Piracy is killing the PC gaming industry as we know it. That's a fact.
The sad details are different from what most people are made to believe though. The industry is fighting piracy by pouring gasoline into the fire. It works perfectly. Piracy has become big. There are different hacking groups, warez sites, DRM vendors, etc. all competing with each other, trying to get the "consumers" click or attention.
On one side we have the DRM software vendors. They try to improve the product for the publisher by embedding various methods to secure the product. By that they usually break various ISO norms or severly violate the consumers freedom. The consumer ends up with a product that forces his hand. I suppose everyone has had a game that didn't install because of a virtual DVD drive or an installed burning software like alcohol. Everyone has experienced a game stuttering because it had to check whether the original DVD was in the drive or if the daring consumer replaced it with a salami from the nearest supermarket. Most gamers have at some point forgotten to bring their original DVD to a LAN party. Most people have had a game crash/fail to start because of a badly implemented copy protection. I've had games that didn't even start without patching the copy protection (Evil Islands) or that ran badly because the copy protection checked for the original medium every 5ms (Armed Assault). The list goes on.
On the other hand we have the crackers/hackers that remove the copy protection and improve the product for the consumer, but make it available for everyone and for free - a horrible outlook for the publisher. While the hassle with the copy protection is gone, other nasty flaws show up. Patching a cracked game turns into a gamble. Will it work? Will it re-establish the copy protection? Will it mess up my game? Sometimes the crack does not work properly (Titan Quest - if it is true and not just an excuse). Some cracks are loaded with trojans or the odd virus. If the game doesn't work properly, the publisher won't handle support anymore since consumer uses modified files. The list goes on.
So in the end the consumer gets screwed by both sides of the pirate problem, at least to a certain degree, and must try to figure out the lesser of two evils. And, in case i didn't mention it, the consumer has to actually pay for it, too.
There are some nice people in both camps. There are hackers that do what they do just because they want to see if it can be done or because they feel the copy protection is a real hassle for the user. There are software engineers working on DRM software because they really believe that they can improve profits for the publisher.There are a lot of black sheep on both sides too though and their number is far greater. Hackers crack a game so they can publish it on a warez site, get some money for clicks or get paid by someone who burns and sells cracked games. The DRM companies are not any better. I still remember starforce staff posting links to a torrent site of a stardock product that was not copy protected. Obviously someone was angry because a publisher tried to offer a good product without starforces approval. And i am confident that there are quite some DRM specialists providing cracks to make the competition look bad.
Every time a hacker is caught, a copy protection is circumvented or doesn't work the press is buzzing about software piracy, DRM etc. Most will remember the Sony rootkit debacle. Or the endless law suits because of ripped dvds. Some might even remember the guy that was clubbed down because he was sporting the dvd encryption algorithm on his t-shirt which was illegal in his country? My point is, the industry around this piracy issues has evolved into a self-sustaining monstrosity. There are people being paid to make surveys about it. There are laywers doing nothing but hunting drm-offenders, be it a copied game or a downloaded movie.
90% of all PC gamers are criminals, at least that's what i'm told. While it seems shocking it makes me wonder. I mean, 90%. 90 percent. In a school class of 30 people 27 of them are criminals. Thugs. Rapists. Murderers. Well, and software pirates. Since 90% seems like a big chunk i can call it the majority. What I truly wonder about is not the majority, but the 10 other percent. The minority, that is not hacking games, modding it to include nudity, train for their next amok gig or eat little babies for lunch. What's wrong with them? Why can't they be like everyone else and steal software? Maybe they are too young or ride the short bus? Nope - it is safe to assume that everyone within that minority knows someone who steals software and thus has access to it. Be it the 8 year old girl playing Sims 2 or that 15 year old emo kid training for his great day at school with the r-rated shooter his brother bought. No, they all can get it free. Well, to be fair, there may be the odd guy living in the deepest depths of the congo, surrounded by crazy baboons, without an internet connection (or AOL), but thats's a rare oddity, probably less than 1%.
Based on that i can only conclude that either the 90% figure is totaly off or that the protection models implemented in the past were not only a failure, but increased piracy instead of preventing it.
What do i mean by totally off? The number of thiefs would have to be significantly lower. Even 40% would be way too much, because everyone would still know someone who could access pirated software. On the other hand the 90% suggests a majority of gamers. That would mean that pirating sofware is easy and available. That's actually true. All that is needed is an internet connection and a computer or someone else who meets that requirements. Everyone can download a p2p client, google for his favorite game and download it within a day or two. All that percentages are just fictious, but what they mean is not. It means stolen software is available to everyone looking for it. It means that the DRM doesn't prevent piracy, it only delays it. Actually it has some nasty side effects too. It promotes piracy by restricting the consumer, by making the product more expensive and by calling for the consumers attention if something goes wrong.
Now back to that religious minority that actually buys games. Why do they buy the games? It can't be fear of getting caught since it's more likely to be struck by a lightning than getting caught for stealing a computer game. There are several groups of people that buy games.
