Illegally downloading video games is considerably worse than torrenting music based purely off of pricing, but how does it actually affect the developers and the gaming industry as a whole. Some people argue that an illegally downloaded version of a game, is a direct lost sale of said game, while others argue that the person who torrented the game would have never purchased it in the first place. There's quite a lot of factors to put into perspective when considering the impact game piracy has on the industry. It's not so black and white. I'll try to accurately break down the issue of game piracy to the best of my ability and come to a conclusion on whether or not it poses a serious threat to the gaming community.
First of all, we have to consider how piracy effects other media related industries. For instance, Music is probably the most commonly torrented media, and many artists have shared their opinions on whether or not its effects them in a negative way. Some artists believe that if their music is illegally downloaded, it still helps them grow popularity wise, while others believe it hurts them monetarily. One of the most extreme examples of Piracy, in general, is Game of Thrones. Game of Thrones is arguably the most popular television show in the world right now, and a huge percentage of their viewers, torrent the show every single week.
For example, the episode titled The Wars to Come hit an absolutely breathtaking 13 million downloads, with a majority of them coming from Australia. It was estimated that they lost approximately $44 million in US revenue from that episode alone. While Game of Thrones is officially the most pirated show in the world, its legal sales are also at an all-time high for HBO. So regardless of the lost revenue caused by piracy, Game of Thrones would not be as universally popular like it is now if it wasn't for their illegal viewership. While HBO is definitely not happy with the number of illegal downloads, their legal viewership is consistently expanding, and some could argue its thanks to the piracy community. Some people that start off pirating a show will most definitely come to love it so much that they will pay to support the production, while also receiving a more convenient and quality experience.
There's a Right and Wrong Way to Deal with Game Piracy
Game piracy is a little more complex than music or television/movie piracy. You illegally download any music, television show or movie and you're instantly done. You got the product, no further work required, you can enjoy it on your own time, at your own pace. Games; however, usually get updated frequently, depending on the title of course. Some cracked versions of games you can find on torrenting websites take extremely long to download and run successfully, and if the official version of the game is updated significantly, then your illegal copy of the game will be out-dated and rendered useless. Some developers have gone to extreme lengths to prevent the illegal downloading of their game, with methods like updating the game on a weekly or even more frequent basis. Of course, people can still crack the current version of the game, but at the rate that the developers are updating it, it's much more troublesome and frustrating than it is worthwhile. Frequent updating said game is probably the best way to prevent a large illegal community behind your game, while also respecting the player base that actually paid for the game. While some developers do practice this method, it's mostly indie developers since AAA studios don't necessarily need to worry about illegal downloads solely because of their high budgets and massive fan base.
Since we've discussed the right way to deal with game piracy, of course, some developers/publishers decide to use significantly less optimal prevention methods, to say it lightly. One of the most controversial cases of a developer/publisher dealing with game piracy in the absolute worse and most offensive way possible goes to CD Projekt with The Witcher 2. CD Projekt sent out letters to every IP that they accused of illegally downloading their game, threatening them to pay an absurd amount of money with the fear of being taken to court if the full amount is not paid. The amount requested based on evidence was in the region of 750 euros, which of course many of the accused people could likely not afford. CD Projekt essentially threatened people to pay an obviously absurd amount of money, for an accusation that is extremely hard to prove via an IP address and that has so much room for false positives.
Not only is it an unfair amount of money for an unfair accusation, but the crime doesn't even necessarily equate to the loss of a sale, and therefore would likely not even hold up in court. Whether the accused are aware of the situation or not, many are likely to succumb to the fear of losing their livelihood due to outrageous court fees. CD Projekt did reply to the overwhelming backlash from the gaming community, providing various odd claims, and somewhat auspicious reasoning to justify their actions. While they claimed that the reasoning behind their actions was to respect their paying customers as much as possible while taking action directly to individuals that they somehow can %100 confirm to have illegally downloaded their game, they could not confirm the method they use to accurately accuse certain individuals via IP address. They only claimed that its a trade-secret, but nonetheless is %100 accurate. The whole case is shrouded by shady excuses and very controversial claims that left the community with a bad taste in their mouth. There is a right and wrong way to deal with every issue, and CD Projekt's actions against piracy with Witcher 2 is a perfect example of the worst possible solution to the problem.
Root of the Problem
If were to tackle this issue of game piracy like all good problem solving, we have to travel to the root of the problem which is, what kind of people pirate games, and why do they do it? While this is more of an educated guess than hard fact, I think we can agree that a large percentage or even the majority of pirates (people who illegally download will from now on officially be called pirates) are most likely children/teenagers. The reason for this is simply because teenagers or children in general, can't afford to pay for games as much as adults will full-time employment can.
Other than monetary reasons, children don't usually understand the consequences and repercussions that go with illegally downloading or stealing something. Since you're not going to an actual store and risking your well being to steal the game, but rather sitting safely behind your computer and a VPN, it's so easy that you can completely ignore the reality of your actions. It's so easy to illegally download games, that some pirates may not even realize that they could be affecting the developers in a negative way. Smaller studios need support more than anything, and the best way to support a new studio is to support the project that they've poured years of their life into. If a developer/publisher doesn't receive enough legal purchases, then they simply cannot continue to improve their game, or even develop a sequel, which evidently could result in the abandonment of said game or even the studio itself in the worse case scenario.
How Bad is Game Piracy Really?
