BSA Piracy Study

By Jim Rossignol on January 25th, 2008 at 9:30 am.

Not that kind of pirate, silly
Ars Technica have posted a piece on the BSA’s recent piracy study, the conclusion of which is that digital file-stealing is actually stunting economies around the world to a significant degree.

If the amount of software piracy in the US were to be reduced by 10 percentage points over the next four years, IDC believes the end result would be $41 billion in economic growth, $7 billion in additional tax revenues, and the creation of over 32,000 new jobs. In countries with higher rates of piracy, the impact would be even greater.

And it’s at this point that my understand of economics fails, because aren’t those people who aren’t spending money on pirated good actually spending the money they would have spent on something else? And if there’s no money to be spent on the games in the first place, necessitating piracy, where would all this extra cash come from? Hmm.

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96 Comments »

  1. Steve says:

    Not entirely. In short, a pound in one market can go further than a pound in another. There’s a whole world of difference in buying £20 of game and £20 of beer.

    Also, come on, we all know most piracy isn’t done out of destitution.

  2. Grandma Pod says:

    32,000 new jobs?
    Persumably because the pirates all new to get jobs at McDonalds in order to actually buy games?

  3. Lightbulb says:

    Well it works on the assumption that if people spent money on games instead of pirating them there would be a growth in sales. This is obvious.

    However i have borrowed games from my friends before – thus ‘losing a sale’ – but i never would have bought the game at all under any circumstances therefore me NOT borrowing it has NO effect on sales.

  4. Meat Circus says:

    I don’t believe in imaginary property and neither should you.

    The BSA are corrupty, filthy, lying, deceitful greedy scumbags and every piece of bullshit propaganda that comes out of their subhuman mouths should be treated with the contempt it so thoroughly deserves.

    Your portrayal of them as stupid is dangerous. They know full well that their lies make no sense, and understand the real economics. But their contemptuous attitude to mankind is that since our dim-witted governments and legislatures in Westminster, Brussels and DC have a limited grasp of economics, such unreconstructed crap is perfectly okay to spout as a means to an end to extort ever more draconian and imbecilic Imaginary Property laws.

    The spanner in the works of their little plan is, organizations like the BSA keep hoping the proles are just as corrupt and gullible as our elected representatives, yet time and time again, they’re not.

    YOU WOULDN’T STEAL A CAR
    YOU WOULDN’T ABUSE A BABY

    SO WHY DOWNLOAD SOFTWARE?

    PIRATING SOFTWARE IS AS BAD AS FIDDLING WITH AN ENTIRE KINDERGARTEN.

    Kill the BSA with painful tumours please Lord Xenu.

  5. Joonas says:

    These studies always fall apart when they try to gauge the allegedly lost sales. The heavy pirates I’ve known have been more collectors than gamers, not really playing the games. Obviously piracy has an effect on sales and day-one cracks do make a dent on overall sales, but I just don’t buy the idea that you can just multiply the number of pirated games with the RRP.

    When I didn’t have enough money for new games, I only bought my games used or from sales. Those are all “lost sales”, too. Instead of focusing on piracy, I feel the publishers should think more about how they could add value for the prospective customer. Most people happily pay monthly fees for online games they love, for instance.

  6. Philip says:

    And it’s at this point that my understand of economics fails, because aren’t those people who aren’t spending money on pirated good actually spending the money they would have spent on something else?

    It’s a good point, as all these studies seem to suggest that stopping piracy will magically conjure up millions of dollars of money that people are going to spend that they weren’t spending on something else. It’s like a person pirating a game says to themselves “I don’t want to spend £30 on Crysis, so I’ll find a crack and put that £30 into a savings account…”.

  7. Leelad says:

    If all developers released demo’s like the Crysis one, piracy would vanish overnight.

  8. marilena says:

    I can’t be bothered to go through the study, but it seems a bit ridiculous. They think the state would get more money from taxes? The only way I can imagine this would happen is if they would tax games more than other goods.

  9. David says:

    Leelad, you say that but Crysis has both a high rate of piracy and low sales so I’m not sure that holds much water. (It was a great demo though)

  10. DigitalSignalX says:

    I can say with certainty that I would *never* have purchased dozens and dozens of games over the years had I not already established a positive experience with either the franchise or an unknown publisher’s credibility via dubious means we won’t speak of.