First there are games that are played online. World of Warcraft - it makes no sense stealing the game if you have to pay a monthly fee anyway. Then there are people that actually want to support the developers. A minority, but they really do exist. Damn weirdos.
Some people buy a game because they actually like it - despite the wicked protection mechanisms included. Sometimes a game can be as expressive as a poster or a music CD. Being a Quake player or owning Man Hunt can be a statement as personal and strong as a tattoo or a piercing with some people. Don't forget, we are talking about a minority here.
Last but not least are the political buyers. People that buy games because of their message and not because of their content. A dangerous bunch but i consider myself a member. I bought two games (Hearts of Iron Anthology/Galactic Civlizations 2) because they have no DRM and am about to buy another (Sins of a Solar Empire), not only because i like them, but also because neither of them comes with anything that bothers me.
To sum it up, the whole minorty chooses to buy those games despite all odds that speak against it. The publishers or developers have no control either way - the gamers choose whether to buy a game or not.
That brings us finally to the root of all evil. The publishers should stop to thing how to prevent people from playing their games but how to make it worthwhile for them to actually play them and in the end maybe even own them. If you look down the street it is not unlikely that there is not a single person living there that hasn't stolen a game or mp3, maybe ripped a DVD or watched a stolen copy at a friends house.
By trying to enforce strict copy protections and digital rights publishers willingly limit their market to a mere minority of possible customers. While they keep spouting about that they have to encode/secure and restrict because if they stop to, nobody will pay for their content, they comfortably ignore the truth. Whatever they offer is free for grabs whether they want it or not anyway. And it is a lie that every software pirate is a stealing free loader. I've seen black markets, well, let's call them flea markets, in Warsaw, Seville and other european cities where people actually buy pirated DVDs of games or movies. Even some policemen bought bought copied movies in spain. And the kicker is, they pay for it. Nope, they don't pay 50€ for a game or 20€ for a movie, but they are without a doubt willing to pay something.
The market has changed. Consumers have become a whole lot smarter and have a lot more choices. The competition has become a lot fiercer.
While the market changed, the income changed and the money consumers have to spend changed, somehow the pricing of the products has become worse. Games have always been expensive. Despite the growing number of computers sold. Setting the price and then selling a product does not work anymore. At least not in the computer industry.
Instead of clinging to an old and dying market model, the gaming industry needs to adjust. Putting harsher rules into place, embedding even more restricting protections and sacrificing more freedom of their customers to save their undead market model from well deserved extinction is not going to work.
It seems the fastest changing industry of the world is afraid of change.
If a game is made for an audience of maybe 200.000 players and each is willing to pay 5$ for a copy of it, then making a game that costs 3 Million dollars plus distribution and DRM look like a very stupid idea. Lowering the production costs of games that have no big market, cut out the DRM crap and pass the savings to the customers seem better.
If a gamer has a budget of 40$ and a game costs 60-80 he'll only be able to buy one every other month or so, making the competition a lot fiercer. If the game would cost 20$, said gamer could buy 2 games every month. The money that gamer spends gets spread a whole lot better. There won't be one super uber game and a bag of flops. Sure, there still will be games that won't sell. Those are the lousy games. No one goes to a movie that sucks badly either.
While game publishers have been moaning and crying about pirates reducing their cut, and computer game sales have declined, they should look at the total money spend on gaming instead of looking at how many games they sold. A single MMO account sucks up the budget two block buster games over the year.
Right now if mom of pa go out and buy a console game or pc game for 60$, they will, in most cases, spend some thought on it. If it costs only 20$ they won't. And lowering the prices isn't difficult at all. Put some ads in my gaming box, give me a McDonalds SplashScreen before the game starts (It may get hacked though), offer smaller addons for your games for little fees. Offer me some gaming posters or plastic toys. Put the manual on the Disk, but sell a seperate hardcover bound with hamster-leather for the super freaks that feel the urge. It is possible.
With lower cost and without harsh restrictions people will stop pirating. The gaming market doesn't even have to grow - it's already there but no one is willing to offer a product to those 90% that is reasonably priced and doesn't make their owners feel like being remote controlled. Some people will keep pirating because they always do, but they will switch places with what is todays minority.
Paradox Interactive, Stardock and some other companies have shown that it is indeed possible to offer cheap products without DRM and draconic restrictions. In addition consumers tend to be a whole lot more forgiving if their 20$ game has a bug compared to their 60$ major investment not working perfectly.
Moving to another platform will only work until the consumers catch up and then the pirates move in again. Once PC gaming is dead (i don't think that will happen) the trend we see now with PC gaming will repeat itself with the console market. And consumers will catch up once they see the opportunity and realize that the product, in this case a game, is not worth what they are paying.
Selling Grand Theft Auto IV for 70€ (roughly 100$)? I can get a hooker, three tickets for the movies, a happy meal and a box with 600 nails for that. That's though competition and that's where people turn to pirates.
Arrhh.
PS: Take this with a grain of salt. Better yet, just skip it and read something worthwile.