"The first day, it sold 1,000 copies for $5. But pirates had also made 35,000 copies for free."

WITH THEIR BARE HANDS.

Bless you, Kotaku. You're a bastion of quality journalism.

Too many TV shows have been canceled due to not enough millions of people seeing the ads. Too many bloggers have lost their entire income when Google wrongfully banned their AdSense accounts. This is not a good solution, and it's not very indie-pendent at all.

I'm not sure what the best solution is, but whoring yourself out to ad companies is not it. I think more experiments should be done in the realm of getting pirates to give a little money. For starters, it couldn't hurt to ask.

A misunderstanding of piracy's effect irritates me. From my studies I've concluded piracy doesn't change how many people purchase your game, merely how many people obtain your game.

I view ads as being pretty evil. They corrupt media and shift focus from the audience to advertisers. Piracy is a real problem, but I'd never release an ad-supported game. If that's what I have to do to release a game, it's not worth doing it.

@Adam

What evidence do you have to support that view?

well first of all I have ethical issues with advertising, so regardless of money its not an option I'll consider.

plus I agree with Adam, Its my experiance that people will still spend a certain amount of money on games but will want more than they can afford.

The advantage we have as independants is that most gamers actually WANT to support us.

IMO using piracy as an excuse to justify advertising is total rubbish.

with regard raycatcher I'm a music game nut, but theres no way I'm spending £4 on something that doesent even look exciting in the videos. for £2 more someone can get audiosurf!

...plus this weekend is a mini ludum dare and I expect aload of free games that kick the crap out of raycatcher to appear overnight...

wow, long comment, sorry to whoever feels compelled to read all that

I don't have problem with ads in games, just don't put a character saying "I gonna cut ya with the george forman knife", make something like posters on the walls, and stuff, alo they could put ads in exe games, not only browser ones.
And i am not talking about "win 500 ring tones, click here" but real products like coca-cola that don't need to click on anything or go to they webpage, just something about coca someplaces of the game.

I view ads as being pretty evil. They corrupt media and shift focus from the audience to advertisers. Piracy is a real problem, but I'd never release an ad-supported game. If that's what I have to do to release a game, it's not worth doing it.

Completely agree with this. It's a real shame that independent games get pirated as much as commerical games but advertising isn't a good solution because it shifts the focus on who the publishers are working for and makes them subservient to advertisers rather than trying to keep their customer base happy.

The indie community anal over adverts in game? Whodathunkit?

Piracy is a problem to some developers and adverts basically mean they could even release a game for free. A lot of people would like that. im going down the sponsor route myself with a few logos on the boot up screen but as a graduate with a student loan to pay back... I dont give a rats ass.

Put annoying ads in a game, and i will neither buy it nor pirate it.

How the hell is piracy a problem to anybody? Contrary to Alex's question, I think the burden of proof in this is actually on the anti-piracy crusade, who still haven't made an adequate case that piracy hurts video game sales.

Hey, how can you say piracy doesn't hurt games? It sure hurt the cripple music...indust...ok, well they're doing fine, but have you seen the movie...well, they aren't pining either, but...there's always the... is there really one industry at all that has been able to claim it has substantially suffered thanks to pirates?

I do believe ads in games are evil as well.
http://www.microsoft.com/presspass/press/2008/jun08/06-03AdEffectivenessPR.mspx

"A global candy bar company executed a branding campaign in “NASCAR® 08,” published by Electronic Arts. Seventy-five percent of gamers recalled the candy bar in-game advertising with 56 percent recalling the specific ad creative. Within the test group, 72 percent agreed with the statement that the candy bar is “a great snack to eat while playing video games,” an increase of 29 percent from the control group; the proportion agreeing that the candy bar “gives you energy” and “is cool” rose 24 percent and 21 percent from control group to test group, respectively."

Ads in general, and I wonder if especially in games, are able to alter people's opinions of products on completely irrational levels. People actually said a candy bar was cool because they saw it in a video game! Not because they'd tasted it. Not because they'd evaluated its worth. A simple friken ad.

