Aye, that's my point, and I do believe it correlates a little into piracy (the issue of the cost being 'too high')
Mind you, thousands of people have torrented those charity indie bundles that you can pay as little as $1 for, so its not all black and white I guess...
Torrenting the indie bundles is better than paying 1cent for em due to the cost of bandwith.
Aye, that's my point, and I do believe it correlates a little into piracy (the issue of the cost being 'too high')
Mind you, thousands of people have torrented those charity indie bundles that you can pay as little as $1 for, so its not all black and white I guess...
There is no point made and there isnt any correlation to piracy at all. Steam users are returning consumers who have made the conscious choice of being legitimate software purchasers with the understanding that they will be treated great.
You are relating boxing day sales to shoplifting.
The whole steam vs. pirating topic is misrepresented. Just because others were short sighted and didn't see the benefit of providing the Russian consumers with a fantastic means of digital distribution it didn't have anything to do with piracy. Valve simply made a fantastic product for legitimate consumers. It didn't convert pirates, it simply capitalized on a small portion of a gigantic population who became legit steam users in a country where they dont have GameStops and walmarts everywhere.
It didn't convert pirates, it simply capitalized on a small portion of a gigantic population who became legit steam users in a country where they dont have GameStops and walmarts everywhere.
or it converted pirates and capitalized on a small portion of a gigantic population who became legit steam users in a country where they dont have GameStops and walmarts everywhere.
In other words, 14 months after the game has been released. By which time the game had already been lowered in price in brick&mortar stores and on amazon. Frankly,I'm a bit amazed that Steam was still selling a game over a year later for $50.
I'm talking about releasing new games for either $60 or $30.
Not to mention that, hm, people buy more gifts during the holiday season)
Also, does anyone remember? Was Titan Quest launch on steam? I know it was eventually released discounted and saw some decent sales but it was way too late.
If it launched on steam today, things may have been different for IL. Steam simply gives developers more direct access to legit consumers market it doesn't convert pirates.
or it converted pirates and capitalized on a small portion of a gigantic population who became legit steam users in a country where they dont have GameStops and walmarts everywhere.
I am sorry, I don't know how to explain it to you any better.
Compare the target market of people who are willing to spend $60 on a game. Now compare that to a target market of people who are willing to spend $30 on a game. Seems obvious to me that the $30 market is a hell of a lot bigger.
If someone has a small budget, that small budget is all you can gain from them. Those who would spend 30 on games will STILL spend it on games, though maybe not on the $60 headliner, but last years headliner which is now cheaper and has proven its worth. Whether they spend it on a cheap launch title or a depreciated last-yearer, they spend their whole budget: $30.
On the other hand, people that DO have a large budget, would just buy the games they want, right at launch. If that's $60, they pay $60, if it's 30, 30, and if it's 120, they will probably fork over that too. Heck, look at collectors' editions. But if you launch a game at $30, you'll only get half the income out of these people with larger budgets - while not getting any extra from the people with maxed-out credit cards.
You could say "but yes, these people will also spend the other $30 but that's not quite true. How do people with money, get that money? Jobs. What does that job require? Time. People with money have no time to play all games, so they only play (and buy) the ones they will like most.
Maybe it sounds dickish, but that's how it works. Why else do you think most of the economy is adjusted to the upper/middle class and not the lower class?
You are forgetting the obvious. These games were discounted after being on the market. It's not the same as launching a title at a reduced price. The publisher has to maximize profits in a short time in a competitive market at launch to pay for development costs, marketing and have enough money left over to fairly compensate the developer post launch. Maybe even have enough to warrant another project
Steam is a self marketing behemoth. It has direct access to advertise to millions of users and is able to distribute content much cheaper and faster. Older games cost next to nothing to distribute digitally so of course price cuts results in higher profit margins for publishers who enjoy success of steam. But just because it happens in a tightly controlled ecosystem like steam, it doesn't always apply to traditional methods of distribution.
Steam is great, it's a very great service that treats customers fantastically and thus is very profitable for everyone. But AAA titles don't survive on steam alone. Thus we are back at square one.
So you're saying that others couldn't do the same if they had an effective marketing strategy and offered it for a similarly low price? I guess Steam is just an extreme outlier. It probably has nothing to do with the price being low enough to breach that impulse buyer barrier where the customer weighs the risk against the price and finding the price wins out.
It's pretty simple if you think about it. There are X number people out there willing to take a chance and pay $60 for a game. There are even more people out there willing to take a chance with $30 of their money. Even more with $15 and so on. You see, the as the price decreases the more people see it as an affordable risk. So as the price goes down, your customer base widens. There are apparently significantly more people willing to pay $15 for a AAA title than there are willing to pay $60.
56 Percent of gamers buy used. That seems to make it clear that pricing does effect where people get their games and what price they prefer to pay. If used wasn't an option, they would find another way rather than pay the retail price.
You can blame the dirty pirates all you like, but it's quite clear that it's a service and price issue. Once you align the services that they want for prices that don't give them pause to think, you'll see more revenue coming in.
You do realize that torrenting is exactly the same bandwidth use as downloading from steam right?
What he means that, if you download it from Steam or the developers site, you're taxing their infrastructure, their servers. These servers cost money to run. By not buying the game but downloading it from them and taxing the servers, you force them to have more servers than they'd need for legitimate customers, and are in fact costing the company money.
It's like not buying a train ticket - the train does require a bit more fuel to carry you around as dead weight.
In other words, 14 months after the game has been released. By which time the game had already been lowered in price in brick&mortar stores and on amazon. Frankly,I'm a bit amazed that Steam was still selling a game over a year later for $50.
I'm talking about releasing new games for either $60 or $30.
Not to mention that, hm, people buy more gifts during the holiday season)
You are exactly right. That's where gabe hit the nail on the head. It's not a pricing issue at all it's a delivery issue.
When bestbuy launches their boxing week sales campaign its a multimillion dollar marketing scheme. It doesn't convert shoplifters into buyers or prevent shoplifting. What it does is speak to valuable legit consumers. The more people they can reach, the more can eventually become consumers. But these were legit consumers to begin with.
Steam does it on a much more brilliant, almost devious scale. The way it becomes the central cloud hub for all your content, the way it defaults to newest deals and promotions on boot up, the way it auto patches. We think we are recieving advertisement quite transparently on our own terms yet it still tickles all those well established consumer tendencies like impulse buys, desire, perceived value and so on. Steam just costs a fraction of a marketing campaign and still delivers to 99% of customers. Brilliant
What he means that, if you download it from Steam or the developers site, you're taxing their infrastructure, their servers. These servers cost money to run. By not buying the game but downloading it from them and taxing the servers, you force them to have more servers than they'd need for legitimate customers, and are in fact costing the company money.
It's like not buying a train ticket - the train does require a bit more fuel to carry you around as dead weight.
You're way off there. People downloading games for free aren't getting it from those servers, they get it from their peers whom are sharing their bandwidth. You can't get a free copy of any game by leeching it from the developer's servers.
Paying 1 cent for the Indie Bundle (and then downloading off of their servers, or Steam servers) is not enough for them to recoup the server costs. So while you give them a cent, you cost them two.
Pirating the game gives them no money, but also doesn't cost them any.
And this entire bullshit discussion in value perplexes me. Year on year, we get more and more amazing games well worth their price. Ok, so maybe cheapasses are going to argue that it's still not enough value. But keep in mind on how many shitty films, mediocre meals and crappy products we consume year on year with not so much as a peep against the industries that provide these experiences. So suddenly when a publisher wants to make a profit against very tough competition we are just going to brush it off on poor value and chalk one up for piracy?
60 bucks on a game ain't cheap and when there are so many to play it can sure get expensive. But let's not be self entitled douches and want it all for nothing when a publisher is fighting for your hard earned dollar. It's a luxury good. Are there creative ways to make it a little easier to swallow for the consumer? Yes. But developers are also beginning to provide us with some pretty awesome dlc, new purchase bonuses and preorder treats.