    It’s a double edge sword though, clearly developers of AAA titles lose money, but sort of like music sharing, piracy is a superb shot in the arm for the “little guy” who would never have had their work hit the mainstream without it.

  11. Pwnzerfaust says:

    As far as I can tell, a good deal of people only pirate games when they feel that it isn’t worth their money to buy them.

    Clearly the solution is to not make bad games.

  12. ed says:

    “aren’t those people who aren’t spending money on pirated good actually spending the money they would have spent on something else?”

    …and who says that the consumers would choose to buy the real things if they couldn’t get the free, pirated copies.

  13. po says:

    I wouldn’t. Thing have a value as well as a price. There are too many games that have been overhyped, that turned out to be rubbish, so it’s no wonder people DL to see if the demo is really the only good bit of the game.

    Valve has the right idea. Give a damn about the games you make, and cut out the publishers that are shafting the games industry (and bitching about piracy more than anyone else, while being the biggest cause of it).

  14. Meat Circus says:

    …and who says that the consumers would choose to buy the real things if they couldn’t get the free, pirated copies.

    Well, the BSA does. But they know it’s not true, and they know that we know. I wonder why they bother, and then I remember it’s because they’re demon spawn.

  15. Nick says:

    I notice the PC crowd is always the big bad pirate crew, but as we all know there are plenty of pirated PS and Xbox games. There may not be as many pirates in the console crowd BUT they have one thing the PC doesn’t: a massive second had market. Pre-owned games surely lose just as many sales for the consoles as pirating does for the PC – especially if you factor in pirating on top of that? The preowned market is HUGE and games can go through multiple owners with only the original actually being sold properly. No one ever mentions this and PCs remain the bugbear, dropped as a platform by whiney developers/publishers infavour of perfect console land.

    Meanwhile those of us who actually by games are fucked over by everyone.

  16. Phil says:

    “And it’s at this point that my understand of economics fails, because aren’t those people who aren’t spending money on pirated good actually spending the money they would have spent on something else?”

    The short answers is no, in the terms BSA’s study defines it, it would be beyond the scope of what is being analysed, which is why economics frequently descends into an ontological pissing contest.

  17. Muzman says:

    from the article
    In the past, the IDC has derived its software piracy rates by comparing the estimated amount of software installed on the average computer in a country with the amount of software actually sold. Figure out the number of PCs in the country, do a little multiplication, and you’ve got a figure that supposedly represents the amount of money lost to pirated software.
    Man, when is someone going to get some decent information on this stuff. There are more in depth studies into organised crime and illegal prostitution than there are some thing as fairly straightforward as piracy (perhaps for obvious reasons).
    The other thing besides (or a corollary to) the zero sum game aspect is that piracy doesn’t harm hardware sales in the least and in the perfect scenario it’s doubtful hardware could have advanced as fast as it has with everyone spending every cent on software instead (admittedly, they’re only talking in gentler terms of ten percent drops and hardware advancing slower might actually have been a good thing in some respects)

  18. Ben says:

    The position that every pirated copy of a game substitutes for a copy that would have been bought if piracy was impossible is obviously wrong. But they’re not saying that – they’re saying that if 10% of pirated copies were replaced by legit copies, then more people would be in jobs. That’s clearly true, because there ARE people who pirate games they really want because it’s easy, but could have paid or saved up for it. And that would keep more smaller PC developers in work, force those people to do part time jobs instead of just sitting in their bedrooms wanking, etc. You can’t assume they are all spending their money on something else because a lot of them may be playing games instead of doing something that costs money.

    Stupid though some of the more extreme anti-piracy positions are, it’s also pretty stupid to say that “I don’t believe in imaginary property”. If everyone agreed and started pirating games, there would be no high-end games development at all. And bedroom coders like Introversion would spend most of their time in day jobs coding banking systems.

