Valve co-founder and managing director Gabe Newell has spoken out once again on the issue of piracy.Newell reiterates what he’s said on previous occasions. DRM doesn’t work and pirates are not per se after free stuff.“One thing that we have learned is that piracy is not a pricing issue. It’s a service issue,” he says.“The easiest way to stop piracy is not by putting antipiracy technology to work. It’s by giving those people a service that’s better than what they’re receiving from the pirates.”“For example, Russia. You say, oh, we’re going to enter Russia, people say, you’re doomed, they’ll pirate everything in Russia. Russia now outside of Germany is our largest continental European market.”Newell argues that instead of hurting legitimate customers with DRM, you have to give them something that’s superior to the pirated counterpart.‘It doesn’t take much in terms of providing a better service to make pirates a non-issue,” Newell says.

via Valve: Piracy is a Service Issue | TorrentFreak.

“We’re a broken record on this,” Newell told me,. “This belief that you increase your monetization by making your game worth less through aggressive digital rights management is totally backwards . It’s a service issue, not a technology issue. Piracy is just not an issue for us.”And it’s not because Steam avoids regions of the world known for their software piracy, they actually embrace them.”When we entered Russia everyone said, ‘You can’t make money in there. Everyone pirates,'” Newell said.But when Valve looked into what was going on there they saw that the pirates were doing a better job of localizing games than the publishers were.”When people decide where to buy their games they look and they say, ‘Jesus, the pirates provide a better service for us,'” he said.So Valve invested in getting the games they sold there localized in Russian. Now Russia is their largest European market outside of the UK and Germany.”The best way to fight piracy is to create a service that people need,” he said. “I think publishers with strict DRM will sell less of their products and create more problems.

via Why Portal’s Publishers Don’t Fear Piracy, Competition.

YouTube – How anti-piracy screws over people who buy PC Games.flv


Gamasutra – Features – iPhone Piracy: The Inside Story

When indie game developer Bram Stolk detected 1,114 copies of his The Little Tank That Could being played online, he suspected something was up. He had, in fact, sold only 45 copies of the new iPhone game.

Stolk had fallen victim to what is being called rampant piracy in iPhone titles, possibly worse than has been experienced for so long on other platforms because of the ease with which it can be perpetrated.

2D Boy: I love you, 2D Boy! » Blog Archive

Since the birthday sale started, about 57 thousand people bought World of Goo off our website.  The average price paid for the game was $2.03 a significant percent of which went to PayPal for transaction fees.  Normally, they keep about 5% of the revenue, but because PayPal fees are structured in a way that they take a larger percentage for smaller transactions, we ended up paying over 13% in transaction fees.  For all purchases of around 30 cents and under, we actually saw no money, PayPal took it all, but they probably ended up losing money on most of those transactions ($0.01) as well, they’re not the bad guy.

Here’s a histogram for the amount people chose to pay for the game (click for full size image):


One interesting thing about the amount people were willing to pay is that it went up as the days went by before leveling off.  Here’s what it looked like:


Effect on Other Channels

This one was a big shocker. Steam sales rose 40% relative to the previous week. Our Steam sales tend to fluctuate and it’s not unheard of for there to be a 25% difference from one week to the next (up or down) but the 40% increase came after a week that saw a 25% increase.  It has been several months since we’ve seen this number of sales in a single week on Steam.

The effect wasn’t as dramatic on WiiWare. This week saw a 9% increase in sales over the previous week.  Last week saw a 5% fall, and the week before it saw a 2% rise in sales.  9% seems like it’s large enough to have not been entirely caused by normal fluctuations.

Ars Technica

“Yep. Demigod is heavily pirated. And make no mistake, piracy pisses me off. […]My job, as CEO of Stardock, is not to fight worldwide piracy no matter how much it aggravates me personally, my job is to maximize the sales of my product and service and I do that by focusing on the people who pay my salary—our customers.”


The final sacred cow that Holtman took a stab at was the issue of piracy. “There’s a big business feeling that there’s piracy,” he says. But the truth is: “Pirates are underserved customers.”

“When you think about it that way, you think, ‘Oh my gosh, I can do some interesting things and make some interesting money off of it.'”

“We take all of our games day-and-date to Russia,” Holtman says of Valve. “The reason people pirated things in Russia,” he explains, “is because Russians are reading magazines and watching television — they say ‘Man, I want to play that game so bad,’ but the publishers respond ‘you can play that game in six months…maybe.’ “

“We found that our piracy rates dropped off significantly,” Holtman says, explaining that Valve makes sure their games are on the shelves in Moscow and St. Petersberg, in Russian, when they release it to North America and Western Europe.

There are, concludes Holtman, “tons of undiscovered customers,” because publishers look very narrowly at the Western market.

PC Game Piracy Examined
[Page 4] The Scale of Piracy

PC Game Piracy Examined
[Page 4] The Scale of Piracy

Positech Games

A few days ago I posted a simple question on my blog. “Why do people pirate my games?”. It was an honest attempt to get real answers to an important question. I submitted the bog entry to slashdot and the penny arcade forums, and from there it made it to arstechnica, then digg, then bnet and probably a few other places. The response was massive. This is what I found:

The success of the video game Rock Band is drumming up revenue for the music industry.

Virtual rockers downloaded roughly 2.5 million songs in the eight weeks since the game launched on the Microsoft Xbox 360 and Sony PlayStation 3 systems.

Rock Band, developed by Harmonix, which also created Guitar Hero, comes with 58 playable songs including the Rolling Stones’ Gimme Shelter and Metallica’s Enter Sandman. But many more tunes can be downloaded over the PlayStation Network and Xbox Live for prices varying from 99 cents to $2.99.


On receiving an honorary doctorate from Queen’s University Belfast last week for his services to computer gaming, the Northern Irish video game developer, David Perry, whose creations include Earthworm Jim, MDK, Messiah , Wild 9 and Enter the Matrix, believes that the Western games industry will eventually combat piracy problem by offering games for free.

Perry believes that the western world will soon follow the same business model that has worked well in Asia, where software is offered as a free download and revenue is made from micro-payments for extras such as new characters and weapons.

Speaking in Belfast after his award, Perry said:

“They had so much piracy that they decided to stop charging for the games. Instead, there’ll be a charge for things you might want to use in the game.”

“Your character might have a plain white T-shirt. If you wanted a nicer one you could have it for a dollar. Or perhaps you could buy a magic sword for a knight for a dollar.”

Though the idea may sound far-fetched, EA has already paved the way for the invasion of free games into the Western world by launching its ‘Play 4 Free’ business model and its first free game, Battlefield Heroes, due for release this summer.

It remains to be seen whether others will follow, but with an estimated £2bn lost every year due to piracy, developers may not have much of an option.