I wrote an article a few weeks back on the conflicting claims about the effects of piracy on the PC games market. A friend then recommended to me a very interesting article by Tadhg Kelly in GameSetWatch, arguing that piracy itself can be a beneficial marketing technique and that building relationships with gamers is more profitable in the long term than viewing games development as what he calls a “content business” where the game’s content has value.

My intent here is to show several reasons to view his arguments with suspicion. I think that a certain model of game does lend itself to his view of piracy and that this model (the free-to-play model) has produced some excellent games (League of Legends and Bloodline Champions are two shining examples), some enjoyable, but ultimately more average, games (Champions Online or Dreamlords: Resurrection) as well as some really bland stuff that is often fairly ruthless in getting your money (a lot of Facebook games belong here). While I believe that the gems that this model produced has clearly justifies its existence (the majority of the non-World of Warcraft MMO market runs on this model), it should not ever become the sole gaming market model and that’s one part of what Kelly seems to be saying.

Before he talks about this though, he makes several assumptions to which I take objection and are contentious. He writes:

“[Most game developers are] seeing their business as a content business, where the content is the thing that has value. This is not the case.

The games industry, like all the arts, is about finding and interacting with fans, so that value comes from a relationship. As we slowly move into the post-platform, single-franchise future, understanding the difference between the two is crucial.”

His emphasis on content business and relationship are the crux here. He describes most developers as belonging to the former view, that they create a certain piece of content that has value and attempt to sell it whereas the ideal is the latter. I think there is both an overt and a tacit assumption here that I want to knock out.

First, the overt assumption is that games development is like creating a piece of art. While a lot of ardent games are art types will treat this idea as sacrosanct and often not even debate any of its critics properly, their belief extends exactly zero metres beyond the borders of people already keeping the faith. I would not defend the idea of games as art, even as I ardently defend their value and worth, because even if games could be art (which, in their thousands of years of existence, they still fail to be even as younger things like cinema and photography take up the mantle of art uncontroversially), I don’t want aesthetic concerns to ever override what I want from games: to be entertained and enjoy myself.

The more subtle assumption is that this view between games as a content business and games as creating relationships is presented as a dichotomy, that there is no ability to view games as a content business while building relationships with customers. I spoke in my last article on piracy of games like Gratuitous Space Battles and The Void where the designers did create an outreach to customers, but did not ever assume piracy to be a good thing. They did view their content as being stolen, but seized an opportunity to build relationships and encourage sales.

It’s clearly not the case that you need to abandon the view, as Kelly recommends, that there is value to your content. I find it borderline offensive, even, that a man whose work seems to consist largely in basic microtransaction-based Facebook games like Soccer Hero has the audacity to tell Ice-Pick Lodge or Positech Games that their work has no value.

Kelly goes on to make an analogy between the circulation and sale of Thomas Paine’s Rights of Man and sale of sequels in gaming. Piracy of originals, he argues, could raise awareness of potential sequels in which people are more likely to invest. He compares this to the higher success of the second part of Paine’s Rights of Man in terms of sales than the first part despite the necessity of familiarity with the first in order to understand the more successful second.

The problem I have with this analogy is that it simply doesn’t require piracy in the equation. Borrowing games, watching friends play games, playing them with your friends, these are what are needed and there is another strong argument against DRM within this, but not piracy. Paine’s first book was not widely known because of piracy of the text, but because people shared the physical medium of the text. Piracy never came into it.

Beyond this, he moves into another suspect analysis of the industry. He writes that the industry commits the “one shot fallacy” which is that developers seem to think of games in an atomistic sense. They don’t talk of games with sequel potential unless the game has been successful enough to merit sequels. My only response to this at what game industry is Kelly actually looking? Has he not looked at one of the overriding criticisms of Activision? Activision has long been criticised for only seeing games in terms of long-term exploitable intellectual property, it effectively tried to bury Brutal Legend because it didn’t think it would produce sequels, just compete with its own IP. This view of games in terms of sequel potential is simply not a healthy approach and Activision is the proof one needs of that.

Furthermore, let’s look at the sort of model he suggests, building social features into a game that requires purchasing features (such as support or extra content) after the game is already in the hands of the gamers. This is effectively the F2P model and that’s all well and good except the fact I don’t want every game having this model and neither do the majority of gamers. One of the key criticisms on Metacritic from users of Portal 2 was that it had an in-game store for a game that required a base payment.

I can take this further, one criticism a friend made of recent versions of Team Fortress 2 was that it now has boxes that contains items which you need to pay to unlock and get the contents. This is, in an otherwise great game, a rather awful feature. Even if this was a game where there was no initial payment, is that what we would would be happy with in every game?

Would we be happy where every game is freely distributed only to then get its money from you via social features and in-game quirks like the locked box idea of games such as Team Fortress 2 or Allods Online? It’s nice that the F2P model exists, but it occupies a niche, I simply don’t want every game to work on this model because the F2P model has produced a few gems and mounds of rubbish Facebook apps that I have to keep blocking.

