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.
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).
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.
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...
The North American release of the NES was 28 years ago now.
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.
(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)
Makes sense to me.
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 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).
However, despite the high piracy rates on PC platforms, good games still do well.
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.
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 wonder if there were less sales whether I would spend more on games, spend the same on less games or simply pirate more.
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 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.
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.)
"Games I haven't played since I bought them in a steam sale"
Maybe if I was a student again...
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.
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.
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.
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.
(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.)
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...
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.
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.
[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...
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...
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?
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.
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.
These people count towards the piracy number on hundreds of games yet would only ever buy a small fraction.
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.
Not saying you're wrong, but recognize that you're completely pulling this out of your ass.
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.