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IP Laws and the Games Industry: What Next?

Mon 20 Feb 2012 8:00am GMT / 3:00am EST / 12:00am PST
Legal

With SOPA and PIPA temporarily shelved, Jas Purewal asks what threats do we face from ACTA?

The games industry has an uneasy history when it comes to intellectual property law reform and piracy. Despite the industry's rapid growth over the last few years, it has tended to stay out of the limelight compared to the film and music industries when it comes to debates about these difficult topics. As a result, previous waves of laws on or around this subject, from the US Digital Millennium Copyright Act in the early Noughties to the UK Digital Economy Act in 2010, were passed with relatively little (organised) input from the games industry.

However, IP reform and piracy have risen to near the top of the agenda for the games industry in the space of just a few months, following the rise and (partial) fall of three acronyms: SOPA, PIPA and now ACTA.

There was a torrent of discussion about these proposed laws at all levels of the industry: consumers, developers, publishers and the industry bodies. Clearly, it was in part influenced by the perception that these are draconian laws that would harm the industry's future prospects or very existence. But more than that, they arrive at a time when the industry is just beginning to become aware of its legislative muscle, while the other creative industries have been using theirs for years.

The problems with SOPA and PIPA

But was all the sound and fury about these laws justified? Let's look at the Stop Online Piracy Act (SOPA) and the Protect IP Act (PIPA) first - although it started out in a different part of the US legislature and has some differences, PIPA is essentially similar to SOPA so I'll bundle them together for our purposes.

The stated objective of these draft US laws is to tackle websites that are "dedicated to illegal or infringing activity," but that are outside the USA's legal reach (i.e. they're based outside the USA geographically). Basically, they would work by giving rights holders - a movie studio or games publisher, for example - and/or the US government the power to target the support network around a website: its ad network, payment provider or possibly even its domain provider.

The rights holder/US government would be able to force that network to withdraw its support from a site, initially by a legal letter but ultimately by court action if necessary (subject to some relatively weak defences for the website). Previously, they were even going to have the power to get court orders against DNS registries to effectively block the website from being visible on the web.

However, there were at least three legal problems with SOPA and PIPA. The first is that they would circumvent due process, by enabling the rights holder to put demands on the support network that would only be put before a judge if the website or support network put up a fight. Secondly, the actual wording of the legislation was far wider than its stated objective; in theory, SOPA could have been used to tackle any website that involved IP infringing content. Thirdly, there are already mechanisms to tackle content piracy (look at what has happened since with Megaupload) and no evidence was put forward that new powers were needed.

We could go on about the problems with SOPA - whether it restricts free speech, whether legal action is even a legitimate solution to piracy and so forth. Anyway, following a wide range of protests, in mid-January it was announced that SOPA would be put on ice until a "consensus" could be reached - and frozen it currently sits. Similarly, PIPA seems to be in temporary political limbo.

Were SOPA and PIPA really that bad? Yes, and maybe no. Yes, because, given their problems, they really needed to be stopped before they became law. But maybe no because, based on my reading of the draft legislation, I don't think they were quite as bad as some suggested. The drafters didn't seem to want some kind of Wild West scenario where they can take aim at any website they like - they were trying, at least initially, to focus upon sites which are built for content piracy.

But still, it was too dangerous as it stood. Maybe we'll see a second attempt with a more moderate SOPA or PIPA sometime in the future.

How about ACTA?

Let's move on to ACTA, the Anti-Counterfeiting Trade Agreement. Although it has existed since at least 2008, it only entered the limelight following the furore over SOPA and PIPA and, as a result, it has been much maligned and misunderstood. It is undeniably concerned in part with copyright infringement, and to that extent is related to SOPA and PIPA, but beyond that there is relatively little resemblance.

The first difference is that ACTA is a treaty between various sovereign countries and is subject to their existing laws. The second difference is that ACTA applies to much more than just online content piracy; it also applies to counterfeit goods and IP infringement generally. For example, the pharmaceutical industry has been just as, if not more, keen on ACTA than any of the creative industries.