I don't think there's anyone here that's actually whining that they have a $10 budget, but all the games cost $60. I'd bet most people here have a pretty impressive library of games, and probably spent hundreds or thousands of dollars on them. I know I did. But that's not the point.
It's not about us. It's about other people, people who aren't here whining, that pirate games instead of buying them, and how do we reach them. Sure, you can tell some kid in Russia "stop whining, it's a luxury good". And he'll just give you the middle finger, pirate it, and then where are we?
Or... we can try and be constructive and listen to that person, and figure out a way to give him the stuff he wants so everyone benefits.
BTW, the comparison to movies is a bit odd. A film can have a $200million budget, and tickets still cost the same as a $10million movie. In games though, AAA publishers feel like they need to charge roughly 6 times the price of a movie ticket. The only cheaper games are indie. And why is that? Are you telling me that the cost to produce Gears of War is 6 times as high as producing Lord of the Rings?
People say, "well, they have a larger target audience, so they can afford to sell each ticket cheaper". Well no shit. That's what this whole piracy debate is about. Expanding our target audience from rich (by world-standard) Americans and Europeans, to everyone.
And this entire bullshit discussion in value perplexes me. Year on year, we get more and more amazing games well worth their price. Ok, so maybe cheapasses are going to argue that it's still not enough value. But keep in mind on how many shitty films, mediocre meals and crappy products we consume year on year with not so much as a peep against the industries that provide these experiences. So suddenly when a publisher wants to make a profit against very tough competition we are just going to brush it off on poor value and chalk one up for piracy?
60 bucks on a game ain't cheap and when there are so many to play it can sure get expensive. But let's not be self entitled douches and want it all for nothing when a publisher is fighting for your hard earned dollar. It's a luxury good. Are there creative ways to make it a little easier to swallow for the consumer? Yes. But developers are also beginning to provide us with some pretty awesome dlc, new purchase bonuses and preorder treats.
Stop whining.
And by what measure can you claim that publishers can't make a good profit with lower priced goods? They're games comprised of data that is stored in a data format that is easily replicated without depletion. To not take advantage of that kind of price elasticity under the assumption that they've earned the higher price is foolish. The higher your price is, the fewer customers you're going to have. Do you think Bentley makes a huge volume of units sold? Of course not. Only people with tons of money can buy those, now look at the Ford Taurus. How many of those things do you see on a daily basis? How about a Kia or a Honda Civic? Common as dirt. Why? Because they are affordable to a large portion of the consumer market.
You're cutting out a lot of potential customers by stubbornly adhering to that rigid pricing model when you should be dropping it like a rock as the game fades from the public consciousness.
there is no such a thing as PC or phone hollywood. vs ps3 hollywood.
its quite hard to compare both industry.
but I still wish brand new AAA console game was cheaper.
Yeah, no one here is saying they want AAA games to be $10 at launch. $45-50 is the sweet point for me, hell I don't mind you charging $60 but it damn well be worth it.
Nothing worse than paying $60 for game at launch, running into a ton of drm/activation issues, bugs and eventually finding out that the game has an SP length of 4-5 hours + bad MP.
I don't think there's anyone here that's actually whining that they have a $10 budget, but all the games cost $60. I'd bet most people here have a pretty impressive library of games, and probably spent hundreds or thousands of dollars on them. I know I did. But that's not the point.
It's not about us. It's about other people, people who aren't here whining, that pirate games instead of buying them, and how do we reach them. Sure, you can tell some kid in Russia "stop whining, it's a luxury good". And he'll just give you the middle finger, pirate it, and then where are we?
Or... we can try and be constructive and listen to that person, and figure out a way to give him the stuff he wants so everyone benefits.
BTW, the comparison to movies is a bit odd. A film can have a $200million budget, and tickets still cost the same as a $10million movie. In games though, AAA publishers feel like they need to charge roughly 6 times the price of a movie ticket. The only cheaper games are indie. And why is that? Are you telling me that the cost to produce Gears of War is 6 times as high as producing Lord of the Rings?
People say, "well, they have a larger target audience, so they can afford to sell each ticket cheaper". Well no shit. That's what this whole piracy debate is about. Expanding our target audience from rich (by world-standard) Americans and Europeans, to everyone.
I don't know how many times it has to be explained. You won't prevent a person from pirating software. They are stealing by choosing to acquire content for free. The principle isn't different t than from Walmart trying to cut prices to better accommodate shoplifters. Where you guys see the solution to piracy or even a relationship beetween pricing and piracy is beyond me. You must not be reading my explanations thoroughly. The publisher is not fighting for the pirates dollar! He won't pay even if it's 0.000001 cent.
Video games is a luxury good! It's expensive to produce and still expensive to distribute. I don't know how it can be spelled out any clearer. Films have gigantic distribution opportunities on a quick turnaround through box office. That's how they keep the tickets so much cheaper. Games have to compete with each other in fairly short timeframes to turn profit. And don't forget, a lot of films barely break even at box office. Good or bad, expensive or not. Guess where they make up the additional revenue? DVD sales. What is an average cost of a DVD? Guess how much of the $60 game goes to the publisher ? Well there you have it.
And guess what also? A lot of people still bootleg and torrent brand new films despite a movie theatre at every corner. Is it because they are too expensive? Films have a wider audience appeal by nature, not because they are doing something extra to open up the market and they are definitely not doing anything to appease the bootleggers because they still bootleg to no avail. You are talking as if there is reasonable discourse to be made with a person who is knowingly stealing.
Walmart is not expanding to china to combat millions they lose in shoplifting.
Yeah, no one here is saying they want AAA games to be $10 at launch. $45-50 is the sweet point for me, hell I don't mind you charging $60 but it damn well be worth it.
Nothing worse than paying $60 for game at launch, running into a ton of drm/activation issues, bugs and eventually finding out that the game has an SP length of 4-5 hours + bad MP.
Now be honest and recall how often that happens these days. Between previews, thorough reviews, demos and aggregated scores you can have a pretty good idea of what a game is like.
I guess you can argue that a critically acclaimed game just doesnt excite you for subjective reasons. So if, say, skyrim is not your thing you may be a little upset at spending $60 bucks on it. Fair enough. Just remember, I just explained why games cost more than movies.
You could say "but yes, these people will also spend the other $30 but that's not quite true. How do people with money, get that money? Jobs. What does that job require? Time. People with money have no time to play all games, so they only play (and buy) the ones they will like most.
Maybe it sounds dickish, but that's how it works. Why else do you think most of the economy is adjusted to the upper/middle class and not the lower class?
Actually, huge amounts of market concentration is target at the lower classes and rightfully so ( for an even more dickish sounding reason )
The further down the chain you are, in thriving markets you are practically farmed. The upper and middle class invest and save huge amounts of their money. The upper 10 percent's money is practically locked away for good!
But the crumpled $10 bucks in a poor mans pocket will always be spent by the end of the hour. Lots of businesses thrive in the inner cities. The harshest neigborhoods in east baltimore. ( my neighborhood ) where crime and poverty is as bad as it gets... The majority of kids play Madden on XBox 360's ( last time I spent serious time in the projects Gears of War was pretty popular as well ). Although the majority of households may not actually own a console... each decrepid living room and bedroom that does is packed with hardcore gamers! ( represent ) and although black market movies are rampant those gamers are hardcore enough to prepay to have their must have favorites on release day! I do not remember ever seeing a modded console or pirated game. For the most part the used games were bought at the pawn shops. NOT gamestop. That is now starting to change I am seeing Gamestop creep in. With their research dollars they obviously know the killing they would make so I suppose violent crime is keeping them out.
Yeah, no one here is saying they want AAA games to be $10 at launch. $45-50 is the sweet point for me, hell I don't mind you charging $60 but it damn well be worth it.
Nothing worse than paying $60 for game at launch, running into a ton of drm/activation issues, bugs and eventually finding out that the game has an SP length of 4-5 hours + bad MP.
