.

The CEO of Square Enix was fired because he produced the latest iteration of Tomb Raider, and it arguably is the best iteration of Tomb Raider ever, and plainly didn't make any money.

Also your argument about 20 years ago is plain incorrect. 20 years ago DRM was way more strict and customer screwing than it is today. 20 years ago if you wanted to play a top of the line game, you would have to buy a Nintendo Entertainment system. Arguably the most restrictive walled garden system that has ever been in the market.

You're almost a decade off; 20 years ago Doom was released and the hottest game I knew of.

The North American release of the NES was 28 years ago now.

I think the N64 also had this walled garden system :)

Depending on your definition of "top of the line", I don't think Nintendo has had any sort of monopoly. I would argue that in most terms, the PC has offered a superior gaming experience for most points in the history of gaming. Where it falls down is the supporting needs of gaming, such as system maintenance, game installation, etc. Even so, I think the top of the line title could be said to have been on the PC.

But hey, if you want to compare Doom on the PC when it came out in 1993 to Doom on the SNES when it came out three years later, and consider the sub-standard SNES port that's three years late to be a top of the line game, go ahead.

Although why Doom was used as an example (not by you, I'm aware), I'm not sure. I don't remember any copy protection on it.

Actually if I recall, the problem with Tomb Raider was an exceptionally bloated budget and unrealistic expectations. In the first month something like 3.4 million copies sold, but they were expecting closer to 7! A well reviewed game that sells millions of copies was still viewed as a failure because the budget that went into the game was downright crazy and the expectations were simply not in line with reality. If you can sell millions of copies of a title and consider it to be a failure then there are some pretty big problems with your business model.

http://www.eurogamer.net/articles/2013-04-09-square-enix-tho...

http://www.escapistmagazine.com/news/view/123045-Tomb-Raider...

http://www.escapistmagazine.com/videos/view/jimquisition/712...

Thanks a lot for those links, they are very enlightening.

Tomb Raider was a 'failure' because Square Enix, in order to have a favourable outlook, had to estimate a huge income on it. Basically they had to inflate their predictions for Tomb Raider and try to hit them, or else admit that their future was bleak, and they would be losing money. Tomb Raider was only a failure because it didn't turn enough profit to save the rest of the company. I think this example has less to do with piracy.

My NES continued working when it couldn't contact anyone's always-on DRM servers.

So do all console games.

not the xbox 720, if the rumour mill is to be believed :

http://www.google.com/search?q=xbox+720+always+on+drm&pr...

That's absurd. For many years I used my xbox without connecting it to the internet at all.

xbox 720 is not released yet.

I am aware of that.

Or do buy the game, encounter the DRM, then download the CD-crack or whatever to bypass it. The various piracy figures are incredibly simplistic and just group "downloads" as "total number of pirates".

Exactly! I have a good number of friends who legitimately own the StarCraft, but have it installed via a crack because it is easier that way. And I've had to use cracks to get games to run in Wine, because the DRM won't work in Wine.

As a data point, I haven't pirated a game since Steam came out.

Out of interest, why do you think that is?

Is it due to convenience , availability of cheap games in sales , extra features in steam or did a rise in your disposable income just happen to coincide with the launch of steam?

For me it was mainly 2 and 4.

It's a combination of convenience, sales, rise in disposable income, and the fact that I don't have time to play more expensive big-name titles (plus, I like indie games more).

The other day I saw a trailer about a game I found visually stunning (Anno 2100? I forget the number), and I checked the price on Steam. It was too expensive for something I'd play once or twice, and I thought of pirating it, but then couldn't be bothered to go through all the hassle. Therefore, I suspect it's mostly convenience.

I find myself reluctant to buy games that are not in sales, even if the normal price would be reasonable to me.

I wonder if there were less sales whether I would spend more on games, spend the same on less games or simply pirate more.

Eh, sales are just classic market segmentation. By periodically dropping the price of the game towards some minimally profitable number, they can divide the market based on how much you're willing to pay. People willing to pay the "full price" will do so in the first day/week/month, and then people who are willing to pay less and less will do so more and more months later.

To put it another way, they never planned to sell 10 million units at $60. They planned to sell 1 million units at $60, 2 million units at $30, 3 million units at $20, and 4 million units at $10. Price drops are the only effective and legal way to do that.

I'm trying to imagine a world in which there isn't a guilt inducing shortcut folder on my desktop:

"Games I haven't played since I bought them in a steam sale"

Maybe if I was a student again...

if you were a student again, you'd probably don't have the money.

or a credit card. a lot of great games on steam are dirt cheap - back when i was a kid that played a lot - because i had the time and motivation - 2-8 euros a game would have been affordable. but games were always full priced - 50 euros maybe?, there weren't really any cheap bargain buckets yet.

of course back then i had neither internet and even if i had, no credit card. piracy was the only option mainly because the games weren't affordable nor obtainable.

nowadays i don't have a single pirated program or game on my pc, but neither do i have the patience to play games.

