EU Commission Says No Evidence of Piracy Affecting Video Game Sales

monkeymagick

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The European Commission has released a new study suggesting that there is no evidence linking illegal downloads of video games and other media affecting legal sales of said content. Conducted by research firm Ecorys across the EU, the survey reports that 51% of adults and 71% of minors in the EU downloaded or streamed illegal content. Lowering prices "would not change piracy rates" and also did not have an affect on consumers spending with 55% willing to pay market price or higher for the content.

Those of you interested in reading the report can find it here at a whopping 307 pages to weather through. Thanks cageymaru!

One section of the report actually claims that piracy has a positive effect on legal sales in the games industry. A table shows the displacement rate for video games is +24%, "implying that illegal consumption leads to increased legal consumption."
 
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Kdawg

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TL;DR

But I call bullshit. They're just assuming that pirates wouldn't pay for shit anyway, so they don't count them as lost sales.

people will continue to pirate as long as the cost exceeds the trouble to download.

If the trouble of downloading gigs and gigs from file lockers exceeds cost of the goods, then piracy would go down.

Just look at the $10 Moviepass, where you can watch unlimited movies in theaters every month. At that cost, much fewer people would go through the trouble of downloading a shitty quality Cam movie. (some of you hate theaters, but you're the minority).

Lower the price enough, and it would change piracy rates.

Who wouldn't buy Wolfenstein 2 The New Collosus for $1-$2 ??
Rather than having one person pay $50 for a game, how about having 50 people pay $1 ? Bandwidth is so cheap these days, it would like cost just 10 cents to transmit 60GB for a typical game.

For $1, I wouldn't even bother to download a cracked copy of that game.

I' would really like to see a game publisher do an experiment one day and sell a AAA game for $1, then report the sales figures.
 

focbde

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TL;DR

But I call bullshit. They're just assuming that pirates wouldn't pay for shit anyway, so they don't count them as lost sales.

Who wouldn't buy Wolfenstein 2 The New Collosus for $1-$2 ??
Rather than having one person pay $50 for a game, how about having 50 people pay $1 ? Bandwidth is so cheap these days, it would like cost just 10 cents to transmit 60GB for a typical game.
The problem is, you're making assumptions to support your statement, just in the same way that the authors of the report are. Assumptions are necessary in an analysis such as this, due to the fact we don't have time machines.

Would 50 people buy it for $1 instead of 1 person at $50? Perhaps. But maybe also only 25 people would buy it for $1, not 50 - so then there's the additional costs related to distribution and the like, and so the publisher would be worse off. This is all hypothetical of course, but I find you've been over simplistic about it. It's not as simple as saying it'd cost 10 cents based on wholesale rate data volume alone (bandwidth != volume btw).

I do agree, personally, that lowering the price would affect piracy rates - but to what extent? No idea.
 

cageymaru

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The problem is, you're making assumptions to support your statement, just in the same way that the authors of the report are. Assumptions are necessary in an analysis such as this, due to the fact we don't have time machines.

Would 50 people buy it for $1 instead of 1 person at $50? Perhaps. But maybe also only 25 people would buy it for $1, not 50 - so then there's the additional costs related to distribution and the like, and so the publisher would be worse off. This is all hypothetical of course, but I find you've been over simplistic about it. It's not as simple as saying it'd cost 10 cents based on wholesale rate data volume alone (bandwidth != volume btw).

I do agree, personally, that lowering the price would affect piracy rates - but to what extent? No idea.

Just look at the games on Steam that only have 15 reviews and the game is on sale for 50 cents. Those developers DREAM about a million people buying their game for 50 cents each and writing a review of how good it is. It never happens and the developer fades into obscurity.

In short, price doesn't matter. Quality and word of mouth matters.