The third difference is that ACTA is trying to do something different to SOPA and PIPA: it is trying to harmonise how the major Western countries approach counterfeit and pirated products, not to impose new standards on them. For example, this is what the UK's Intellectual Property Office says about ACTA:

"ACTA is a plurilateral treaty that seeks to improve the global enforcement of intellectual property rights through the creation of common enforcement standards and practices and more effective international cooperation... ACTA will not create new intellectual property rights, laws, or criminal offences in the UK and EU but will provide an international framework that strengthens international enforcement in areas of intellectual property."

And, by and large, that's what ACTA will do. It is careful to be respectful of the existing laws of signatory countries and tries to ensure that they all have certain minimum standards in place, which, in practice, most if not all the Western countries already comply with.

It also recognises the importance of the balance between protecting IP rights while not restricting freedom of expression or speech. For example, its section regarding IP protection online says "...procedures shall be implemented in a manner that avoids the creation of barriers to legitimate activity, including electronic commerce, and, consistent with each Party's law, preserves fundamental principles such as freedom of expression, fair process, and privacy."

Sounds fair enough to me.

Some commentators have pointed out that what this actually means is that the Western economies want to toe the same line on these issues in a bid to encourage emerging world economies, such as China and India, to do the same. Or put it another way: ACTA isn't about piracy in the USA or the EU; it's about piracy everywhere else. Make of that what you will, depending on your geopolitical outlook.

But that doesn't mean ACTA is squeaky clean. It does have some provisions that are potentially concerning, in particular its encouragement of minimum/statutory damages for copyright infringement, which are standard in the USA but foreign to the UK - it's how the USA gets to its impressive copyright damages awards. It also has a SOPA-lite strategy of permitting action against a support network to a website, although it must be done under judicial scrutiny under ACTA.

As any lawyer will tell you, half the struggle in a legal matter is getting the right words down, but the other half of the struggle is getting both sides to respect those words. ACTA looks like a relatively reasonable document at the moment, but it always comes down to what the signatories actually do rather than what they say.

What harms ACTA the most in that respect is how it was negotiated until recently. Critics have argued that ACTA started as a much more draconian set of proposals and that it was negotiated in extreme secrecy. In the EU, for example, successive requests for information by interested parties were rebuffed. A few recently high-profile kicks against ACTA haven't helped dispel this concern either, such as the surprise resignation of the European Parliament's rapporteur on ACTA, who described the process as a "masquerade".

So, while ACTA is clearly not even in the same ballpark as SOPA or PIPA, there are a few legitimate questions about it.

Where does ACTA stand legally?

It's a bit of a mixed bag. Member countries have to both sign and 'ratify' ACTA, meaning they have to pass a domestic law to implement it. But that ratification process is suffering some bumps along the way - above all in the EU.

For ACTA to become law in the EU, it would need to be approved by the EU itself (which has now happened) and ratified by every EU Member State. Normally, this triggers either reasonably swift national implementation for uncontroversial laws, or a period of navel-gazing for controversial laws while each Member State tries to find out if everyone else is going to ratify the law.

For ACTA, expect navel-gazing aplenty since Poland has already announced it needs to go through more "consultations." This may or may not have been influenced by the news of thousands protesting against ACTA in Polish streets. In the meantime, ACTA is in limbo in the EU, and probably elsewhere too.

So there we have it: three laws all in their own way dedicated to tackling IP infringement and piracy, all brought low to differing degrees. What can we take away from all this? First is that, like it or not, there will be further attempts to tackle IP infringement and piracy by legal means. That might come via a resurrected SOPA, another new law, or possibly using just existing laws. The UK's Digital Economy Act 2010, for example has already given the UK government the power to enact a SOPA-lite mechanism; it just hasn't activated it yet.

The key for the games industry is to make sure it understands early enough exactly what the proposals would actually do - rather than just trusting the hype - so that it can respond accordingly. We also need to be involved in the discussion about whether there is a factual requirement, and legal justification, for any change in the law.

On that front, opinions differ as to what harm piracy actually does to creative industries, and whether legal solutions can be an appropriate, cost-effective way of tackling it. Or whether, for example, piracy is just a service issue that will ebb away as we get better at delivering content to consumers.