  19. ed says:

    “a massive second had market. Pre-owned games surely lose just as many sales for the consoles as pirating”

    and isn’t it–ironicaly–the industry’s fault that there’s a huge, retailer supported, pre-owned market? at least in the us, according to this article:

    http://www.costik.com/weblog/2007/02/are-retailers-actually-screwed.html

  20. Rayme says:

    I think the darling people doing the actual pirating are the “biggest cause of it”.

    And who downloads a 6-gig ISO to “just check it out”? Do you honestly that would be a majority of the people?

    Look, I would never subscribe to the ignorant “each pirated copy is a lost sale!” rhetoric, but there’s more than a grain of truth to it. For illustration… y’see, there are thousands of people playing CoD4 on crack servers RIGHT NOW.

    See here? (link)

    ..and the numbers are consistently high, every evening (these just being the obvious servers listed on this service). I suggest that means a large number of them are playing consistently, every night. If they don’t want to buy it, then WHY ARE THEY PLAYING IT ALL THE DAMN TIME? It sure seems to have some value to them.

  21. Turin Turambar says:

    If piracy were impossible software sales would increase.

    A 20% of the lost sales or something like that. Not the 100% as the BSA and other studies indicate.
    Most people who pirate games wouldn’t buy more games, but turn on the tv, or read some magazine, or go out more with friends, etc etc. But they wouldn’t buy the same amount of games that they downloand and copy right now.

  22. AbyssUK says:

    Hey the industry had its chance to jump into the digital distribution area and stop a lot of piracy. What did they do.. released box games and downloadable games at either the same price or with a saving of like £2.50 for the downloadable and may us pay for updates!. Then crippled us with spyware and stupid activation systems, destroyed LAN gaming by making you require 1 cd per game or everybody requiring a unique key.
    The pirates are the gamers response to the idiots in the game industry trying harder and harder to screw us over. Look at the new batch of games requiring games for windows LIVE gold accounts for multiplayer… we won’t stand for it we can hack and we will carry on hacking until the idiots in the games/it industry get a grip and stop forcing shit on us.

  23. sigma83 says:

    As a person who lives in a city where the minimum wage is ~40 cents an hour, I can see why piracy is huge here. Games (And DVDs, and albums) simply cost too much for the average joe to afford dropping cash on on a regular basis.

    The only upside is that hardware here is near factory price.

    All the points I see above for and against piracy (and DEFINITELY against the BSA) are valid to a degree. I believe there is no true single ‘reason’ and it’s simply an amalgamation of factors, but I believe the biggest one is ‘value’, where I simply feel that with most games I am simply not getting my money’s worth from full price, so I simply don’t buy them.

  24. Steve Cooper says:

    Pirates want something for nothing, let’s not get carried away with anything as “noble” as taking on the evil MegaCorp Inc.

    Back when the Spectrum and C64 were the gaming kings and those young upstarts the Amiga and ST were making their debuts, I owned a high street shop that sold, among other things, games software. I was losing sales to the pirates who were copying 99p cassette tapes – what injustices from which companies were they railing against then?

  25. AbyssUK says:

    Oh oh don’t get me wrong I hate people who sell pirated goods! The scum at computer markets selling bad divx’s and games across the globe do my head in big time. Thats a different story in my book.

  26. Mr Pink says:

    One of the biggest issues imho is that often it is easier to pirate a game than it is to go out and buy it. Digital distribution of games leaves a lot to be desired at the moment. Also, as someone has mentioned above, the prices are often ludicrous. By downloading a game I would say we should be saving 30-50% compared to the boxed copy.

  27. The Sombrero Kid says:

    i am a game developer and i don’t believe i own any of my code the fact is i need a revenue stream for the work i do and the goverment a while back decided the best model that fitted was the ownership model the fact is it isn’t true.

    In my opinion my work as well as the work of any write once read many entertainer should be paid for by the government and all the IP’s should belong to them/everyone, copywrite law is unenforcable and almost constitutes a thought crime especially when programming is concerned i.e. i’m not allowed to arive at the same conclusion for a solution to a problem that has been solved before and copywrighted, without paying the person money or if they’ve given the idea to someone else i have to pay them, for doing didly squat.