Look at the threads here in the video game section. The threads start off with a preview and a bunch of people saying that they hope the game is good. Then the game's release happens. Nobody says much other than the game is out today. Then a brave soul buys it and posts his positive or negative review of what they experienced. Within a few hours that person has many responses from others who followed suit and purchased the game based on the first guy's positive review. They post whether they liked it also. If they are mostly positive, then more people thank them and buy the game and post their experiences. Then we start answering questions about how to beat Boss X with weapon Y. Then whatever price point based on personal budget is met by during a sale and more readers purchase the game. More positive reviews flow in and the thread is necro bumped. Just pick a positive game like Dark Souls and scan the thread to see the social aspect of video game purchasing on our forums. Same happens in negative and middling reviewed games, but those threads are a lot shorter due to everyone skipping the title. Humans want to back winners. Then those companies experience things like layoffs.


That is the same thing that happens with movie pirates, video game pirates, music pirates, etc. Humans are social animals that like to share their experiences with others. All the DRM in the world hasn't changed that aspect of our lifestyles. We listen to shared works on a daily. How many times have you stopped at a coffee shop and listened to a track and looked it up so that you could listen to it again? Did the coffee shop pay a commercial license for the radio that they installed in the business? If not then you and them are officially pirates and all the experiences that you shared with others over the love of a particular track was from the viewpoint of a music pirate. We are all pirates as we share our experiences everyday.

I love this quote from the article because it is so true.

One section of the report actually claims that piracy has a positive effect on legal sales in the games industry. A table shows the displacement rate for video games is +24%, "implying that illegal consumption leads to increased legal consumption."

Translated this means that when people get to experience a work and then share those experiences with others, the sales of that particular product increase in volume. Who what have thought of that? Revolutionary!

Perfect example is me. I didn't give a darn about Destiny 2 myself until I played the demo. The ONLY reason that I bothered to touch the demo is because frankmansal convinced me to open my mind and give it a try. Now it is a day one purchase for me. I'll probably grab the Limited Edition whatever that I can find. Again I wasn't going to play the game until I got to experience the demo.
 
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chenw

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That quoted statement could be misleading though, since the whole paragraph actually read as follows:

"This positive effect of illegal downloads and streams on the sales of games may be explained by the industry being successful in converting illegal users to paying users. Tactics used by the industry include, for example, offering gameplay with extra bonuses or extra levels if consumers pay."

Basically, this isn't the "the more a game is pirated, the more people would buy that very game", at least I don't think so. It seems to claim that Piracy in one area (p2p games) leads to legal consumption in other areas that result in net positive effect on the industry overall.

I do like how Music seems to be TOTALLY unaffected by piracy though.
 

Shintai

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The movie industry is more or less the last bastion that haven't fully understood the future. The music business had to learn it the hard way. Gaming have by natural causes moved to online purchase services.
 

focbde

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In short, price doesn't matter. Quality and word of mouth matters.
In your opinion. I disagree. I'll agree that quality and word of mouth matters hugely to a game's chances of sales success, but stating that price doesn't matter and only quality/word of mouth matter is, I think, ignoring too many other factors. I believe that people may stretch FURTHER to pay more for a game depending on those factors, but it doesn't mean the ceiling is limitless. They may also, for example, wait until it is cheaper but there is the risk there of it becoming a bit forgotten and not being bought at all in the end.

One thing I will say is that, like you, I agree overall with the report though - that generally speaking, piracy is nowhere near the financial drain for games and media that the industry tries to make out. But then, we've known that for quite a long time.
 

naib

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you forgot to state the main controversy over this report ... they commissioned the report and when it disagreed with their supposition the corrupt EU tried to suppress it

https://www.engadget.com/2017/09/22/eu-suppressed-study-piracy-no-sales-impact/
In 2013, the European Commission ordered a €360,000 ($430,000) studyon how piracy affects sales of music, books, movies and games in the EU. However, it never ended up showing it to the public except for one cherry-picked section. That's possibly because the study concluded that there was no evidence that piracy affects copyrighted sales, and in the case of video games, might actually help them.

Done by Dutch organization Ecorys, the study might have been lost altogether if not for the effort of EU parliamentarian Julia Reda. She submitted a freedom of information request in July 2017, and after stalling twice, the commission finally produced it. The conclusion? "With the exception of recently released blockbusters, there is no evidence to support the idea that online copyright infringement displaces sales," Reda wrote on her blog.