The games industry has an important part to play in that debate - but it needs to make its voice heard.

Jas Purewal is a games lawyer and writer of Gamer/Law.

46 Comments

Bruce Everiss
Marketing Consultant

1,692 594 0.4
Online theft of digital content is the biggest orgy of stealing in the history of humanity. Over 90% of all users for some PC games and some recorded music.
It has cost a lot of jobs and closed many companies. In many areas far less quality new content is being generated because the stealing makes it uneconomic to make things.

The market is reacting by implementing different business models, such as freemium and other forms of paid downloadable content.

But the thieves want it both ways. They want to have the quality and quantity of new content that was generated before digital theft became such a huge problem. But they don't want to pay for it. So who is going to pay the wages of the content creators?

Thus far the only answer seems to be technical solutions, such as game consoles, which act as anti piracy dongles. Certainly going after the thieves is like poking a stick in a hornet's nest. They collectively feel that they have the right to steal.

Posted:2 years ago

#1

Martyn Brown
Managing Director

138 33 0.2
Two generations of expectation that content will be free, its a hard one to shift Bruce.

Posted:2 years ago

#2

Klaus Preisinger
Freelance Writing

1,129 1,161 1.0
The real world is split in two parts. The well regulated public space in which enforcement of rules is good and the private space, where people can do pretty much want they want as long as the information about it does not leave the room.

What we see is a struggle of how we define digital connections from one private space to another. Is it public space because the data crosses into public space? or is it private space, because both end points are protected by laws of privacy?

The content industry will always want to define the digital realm as public space, because their business can only be protected in a public space. But people, no matter where they live, want the web to be a place of privacy, even in the face of social media turning everybody into public personas.

Posted:2 years ago

#3

Wesley Williams
Quality Assurance

133 72 0.5
Bruce, while the sentiment of your post might be well meaning. The language you're using is the same old rhetoric being churned out by many in the content industries (particularly Hollywood). Using words like "Steal" and "thieves" to make a point will hurt your credibility. What we're talking about here is copyright infringement.

In terms of copyright infringement "costing jobs and closing companies", it might be the obvious conclusion to arrive at, but there is no evidence to back up such a claim. Now that's not to say it's not true, but a recent study suggests that creative industries have grown and continue to grow year on year. Even throughout the global recession.

I would highly recommend everyone read the following three pieces, as they're some of the most well written dissections of the current issues that I've come across:

[link url=http://www.forbes.com/sites/insertcoin/2012/02/03/you-will-never-kill-piracy-and-piracy-will-never-kill-you/
]http://www.forbes.com/sites/insertcoin/2...[/link]
[link url=http://www.forbes.com/sites/insertcoin/2012/02/07/lies-damned-lies-and-piracy/
]http://www.forbes.com/sites/insertcoin/2...[/link]
[link url=http://www.techdirt.com/skyisrising/
]http://www.techdirt.com/skyisrising/
[/link]

If you create great content, make it easy to consume and at a price that is sensible, I'm convinced piracy would be a non-issue.

Posted:2 years ago

#4

Bruce Everiss
Marketing Consultant

1,692 594 0.4
@Wesley

I was at Codemasters during the era at the end of the PS1 generation when piracy had gained supremacy. People were using burners on PCs to mass produce our games for illicit theft. And the more tech savvy consumer was doing it for themselves. Anyone who was around in the industry at the time can tell you what happened. Sales collapse. Getting to number one would not last very long as piracy quickly eroded legitimate sales.
At Codemasters we made 20% of our staff redundant because of the lack of income. Projects were cancelled. This happened across the industry. There were no jobs for new entrants or for veterans. Many good people left the industry.
Yet the thieves (for that is what they are if they have the goods without paying for them) were in total denial as to the harm that they caused.

I was there when people were losing jobs because of stealing, with no hope of finding another job in the industry. Wait till it happens to you.