  28. cliffski says:

    wow I hope that post is a joke, because the idea of me having to go to the government and have them approve my design document before I’m allowed to make a game is just fucking silly.
    The free market consistently gives people the best entertainment, unless you somehow think that North Korea and Soviet Russia were hotbeds of creative freedom?

    Anyone pretending ‘its all teh evil companies fault’ is just talking crap. Games are luxury items, its not food. if you cant afford them, or you don’t like the terms (DRM etc) on which they are sold, just do without them. If you can afford a PC that will play crysis, you can flipping well afford the game.

    as to the economics, if people get all their entertainment for free, they are not motivated to work more (better job/overtime/get a job) etc, which is where the explanation lies for the lost potential boost to the economy.

  29. Hobbes says:

    In my opinion my work as well as the work of any write once read many entertainer should be paid for by the government

    Ah, this is probably the funniest thing I’ve read all day.

  30. AndrewA says:

    The Sombrero Kid, That is a nonsense though and you must know it. The only way to judge what the product is worth is to sell it. In that system you would have to have some flat rate value on all IP. Then you would get nothing but vast amount of low quality work and no quality based valuation could ever be placed upon it.

    Also your conclusion about copywright seems to be incorrect. Software Patents are tough to get and harder to enforce. 2 People can arrive at the same answer to a problem but you cannot simply copy someone elses answer. See word processors, I could write one and sell it and not have to pay anyone anything, I cannot copy OpenOffice and release it as my own work.

    The whole argument is like 2 Iraqii Information Ministers facing off. “Piracy is great and actually improves Developers sales!!! And it cures Cancer” …”Piracy is destorying civialisation as we know it!! and it gives you herpes”

  31. Lou says:

    Too much of a minefield for me for a Friday afternoon.

    Don’t think anyone can deny that piracy hurts the industry, to which extent can be argued about. Of course not everyone who pirates something would buy it, but a significant enough percentage would.

    Generally, I am of the opinion that copyright infirngement is just as bad as theft of an object. If you steal a game in a shop, the material value you steal (the box and the data carrier) is negligible. The value is the IP on the disc. Not much difference to downloading it.

  32. Okami says:

    Want to know what’s really funny?

    Ever since I’ve had enough money, I allways bought my games (even if that meant beeing ridiculed by my friends), since I’ve allways dreamt about beeing a game developer myself some day and piratin games just felt wrong to me. I’ve paid good money for some really awfull games in my time.

    Now that I work in game development, I have less qualms about pirating games. Why? Because I’ve had jobs as a call center agent that paid better than most studios I’ve worked for and I just can’t afford to buy 4 to 6 games a month anymore..

    Sweet irony!

  33. Hobbes says:

    Hmm, Whatever you think about copyright infringement on software, I Think we *can* all agree that the BSA is highly unlikely to gather, analyse or present data on the phenomenon (non non) in an unbiased and dispassionate manner.

    I’d be interested in seeing a good, objective study into this, but unless an academic does a paper off their own back, we’re unlikely to see on whilst the main funding source for such studies remains the industry itself.

  34. AndrewA says:

    Thats why I work in financial system development. It’s all down to economics again, so many people want to be games developers that they dont really need to pay them because there will always be people wanting to do it. Fewer people want to work for investment banks as devs so they pay big money to secure the best talent.

    Good old supply and demand.

  35. Anonononomous says:

    Jim, did you really say that something “necessitates” piracy?

    Nothing necessitates piracy. People who try to justify their piracy are pathetic.

  36. Meat Circus says:

    @Andrew A:

    As somebody who works as a developer in the City, to say that more people want to be games developers than work in the city seems to me not to be completely true.

    But then again, the fact that I’m earning four times what I would be in the games industry swayed my mind a long time ago, so perhaps I’m just a whore and completely biased?

    The thing is, the games industry treats its devs like shit, whereas The City treats its devs as a goldmine, with associated compensation. I know which I prefer.

  37. ishkamiel says:

    Generally, I am of the opinion that copyright infirngement is just as bad as theft of an object. If you steal a game in a shop, the material value you steal (the box and the data carrier) is negligible. The value is the IP on the disc. Not much difference to downloading it.