To be fair: in this day and age all it takes is one review to find out if the game has drm or a singleplayer campaign the length of 4-5 hours.
There are plenty of other games out there, including a massive thriving indie-industry with games people can spend their money on instead of pirating games they didn't want to pay for.
To be fair: in this day and age all it takes is one review to find out if the game has drm or a singleplayer campaign the length of 4-5 hours.
There are plenty of other games out there, including a massive thriving indie-industry with games people can spend their money on instead of pirating games they didn't want to pay for.
That's true, but then you have to question why publishers deem such games worthy of a $60 price tag. There are some genuinely good games out there that suffer because of a short SP campaign (Enslaved comes into mind). People look at the reviews mentioning the short length and decide that they're better off buying it 4-6 months later at a bargain price.
I don't know how many times it has to be explained. You won't prevent a person from pirating software. They are stealing by choosing to acquire content for free. The principle isn't different t than from Walmart trying to cut prices to better accommodate shoplifters. Where you guys see the solution to piracy or even a relationship beetween pricing and piracy is beyond me. You must not be reading my explanations thoroughly. The publisher is not fighting for the pirates dollar! He won't pay even if it's 0.000001 cent.
This is a really good post but I think you've made a mistake here. You could just as easily argue that if price has no relation to piracy then you could peg the price at $500 for a game at launch and it wouldn't result in a rise in piracy, would you actually believe that?
Consider this: You have a certain portion of the population that is willing to pay $30, or just $10 for a game. The game launches at $60, marketting is in full force, demand is pretty much at its peak but those consumers who are only willing to pay $10/$30 cannot purchase it. They must wait months before it goes down in price. But they want it now. Since they can't buy it at the price they are willing to pay, the ones with more moral flexibility simply pirate it instead. They finish the game and never buy it even when the price does drop in 2 months.
The real question is this: Lowering the price might reduce piracy, but will the new-found sales actually be enough to actually make more money than if you had just kept the price high and ate the losses from piracy?
Consider how many people here on Polycount pirate 3ds max and Maya. This is software that costs thousands of dollars, the typical end user, especially a student trying to learn is not going to be able to afford that price. But Autodesk keeps the price high because the end user sales they lose to piracy do not make up for the corporate licenses from companies that CAN afford it.
It's a simple bell curve problem. You set the price too low and you might have successfully fought off most piracy (the pirates that CAN actually be fought off with pircing) but you also haven't made as much profit, you set it too high and you turn potential customers into pirates and again you haven't made much profit.
Yes there are undoubtedly pirates who will not even pay one cent for a product, piracy can never be completely eliminated. But it's a mistake to assume that all piracy is the same, a lot of piracy actually can be deterred by lower pricing. The issue is where do you set the price of a product so that you are not losing TOO MUCH to piracy so that you can still maximize your profit. The actual number really depends on the game, how well its been marketed, and the target audience, but I think $60 is probably pretty close to the ideal pricepoint for most products.
That's true, but then you have to question why publishers deem such games worthy of a $60 price tag. There are some genuinely good games out there that suffer because of a short SP campaign (Enslaved comes into mind). People look at the reviews mentioning the short length and decide that they're better off buying it 4-6 months later at a bargain price.
Production costs,
Even if the game itself is shorter than 1000 hour skyrim, they might've cost as much to create, and even if the singleplayer-only crowd will not find the price worth it, there majority of the purchasers of those games are the one that are after the whole experience, SP + MP.
If we take a short campaign like in modern warfare 2 for example, I loved it even if it was that short, since the popcorn-value was high all the way through than if I had gotten a 20 hour game with half the time being down-time with non-interesting stuff.
We can judge games after time it takes to play through the singleplayer campaign, but it might or might not be proper science to do so.
We can judge games after time it takes to play through the singleplayer campaign, but it might or might not be proper science to do so.
It might not be right to judge games based on their length, but that's the reality of the situation. These days it's rare for a game to survive without some form of MP. Customers expect more from expensive games..if you don't have an online component you better make sure your game has tons of replay value.
Consider how many people here on Polycount pirate 3ds max and Maya. This is software that costs thousands of dollars, the typical end user, especially a student trying to learn is not going to be able to afford that price. But Autodesk keeps the price high because the end user sales they lose to piracy do not make up for the corporate licenses from companies that CAN afford it.
Mm, Indie-games used to be very niche and could cost $30 back in the days because their customer-base was very limited and tiny, but with the big rise of the internet and stuff like steam, the very same indie-games can be sold at $5 and still make more money off it than they ever did before due to coverage.
yup. And the funny thing is, the players in those countries DO buy games - many do not pirate themselves. Except they buy them from pirates who offer them at prices suitable for those economies. Funnily enough, here in China are still many people who do not even KNOW that the $5 USD game/DVD they just bought is NOT the real thing. The copy is often just perfectly packaged and many of them have never seen the real legit retail box.
I think this along with the stat above that 56% of all games sold are used sales does go to show that people ARE willing to pay, but find the prices too high (I'm not saying here that the prices ARE too high, but that these people find them too high. Which in supply and demand could be the same thing).
The publisher is not fighting for the pirates dollar! He won't pay even if it's 0.000001 cent.
[...]
You are talking as if there is reasonable discourse to be made with a person who is knowingly stealing.
You're stating this things you just make up on the spots as facts. How can you be so sure?
I used to pirate a lot because I couldn't afford games, I admit, and looking back I can't defend it, but I know why I did it. I also know that when games got to the used bin or were released at a lower than usual price I usually bought it instead.
While you say they are "knowingly stealing", that is not the feeling many pirate have. No matter how it looks to you many simply don't put that value to it. For them it's NOT the same as shoplifting (not matter how it looks to us).
So for me, I realized after a while that it was the same as stealing, and stopped pirating games even when I couldn't afford them. With your reasoning that couldn't happen.
That is just coming from my own perspective as a former pirate and person with very low income.
I think this along with the stat above that 56% of all games sold are used sales does go to show that people ARE willing to pay, but find the prices too high (I'm not saying here that the prices ARE too high, but that these people find them too high. Which in supply and demand could be the same thing)..
The prices will always be too high. People are not buying $55 games at gamestop because $60 is too high of a price, they're buying it because it's a cheaper price than $60.
$20 is considered too high for an indie game, even if it has 200 hours worth of gameplay.
$10 is considered super costy for a game on the i-market, even if it is a lengthy game.
and apparently yet again, to some a pack of indie games for 1 cent is too much.
The current price on retail games is this sweet-spot the industry found, which is even considerably less than games cost before when you take production-costs into mind, where console games were sold for $60 but were developed with the costs of a $2 indie-game today.
The funny thing is that I find indie games to be underpriced when they're in the $10 price range. I think 20-40$ is a great price range for almost any game, with 5-20$ for short games (like limbo).
I think this along with the stat above that 56% of all games sold are used sales does go to show that people ARE willing to pay, but find the prices too high (I'm not saying here that the prices ARE too high, but that these people find them too high. Which in supply and demand could be the same thing).
You're stating this things you just make up on the spots as facts. How can you be so sure?
I used to pirate a lot because I couldn't afford games, I admit, and looking back I can't defend it, but I know why I did it. I also know that when games got to the used bin or were released at a lower than usual price I usually bought it instead.
While you say they are "knowingly stealing", that is not the feeling many pirate have. No matter how it looks to you many simply don't put that value to it. For them it's NOT the same as shoplifting (not mater how it looks to us).
So for me, I realized after a while that it was the same as stealing, and stopped pirating games even when I couldn't afford them. With your reasoning that couldn't happen.
That is just coming from my own perspective as a former pirate and person with very low income.
So you are proving my point exactly, no amount of pricecuts, better distribution models, wider consumer appeal or marketing stopped you from pirating until you made a moral choice to simply stop. So what on earth are you talking about then.