I had a disposable income before Steam had quite come into its own. I still pirated games. I think the biggest thing for me is not having to go to a box store to buy them. I hate going to stores, any stores, given the choice I will always choose online first. Steam being a viable and convenient source of games was the nail in the coffin, I have never bought a game in a retail store nor pirated a game since.

All of the above. I buy from Steam because I don't have to worry about DRM, I don't have to worry about losing the disks or if they get scratched. I don't have to worry about remembering another password for another site. (Fuck you Origin)

I buy from steam because I don't have to deal with any of this bullshit. It's stress free and easy to use. It's the same reason I buy from iTunes. The only computer game I bought that was not on Steam was Starcraft 2. And that was mostly because of nostalgia and great reviews.

The sales, prices, and income mean I buy more games. When I spend $60 on a game it's an investment. I want more than $60 worth of entertainment from it, otherwise I'll just take the g/f to the movies or on a date. When I spend < $20 on a game, it's on the level of a lunch. If it can last a few hours I'm happy.

I sure do agree emotionally with you about "fuck you Origin"... which is weird, because I also think that a monopoly is dangerous for gamers, so why am I emotionally so pro-Valve-monopoly? I guess it's partly because I know that EA _will_ try to screw me, whereas I trust Valve a lot more. Who else is as trustworthy as Valve (i.e. far from perfect, but you've gotta be way better than EA), and big enough to pull it off?

When I think about how Valve built their brand, at least in my eyes, it was a two-step process. First, make a few great games (and no high-profile duds). That's your foundation. Then add all the Steam stuff, and be careful to never ever screw me over. EA isn't good enough at step 1, and while they haven't screwed ME over, there are too many people crying and screaming for me to ignore it.

Who else could diversify the digital-distro ecosystem? Maybe Blizzard? Except now it's Blizzard/Activision, and Activision seems sketchy this era.

Maybe ZeniMax? (I dunno what Zenimax is like as a corporate overlord, but if you sum up the brand credibility of all their subsidiaries, that's a lot of credibility! I might not enjoy playing id games any more, but I respect the hell out of them, and open-sourcing all your engines is exactly the kind of trust-builder that an overlord needs.)

For me 1, 2, and 4 each play a big role, for sure.

On an ongoing basis, #3 plays little or no role, but if you count "steam exclusive" as a feature, then it played a critical role in getting me onto Steam in the first place. I wanted to play Natural Selection (original, natch), and that meant I needed a Steam account. Back then I was too miserly to pay for HL1, so a friend gave me a spare serial (I'd argue this was borderline piracy in-spirit). Valve didn't get money from me on HL1, but they've definitely had the last laugh. These days I spend a hundred bucks a month via Steam, and I'm happy about it.

Convenience, more disposable income becoming more knowledgable over time about the game dev business. As a 16 year old I was relatively poor and didnt think as much about the work and investment that went into games.

Also lack of time, I would never think of pirating a book or game because one will keep me going for ages. I listen to music every day though so until the streaming services come in maintaining a legal music collection as prohibitively expensive.

Random noise. I haven't bought a game since my yearly disposable income became $0. The only way i can play any games is by pirating them.

Conclusion: even if everyone on hacker news answered a survey on piracy practices the data would be useless because HN is not a representative population for all videogamers.

And yet every article (including this one) seems to compare raw numbers of pirates to number of sales, implying they think the former.

Yeah, I get you--I apologize to poster^3, I'm used to hearing that line out of people more interested in rationalization than anything else. That said, in my experience the assumption that each pirate is a lost sale went out the window about a decade ago. And the idea that it's only "1%" of pirates who'd have bought the game, on the other hand, is ridiculous on its face. There's about 10,000 seeds and leeches of the various Skyrim torrents on The Pirate Bay, do you seriously think that only 100 of them would pay for it?

(Most folks I know who deal with game piracy figure a hypothetical conversion rate around 20-25%, which, especially for companies of the article writer's size, is easily the difference between make or break.)

20% sound ridiculous high, and I would ask where in the world of sanity that people got that number.

If we look at freemium to paid conversion rates, 20% seems out-of-this world large. Almost no one has that high. Looking around, 1% or 2.5% is said to be the average for games[1][2][3].

Why would a pirate be 10 times more likely to be incited to buy a game, rather than those who play a game designed from the ground up to encourage high conversion rates? It sound to me that logic demand that games with features designed for high conversion rates will do better than games that don't.

Ie, to sum up, the conversation rate for pirate->paying should be far less than 2.5% in average, and nowhere near 20%.

[1]: http://blog.scoutapp.com/articles/2009/11/04/running-a-freem...

[2]: http://www.gamesbrief.com/2011/11/conversion-rate/

[3]: http://www.gamesbrief.com/2013/03/arpdaus-conversion-rates-a...