    Surely the bad thing in either downloading/stealing isn’t someone getting something for free, but rather it hurting someone else? Downloading will cause loss of potential sales, whereas stealing will cause the loss of something the store has had to acctually pay for. (I admit I don’t know how stores/insurances/whoever handle losses due to theft, so I might be wrong, and it really is just the material value being lost)

    Not that I agree with the imaginary property sentiment as any justification for piracy, it’s like instead believing in imaginary developers, that’d keep making games without getting paid. And how is it that when it comes to piracy, disagreeing about price means you just get to have it for free?

    I do believe though that DRM hurts more than it helps, and that copyright laws and BSA studies aren’t quite what they should. Just for the record.

  38. Okami says:

    Nothing necessitates piracy.

    Wrong! Imagine the mafia kidnapping your girlfriend. And they’ll kill her, unless you can manage to beat.. ohh… let’s say.. Doom3!! And you don’t have the game and you don’t have money and no time to go and buy the game!

    So you have to download a pirated version of Doom3 to rescue….

    I’ll stop now…

  39. Meat Circus says:

    @Anon: Getting games for free necessitates piracy. Unless you can think of a better way?

    It’s odd that using the Internet to move some bits of data from one place to another is considered ‘pathetic’ in the mind of the more brainwashed corporate shills like Anononononymous.

  40. Alec Meer says:

    Opinions not insults please, folks. Further flaming will see The Delete Beast sent in.

  41. Gwyn says:

    Cuba pays its artists to produce art. Its culture wouldn’t be nearly as rich and interesting (and authentic) if it followed economics. That’s not an argument for or against communism, it’s just proof of concept.

    Besides which – it’s really not beyond anyone to download a 6 gig ISO to check it out. Where have you been living for the last 3 years?

  42. cliffski says:

    Am I a brainwashed corporate shill? I’m an indie develoepr, I’ve worked for lionhead and been a gamer since pong. I think you can actually realise that piracy is morally wrong AND killing off the industry without being ‘a corporate shill’ or ‘an agent of teh mafiaaaaa’.
    I make more games per year now I can do it full time. If my game sales didn’t pay my rent I’d have to go get a job doing something else, and I’d make no more games. It really is that simple. if everyone had pirated uplink, there would have been no defcon. If everyone pirates mulitwinia, there will be no more introversion games.
    Game developers are just as entitled to be paid for their work as plumbers, doctors, lawyers or builders.

  43. Dot says:

    Meh, maybe what they said really did sound somewhat…weird, the fact that pirating games harms the PC gaming industry is still there. Just don’t pirate stuff.

  44. Lou says:

    “It’s odd that using the Internet to move some bits of data from one place to another is considered ‘pathetic’ in the mind of the more brainwashed corporate shills like Anononononymous.”

    What’s the problem with moving a few sheets of paper with numbers printed on them from the next bank to my house?

    You’re confusing the ease of piracy with the act itself. Your attitude is exactly the problem. People think everything on the internet is free, and because it’s so easy to get, it can’t do any harm. Don’t really mind if people who also buy stuff downlaod the odd thing, but I can’t stand unreflected justifications.

  45. Meat Circus says:

    Calling piracy a “moral wrong” is already evidence of how far [your feelings on the matter differ to mine] I’m afraid. So yes.

    Copyright is supposed to be a limited-term compromise between the rights of the public and the desire to encourage creativity.

    The escalation via propaganda of such imaginary property into a moral right is of manifest harm to the public good, and is nothing more than corporate welfare whining. The Universe does not owe you a living. The day you start imagining you have a moral right to such is the day you become a corporate shill.

    My plumber does not have a right to a payment every time I take a shit; Nor should a game developer imagine they have a ‘right’ to get paid every time somebody moves certain numbers through some wires.

    It pays to be aware of the origins and reasoning behind imaginary property like copyrights. Once you start thinking of them as ‘moral’ you have already lost.

    They are inherently amoral; They are a utilitarian concept at core. To abuse them into thinking your ‘right’ to get paid tramples all of mankinds access to our shared cultural heritage is [not something I approve of]. The thriving of fair use and the wellbeing of the creative commons is more important than your bank balance. Sorry.