I am not passing judgement I am simply making a distinction between a possible consumer and a pirate. Spin it how you want, pirating is a theft. They don't give a shit. You should not be fighting for their dollar. Their dollar doesn't exist.
For those rare occassions of pirating due to lack of market presence in the area or availability etc. That's just it, rare ocassions. They were always potential customer with no easy means to buy your product. That's where steam and Russia example comes in.
This is a really good post but I think you've made a mistake here. You could just as easily argue that if price has no relation to piracy then you could peg the price at $500 for a game at launch and it wouldn't result in a rise in piracy, would you actually believe that?
Consider this: You have a certain portion of the population that is willing to pay $30, or just $10 for a game. The game launches at $60, marketting is in full force, demand is pretty much at its peak but those consumers who are only willing to pay $10/$30 cannot purchase it. They must wait months before it goes down in price. But they want it now. Since they can't buy it at the price they are willing to pay, the ones with more moral flexibility simply pirate it instead. They finish the game and never buy it even when the price does drop in 2 months.
The real question is this: Lowering the price might reduce piracy, but will the new-found sales actually be enough to actually make more money than if you had just kept the price high and ate the losses from piracy?
Consider how many people here on Polycount pirate 3ds max and Maya. This is software that costs thousands of dollars, the typical end user, especially a student trying to learn is not going to be able to afford that price. But Autodesk keeps the price high because the end user sales they lose to piracy do not make up for the corporate licenses from companies that CAN afford it.
It's a simple bell curve problem. You set the price too low and you might have successfully fought off most piracy (the pirates that CAN actually be fought off with pircing) but you also haven't made as much profit, you set it too high and you turn potential customers into pirates and again you haven't made much profit.
Yes there are undoubtedly pirates who will not even pay one cent for a product, piracy can never be completely eliminated. But it's a mistake to assume that all piracy is the same, a lot of piracy actually can be deterred by lower pricing. The issue is where do you set the price of a product so that you are not losing TOO MUCH to piracy so that you can still maximize your profit. The actual number really depends on the game, how well its been marketed, and the target audience, but I think $60 is probably pretty close to the ideal pricepoint for most products.
I've already explained why games cost how much they cost. I won't explain it again
On the point of cutting initial cost for wider consumer appeal it only happens with businesses that have an established revenue stream due to market share. So Sony and Microsoft can bite the bullet on console prices because they get sweet licencing cash on every game sold. That is not how a game publisher recoups their costs and makes a profit by selling a packaged good. There is no licensing deal to benefit from (sony, ms) nor is there a wide corporate market to draw revenue from like autodesk.
I assume that a lot of you work in the industry. These are basic things I am explaining here.
There have actually been a few times where a publisher would undercut another at launch. It was only 5 bucks. Rarely more than that. But only because the publisher needs that ~$30 to turn a profit on an expensive title.
The only case of at launch priceslashing I can imagine is if activision was so confident in call of duty that it sold it half price. But that wouldn't result in twice the sales. The market adoption rate for COD is already very saturated.
Remember, with your logic. Half price COD has to sell more than double to be a superior business model.
So you are proving my point exactly, no amount of pricecuts, better distribution models, wider consumer appeal or marketing stopped you from pirating until you made a moral choice to simply stop. So what on earth are you talking about then.
Actually I said I bought the cheaper games.
edit: but I'm of course also talking about not seeing it as theft, and coming to the realization that it is. And I am saying that reasonable discourse can be had. I didn't come to the moral conclusion all on my own, it was due to discussions (like these).
We already know it's theft, I didn't try to spin it in any way. It's just that the majority of the thieves don't regard it as theft. If they are made to do so, they would most likely stop (like me).
That's fine you were a bargain bin hunter. But that's way past the time when a publisher makes or breaks on a game. Like I said, unless you are wow or cod, you gotta make your money fairly quickly in a very competitive AAA game market. They were not fighting for your pirate dollar or your bargain bin dollar.
You are not entitled to lower prices just because of how much you personally can bear. The market and profitable business models will determine that.
We are exposed to so much affordable entertainment these days through xbla, psn, steam and of course mobile. How you can think that fantastic price models don't exist or aren't mainstream escapes me.
Just because you may want your HD uncharted experience at half the price doesn't mean you have a good grasp on how these business models work.
We're not talking about entitlement or rights. This is a discussion on how to stop piracy, right?
It's not if piracy is right or wrong, we all know it's not right.
So what I've been trying to do is not justify the acts, but explain them. To stop something you need to understand it.
When we understand it, and see the problem, we need to say "How do we deal with the problem?". Or even "is the way we're dealing with the problem today removing the problem? If not, is it the right solution?"
If the problem is a perceived overpricing, how do we solve it?
If the problem is something else, how do we solve that?
I've already explained very thoroughly. You revert to bouncing around without making a concrete informed point and speculating. I've not much else.
At the risk of repeating myself. Piracy is not a pricing problem. Piracy can't be eliminated or turned or prevented. All we can do is find ways to reach more legit consumers in better ways and treat them better.
edit: but I'm of course also talking about not seeing it as theft, and coming to the realization that it is. And I am saying that reasonable discourse can be had. I didn't come to the moral conclusion all on my own, it was due to discussions (like these).
We already know it's theft, I didn't try to spin it in any way. It's just that the majority of the thieves don't regard it as theft. If they are made to do so, they would most likely stop (like me).
I hear ya buddy and I think a lot of us share those experiences. But that's a social problem. A very difficult problem to solve overseas especially. It has nothing to do with prices or distribution or within the means of the publisher. Look at it this way. Developers hold very close communication with their consumers, more so than any other industries. But people still have the odacity to complain about drm bugs on pirated versions of Titan quest on official iron lore forums. So what discourse can be made? And if any can be made, you are only speaking to a tiny fraction of people who didn't give a shit and pirated.
Steam is part of the solution. Controlled hardware ( consoles) is part of the solution. Drm is kind of a pain. But we are not all without guilt. The industry is just trying to figure out how to protect its property. I work in the industry and every time I've worked with someone who still pirates. You want to be part of the solution? Then be outspoken about your feelings towards piracy. Considering how hard we all work and how volatile the economy can be, I am baffled at how little some people care about their fellow developers.
Every time I hear "but I am not hurting anyone" my eyes roll.
Next time you balk at a $800 console price or a $60 6-hour thrill ride think long and hard that perhaps your ingnorance in understanding how these business models work may be indirectly contributing to these problems, because we as consumers are not doing a good enough job at spreading the word that piracy hurts.
I've already explained very thoroughly. You revert to bouncing around without making a concrete informed point and speculating. I've not much else.
At the risk of repeating myself. Piracy is not a pricing problem. Piracy can't be eliminated or turned or prevented. All we can do is find ways to reach more legit consumers in better ways and treat them better.
Fuse, sorry to sound like a total dick, but from reading this thread, the impression I have is that you're the one speculating the most and presenting your opinions as facts. Don't take it as a personal attack. The thing is, I haven't seen you post any sources, so I'm wondering why are you so certain that your arguments are correct?
I'm referring primarily to this: " Piracy is not a pricing problem. Piracy can't be eliminated or turned or prevented." This is an extremely strong statement.
I will probably join the discussion myself seeing how I grew up in a country where piracy was and remains rampant to this day. I believe I might have something relevant to say about the topic.
I've already explained why games cost how much they cost. I won't explain it again
On the point of cutting initial cost for wider consumer appeal it only happens with businesses that have an established revenue stream due to market share. So Sony and Microsoft can bite the bullet on console prices because they get sweet licencing cash on every game sold. That is not how a game publisher recoups their costs and makes a profit by selling a packaged good. There is no licensing deal to benefit from (sony, ms) nor is there a wide corporate market to draw revenue from like autodesk.
I assume that a lot of you work in the industry. These are basic things I am explaining here.
There have actually been a few times where a publisher would undercut another at launch. It was only 5 bucks. Rarely more than that. But only because the publisher needs that ~$30 to turn a profit on an expensive title.