Possibly the biggest and most important question when talking about video game piracy, is how bad is the situation in the first place, and how much of a threat does it pose to the well-being of the industry and gaming community? It's very hard to collect actual cold hard facts about game piracy, and even then, most of the statistics available are very much based off of assumptions. The real hard part is quantifying what the real losses actually are, and since real hard facts are hard to come by, only assumptions can be made that cannot effectively validate whether or not a pirated copy of a game equates to a legitimate loss of sale, and therefore, a conclusion is extremely hard to come to.
In an investigation done by Eurogamer into the true impact that piracy has on the gaming industry, they found out how truly complicated the issue is. According to SEGA, more than 80 percent of the people playing Football Manager are doing so with an illegally downloaded version of the game. SEGA claimed that if a quarter of the population of people who usually illegally download Football Manager would switch over to actually purchasing the game, worldwide sales would more than double. That's of course, the statement of a company who is claiming that an illegally downloaded copy of a game directly equates to a loss of sale, which is totally debatable of course. According to Reinhard Blaukovitsch from Sony DADC, also the company responsible for SecuROM, "Piracy levels, depending on the country, range between 40 per cent and 80 per cent. While this is a pretty bold statement, it seems to match the claims of other developers as far as the percentage of pirated copies as a whole. Blaukovitsch also claimed that the commercial value of global software piracy is growing by %14 every year, which obviously includes music, TV, movies and video games alike.
Christian Svensson of the PC Gaming Alliance and Capcom shares his interesting take on the issue that is Game piracy, explaining that it's a cultural issue more than anything. He says that at the most extreme end of the issue, piracy rates are as high as %90 compared to %10 legitimate usage. He even claims that Capcom has received support calls from people who were using illegally downloaded versions of the game. This just proves not only that most of these pirates are children, but also that they don't even fully realize they are stealing a product, or even that what they are doing is inherently wrong. Svensson hits the nail on the head in my opinion with explaining how it's a cultural issue, going further to say that the sensitivity and opinions on the issue vary from country to country.
"At the higher end you can see 90 per cent illegitimate usage to 10 per cent legitimate," Svensson says. And they're not, what he calls "victimless crimes". He says Capcom had support calls from people playing pirated copies of the game. "There's a dollar cost to that. They're not even aware of what they're asking being wrong," he shrugs, "they're not aware it's theft. It's a cultural issue. And you'll find that the sensitivity to it or against it really varies a lot, a lot, from country to country."
Michael Pachter, a Wedbush Morgan analyst agrees with Svensson, saying that It's impossible to know how bad piracy is but that he's also heard from Ubisoft claiming that piracy rates are as bad as %90 with specific titles. At the lower end of the spectrum, piracy rates tend to be 50/50 compared to legitimate sales, with bigger brands naturally being pirated at a higher rate. At the end of the day, none of these statistics can actually be effectively used to determine loss of revenue since nobody can accurately determine how many of the illegally downloaded copies could actually be converted into a legitimate, paying customer.
Digital rights management, most commonly referred to as DRM is the most common form of prevention against piracy in the gaming industry. DRM technologies are used to essentially restrict usage of hardware and software. Basically, DRM is the equivalent of a lock, preventing the property from being copied or stolen, just as a physical lock protects your house or car from being broken into. Since the dawn of time, or at least the birth of video games, companies have tried to prevent pirates from getting their hands on their games without paying.
Currently, most companies opt for DRM. While there is no public data to suggest DRM actually works, Svensson is convinced that it does. Along with Svensson, most companies believe that DRM works to prevent piracy, while its commonly known that a relatively experienced hacker can easily bypass DRM, leaving the legitimate, paying customer worse off since they too have to deal with the hassle of DRM. The controversy that lies around DRM is that it affects paying customers just as much if not more than pirates, and there's no proof that it even works. Clearly buying a game legitimately should provide an easier and more convenient experience that pirating it, but in the case of video games, that just isn't the case. Developers and publisher have to give the community rewards for actually paying for their product, which includes proving them a care-free playing experience, or some people might be tempted to try pirating. Morals aside, paying customers should always have a better experience that illegal users, regardless of what the product is.
The debate of whether piracy actually significantly affects the gaming industry as a whole is most likely never going to come to a substantial conclusion, simply because it's not something that can be determined based on cold hard facts. We will never be able to truly determine whether every illegally downloaded game actually equates to a loss of sale. It's entirely possible that someone who pirated a game could purchase it legitimately after, as much as it's possible that said individual would have never purchased the game in the first place. It comes down to assumptions, and obviously, these assumptions cannot contribute to a factual conclusion.
In my opinion, illegally downloading a game is just not worth it due to the amount of work involved, versus me just paying for a game that I want, and being able to play it, and receive future updates and content drops, hassle free. While most people don't even think of game piracy as an issue since it doesn't directly effect the player, it's definitely still an underlying issue in the industry. The biggest question is whether or not it's actually making an impact on the industries future. At this moment in time, I don't think piracy is a legitimate issue for the industry and definitely, not one that warrants action similar to CD Projekt's violent campaign.
At the time of publication, torrenting websites have been under ruthless attack, with all of the front-running sites being taken down permanently such as Kickass, Extratorrrents, and Piratebay. Though Piratebay tends to always re-surface, It seems like a matter of time until it's gone completely. Of course, more torrenting sites will replace the ones taken down, but overall torrenting has become more and more difficult. Whether this is the fall of torrenting or not is yet to be known, but I'm confident that the internet will always find a way to recover.