This line of thinking is what happens when you take barely overlapping populations and attempt to extrapolate between them. For a more related data-point that you can get from public data (because the 20-25% comment was inside baseball from folks I know personally), the average conversion rate across all titles on XBLA hovers around 18%. When you take into account the general demographics on XBLA versus something like Steam (where the folks I was referring to previously generally roll), a small bump from there doesn't strike me as overly conservative.

You can't really compare what amounts to a SaaS conversion rate to a purchase of a completely realized product with significant media presence (like, even indie games get a ton of eyeballs and an implicit seal-of-quality when they hit Steam or XBLA). It just doesn't shake out that way.

Source for that 18% on XBLA?

Through, you don't answer the question on why games designed for high conversion rate should fair worse than games that aren't. You also add a additional questions when putting distinction to the population in question. Are we saying here that pirates are more likely to convert to a pay-to-play model than non-pirates are to go from a freemium model to pay? Whats the basis of such statement? All I see is a claim of inside knowledge, which in 2013 means as much (or little) as anecdotal evidence.

If all we have is unverified claims about high conversion rates, and in opposing side we have studies that shows low conversion rates for identical products, I will go with the study until proven different otherwise. I find the idea that the population in question would have a 2000% effect on the conversion rate, and that pirates are part of that group, to be a very large and unverified claim. The wilder a claim is, the more is it up the commenter to provide evidence to support it.

> Source for that 18% on XBLA?

[1] says it was 18% in 2007. I very, very strongly doubt it's gone down. XBLA de-lists games with a Metacritic score below 65 (which is basically impossible) and a conversion rate below 6% (which is apparently really hard, huh?)[2]. Ken Lobb has referred to 20%-40% conversion rates for in-house games at MGS.

And you once again are bound and determined to ignore the differences between the markets you want to compare (hint: they're not identical products, they're not even substitutable products!), I think I'm going to bow out because there's no progress to be made here. HAND.

[1] - http://www.gamasutra.com/php-bin/news_index.php?story=15117

[2] - http://www.joystiq.com/2008/05/22/underperforming-xbla-title...

Funny, a statician would laugh at this discussion. XBLA remove games with lower than 6% conversion rates, and we are supposed to be surprised that their average is higher than in other markets? If XBLA removed anything below 6%, it has the exact definition of selection bias by only allowing the top ranking freemium games a place in the store.

This will sound rude, but are you trying to fool others are have you just fooled yourself? Comparing a restricted store which only allow a few marked freemium games, with the PC game market in general is ridicules. The article is about the PC market and PC pirates. Not only is the PC market massive bigger than the total of 588 titles since 2004 that XBLA has, but XBLA has less freemium games per title than the PC market has. They also have a different demographic. A XBLA users is average ages 22, is a causal gamer, and has a middle class income. The average PC pirate age is lower, has less exposable income, and preference more hardcore game.

There is no shareable trait between the PC pirate, and the XBLA market. Trying to present the PC market as if its somehow would be the limited selection of XBLA titles is just false. Presenting a small selection bias as representable for the game industry is just...

"when in reality there maybe 1% of pirates that would have otherwise bought the game"

Your number is ridiculous, and no-one assumes every pirated game is a lost sale either. Do you have any evidence to support this number?

1% is not totally unreasonable. See belorns post about conversion rates in freemium games for an explanation.

Comparing freemium game conversion to Triple AAA piracy is ludicrous, and the argument that a freemium game should convert more because its designed to convert people is the most textbook definition of a specious argument I've ever seen.

Successful Free-to-Play games like League of legends are suspected to convert greater than 10 percent of players to paying customers. Of the millions of players who pirated Bioshock infinite, I seriously doubt that only 1 percent could have afforded to pay for it and had a desire to play it.

In all honesty, I gave the %1 number based purely on my own experience. When I was a kid/teenager, I didn't have much money and I certainly didn't have a way to buy things digitally (debit or credit card). So I pirated games that I wanted because that was the only way I could get access to them. And so did the people I knew and interacted with.

If we couldn't pirate something, we just didn't ever end up playing. It seems like the amount of money any one person will spend on games/gaming is very stable. So what game devs are really trying to do is to be a part of each of their customers game-spending pie. I know that's how it is for me and the people I interact with.

You also have to take into account those that are pirating anything in sight and might only have a slight interest in playing if they every get around to it or might play for half an hour.

These people count towards the piracy number on hundreds of games yet would only ever buy a small fraction.

His post uses a freemium market of gamers who are predominantly either too young/poor for a credit card or too casual to attach to a game to draw his conclusions against buying realized products targeted at core audiences (and I say this because the biggest torrents are all for core-targeted games).

XBLA had an 18% conversion rate in 2007, and it's hard to say with a straight face that it'd go down. 2010 saw Ken Lobb (MGS) citing 20% to 40% rates in interviews for in-house games. These aren't perfect proxies for PC piracy but even if it's halved when you jump from console to PC, the 1% value just doesn't make any sense.

"when in reality there maybe 1% of pirates that would have otherwise bought the game."

Not saying you're wrong, but recognize that you're completely pulling this out of your ass.

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