  46. AndrewA says:

    @Meat Circus

    Surely you believe it is right for everyone to be paid for the work they do in some respect? If your employer decided simply not to pay you because he didn’t feel like it you would be outraged. Do you not think it is your employers moral obligation to pay you for the work he has hired you to do.

    Intellectual property is much the same in my view. If I just take it for free all i’m saying is I dont think your worth paying for the job your doing. Yes i’m going to use your work and possibly enjoy it, but I dont think I should pay for it.

    I dont think it’s being a corporate shill to think that, it just seems correct, in a moral sense.

  47. Meat Circus says:

    @AndrewA:

    An individual developer has the right to withdraw his labour if he doesn’t get paid. That’s not what we’re talking about here.

    We’re talking about licenses and copyrights. The ‘right’ of a corporation to get money every time some bits are moved over a wire, or every time a small plastic disc moves from one place to another.

    It’s precisely as ludicrous as my plumber getting a royalty every time I take a dump. Only, plumbers haven’t spent decades brainwashing people and corrupting parliamentarians with draconian legislation to convince them that this absurdity is a ‘right’.

    Don’t confuse the individual worker’s right to withdraw his labour for lack of compensation with the enormities of modern copyright laws. They are unrelated, and you have made a huge category error in conflating unrelated concepts.

  48. Phil says:

    Much as I enjoy watching an ethnical argument degenerate into bitter personal attacks, I think we might be missing the point by focusing on morality of the piracy.

    I don’t think piracy, on the whole, hurts the industry. Instead it’s the thing that lets it grow so spectacularly. The model seems to be that kids (of all eras) pirate, fall in love with the medium, grow up, get jobs, realise they can afford the cash to avoid messing around with .iso files for hours on end and start buying games. If my Amiga and Playstation hadn’t allowed me to pirate games I would likely got interested in something else, like voluntary work in an animal shelter – so piracy could be blamed dogs going unwalked if nothing else.

  49. Okami says:

    Meat Circus: Look buddy. I’m as left wing and bleeding heart liberal as the next guy passing out in drug induced coma next to me, wearing an Anti-Capitalista shirt.

    As I’ve said, I’m a developer and I do sometimes pirate games, especially if they’re hard to get (hello obscure japanes ds title!) or if I’m flat out broke. Which hasn’t happened in quite a few years, thank you very much.

    I’ve pirated mp3s and movies, etc…

    And I’m sure, most of the people here (especially if, like me, they grew up during the golden age of home computers) have done likewise.

    But at least I’m not claiming some morale high ground here!

    People work their asses off (for low wages) to create these things. They deserve credit and recognition for that. In the form of money, if you please, because warm feelings don’t pay rent!

    Pirating a game every now and then… Well, it won’t hurt anyone. But please spare us your [arguably wrong-headed argument] about copyright being inherently amoral, thus justifying pirating.

    When I create a PayPal account (eventhough I hate digital transactions, credit cards and all that other nonsense) just so I can pay for Darwinia, when I give a friend of mine some cash so that he will use his credit card to buy me Armageddon Empire, I’m not supporting some evil capitalist corporations. I’m showing people who put their heart’s blood into something some respect!

    And that’s what it all boils down to. If you pirate a game, you disrespect all the hard work the people who made it have put into. You disrespect people who routinely hurt their health during crunch time, who jeopardize their relationships and do all of that for wages that other people wouldn’t even leave their house for.

    No amount of spinning on your side will change that simple fact.

  50. Anonononomous says:

    Yes, I must be a corporate shill because I believe that the people who contribute to making my life fun deserve compensation. [I feel your argument is weaker than mine]. First you say that you have no rights to anything. But by pirating you’re assuming that you have a right to games created by others and that they don’t deserve anything in return.

    Then you go and tell us that piracy is perfectly moral. I would love to see the justification for that because, frankly, I can look at piracy in threeof the most highly held ethical systems, utilitarianism, virtue ethics and Kant’s moral imperative, and clearly piracy comes out as wrong. It doesn’t help the greater good in the long run, it isn’t just and if everyone did it, then nobody would make big games. The only way that you can justify it [believing you] deserve to get stuff for free (even though you previously said that the universe owes you nothing).

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