The only case of at launch priceslashing I can imagine is if activision was so confident in call of duty that it sold it half price. But that wouldn't result in twice the sales. The market adoption rate for COD is already very saturated.
Remember, with your logic. Half price COD has to sell more than double to be a superior business model.
You've read too much ideology into my post. I'm not claiming that cutting prices is a superior business model, if you had read the last paragraph of my post you'll see I think games are already well priced. It would more than likely be a revenue loss trying to chase the bottom dollar crowd because piracy as a matter of pricing has essentially been fought as far as it can possibly be fought at this point without diminishing revenues.
My only issue with your post is the assertion that piracy and price are totally unrelated. That's a seriously bold claim and in order for that to work you'd need to assume that the upper dollar limit for all pirates is $0 (or alternatively that no one pirates as a matter of price.)
We're both making the same point in two different ways: That lowering prices isn't a good way of fighting piracy. The difference is that you're doing it by claiming it's pointless because piracy and price are unrelated, my argument is that they are related but it's not worth doing because they'd gain sales but lose revenue.
I've already explained very thoroughly. You revert to bouncing around without making a concrete informed point and speculating. I've not much else.
At the risk of repeating myself. Piracy is not a pricing problem. Piracy can't be eliminated or turned or prevented. All we can do is find ways to reach more legit consumers in better ways and treat them better.
But you have to agree that price is a problem, especially for those in Asia. I know that Australians constantly get screwed with game prices there, and it's bad in Malaysia too (games cost 2-3x as much)
piracy isn't a pricing problem, and is only partially a service problem.
the service part comes in when you can get a better quality product from a pirated copy, such as no DRM, or in the case of a movie not having to sit through fucking ads and FBI warnings when you payed for your copy. So that there is completely the industries fault, for treating there legit customers like theifs, with shit that wont even effect pirates, or at best slow the release of the first cracked copy down by a bit.
the big sales valve puts on isn't converting pirates, it;s just getting more out legit customers, and even if your legit customers how infinite money just for games, there still not going to buy everything because unlike some kid who pirates the fuck out of everything, the working class has very limited time to actually play there games, since right off the bat 40+ hours a week are going to making there money, then there is there social/love life and sleep, which doesn't leave huge amounts of time to play games.
compare that to a jobless teen in mamma's basement who has absurd amounts of time on there hands to play games, feel entitled, and got no money.
Fuse. I'm going to try to not make you repeat yourself, but I'm afraid I can't be more concise since the problem in itself is so abstract. I think a lot of speculation and questions are necessary before being able to form an opinion on what the actual problem is, or what is the cause that gives the symptom of piracy.
Something you've mentioned many times is the current business model.
It could just be that the current business model does not work. This is not the only industry that could face a change in it's entire model. And then we could get into a completely separate discussion that I'm even less qualified to speculate about on how you could modify or change the current business model.
However, I'm going to quote you on some things:
"The publisher has to maximize profits in a short time in a competitive market at launch to pay for development costs, marketing and have enough money left over to fairly compensate the developer post launch."
"But just because it happens in a tightly controlled ecosystem like steam, it doesn't always apply to traditional methods of distribution. "
From what I can tell, Steam is a non-traditional business model. It's apparently succeeding where traditional ones are not. I think what they're trying with things like Steam, Origin and Uplay is one way of starting to adress the problem of piracy, which is moving away from the old business model.
It still relies on maximizing profits in a short time, but arguably succeeding better with a better form of delivery.
It might be that traditional forms of delivery cannot be as profitable as they were before and never will be again.
"Steam users are returning consumers who have made the conscious choice of being legitimate software purchasers with the understanding that they will be treated great."
"Steam simply gives developers more direct access to legit consumers market it doesn't convert pirates."
Here is where I do not agree unless I see some hard facts. I don't know where to find stats saying pirates are not converted or if they are converted. I don't necesarily disagree but it's such a big claim to make without something to back it up. But again, I don't know where to find any numbers on this so all I can do is speculate, as you said.
"Year on year, we get more and more amazing games well worth their price. Ok, so maybe cheapasses are going to argue that it's still not enough value."
And if they argue that, they feel they have a moral right to pirate the game. I'm not saying they do, but that would be one of their justifications.
And as I talked about perception before, the solution doesn't necessarily have to be lowering the price but rather altering their perception on what a fair price is.
My perception of a fair price is vastly different than before, as is the same with many people I know. If you can't justify pirating something then you might come to the insight that doing something like that is pure theft.
Combining that with altering customers perceptions, increasing benefits for being a customer etc I think it is very possibly to convert pirates.
Fuse, sorry to sound like a total dick, but from reading this thread, the impression I have is that you're the one speculating the most and presenting your opinions as facts. Don't take it as a personal attack. The thing is, I haven't seen you post any sources, so I'm wondering why are you so certain that your arguments are correct?
I'm referring primarily to this: " Piracy is not a pricing problem. Piracy can't be eliminated or turned or prevented." This is an extremely strong statement.
I will probably join the discussion myself seeing how I grew up in a country where piracy was and remains rampant to this day. I believe I might have something relevant to say about the topic.
No you are not being a dick at all.
I've already brought up numerous analogies, industry examples, distribution models to illustrate my major point. There is a pretty concrete distinction between a pirate and a potential consumer. What you guys feel is that the line is much more blurred. In fact we are probably arguing the same thing. Those "pirates" that you guys think get converted were always potential customers that the industry just couldnt reach. But that pales in comparison to real pirates who just won't pay a dime.
I grew up in Russia, so believe me people just dont give a shit. It's a social and cultural thing. Even if we pointed them to this discussion they would take it all in and still pirate. They pirate despite steam doing fantastic numbers. Why? Because there are still legit consumers in Russia who really hadn't any way to aquire legit games through means of Walmart or bestbuy or GameStop. Its not a large % of total Russian gaming population, but still enough people to make it real lucrative.
You are going to say you are from Asia and growing up in Toronto I know all about it. Again you just won't convince them, its a cultural thing.
What steam is doing is reaching more potential customers and treating the great thus turning them into return customers. It's not converting mass scale pirates.
But you have to agree that price is a problem, especially for those in Asia. I know that Australians constantly get screwed with game prices there, and it's bad in Malaysia too (games cost 2-3x as much)
Yes I'll agree with you mate. But again, we aren't really talking about cross continental product economics. There are other things in play there that cause insane game prices. A lot of it (freight, taxes, etc) add up and are unfortunately are out of our control as developers and as publishers.
Even if we could solve the stupid pricing discrepency it doesn't help solve our domestic piracy problem. Think about it. If we could turn all pirates in North America alone into consumers, we wouldn't give as much of a shit about Russia and China. We can't do that so the best we can do is reach more legit customers domestically and overseas which is what Steam is doing.
Yeah, it's a shame the prices get jacked up so much because of external factors. Digital distribution has somewhat fixed this, but shitty internet speeds and bandwith caps come into play too.
Yeah, it's a shame the prices get jacked up so much because of external factors. Digital distribution has somewhat fixed this, but shitty internet speeds and bandwith caps come into play too.
ya got a few aussie friends i play a lot of games with, and there always capped out on there monthly bandwidth usage, so when ever they get a new game on steam they need to wait till next month or pay huge amounts for going over there bandwidth cap, which to me seems so foreign since i dont think there are any Canadian isp's that have monthly caps on broadband usage.
a lot of people in countries with good Internet infrastructure dont relise what it is like in other countries.
Indeed. I mean there is a potential for Microsoft and Sony as well as all major publishers just to say fuck you GameStop and start selling their digital versions on xblive, psn and steam at a reduced price while still generating similar profit margins off each sale, maybe even better. But they can't do that. GameStop, Walmart etc would go apeshit and end their partnership deals. I mean, how can stores even begin to compete with digital distribution models that aren't artificially inflated ? Besides, I am sure there are legal contractual obligations to keep the market price equal.
