Ubisoft Boss Declares F2P Is Because Of 95% Piracy Rates

By John Walker on August 22nd, 2012 at 1:00 pm.


Rock, Paper, Shotgun is read by over 92% of the Earth’s population, and our most frequent readers are in the top 15% most attractive people on Earth! Yes, we all love statistics we don’t provide any evidence for. There’s so much fun to be had. Ubisoft have also been revelling in that fun, by telling GI.biz that they experience “93-95% piracy” rates. Which is odd, what with all their boasting that their always-awful DRM has been so darned effective at combating piracy. How incredibly confusing! Anyway, this, says bossman Yves Guillemot, is why they’re heading down the path of F2P games.

Here’s the logic: Only 5-7% of people ever fork out cash for the F2P models that are out there. And that just happens to match the piracy rates seemingly plucked out of the air. You may immediately say, “Er, if it’s the same, why bother doing something different?” But Guillemot explains that with the F2P model, that 5-7% who pay will keep on paying, over and over, making more money for the F2Ping company in the long run. Thus making the F2P model more financially effective.

But the problem is deeper than just believing that piracy rates are 95%. (Because of course you just can’t measure that. You can count torrents and compare it to sales, etc, but it’s still a guess.) Let’s just say that piracy rates are 95%, because I’ve no more evidence to say they aren’t than they likely have to say they are. The issue is determining what it’s 95% of.

There is no hard evidence to show that piracy affects sales. If Ubisoft has some, then they should share it. There is evidence to show that pirated copies almost never translate to lost sales (and as much anecdotal evidence to show that piracy encourages sales as there is to show it discourages them), and we absolutely cannot take the music and film industry’s laughable route of declaring every pirated copy as lost revenue. That’s plain deceitful, and of no help to anyone. So instead you could, if you were actually interested in business and not in scaremongering, say “We sold X hundred thousand copies of game Y”. Or indeed Z hundred copies. And then you could stop saying anything else, since that’s the only useful data you actually have.

Because really what matters is how many you sell, or – in F2P land – how much money you persuade people to give you.

The 95% figure is based on two numbers (one of them guesswork) happening to match up: F2P rates, and alleged piracy rates. It’s a comparison that is completely meaningless, as the two have little in common. When I buy a game, as much as the vile EULAs and licenses we are required to agree to may say otherwise, I do on some vague level have (if not own) a copy. When I play an online game, I am only ever visiting that game’s house, and the moment they switch it off (and they will) all my investment is gone forever. And one of them IS FREE. It says so right in the business model. I’m allowed to play it for free. And in doing so, by Ubisoft’s logic, means I am being compared with a pirate. That is so damned distasteful.

Conflating F2P numbers with piracy “numbers” is a handy way to excuse going down the path of the far cheaper development for F2P gaming, where sticking it in a browser, or cutting it down for a downloadable client, means players have their expectations severely cut down. A path that can, if you strike lucky, find your product catching a very large audience of people willing to constantly fork out small increments in order to be able to keep playing. Most don’t succeed, but one big hit can be enough. They’re cheaper to develop, they also have the potential of having players just keep on paying, and people don’t expect them to be nearly as good as full price boxed games – and hey, they’re free, right? So why would anyone complain?

Of course it’s absolutely fine for Ubi to head off in the F2P direction. It makes business sense for people to leap and grab cash before the fad is over, and the next new thing comes along. You may not like the business model, you may even think the way pay-to-play’s insidious increments work is distasteful. But if you’re a publisher, it’s a revenue stream you’ll want to tap into. But Ubi, please don’t make ridiculous excuses. Honestly, I find it bewildering that the entirety of Ubi’s board of directors hasn’t decreed that Guillemot is never allowed to say the word “piracy” again as long as he lives. Their reputation amongst PC gamers is so utterly terrible right now, despite releasing a ton of great games on the machine. It would just be amazing to see the company, for once, celebrating their PC customers, rather than berating them. Because they have customers. Paying customers. Maybe instead of pointing out that whatever their imagined piracy rates are, they could acknowledge they also have people who pay a huge chunk of cash for their games, and just maybe act like they’re grateful. Just maybe.

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282 Comments »

  1. Uninteresting Curse File Implement says:

    I live in Russia, and while it’s impossible to prove/disprove, based on my observations I have a pretty strong feeling that even we don’t have 95% piracy rate.

  2. InternetBatman says:

    People blame Eastern Europe for piracy all the time, yet Russia is Steam’s second largest market.

  3. mrmalodor says:

    You completely forgot price for some reason. High-piracy nations pirate first and foremost because they don’t think 60 euros a pop is fair. When developers and sellers get off their high horse and start pricing appropriately, piracy rates drop and revenues rise. Case in point: Russia & Steam.

  4. Sayori says:

    Yup.
    If a game can costs 15 euro in Russia it means the publisher still gains a profit.
    Now imagine their cosmic profit when the price is 60 euro…
    Inb4 GDP excuse for the pricing.
    Come on… Be serious. My country is part of EU but with ridiculously sh*t GDP, yet the prices are same as they are in UK, DE, FR etc. Some games are with reduced price, thanks “God”. Sleeping Dogs for example is 22 euro.

  5. El_Emmental says:

    You do understand the idea of “profit” is not just how many bucks they make per copy, right ?

    The development cost is fixed (once the game is done and post-launch support budget already paid), then they’ll have a budget for localization (text and voice if possible), then they’ll have a cost to print, pack, ship, store, sell per copy.

    * To produce, pack, ship, store and distribute a copy, it costs around 3 euros per copy. In Russia, the pack/ship/store/distribute part might go down to 2.5 euros.

    * Localization cost is fixed (one budget). For the russian market, it’s mostly done in Ukraine because it’s way cheaper and easier to do.

    * Usually, retailer gets 20%-25% of the price, while publisher gross margin is around 50% (rest is distribution+producing, platfom royalty, returns)

    In Russia, it means getting 7.5 euros (gross margin) per copy. Now depending on the localization quality (voiceover or not), you’ll recoup that cost with decent/okay sales.

    If you sell the game for 60 euros in Russia, you won’t make enough sales to recoup the localization, let alone make some profits (to recoup the initial development cost).

    Why you (and I) pay 60 euros for brand new games ? Because 1) we technically can 2) people are still buying at that price 3) the video-game publishing market is rigged since the 90s in Europe.

  6. fish99 says:

    That’s because it’s huge.

    (reply to comment about Russia being the 2nd biggest steam market)

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