And examples like this are not hard do find. I just googled "ads effectiveness games" and knew pretty much any article would demonstrate this. Try it.

TV is bad enough. Even product placement in movies is evil. At least with games, we've resisted for so long. (Well, maybe not really, but it's not in every game, unless the publisher is EA.)

@kongming

Are you really arguing that pirates don't buy games? Not a single person will buy the game because there is no free copy available?

I'm sorry, but this is bizarro world logic. If it's not apparent to you that some people are cheap bastards, you need to take a hard look at human nature. It's self-evident that piracy can hurt sales. The question is to what degree and under which conditions.

I'm sick of pirate apologists making excuses. People are not entitled to enjoy the work of others for free without permission.

If advertisers will support a game while people won't, ads are going in games.

Some people can afford to release free software, others can't. It's a case-per-case basis.

Seems like people feel like their trust has been circumvented when they see ads in a game. This isn't true. Developers just need the money now in order to make their next game. Games cost a lot of money to make because they take a lot of time to make.

That's why the rapid prototype competitions like Ludum Dare are popular. Make a good game for not a lot of risk to the developer's time.

But not every game can be rapidly created.

Piracy can result in a decrease of sales, and it can also result in an increase in sales, it all depends on the particular circumstance. Sometimes it can even do both for the same game, at different times. It's all contextual, you can't make general rules about it.

I still suspect selling games is a better way to make a living as an indie developer than advertisements. Even if only 10% of people with the full version bought it and 90% pirated it, it's possible to survive by virtue of the generosity of those honest 10%.

In my experience most of the people who pirate fall into a few categories: kids without jobs or with only low-paying jobs, people without credit cards (in many countries credit cards are not common), people in the third or second world (especially Russia and Eastern Europe), and a few hardcore ideological pirates who just pirate everything as a rule even though they can afford not to. People in their 30s or 40s who are comfortable and making a decent living usually don't pirate. It just so happens that the internet is dominated by those earlier categories right now: a good portion of people who use the internet don't have very large expendable incomes. This will change with time as more people start to use the internet.

@Paul

I hope that you're right. People don't seem to make the connection between copyright and creators producing work right now. Unfortunately, copyright is the best model that we have so far promoting media creation.

It's not all doom and gloom, however. The reason that we can have 90% piracy rates is the reason why we can have indie games for sale. It doesn't mean that we have to take piracy sitting down, but there's no need to get bent out of shape either. It's a cosmic phnomenon like death or taxes.

Whet pisses me off is people trying to make it look like pirates are doing artists a favour. I'm fine with people being cheap, as long as they're honest about it.

"People are not entitled to enjoy the work of others for free without permission." Wow, somebody's sure bought into the questionable concept of 'intellectual property' hardcore.

If YOU think that most pirates would have bought the games they're pirating, you're an idiot. For one thing, many pirates live in countries such as China or Russia where games generally aren't available commercially, and even if they were they're quite expensive.

But even in the case of pirates in rich countries... Well, it's anecdotal, but most of the pirates I know who can't get around the DRM for a game just don't bother with it. There are plenty of other games for them to pirate and play, why would they bother spending money just to play this one game they can't pirate?

And again, the burden of proof is on your side. You haven't actually presented any evidence, you're just making an appeal to the vague concept of 'human nature.'

GirlFlash, for many people I know, the amount they spend on games per month is exactly zero point zero. Of course, I have no hard proof that—given a hypothetical impossibility of piracy—they would spend money on games or not. But considering many spend days and days playing games and are nowhere near starvation, I think it's just silly to pretend that these people would never ever pay for games if they had to.

But of course, no hard proof. So that probably means it's okay.

@Alex, I agree that the pretending part is a bit weird, but people are always going to rationalize their behavior. It doesn't really upset me, defenses of piracy are often so obviously a set of rationalizations that serious discussions about it are impossible. Smokers often believe that the idea that smoking causes lung cancer is overstated or false too. No evidence would convince them. But piracy isn't like a disease, it's much harder to prove either way.