Replies
There is no point made and there isnt any correlation to piracy at all. Steam users are returning consumers who have made the conscious choice of being legitimate software purchasers with the understanding that they will be treated great.
You are relating boxing day sales to shoplifting.
The whole steam vs. pirating topic is misrepresented. Just because others were short sighted and didn't see the benefit of providing the Russian consumers with a fantastic means of digital distribution it didn't have anything to do with piracy. Valve simply made a fantastic product for legitimate consumers. It didn't convert pirates, it simply capitalized on a small portion of a gigantic population who became legit steam users in a country where they dont have GameStops and walmarts everywhere.
or it converted pirates and capitalized on a small portion of a gigantic population who became legit steam users in a country where they dont have GameStops and walmarts everywhere.
In other words, 14 months after the game has been released. By which time the game had already been lowered in price in brick&mortar stores and on amazon. Frankly,I'm a bit amazed that Steam was still selling a game over a year later for $50.
I'm talking about releasing new games for either $60 or $30.
Not to mention that, hm, people buy more gifts during the holiday season)
If it launched on steam today, things may have been different for IL. Steam simply gives developers more direct access to legit consumers market it doesn't convert pirates.
I am sorry, I don't know how to explain it to you any better.
You do realize that torrenting is exactly the same bandwidth use as downloading from steam right?
If someone has a small budget, that small budget is all you can gain from them. Those who would spend 30 on games will STILL spend it on games, though maybe not on the $60 headliner, but last years headliner which is now cheaper and has proven its worth. Whether they spend it on a cheap launch title or a depreciated last-yearer, they spend their whole budget: $30.
On the other hand, people that DO have a large budget, would just buy the games they want, right at launch. If that's $60, they pay $60, if it's 30, 30, and if it's 120, they will probably fork over that too. Heck, look at collectors' editions. But if you launch a game at $30, you'll only get half the income out of these people with larger budgets - while not getting any extra from the people with maxed-out credit cards.
You could say "but yes, these people will also spend the other $30 but that's not quite true. How do people with money, get that money? Jobs. What does that job require? Time. People with money have no time to play all games, so they only play (and buy) the ones they will like most.
Maybe it sounds dickish, but that's how it works. Why else do you think most of the economy is adjusted to the upper/middle class and not the lower class?
So you're saying that others couldn't do the same if they had an effective marketing strategy and offered it for a similarly low price? I guess Steam is just an extreme outlier. It probably has nothing to do with the price being low enough to breach that impulse buyer barrier where the customer weighs the risk against the price and finding the price wins out.
It's pretty simple if you think about it. There are X number people out there willing to take a chance and pay $60 for a game. There are even more people out there willing to take a chance with $30 of their money. Even more with $15 and so on. You see, the as the price decreases the more people see it as an affordable risk. So as the price goes down, your customer base widens. There are apparently significantly more people willing to pay $15 for a AAA title than there are willing to pay $60.
56 Percent of gamers buy used. That seems to make it clear that pricing does effect where people get their games and what price they prefer to pay. If used wasn't an option, they would find another way rather than pay the retail price.
You can blame the dirty pirates all you like, but it's quite clear that it's a service and price issue. Once you align the services that they want for prices that don't give them pause to think, you'll see more revenue coming in.
What he means that, if you download it from Steam or the developers site, you're taxing their infrastructure, their servers. These servers cost money to run. By not buying the game but downloading it from them and taxing the servers, you force them to have more servers than they'd need for legitimate customers, and are in fact costing the company money.
It's like not buying a train ticket - the train does require a bit more fuel to carry you around as dead weight.
You are exactly right. That's where gabe hit the nail on the head. It's not a pricing issue at all it's a delivery issue.
When bestbuy launches their boxing week sales campaign its a multimillion dollar marketing scheme. It doesn't convert shoplifters into buyers or prevent shoplifting. What it does is speak to valuable legit consumers. The more people they can reach, the more can eventually become consumers. But these were legit consumers to begin with.
Steam does it on a much more brilliant, almost devious scale. The way it becomes the central cloud hub for all your content, the way it defaults to newest deals and promotions on boot up, the way it auto patches. We think we are recieving advertisement quite transparently on our own terms yet it still tickles all those well established consumer tendencies like impulse buys, desire, perceived value and so on. Steam just costs a fraction of a marketing campaign and still delivers to 99% of customers. Brilliant
You're way off there. People downloading games for free aren't getting it from those servers, they get it from their peers whom are sharing their bandwidth. You can't get a free copy of any game by leeching it from the developer's servers.
Mate you and I both know that this is an isolated and fairly poor argument regarding the overal debate in this thread.
Paying 1 cent for the Indie Bundle (and then downloading off of their servers, or Steam servers) is not enough for them to recoup the server costs. So while you give them a cent, you cost them two.
Pirating the game gives them no money, but also doesn't cost them any.
60 bucks on a game ain't cheap and when there are so many to play it can sure get expensive. But let's not be self entitled douches and want it all for nothing when a publisher is fighting for your hard earned dollar. It's a luxury good. Are there creative ways to make it a little easier to swallow for the consumer? Yes. But developers are also beginning to provide us with some pretty awesome dlc, new purchase bonuses and preorder treats.
Stop whining.
I don't think there's anyone here that's actually whining that they have a $10 budget, but all the games cost $60. I'd bet most people here have a pretty impressive library of games, and probably spent hundreds or thousands of dollars on them. I know I did. But that's not the point.
It's not about us. It's about other people, people who aren't here whining, that pirate games instead of buying them, and how do we reach them. Sure, you can tell some kid in Russia "stop whining, it's a luxury good". And he'll just give you the middle finger, pirate it, and then where are we?
Or... we can try and be constructive and listen to that person, and figure out a way to give him the stuff he wants so everyone benefits.
BTW, the comparison to movies is a bit odd. A film can have a $200million budget, and tickets still cost the same as a $10million movie. In games though, AAA publishers feel like they need to charge roughly 6 times the price of a movie ticket. The only cheaper games are indie. And why is that? Are you telling me that the cost to produce Gears of War is 6 times as high as producing Lord of the Rings?
People say, "well, they have a larger target audience, so they can afford to sell each ticket cheaper". Well no shit. That's what this whole piracy debate is about. Expanding our target audience from rich (by world-standard) Americans and Europeans, to everyone.
And by what measure can you claim that publishers can't make a good profit with lower priced goods? They're games comprised of data that is stored in a data format that is easily replicated without depletion. To not take advantage of that kind of price elasticity under the assumption that they've earned the higher price is foolish. The higher your price is, the fewer customers you're going to have. Do you think Bentley makes a huge volume of units sold? Of course not. Only people with tons of money can buy those, now look at the Ford Taurus. How many of those things do you see on a daily basis? How about a Kia or a Honda Civic? Common as dirt. Why? Because they are affordable to a large portion of the consumer market.
You're cutting out a lot of potential customers by stubbornly adhering to that rigid pricing model when you should be dropping it like a rock as the game fades from the public consciousness.
Edit:
What BigJohn said.
its quite hard to compare both industry.
but I still wish brand new AAA console game was cheaper.
Nothing worse than paying $60 for game at launch, running into a ton of drm/activation issues, bugs and eventually finding out that the game has an SP length of 4-5 hours + bad MP.
I don't know how many times it has to be explained. You won't prevent a person from pirating software. They are stealing by choosing to acquire content for free. The principle isn't different t than from Walmart trying to cut prices to better accommodate shoplifters. Where you guys see the solution to piracy or even a relationship beetween pricing and piracy is beyond me. You must not be reading my explanations thoroughly. The publisher is not fighting for the pirates dollar! He won't pay even if it's 0.000001 cent.
Video games is a luxury good! It's expensive to produce and still expensive to distribute. I don't know how it can be spelled out any clearer. Films have gigantic distribution opportunities on a quick turnaround through box office. That's how they keep the tickets so much cheaper. Games have to compete with each other in fairly short timeframes to turn profit. And don't forget, a lot of films barely break even at box office. Good or bad, expensive or not. Guess where they make up the additional revenue? DVD sales. What is an average cost of a DVD? Guess how much of the $60 game goes to the publisher ? Well there you have it.