Posted:2 years ago

#5

Wesley Williams
Quality Assurance

133 72 0.5
Bruce, you blame copyright infringement for Codemaster's layoffs and you may well be right, but there is still no evidence that it was directly responsible for the lack of sales. You may believe it with all of your heart, but that doesn't make it right. We have no way of knowing how many of the people who copied your game would have bought it in the first place. It could be 100%, it could be 0%. The truth is probably somewhere in between. The people burning copies were making it easier and cheaper for people to get hold of your software and you didn't have the means to combat that (through no fault of your own). Now companies do.

I'm not going to stand here and say copyright infringement is good and that it doesn't ever hurt companies. Nor am I going to say you're wrong, but there are many tools in place to help content creators protect their works and there are many technologies around to help content creators securely (and more importantly, easily) distribute their works. No system is perfect however and I think the laws and technologies available at the moment are perfectly adequate for deterring casual piracy. When combined with the great content, easy consumability and suitable price points, content creators really have no excuse for failure other than themselves.

Posted:2 years ago

#6
@Jas - good piece well researched and argued as one would expect. For the first time in living memory the law could be deemed to be somewhat unenforceable though. 97a of the DEA allows site blocking right now. Ultimately the market will decide if it wants to pay or not. Disruption and innovation work side by side and evolution or revolution in business models plus the evolution of fair pricing will play their part.

Posted:2 years ago

#7

Tamir Ibrahim
Programmer

76 56 0.7
@Bruce
I don't approve of piracy. But are you seriously suggesting that, during the time period you've stated, the sole reason for general sales decline and for Codemasters reduced revenue was piracy?

Posted:2 years ago

#8

Nicola Searle
Senior Knowledge Exchange Associate

24 0 0.0
This is a plea to the games industry - please do not fall into the same trap as other industries have when it comes to IP.

Yes, piracy is bad and yes, we want content creators to get paid. However, the evidence for the impact of piracy on sales is ambiguous. IP is only part of the answer to wider problems posed by the digital era and changes in the market structure and consumption of digital media.

The games industry has thus far been a breathe of fresh air with respect to IP. It doesn't engage in tiring rhetoric and tends to work with, instead of against consumers. Unlike other Creative Industries, where too much now hinges on IP, the games industry has evolved. Please continue to do so!

Posted:2 years ago

#9

Bruce Everiss
Marketing Consultant

1,692 594 0.4
@Tamir

Yes.
Over a relatively short period our revenue collapsed. Over this same relatively short period there was a massive increase in PS1 piracy. No coincidence there. If the public were buying our games cheaply off pirates then we weren't getting paid for our work.
The pirates had door to door, weekly rounds on large estates selling all the latest hits.

Edited 1 times. Last edit by Bruce Everiss on 20th February 2012 2:01pm

Posted:2 years ago

#10
"We have no way of knowing how many of the people who copied your game would have bought it in the first place. It could be 100%, it could be 0%. The truth is probably somewhere in between."

That's neither here nor there. The whole "I wouldn't have bought the game, so they've not lost a sale by my downloading it" argument holds no water at all. It's absolutely, totally and utterly neither here nor there. It's simply a reason criminals use to justify their illegality to themselves, and others. If you don't want to pay for it, don't play it.

Wes, not aiming this at you, just taking your comment to illustrate a more general point:)

Posted:2 years ago

#11
@ Nicola

"the evidence for the impact of piracy on sales is ambiguous."

This is the problem - piracy is piracy, irrespective of whether it results in a lost sale or not. We need to get away from the idea that lost sales have anything to do with how we tackle this issue - because that just opens up the whole "I wouldn't have bought it anyway" argument to those who try to justify this to themselves. Piracy is piracy, and it's wrong. Lost sales are neither here nor there.

Edited 1 times. Last edit by Fran Mulhern on 20th February 2012 2:07pm

Posted:2 years ago

#12

Bruce Everiss
Marketing Consultant

1,692 594 0.4
@Nicola

"ambiguous evidence"

My foot. Maybe to academics, but tell that to people on the ground losing their jobs because the former customer base has switched its buying habits away from legitimate product and you might get a spirited response.