Anyone who has sold games and had to deal with it knows piracy can hurt sales from firsthand experience. I could give figures from my own game with specifics if anyone wants, but as I said, it's superfluous. Such discussions don't interest me, they just waste time.

But it's still also true that piracy can be used to promote a game and increase sales. So there's still a seed of truth to such claims.

To be fair, almost no one is brining real info into this debate. I want links to articles. Either that, or I want statements so purely rational that they are no arguable. But, most people don't realize their arguments are not based on fact or reason. (Like a "pro-life" claiming abortion is murder without debating whether a fetus counts as human life.)

So, the rule of thumb is back up your argument. If you say you've read an article, let's see it. Google a similar one. Seriously.

http://www.gamasutra.com/php-bin/news_index.php?story=17350

Here's an interesting article. It actually...uh...*nearly pukes* shows that DRM ...actually increased sales and lowered piracy, in one instance. It's possible that one could argue that...piracy DID...in one instance..hurt.

Though, I would like to note that DRM can't be proved so easily to prevent piracy because Spore, despite it's EXTREME use of DRM, was a piece of cake to pirate.

Here's an article supporting that.

http://www.gamasutra.com/view/feature/4020/pc_game_piracy_why_bother_with_.php

Gamasutra as well, btw. It seems Reflexive just did something smart with their DRM.

There's plenty more on the subject, but why do I have to do all the legwork?

Paul Eres: "Anyone who has sold games and had to deal with it knows piracy can hurt sales from firsthand experience."

The second article I linked had an interesting paragraph from 2D Boy's Ron Carmel claiming he really didn't think piracy was an issue.

[quote]"I'm convinced that we lost very few customers because of piracy," he says. "People who pirate the game are people who wouldn't have bought it anyway. I don't know anyone who would try to find a cracked version and, if they can't locate one, they say, ‘OK, since I can't find it for free, I'm going to go out and buy it.' I just don't think that happens." [/quote]

@Splinter of Chaos

Interesting article. I wonder if the patches contained anything other than the DRM fixes. That would introduce noise into the data.

@kongming

"Wow, somebody's sure bought into the questionable concept of 'intellectual property' hardcore."

Copyright is the only reason why we can have full-time authors. Take that away and the only thing that you'll have is the result of hobbyists. Or do you want to go back to a model where the wealthy sponsor creative works?

How about this, kongming; you propose a viable model to allow creative types to keep doing what they do well, and I'll take you seriously. So far, you sound like another apologist who's never made anything of worth himself.

You are probably the first journalist I know to actually give sufficient insight, balance two sides, and worry about being unbalanced.

I congradulate you, sir. Most blogs and newscasts make steep generalizations and are huge attention getters. What they don't realize is that the more accurate they try to sound, as you have put it, the more attention you get. People are debating like crazy!

Pirates are those who extort money. Better not to pay to pirates than extort money from other people.

Haha, 'another apologist'? What, exactly, am I an apologist for?

You still haven't presented any evidence, so whatever, I don't even know why I'm bothering to respond to your pointless posts.

Splinter of Chaos, that's a pretty interesting link. Of course, there's a bit of a correlation vs. causation issue there. Due to other factors (such as the vagaries of Internet sales) there might not even be any relation at all between Reflexive's fixes and sales. I wonder how those numbers would look if we applied the right econometric models to them...

I'm not trying to discount the numbers. It's real data and it's valuable. I'm just saying, we probably shouldn't take them at face value, and we'll need far more data before we can make a reasonable conclusion.

@Splinter of Chaos

Well, I don't think it's a big problem either. Just because I think it can reduce sales doesn't mean I think it's a huge problem. So "piracy can reduce sales" isn't really refuted by a developer saying it isn't a problem, since I don't think it is either.