And guess what also? A lot of people still bootleg and torrent brand new films despite a movie theatre at every corner. Is it because they are too expensive? Films have a wider audience appeal by nature, not because they are doing something extra to open up the market and they are definitely not doing anything to appease the bootleggers because they still bootleg to no avail. You are talking as if there is reasonable discourse to be made with a person who is knowingly stealing.
Walmart is not expanding to china to combat millions they lose in shoplifting.
Now be honest and recall how often that happens these days. Between previews, thorough reviews, demos and aggregated scores you can have a pretty good idea of what a game is like.
I guess you can argue that a critically acclaimed game just doesnt excite you for subjective reasons. So if, say, skyrim is not your thing you may be a little upset at spending $60 bucks on it. Fair enough. Just remember, I just explained why games cost more than movies.
Actually, huge amounts of market concentration is target at the lower classes and rightfully so ( for an even more dickish sounding reason )
The further down the chain you are, in thriving markets you are practically farmed. The upper and middle class invest and save huge amounts of their money. The upper 10 percent's money is practically locked away for good!
But the crumpled $10 bucks in a poor mans pocket will always be spent by the end of the hour. Lots of businesses thrive in the inner cities. The harshest neigborhoods in east baltimore. ( my neighborhood ) where crime and poverty is as bad as it gets... The majority of kids play Madden on XBox 360's ( last time I spent serious time in the projects Gears of War was pretty popular as well ). Although the majority of households may not actually own a console... each decrepid living room and bedroom that does is packed with hardcore gamers! ( represent
To be fair: in this day and age all it takes is one review to find out if the game has drm or a singleplayer campaign the length of 4-5 hours.
There are plenty of other games out there, including a massive thriving indie-industry with games people can spend their money on instead of pirating games they didn't want to pay for.
That's true, but then you have to question why publishers deem such games worthy of a $60 price tag. There are some genuinely good games out there that suffer because of a short SP campaign (Enslaved comes into mind). People look at the reviews mentioning the short length and decide that they're better off buying it 4-6 months later at a bargain price.
Consider this: You have a certain portion of the population that is willing to pay $30, or just $10 for a game. The game launches at $60, marketting is in full force, demand is pretty much at its peak but those consumers who are only willing to pay $10/$30 cannot purchase it. They must wait months before it goes down in price. But they want it now. Since they can't buy it at the price they are willing to pay, the ones with more moral flexibility simply pirate it instead. They finish the game and never buy it even when the price does drop in 2 months.
The real question is this: Lowering the price might reduce piracy, but will the new-found sales actually be enough to actually make more money than if you had just kept the price high and ate the losses from piracy?
Consider how many people here on Polycount pirate 3ds max and Maya. This is software that costs thousands of dollars, the typical end user, especially a student trying to learn is not going to be able to afford that price. But Autodesk keeps the price high because the end user sales they lose to piracy do not make up for the corporate licenses from companies that CAN afford it.
It's a simple bell curve problem. You set the price too low and you might have successfully fought off most piracy (the pirates that CAN actually be fought off with pircing) but you also haven't made as much profit, you set it too high and you turn potential customers into pirates and again you haven't made much profit.
Yes there are undoubtedly pirates who will not even pay one cent for a product, piracy can never be completely eliminated. But it's a mistake to assume that all piracy is the same, a lot of piracy actually can be deterred by lower pricing. The issue is where do you set the price of a product so that you are not losing TOO MUCH to piracy so that you can still maximize your profit. The actual number really depends on the game, how well its been marketed, and the target audience, but I think $60 is probably pretty close to the ideal pricepoint for most products.
Production costs,
Even if the game itself is shorter than 1000 hour skyrim, they might've cost as much to create, and even if the singleplayer-only crowd will not find the price worth it, there majority of the purchasers of those games are the one that are after the whole experience, SP + MP.
If we take a short campaign like in modern warfare 2 for example, I loved it even if it was that short, since the popcorn-value was high all the way through than if I had gotten a 20 hour game with half the time being down-time with non-interesting stuff.
We can judge games after time it takes to play through the singleplayer campaign, but it might or might not be proper science to do so.
It might not be right to judge games based on their length, but that's the reality of the situation. These days it's rare for a game to survive without some form of MP. Customers expect more from expensive games..if you don't have an online component you better make sure your game has tons of replay value.
Mm, Indie-games used to be very niche and could cost $30 back in the days because their customer-base was very limited and tiny, but with the big rise of the internet and stuff like steam, the very same indie-games can be sold at $5 and still make more money off it than they ever did before due to coverage.
I think this along with the stat above that 56% of all games sold are used sales does go to show that people ARE willing to pay, but find the prices too high (I'm not saying here that the prices ARE too high, but that these people find them too high. Which in supply and demand could be the same thing).
You're stating this things you just make up on the spots as facts. How can you be so sure?
I used to pirate a lot because I couldn't afford games, I admit, and looking back I can't defend it, but I know why I did it. I also know that when games got to the used bin or were released at a lower than usual price I usually bought it instead.
While you say they are "knowingly stealing", that is not the feeling many pirate have. No matter how it looks to you many simply don't put that value to it. For them it's NOT the same as shoplifting (not matter how it looks to us).
So for me, I realized after a while that it was the same as stealing, and stopped pirating games even when I couldn't afford them. With your reasoning that couldn't happen.
That is just coming from my own perspective as a former pirate and person with very low income.
The prices will always be too high. People are not buying $55 games at gamestop because $60 is too high of a price, they're buying it because it's a cheaper price than $60.
$20 is considered too high for an indie game, even if it has 200 hours worth of gameplay.
$10 is considered super costy for a game on the i-market, even if it is a lengthy game.
and apparently yet again, to some a pack of indie games for 1 cent is too much.
The current price on retail games is this sweet-spot the industry found, which is even considerably less than games cost before when you take production-costs into mind, where console games were sold for $60 but were developed with the costs of a $2 indie-game today.
So you are proving my point exactly, no amount of pricecuts, better distribution models, wider consumer appeal or marketing stopped you from pirating until you made a moral choice to simply stop. So what on earth are you talking about then.
I am not passing judgement I am simply making a distinction between a possible consumer and a pirate. Spin it how you want, pirating is a theft. They don't give a shit. You should not be fighting for their dollar. Their dollar doesn't exist.
For those rare occassions of pirating due to lack of market presence in the area or availability etc. That's just it, rare ocassions. They were always potential customer with no easy means to buy your product. That's where steam and Russia example comes in.
I've already explained why games cost how much they cost. I won't explain it again
On the point of cutting initial cost for wider consumer appeal it only happens with businesses that have an established revenue stream due to market share. So Sony and Microsoft can bite the bullet on console prices because they get sweet licencing cash on every game sold. That is not how a game publisher recoups their costs and makes a profit by selling a packaged good. There is no licensing deal to benefit from (sony, ms) nor is there a wide corporate market to draw revenue from like autodesk.
I assume that a lot of you work in the industry. These are basic things I am explaining here.
There have actually been a few times where a publisher would undercut another at launch. It was only 5 bucks. Rarely more than that. But only because the publisher needs that ~$30 to turn a profit on an expensive title.
The only case of at launch priceslashing I can imagine is if activision was so confident in call of duty that it sold it half price. But that wouldn't result in twice the sales. The market adoption rate for COD is already very saturated.
Remember, with your logic. Half price COD has to sell more than double to be a superior business model.
Actually I said I bought the cheaper games.
edit: but I'm of course also talking about not seeing it as theft, and coming to the realization that it is. And I am saying that reasonable discourse can be had. I didn't come to the moral conclusion all on my own, it was due to discussions (like these).
We already know it's theft, I didn't try to spin it in any way. It's just that the majority of the thieves don't regard it as theft. If they are made to do so, they would most likely stop (like me).