Of course, the other part of this is that copying the raw install files for League of Legends or Bloodline Champions for a friend is not piracy, it’s legitimate distribution (unless I messed with the files somehow). What he describes as piracy is in fact, perfectly legal under the F2P model and not piracy in any sense of the word. Where it would be piracy is if I gave a friend an unlocked version of either game with all the characters unlocked already (apparently, with League of Legends, unlocking extra skins illegally was once possible). Something tells me that if I distributed genuinely pirated copies of Tadhg Kelly’s game, all the social features and extra content promised after the gamer started playing already unlocked, he might have a bit more of a problem with what I was doing than his article would suggest. That is piracy.

The quick cap news

* Peter Molyneux is to receive a BAFTA fellowship, the highest honour bestowed by the British arts award body.

* Tax breaks in the next budget might be in the works for UK games developers, as a measure to bolster the growing industry.

* Bioshock 2 DLC goes up and then down on GfWL. Despite the problems, 2K gave assurances that refunds would be given to those who purchased the originally free DLC.

* A new pro-gaming show, covering Intel-sponsored games, draws in 2.26 million viewers on Eurosport.

* Former RedOctane CEO attributes the death of the Guitar Hero franchise to abuse from Activision.

* Gabe Newell, managing director of digital distribution front-runners Valve, proposes a merit-based system for the purchasing of future DLC and, possibly, games.

* The US Federal Trade Commission are to investigate free-to-play games due to consumer fears that children did not understand the ramifications of in-game purchases.

* Yet another study concludes that there is no desensitising effect to video games. Thank you for saying, yet again, what gamers already know, and conservatives and identity politics groups will ultimately ignore.

* Assassin’s Creed: Brotherhood will feature DRM that is much more tolerable than its predecessor. No longer will gamers be required to remain connected to the internet constantly to show Ubisoft that they haven’t been playing a second-hand pirated game.

* Witcher II developer CD Projekt Red asserted its own opposition to DRM in its new game, preferring a focus on richer game content. It was conceded that DRM may feature in the game as a result of factors from other parts of the retail chain.

* Several former Bizarre Creations employees have started a new studio, Lucid Games. Backed by local concerns trying to keep talent within Liverpool, the studio may create up to 50 jobs.

Main news

Telltale Games have been in the news a fair bit recently. Besides the recent Back to the Future series of episodic games, the developer has announced games based on the Jurassic Park franchise to appear in April. Further, they are expanding their range with the acquisition of DC’s Fables and a revival of Sierra classic King’s Quest. Other things in the pipeline included a publishing deal for indie adventure Hector: Badge of Carnage and a sequel to the earlier hit Puzzle Agent. Also, they released a video chronicling the rise of digital distribution.

Also…

* You won’t find this side of gaming out from Fox… Chime brings in $96,000 for charity.

* If human rights abuses and lack of democracy weren’t enough, it’s a bad day to be a gamer in Vietnam.

* Wind Waker stained glass auctioned on eBay.

* Petroglyph announces closed beta for its new F2P DotA style game, Rise of the Immortals.

* Also, this is one cool dad.

Have a good weekend all.

The Background

Crysis 2 and Killzone 3′s early leaks were not the only news last week on the subject of piracy. The PC Gaming Alliance (PCGA) reported a drop in overall piracy rates and yet, despite this, PC gaming fans were the first to turn to self-censure and even go as far as accuse the majority of PC gamers of being pirates in some cases. Personally, I know of very little piracy that goes on amongst my own gaming circle and I think digital distribution is largely the cause of the drop in piracy reported by the PCGA.

If this is the case then why is there this gnashing of teeth and wailing of the damned coming from several gaming magazines and electronic publications about piracy? First of all, regardless of the amount, it is still a bad thing as it is ultimately the pirates playing for free something that funds further work by the developers. I will leave aside arguments over whether software should be open or closed source; neither side disputes the idea that if you use a piece of software then the best thing to do is to help contribute to future development and, in most situations, that means with money.

Are gaming publications biased? If so, why?

But the fact that piracy is bad is not the issue, no one except a few people on the peripheries on this debate would argue against that. I think the reasons for an extreme response like my example above are more complex than a simple dislike of pirates. One thing I think has a large part in this is the influence large game publishers have over games journalism.

Around July of 2000, someone at Sony invented a fictitious film critic named David Manning. Manning produced blurbs praising various films from Sony subsidiary Columbia Pictures, which had been reeling out pieces of trash, one after the other. This was all revealed and Sony had to allocate blame and wipe the egg off its face.

One thing Sony never did was threaten real movie critics with bans on attending review screenings in response to bad reviews, but this is not an uncommon event midst the youthful games journalism we know today. A certain magazine starts really criticising a major games publisher? Quite a few publishers are going to make as much trouble as possible for that magazine (my about page mentions the example of Team 17 with Amiga Power in the 90s).

