Save the Internet: The SOPA/PIPA thread.

[DioShiba]

ignoring the whole twitter thing, I did find something rather interesting from 4chan regarding SOPA and Piracy.

>Somewhat SOPA Related Rant, Probably in multiple posts

I've kind of always been confused about pirating video games/music/movies/ect. Consistently the media releases estimates in the Millions (of piracies) and Billions (In revenue loss) of , senseless numbers to try to prove some ultimate point that piracy is bad.

But i'm confused, because the very nature of digital piracy ensures it's FREE to both parties involved. (Possibly even profitable to the developer)

Take for example actual theft, a black guy runs into a store grabs a candy bar and leaves without paying for it. The company that owned the candy bar payed to have it manufactured, developed and shipped to the location, getting nothing in return. The company's loss is the shipping/creation fees.

Then take for example digital piracy, an asian guy walks into a store, pulls out a star-trek type replicator and copies the candybar, places it back on the shelf and walks out of the store with his brand-new one.

The company in that second case only paid for the development of that candy bar, meaning they don't lose anything in the shipping/creation process, although it still cost them money to "Invent" the candybar in the first place, they don't lose money for someone copying it, they just don't get any.
Which is a point in itself, Software development is the entire process and shipping/item creation is a very small part of it. However it still strikes me a bit funny they count the number of copies pirated as "losses" instead of "Possible revenue". Specifically when they correlate all 100% of illegal downloads as being "People that would buy the game otherwise"

Specially when you look at the real logistics of pirating digital content. Usually anywhere from 1/2 to 1/3rd of the game's actual sales, are mirrored in illegal downloads. Which Means if you take a game that sells 10,000,000 Copies, roughly 3,000,000 Additional copies will be downloaded illegally.

Now you can make all kinds of estimates about random things to narrow that number down, but most of them would be widely inaccurate. The best case would be to take very small percentages (well below the believable average) and point out that even in an absolute best case situation for the developer, it's probably the opposite of what they make it out to be.

In my personal experience and opinion, through the constant reading of posts/forums/blogs/friends/ect. I've got a few numbers i'd like to throw at you.

I would like to say that 20-30% of people who download games illegally, can't play them, have technical issues that prevent them from playing the game, don't have systems that can run them, don't set them up properly, never install them, don't enjoy the game and stop immediately and would return it otherwise ect ect ect.

But that's a pretty big percentage, so to make everyone happy let's half that. Let's say that 15% of people who download games, don't care enough to get past the first level/menu screen. Considering i know most people don't play/enjoy up to 30-40% of games they bought in sales off steam (including myself), i think 15% is probably a fine number.
So dropping that, we have 2,550,000 Million / 3,000,000M who actually pirate and play/enjoy the game.

Now say that 10% of those remaining 85% Pirates, don't have friends (Hahaha that's horrible) Just to drop them out of the race.

That means 75% (2,250,000) have friends. What do you do when you get a new video game and enjoy it? You tell friends! On average 2-3 friends hear in some way about this game you're playing. May it be through /v/, forums, skype, steam, school, ect.

Now let me make this very very clear. The absolute second you pirate a game and tell your friend, which results in him/her buying it too. The game manufacturer makes a profit. That's it, at that point where you're telling other people and those 2.25 Million people are giving you FREE advertising to a video-game interested 6-7 Million others. You instantly make a profit.

By advertising standards usually for every 1000-2000 wide-market you advertise to (depending on the product) you get 1-2 of them to buy it. AKA Magazine ads that only 1/1000 people give a fuck about.

But your friends are a very localized and specific market group, they are already interested in video games and you're marketing directly to them. In specific markets where you're getting directly to the targetted advertising groups, returns can be 10/100 people or more purchasing the game. But once again for the sake of being conservative let's say 5% of all the people told about it, buy it.