You are not entitled to lower prices just because of how much you personally can bear. The market and profitable business models will determine that.
We are exposed to so much affordable entertainment these days through xbla, psn, steam and of course mobile. How you can think that fantastic price models don't exist or aren't mainstream escapes me.
Just because you may want your HD uncharted experience at half the price doesn't mean you have a good grasp on how these business models work.
It's not if piracy is right or wrong, we all know it's not right.
So what I've been trying to do is not justify the acts, but explain them. To stop something you need to understand it.
When we understand it, and see the problem, we need to say "How do we deal with the problem?". Or even "is the way we're dealing with the problem today removing the problem? If not, is it the right solution?"
If the problem is a perceived overpricing, how do we solve it?
If the problem is something else, how do we solve that?
At the risk of repeating myself. Piracy is not a pricing problem. Piracy can't be eliminated or turned or prevented. All we can do is find ways to reach more legit consumers in better ways and treat them better.
I hear ya buddy and I think a lot of us share those experiences. But that's a social problem. A very difficult problem to solve overseas especially. It has nothing to do with prices or distribution or within the means of the publisher. Look at it this way. Developers hold very close communication with their consumers, more so than any other industries. But people still have the odacity to complain about drm bugs on pirated versions of Titan quest on official iron lore forums. So what discourse can be made? And if any can be made, you are only speaking to a tiny fraction of people who didn't give a shit and pirated.
Steam is part of the solution. Controlled hardware ( consoles) is part of the solution. Drm is kind of a pain. But we are not all without guilt. The industry is just trying to figure out how to protect its property. I work in the industry and every time I've worked with someone who still pirates. You want to be part of the solution? Then be outspoken about your feelings towards piracy. Considering how hard we all work and how volatile the economy can be, I am baffled at how little some people care about their fellow developers.
Every time I hear "but I am not hurting anyone" my eyes roll.
Next time you balk at a $800 console price or a $60 6-hour thrill ride think long and hard that perhaps your ingnorance in understanding how these business models work may be indirectly contributing to these problems, because we as consumers are not doing a good enough job at spreading the word that piracy hurts.
Fuse, sorry to sound like a total dick, but from reading this thread, the impression I have is that you're the one speculating the most and presenting your opinions as facts. Don't take it as a personal attack. The thing is, I haven't seen you post any sources, so I'm wondering why are you so certain that your arguments are correct?
I'm referring primarily to this: " Piracy is not a pricing problem. Piracy can't be eliminated or turned or prevented." This is an extremely strong statement.
I will probably join the discussion myself seeing how I grew up in a country where piracy was and remains rampant to this day. I believe I might have something relevant to say about the topic.
My only issue with your post is the assertion that piracy and price are totally unrelated. That's a seriously bold claim and in order for that to work you'd need to assume that the upper dollar limit for all pirates is $0 (or alternatively that no one pirates as a matter of price.)
We're both making the same point in two different ways: That lowering prices isn't a good way of fighting piracy. The difference is that you're doing it by claiming it's pointless because piracy and price are unrelated, my argument is that they are related but it's not worth doing because they'd gain sales but lose revenue.
But you have to agree that price is a problem, especially for those in Asia. I know that Australians constantly get screwed with game prices there, and it's bad in Malaysia too (games cost 2-3x as much)
the service part comes in when you can get a better quality product from a pirated copy, such as no DRM, or in the case of a movie not having to sit through fucking ads and FBI warnings when you payed for your copy. So that there is completely the industries fault, for treating there legit customers like theifs, with shit that wont even effect pirates, or at best slow the release of the first cracked copy down by a bit.
the big sales valve puts on isn't converting pirates, it;s just getting more out legit customers, and even if your legit customers how infinite money just for games, there still not going to buy everything because unlike some kid who pirates the fuck out of everything, the working class has very limited time to actually play there games, since right off the bat 40+ hours a week are going to making there money, then there is there social/love life and sleep, which doesn't leave huge amounts of time to play games.
compare that to a jobless teen in mamma's basement who has absurd amounts of time on there hands to play games, feel entitled, and got no money.
Something you've mentioned many times is the current business model.
It could just be that the current business model does not work. This is not the only industry that could face a change in it's entire model. And then we could get into a completely separate discussion that I'm even less qualified to speculate about on how you could modify or change the current business model.
However, I'm going to quote you on some things:
"The publisher has to maximize profits in a short time in a competitive market at launch to pay for development costs, marketing and have enough money left over to fairly compensate the developer post launch."
"But just because it happens in a tightly controlled ecosystem like steam, it doesn't always apply to traditional methods of distribution. "
From what I can tell, Steam is a non-traditional business model. It's apparently succeeding where traditional ones are not. I think what they're trying with things like Steam, Origin and Uplay is one way of starting to adress the problem of piracy, which is moving away from the old business model.
It still relies on maximizing profits in a short time, but arguably succeeding better with a better form of delivery.
It might be that traditional forms of delivery cannot be as profitable as they were before and never will be again.
"Steam users are returning consumers who have made the conscious choice of being legitimate software purchasers with the understanding that they will be treated great."
"Steam simply gives developers more direct access to legit consumers market it doesn't convert pirates."
Here is where I do not agree unless I see some hard facts. I don't know where to find stats saying pirates are not converted or if they are converted. I don't necesarily disagree but it's such a big claim to make without something to back it up. But again, I don't know where to find any numbers on this so all I can do is speculate, as you said.
"Year on year, we get more and more amazing games well worth their price. Ok, so maybe cheapasses are going to argue that it's still not enough value."
And if they argue that, they feel they have a moral right to pirate the game. I'm not saying they do, but that would be one of their justifications.
And as I talked about perception before, the solution doesn't necessarily have to be lowering the price but rather altering their perception on what a fair price is.
My perception of a fair price is vastly different than before, as is the same with many people I know. If you can't justify pirating something then you might come to the insight that doing something like that is pure theft.
Combining that with altering customers perceptions, increasing benefits for being a customer etc I think it is very possibly to convert pirates.
No you are not being a dick at all.
I've already brought up numerous analogies, industry examples, distribution models to illustrate my major point. There is a pretty concrete distinction between a pirate and a potential consumer. What you guys feel is that the line is much more blurred. In fact we are probably arguing the same thing. Those "pirates" that you guys think get converted were always potential customers that the industry just couldnt reach. But that pales in comparison to real pirates who just won't pay a dime.
I grew up in Russia, so believe me people just dont give a shit. It's a social and cultural thing. Even if we pointed them to this discussion they would take it all in and still pirate. They pirate despite steam doing fantastic numbers. Why? Because there are still legit consumers in Russia who really hadn't any way to aquire legit games through means of Walmart or bestbuy or GameStop. Its not a large % of total Russian gaming population, but still enough people to make it real lucrative.
You are going to say you are from Asia and growing up in Toronto I know all about it. Again you just won't convince them, its a cultural thing.
What steam is doing is reaching more potential customers and treating the great thus turning them into return customers. It's not converting mass scale pirates.
Yes I'll agree with you mate. But again, we aren't really talking about cross continental product economics. There are other things in play there that cause insane game prices. A lot of it (freight, taxes, etc) add up and are unfortunately are out of our control as developers and as publishers.
Even if we could solve the stupid pricing discrepency it doesn't help solve our domestic piracy problem. Think about it. If we could turn all pirates in North America alone into consumers, we wouldn't give as much of a shit about Russia and China. We can't do that so the best we can do is reach more legit customers domestically and overseas which is what Steam is doing.
ya got a few aussie friends i play a lot of games with, and there always capped out on there monthly bandwidth usage, so when ever they get a new game on steam they need to wait till next month or pay huge amounts for going over there bandwidth cap, which to me seems so foreign since i dont think there are any Canadian isp's that have monthly caps on broadband usage.
a lot of people in countries with good Internet infrastructure dont relise what it is like in other countries.