I would like to mention another thing that points to this problem. Look at Metacritic and you’ll see that it has given DC Universe Online, at the time of writing, 73% based on 21 reviews. Metacritic considers this a mediocre score and this is not an oddity of Metacritic. Picking out a film that got 61% on 17 reviews (Cold Weather is my example here), Metacritic gives this a green light, signifying positive reviews overall. Why is that dichotomy happening? Look at the review listings for Eurogamer for your answer.

Eurogamer reports 5/10 as “average” and 6/10 as “above average” in its score key (it scores games on a scale of 1 to 10). Out of the 865 PC reviews, 529 of these (just over 61%) are 7 or above. The breakdown is below.

I’m not the first and I won’t be the last to point this out about professional games reviewers. What does any of this have to do with piracy though? The answer is that it was a rather detailed way of saying that publications could have a very strong bias in overestimating the prevalence and effect of piracy. I argue they make efforts to appease the games industry, reviewing policy shows this when contrasted to things like the Team 17/Amiga Power dispute, and that the vitriol in their reports about piracy is a manifestation of these efforts.

This is what I argue they do, it is not the case that the majority of PC gamers are pirates as was claimed. Yet still, as the articles in the last week in gaming seem to proclaim, we ought to not be surprised that developers and publishers hate PC gamers, we ought not to be surprised if Crysis 2 fails at the marketplace because pirates will make sure that 95 out of 100 PC gamers have cracked, illegal copies of it, we ought to accept that we have to remain constantly connected to the internet to play Assassin’s Creed 2 even when Ubisoft can’t keep the servers up under demand or that we should need an internet connection and a limited number of installs for Spore before we have to contact EA again.

There is a fallacy called the base rate fallacy. It comes in quite a few forms and both Jim Sterling’s article at Destructoid and Miklós Szecsei’s article at Lazy Gamer commit it. A while ago, the author and supposed expert Carole Lieberman told Fox News that sexualised violence in video gaming is responsible for the increase in rapes, even when there is no such increase (the US, like most if not all Western nations, has a low and rapidly decreasing number of rapes per capita). She committed a form of this fallacy because she ignored the base rate. Most games journalists were very quick to point such out, as quickly as some would accuse the majority of PC gamers of being pirates.

So how much piracy is there?

Maybe they are not exaggerating the amount of piracy. One often cited example of the prevalence of piracy is the successful indie hit World of Goo. The developers reported, on their blog, that piracy was around 90%. The method was quickly pointed out by many as flawed and the developers added in some corrections that reduced the rate of piracy to a still considerable 82%.

I still have multiple problems with their stat gathering that lead me to believe the numbers are much lower than their corrected estimate. I won’t list them all here, but my choice problem is the equation of what raises and lowers the rate of reported players out there. It’s extremely crude and such a equivalence blows it out the water as a groundwork for any claim about the prevalence of piracy. Still it gets presented on several gaming websites as near objective despite the fact it doesn’t even remotely approach the vigour of serious statistics.

So I have no clue how much World of Goo has been pirated and neither do the guys at 2D Boy because they don’t have any concrete data. So where do we get the real data from? It’s hard to actually find anything approaching good statistics, even the sources of the PCGA’s claims are obscure in the publications I have checked.

Look at the Seventh Annual BSA and IDC Global Software Piracy Study from 2009 (2010 has not yet been produced) and you’ll see that overall software piracy (not just including games) has risen, on a world scale, “from 41% in 2008 to 43% in 2009.” Already a lot lower than what 2D Boy’s statistics and the prophets of doom would indicate, but the report goes on to say the piracy increase is “largely a result of exponential growth in the PC and software markets in higher piracy, fast growing markets such as Brazil, India and China.”

What does that mean?

These higher piracy markets (the report states software piracy is as low as 20% in the USA) are developing nations with recent growth in the sales of PCs. What is important in calculating the effect of piracy on sales is how much of those billions of dollars in software would be converted to real sales and this data shows that software piracy occurs most in the poorest markets, ones where consumers have the lowest capital to invest in software if it is available and the lowest availability of software legitimately anyway. This certainly matches what the PCGA have been saying as well as the experiences of companies like Valve, who reported much higher sales in nations with high piracy rates like Russia simply by making their games more readily available via digital distribution technology. Further, since pirates are known to pirate more software than their normal incomes would allow as legitimate purchases, that cuts into how much of that piracy can be converted into actual sales even in developed countries (but by how much I would not want to say).

What I am saying is…

What I want people going away from this concluding is that software piracy, while wrong, is not the problem it is presented to be by the media. The age-old problem of the media blowing things out of proportion has reared its extremely ugly head once again and people would be wise to note that games with very noted piracy problems like Spore or Bioshock have still been overwhelming commercial successes. The level of piracy does not justify this almost “Nietzschean ascetic” view of PC gamers; we are not criminals or thieves, nor does it justify the failed attempt at preventing piracy that DRM represents (if pirates are indeed the target of DRM).

Yet piracy does exist and it should be stopped. The answers lies in the sort of responses to it that Valve gave above, or those by Positech or Ice Pick Lodge that I mentioned last week. I am led to wonder, however, if the removal of all piracy would simply rob folks at EA or Ubisoft a much beloved and very useful bogeyman.