It's not as though the EU just forgot the study in a drawer. It concluded that one specific category, blockbuster movies, is negatively impacted by piracy, with ten downloads leading to about four fewer cinema visits. Overall, that reduced sales for certain films by about 4.4 percent on average. Two EU Commissioners used those results in a 2016 academic paper to bolster claims that piracy impacts cinema ticket sales, digital rights group EDRi noticed.
 

MaZa

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lostin3d

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In short, price doesn't matter. Quality and word of mouth matters.
I have to totally agree. Remembering how I paid $25 or more for games in the 80's, it doesn't bother me as much to pay even $70 if I really enjoy the game. I usually will go through many reviews across many sites before I'll purchase a game. The only exceptions are when its part of a franchise I really trust(Witcher, Metro, Crysis). Thanks to GOG, Steam, Origin, my game torrenting days are over and I really don't mind.

On the other hand, the ongoing greed that's restructuring streaming options on the internet has got me questioning my ethics again but I'm more leaning to just not watch T.V. as much. Probably healthier anyway. When it comes to movies, I'm fine waiting for discs, 3-6 months isn't that long to wait.
 

rive22

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Who the hell pirates CAM movies? It's 2017 just wait for BD rip or WEBDL. Full HD ftw!
I never understood that either. Not even just in 2017, but ever. It's like eating a raw unseasoned steak with warm beer instead of just taking a little time to do it right and experience the moment to the fullest.
 

Axiomatic

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The problem is that you don't have to sell us on this idea. We [H] readers already knew this. It's the nervous nelly game executive that thinks DRM is the only way to secure his game, or that it even needs securing at all, is who needs to read and understand this info.
 

Shantarr

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My opinion:

Piracy is a free, supplemental, form of advertisement for the product in question.

It is more effective than a thousand bill boards at the right location, more influential than a prime NFL ad spot and far more personal; As the word of mouth spreads from a position of trust (usually).
 

focbde

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I never understood that either. Not even just in 2017, but ever. It's like eating a raw unseasoned steak with warm beer instead of just taking a little time to do it right and experience the moment to the fullest.
Glad I'm not alone. I'm actually one of those people who likes to build up a movie collection so tend to buy the BR, but I DO know people who want to watch it ASAP though and get the CAM/SCRs. Madness.
 

VIC-20

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My opinion:

Piracy is a free, supplemental, form of advertisement for the product in question.

It is more effective than a thousand bill boards at the right location, more influential than a prime NFL ad spot and far more personal; As the word of mouth spreads from a position of trust (usually).
I agree, because even if some dude is like "hey I torrented this game and its the bees nees!" or whatever, it doesn't make me want to pirate it. It makes me want to buy it, because I don't pirate games.
 

Grimlaking

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Personal observation here.. As a damn near 24 year computer gamer. (42 years old.) I can honestly say for me Gaming and in some cases game "piracy" got me into computers. I wanted to play the new games so I worked and got the parts I needed to build a good gaming pc because at the time really having someone build one for me was just too damn expensive. After building my gaming system I didn't have cash for games I wanted to play so I... acquired them via friends. But now I'm an functioning adult computer gamer. I can afford to buy the games I must have. Even paying for the premium editions. My investment into these games today was fueled by my early on gaming desires.

Now I buy all my games and don't sweat it if a game is 50 bucks. I think studios need to understand they are building their fan base for later years for the young 20 somethins that spend all of their available money on hardware and not on the cutting edge game to run on it. Sure they get some free copies and such... but in the end they find other avenues. Yet I guarantee later on in life getting the game the "right" way via whatever retail channel you choose is easier. Faster... and less fraught with virus worry.
 

Grimlaking

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You want a solution to piracy. It's easy... I'll state it in two steps.

1. MAKE AN AMAZING GAME. MAKE IT THE BEST YOU POSSIBLY CAN.

2. Charge 10 bucks to play it for a week. Then the remainder to get the rest of the game. Sort of like a demo but that first week should be the full game.

If you did number 1 right.. number 2 will INCREASE your income.


Addendum: IF you only do quality multi player... don't bother selling me your adventure/shooter game. Just make it a MMO shooter like Destiny. I might just buy it anyway. (Yea I preordered the 100 dollar version of Destiny 2 for PC. I'm a fool. )
 
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