Posted:2 years ago

#13

Jas Purewal
Solicitor

35 0 0.0
@Andy - thanks Andy, much appreciated. You're absolutely right re the DEA, too, though I suspect (and hope) the government is going to let that particular piece of law die a quiet death...

Posted:2 years ago

#14

Harrison Smith
Studying Games and Graphics Programming

75 4 0.1
In 1793 the revolutionary French government was struggling against those who didn't support the revolution, and instead of trying to meet the demands of those opposed and reach an friendly agreement, they started the Terror, basically anyone could blame anyone for being opposed to the revolution and they are set to the chopping block. Sure this worked in some form, but it was abused and overall caused so much disconnected with the government that it collapsed a few years later. Now what does this have to do with software piracy?, well I tend to see quite a few similarities between the terror and the situations were we are heading to.If we are to implement such drastic measures to combat piracy, what are chances of it being abused and overall getting no where? There is a pretty big chance since all current anti piracy measures have all been a slap in the face for paying consumers, basically saying, "You are a dirty theft" to the legit buyers while the pirates enjoy the product. And to top it off when that failed, they went "well we aren't hard enough and should take it up an level" and punished the consumers even more.

This type of backwards thinking, make me think we are back in the late 1700s instead of the 2000s at the moment.

Posted:2 years ago

#15

Wesley Williams
Quality Assurance

133 72 0.5
Sorry Fran, but that argument holds a lot of water. Put me in a shop and tell me I have 30 mins to take whatever I want for free. I will take everything I can within 30 mins. I won't just pick the stuff I'm really interested in. The internet provides similar opportunities.

Using the internet in that way is a crime, but it absolutely shows a pure example of human behaviour that is not reflected by a people in a paid marketplace. If it did, people would spend every last penny they had buying content, because there is more content than they could ever possibly afford or consume.

Not everyone will use the internet in this way, some will selectively grab things they would otherwise have paid for, those are the people we should care about, but the key is that it is only "some" and that is currently unquantified.

Posted:2 years ago

#16
Wes, it holds no water whatsoever - trying to somehow legitimatise it simply allows pirates to think they're not doing anything wrong.

I guess, though, we'll have to agree to disagree.

Edited 2 times. Last edit by Fran Mulhern on 20th February 2012 2:38pm

Posted:2 years ago

#17

Nicola Searle
Senior Knowledge Exchange Associate

24 0 0.0
@Bruce and @Fran
A lot of the evidence simply isn't good enough. That is a huge problem because we aren't doing a good job of separating the effects of piracy from other influences.

I read this quote this morning and find it apt:
"...our empirical knowledge base is very weak. Much more empirical analysis is needed to understand the impacts of changes to copyright legislation. Without such analysis, policy and legal debates will continue to be based largely on anecdote and rhetoric."

from http://oro.open.ac.uk/10299/

Posted:2 years ago

#18
@ Nicola. It seems there are two ways of looking at this.

1. Piracy is wrong because it costs the industry a fortune.
2. Piracy is wrong because, well, it's wrong to take something others have created, when they've asked that only those who pay for it actually use it.

I personally favour the second approach. Maybe i'm just old fashioned.

Posted:2 years ago

#19

Nicola Searle
Senior Knowledge Exchange Associate

24 0 0.0
@Fran

To be clear, I am not advocating piracy in any way. I am just saying that we're talking about huge changes to policy here. If we want good policy, we need to have robust evidence.

On that note, I would welcome data - if anyone would like to share sales or piracy data so that we can work towards robust evidence, message me.

P.S. I should clarify that my views are my own - not Abertay's! In fact, I've just had a number of conversations with colleagues with different views.

Edited 1 times. Last edit by Nicola Searle on 20th February 2012 3:24pm

Posted:2 years ago

#20
Nicola, I know you're not, I was just making a point. It's all well and good trying to work out what actual lost sales are, but that's neither here nor there - we should be clamping down on ALL piracy, irrespective of whether any given pirate would actually have paid for the material if they'd have had no other choice. All pirates - irrespective of whether they'd have paid or not - are equally culpable, morally. Trying to work out lost sales figures are neither here nor there since we frankly can't realistically differentiate between those pirates who would, and those pirates who wouldn't, have if necessary paid for what they pirated.