As an analogy, shoplifting in stores can reduce sales. But shoplifting usually isn't a major problem for stores, because the profit lost through shoplifting is usually minimal and because they can't do much about it anyway. Likewise, in my experience piracy does reduce sales, but the sales lost are often not too significant.

Another thing is that World of Goo was a popular enough game that it hit the torrents on the day of release. My game wasn't that popular, it was pirated through easily taken-down filesharing links, but it didn't have a torrent until recently, when it was released on Reflexive, about a year and a half after its original release. The conversion rate (ratio of sales per demo downloads) went down after a working torrent for the game went up. Which to me means some lost sales. It wasn't that big of a deal to me, and there are other explanations (i.e. it could just be coincidental that a lower proportion of people bought the game after downloading the demo after a pirated version of the game was available, that's fully possible).

I could give more precise data like downloads per month, conversion rate at various months, but blog comments aren't the best place for this, and again, I don't think it'll convince anyone.

I think that there should be a service that puts a virus into games. The virus would do nothing, but it'd prevent people from uploading games to servers, seeing as the virus scanners would pick it up. Maybe a file that remembers when it is uploaded once? :S

That would be pretty interesting, Paul. How about making a post on your blog?

Tony: If DRM is considered restrictive for doing what it does all too well, stopping us from doing perfectly legal things, your idea would be worse.

Paul: I would also really like seeing this on your blog, though I didn't know you had one. If you do make an entry, could you link the blog post here?

@Tony

I hope that was meant to be a joke. The whole point is that we should treat our audience with respect. I know it can be a bit frustrating sometimes, and the netural feeling is to think of a way to get back "at the pirates." However, it's a petty and selfish thing to do. It doesn't make sense artistically or business-wise.

@Paul

kongming is right, that would be very interesting. There's such a sparsity of data out there, that any one contribution is informative. I'm particularly interested in conversion stats. If the article above is true and stopping 1000 pirates nets 1 sale, then piracy is a minor annoyance.

@kongming

I think that I owe you a bit of an apology. Some of your posts rubbed me the wrong way and I mistook you for a generic annoying Internet person. Some of the language you used was unnecesarily snarky, but then you could probably say the same for myself.

I can't say that I agree with some of your presuppositions, but that's life. Anyway, you sound like a reasonable guy, and I respect that.

Apology accepted. :)

the problem with posting a blog entry about it and then linking people to it here is that it'll seem to people like i'm whining about piracy even though that isn't my intention. but i may as well, since there is a paucity of data on the subject

i actually have two blogs: my livejournal (which has more personal stuff not related to games) and the one on studioeres.com which is rarely updated and is more specifically about games -- i'll post it in the second one.

Thanks.

Okay, done:

http://studioeres.com/games/content/history-conversion-rate-immortal-defense

I doubt it's worth making an entry in this blog just to link to it, so hopefully everyone who wanted to see it will check back here.

Thanks Paul! It's interesting to see what the conversion rates are.

kongming, It was just one post/ And you play in free games and extort money from their autors too. So who is a pirat?

I have played a few free ad supported games and I found them as good as any other game. The ads were not too spammy to ruin the game. They played in between level loading screens of the game. I have also seen these same games on Piracy web sites. This works because the ads still get seen.. it really doesn't matter where the game was downloaded from.. The end result is the same.

For your consideration a re-post of my Piracy article below.

GAME PIRACY DOES NOT HURT SALES AND GAME COMPANIES KNOW IT!

This is closely related to the DRM issue.

I look at the piracy issue this way and I believe companies do too but they won't admit this to you:

Piracy doesn't hurt companies one bit and they know it. If they make 1 million copies of a game at a set price and they send to market all 1 million, they figure how much cash they stand to make on those games. If they reach their target number of sales, the company considers that game a success for them.