So by a pretty conservative estimate (Seriously look into peer to peer marketing and how effective it is), about 115,000 ish people are encouraged to buy the game
that wouldn't have otherwise, encouraged directly by people who wouldn't have the game otherwise, or wouldn't be as impressed if they coughed up 50$ for it. With an additional 7,000,000 people hearing about the game, according to CPM that would be worth roughly $70,000-$700,000 in Advertising costs.
So a conservative estimate of pure profit from pirates, would be somewhere between $6-$7 Million, (For a game that sells 10M copies normally) for free, with no shipping costs, no advertising costs, simply from statistical consistent estimates with usual word-of-mouth advertising.

Then of course you have that 85% we were valuing as actual game-pirates who played the game. That's quite a bit of money "Lost" if you assume they all would have purchased the game if they didn't pirate it, but that's probably one of the wildest estimates any market analyst could make.

In Truth, this is where numbers become serious speculation. From an educated guess depending on experience/witnessing first-hand the reasons to pirate. I can say.

5-10% Of people who pirate a game nowdays do it for political motivations, they dislike a game developer or the DRM they use and want to pirate the game simply so they don't have to deal with bullshit to install it. (Yes, pirated games don't require Cds and don't have any security features that harass normal users). It's a toss up as to if this % would buy the game if pirating was not a choice.

20-40% Don't have the money to spend and simply want free entertainment, they probably wouldn't buy the game anyway.

10-20% Don't have the capabilities to buy the game, EG too young for online purchases/ect. This population may or may not beg mommy/daddy for a credit card to purchase the game.

5-10% Do have money to spend, but have better things to spend it on and/or couldn't give a fuck. Toss up as to if they would purchase it or not.

5-10% Would for-sure buy the game if they didn't have the choice to get it for free

5-10% Pirate the game as a demo/ect, and end up purchasing it later. to support game companies and the like.
Mind you these averages are weighted HEAVILY towards the benefit of the doubt for the companies getting pirated from. Chances are most of these "Would buy" or "Could buy" values are half of what they are shown here to be. It's just easier to prove a point if you give tons of leeway and it still makes sense.

So let's say we take the middle of all the groups that may/maynot purchase the game, and the full of the groups that would. 2.5+2.5+2.5+5+5 = Roughly 17.5% Of people pirating video games would probably throw money at the game if they didn't pirate them. (x.75% due to failures/returns from before/buyanyway/alreadyownit)

=13% (oh my god that's so inflated) of pirates would buy a game anyway. But since the values of people downloading a game, are averaged over a year. You can say that 3% is at release. 5% is at a discounted price and the last 5% is at a heavily discounted price. (Video games tend to sell about 20-30% of the total upfront, and the rest over 2-3 years).

So 90,000 Sales upfront, 150,000 Sales at 30$ and 150,000 Sales at 20$ or below.

Wait a second, (90,000x50)+(150,000x30)+(150,000x20)= 6-12 Million Dollars?

Didn't we just prove you make that much automatically from people using CPM/Peer To Peer advertising to sell your game for you? Oh, and remember those were not only conservative values (One half what they should be about), but the estimated peers who would actually buy a game that pirated it instead is also half what was estimated here. I gave companies tons of leeway here.

Hahaha marketing economics, you make me feel funny.

Or...if we buy the game it will give the company more money for their next project. And they can make the game even better than they would without money

According to some pretty loose math/knowledge of advertising/marketing. You can actually assume they get more money in the long run from the free advertising pirating creates.

Not to mention for software like microsoft word, people pirate it because it's a REQUIREMENT for every student on the planet. As a result for the longest time nobody made anything better that was widely adopted.

Pirating microsoft's software may not give them money directly, but it ensures they retain market dominance and your market loyalty, even if you're not buying things that's a good thing from a company/monopoly standpoint.

So basically, Piracy doesn't do that much damage as we thought it did?

I don't understand this entirely, but it's like that some how as long as people keep on making revenue, then it doesn't hurt the company in any way if I read some of it right. Maybe wrong there since I didn't entirely read this but ether way it seems like it's worth a discussion.