Posted:2 years ago

#21

Tony Johns

520 12 0.0
I just want to make a game that is played and enjoyed by people.

And sadly, there is so much legal mess that threatens to destroy consumer confidence in the industry that I like.

And with all these IP laws and copyright laws, even though they are written to make sure I can earn a living, I can only see the publisher getting most of the money and the creator getting only a little slice of that pie.
:(

Posted:2 years ago

#22

Tony Johns

520 12 0.0
I feel sorry for the developers of Xenoblade, Last Story and Pandora's Tower on the Wii.

Nintendo of America would not allow their games to be sold in North America, and many people in North America pirated their games because they were not avaliable for North American Japanese RPG gamers who wanted the games and would have paid for them if they were released on the North American market.

THIS....is the reason why piracy exists, it is because games that don't get made avaliable to consumers to all countries at once, get fed up for waiting for so long that they want to download the game so they could play it.

So please game publishers, don't say that the consumer is the criminal, they may be a victim from your decisions of deciding what games get released in certain countries but not others.

Posted:2 years ago

#23

Tom Wilhelm Ødegård
Dpt. head Gaming

30 1 0.0
I think that the mindset of the pirates don't see downloading music, videos and games as stealing, as stealing it from someone would make that person not having the said item anymore.

To change a whole generations outlook on this will be difficult, and it will be very difficult now that more and more publishers are pushing for download only, cutting out retail completely.

However, it is worrying that the pirates can play their games from day one without problems, while our customers buying the game have tons of trouble with DRM and such. They see the pirates playing and having fun, for free no less, while they pay money and are stuck doing nothing.

Posted:2 years ago

#24

Edward Buffery
Pre-production Manager

149 96 0.6


Posted:2 years ago

#25

James Verity

132 25 0.2
want to stop a lot of piracy then stop producing products that use the "release it now, patch it later" business model that seems to have taken off in a big way with software companies... and you wonder why some people trade in there games so quick... nothing ticks of a paying customer more than buying a brand new product and turning it on to find it needs a patch before it'll work, and if there lucky, close to properly...

btw: if piracy is such a big loss making problem... why are you still making the products or do your profit margins outweigh the loss?

also a lot of piracy is caused by companies producing shovel ware...

p.s. re: digital downloads, don't think that switching to digital downloads will be a good thing, people will take the attitude "why pay for something I don't own, when I can download it for free"... Customers like something they can touch for their money, you need to keep real physical product available at retail...

Edited 2 times. Last edit by James Verity on 21st February 2012 6:13pm

Posted:2 years ago

#26

Nicholas Pantazis
Senior Editor

1,020 1,467 1.4
Can we please stop with the "copyright infringement is theft" thing? That's really not an argument with any merit. Copyright infringement involves the copying of a product. One person gains it illicitly, but the original owner doesn't have a product removed from them. Theft requires something be removed from its original owner. This distinction is absolutely essential to this debate, because it's the difference between potential profits (someone who may or may not have bought your game) and an actual physical loss (an asset was removed from you and no matter what you lost money). Indeed there is little evidence outside of poor anecdotal correlations that piracy results in major decreases in profits. Most pirates are, according to a number of studies, unlikely to purchase the game at any price. This is not me saying that piracy is ok, merely trying to separate the fact from the propaganda.

Stances like Bruce's and Fran's are the reason piracy continues to thrive. If you treat consumers like criminals they will act like criminals. DRM has generated massive amounts of piracy due to significantly damaging the legitimate consumers. Restrictive policies like Ubisofts can in fact prove the point quite readily. They have lost massive amounts of sales due to their DRM, and this is true to anyone who attacks piracy with similar measures. You'll lose far more profits to offended people who just want an easy way to play their favorite games.

Furthermore, the primary cause of piracy is a lack of service and reasonable pricing. You know why Napster became so huge? Because there was no way to purchase individual songs at a reasonable price. The record industry has pulled the most ridiculous PR storm on that the world has ever seen. Do you know why music industry profits have decreased so much since the 80s and 90s? It's because people can now buy songs individually, instead of full albums. Before the 80s there were singles, and now you can buy any song individually. There aren't less people purchasing music legitimately than there were before Napster/online piracy. There are less people buying full albums to listen to one or two songs, which they were forced to do before the rise of digital distribution.