Now lets say another 1 million copies were pirated. This is great for the game company because they get more exposure and chances are better than not that sometime in the future some of those folks will purchase a game from that company. It's free advertisement. None of those pirated games will cause the game company to lose one penny of those targeted 1 million sales because for every kid who has a pirated game there will always be one willing to buy the game off the shelf. Thus they get all the money they were after. The game companies know this.

The marketing divisions also know the psychological factor involved. If you tell a person he can't do something he's more likely to try to do it anyway. I am not saying they want pirated games but they know if a million people refuse to purchase the game and decide to download it free instead, they will have this much more free advertisment.

Some people try to make the claim that the game companies deserve to get paid for the copies of pirated games and are thus losing money. This is totally silly. As an example, people download songs off the radio all day long and pass copies to their friends. The music companies don't figure on getting paid for this, so they don't worry about it. They worry about the sales of CD's they send to market. The game industry is no different. The argument goes like this:

If we (the game company) can stop people from pirating our games (by DRM or anti-piracy technology or what have you then we can put out more game copies and get paid for them. Again this is silly. If the game company wanted to make 2 million sales why didn't they just produce another 1 million copies for market in the first place? They want to make free money on your work. Your machine makes or downloads the copy and gets the copy to a consumer (you). They don't have to spend money on making the copy and shipping it to the store and advertising for you to buy the game. You have done all that work for them and they are just mad they can't make EXTRA money off of you they never accounted for in their targeted sales, in the first place!

It can be said for that very reason the company does not deserve the extra money because they haven't done the work and spent the money to provide the person with THAT COPY.

Yes, this may be illegal but it does not hurt the games sales. Because of this I heavily dispute the decision to make this a crime as there is no real basis for it. It would be like the music industry saying O.K. folks now we are going to charge you for all the songs you downloaded off of the radio, and oh by the way, if we catch you with a CD of radio recorded songs you're going to jail! You never hear the music industry claim they lose money because people record songs off of the radio because they know this does not hurt their intended targeted CD sales.

Only if a semi truck with 50,000 copies ran off a cliff and the games were destroyed on the way to market, would they lose any money.

This to me is very logical. Even in America we are surrounded by media propaganda every day and we just fail to see it. The game industry has yelled for so long now that piracy hurts their sales that we have come to believe it like sheep. They are then able to use this and other means to justify things like a heavy DRM.

You show me any study that proves 100% beyond any doubt that because a game is so heavily pirated it kept people from walking into a store and buying a game off the shelf and for that reason alone a company could not reach their targeted sales, I will kiss your feet in public on National TV. Come on, that's laughable. It can't be done. For a company to expect me to swallow that bull, means they haven't really thought it through.

Bottom line, the Piracy issue is a fallacy made up to force us to accept a companies right to control the use of their product anyway they see fit. Of course they have the right to do that anyway with their product, but this way they will have the mainstream popular consensus on their side, and that means less hassle for the company, which would cost them money. They always feel they have to justify their changes in the product because consumers don't like it. They are only hurting themselves more than the pirates ever could.

Remember, Don't use pirated material as it IS as of now against the law. I just felt the need to share these thoughts as I don't think the issue has been examined enough by the general population.

K just in a rush and wanted to add something to this old'ish post… didn’t get chance to read all the comments so not sure if this has already been outlined…I’m new to Indi game development so please forgive my noob’nes….

Piracy, yes defiantly a problem, why? Cos people will do a lot to keep there pennies and why shouldn’t they :)… Also piracy is becoming incredibly easy for the end user (our clients) to do... Solution? Let me know one you find one that really works, lol….

Advertising in games, possibly a good idea however advertising must work… In other words the investor is going to give you more money if they receive a good return while your game gets dispatched/soled/played and annoyed if they don’t get a return…. Personally advertising in games fells wrong, but if it payed to 30% + of the project I would consider it, as would many I believe….

I also noticed something on the comments "Piracy can result in a decrease of sales, and it can also result in an increase in sales" Paul Eres, spot on!! If you think about this, you can use piracy to your advantage as a marketing strategy, could save a lot of un-needed advertising costs..