This same thing applies to ALL media industries, including gaming. My favorite example of this phenomenon is Steam. Steam has been a ridiculously huge success because it offers the two things consumers want the most: convenience and value. If you want to sell your games to those "horrible pirates" who want nothing more than to rip you off, put it on Steam. Tens of thousands of people who would NEVER have payed you for a game at $50 will buy it when it hits a sale a year after launch for $10 or less. That is turning an area of zero profits into millions of dollars in revenue, and without production costs and a much smaller retailer cut you need FAR less sales to be profitable. Steam has done more to make pirates legitimate purchasers than the entire history of DRM in gaming.

Piracy is combated by providing great service and value for legitimate buyers. It's why Netflix is huge, it's why Hulu is rising, it's why Steam is a resounding success, and it's why companies that continue to fight against this and look for ways to attack pirates which don't hurt the pirates AT ALL are only hurting themselves and their few remaining loyal consumers. Piracy has become the industry's greatest scapegoat. Make some poor business decisions? Blow your budget way out of proportion because you hopped on that HD bandwagon too soon? Fail to market then complain about poor sales? What's there to sooth your investors: Piracy figures.

You can report hundreds of thousands of illegal downloads and all of a sudden things look a lot rosier to your stock holders. "Oh, well people had lots of interest in the game, so obviously they did that part right. We'll just have to invest in better anti-piracy measures and everything will be great!" Except most of those downloads weren't interested consumers, just bored or broke people who would never pay for the game, and that DRM that you've convinced your investors is helping is only making things worse, and you still haven't addressed the real problem: Poor management of budgets and sales expectations in an industry full of rising costs, none of which you want to admit to your investors.

Meanwhile this vicious cycle of more anti-piracy measures continues to lead to worse piracy and more loss of legitimate consumers and more loss of profits and nothing is done about the development budgets and this spiral leads to the demise and shrinking of MANY publishers.

Welcome to the modern gaming industry.

Posted:2 years ago

#27

Andrew Wafer
CEO

21 17 0.8



Posted:2 years ago

#28

Christopher McCraken
CEO/Production Director

111 257 2.3
It's both sad and amazing how many smart people argue "correlation equals causation" in these debates.

While people keep doing so, the dead ended DRM Arms race continues. Clever innovation suffers, or is back seated to people who want to rant long and hard about how correlation must simply and always equal causation because they say so, and because they feel "more right" than anyone else on the subject.

This problem must not, and can not be solved with guns that have increasingly larger barrels. Like it or not, for every single person who rants about piracy, and how it's destroying them...there's a Garry Newman, or a Rocksteady releasing games with innovative and creative piracy control.

There's also a Gabe Newell telling all of you: piracy has never hurt Steam, because they found that one real cause of piracy is that the pirates service your clients better than you do. What Gabe did not do was talk about how correlation must equal causation.

That's the real thing nobody in games wants to really touch...that perhaps despite all of your metrics, all of your data...all of your creativity, some of this boils down to simple facts: you're not listening to your customers, and you're not exploring innovative and clever ways of dealing with the problem. You're just looking for a bigger gun, a bigger bat...a more influential senator...

When you treat your customers like criminals, and then you sit and wonder why your model falls apart...you look silly. When you treat government as your own personal enforcer, you show a complete lack of regard for the citizenry. Piracy is a problem...but it's not going to be solved with bigger guns. If you want to solve it, start channeling some of your frothing at the mouth outrage into figuring out some innovative and creative ways of dealing with the issue instead of finding excuses as to why you need a bigger stick.

Posted:2 years ago

#29

Dominic Jakube
Student

92 13 0.1
Some people are always gonna steal thats why there are locks and alarms.You can only use incentives and disincentives to persuade them like on-line play,free dlc Etc.You can't take them all to court as it would flood the system and where would it end?Is taping a song of the radio or recording a movie or show on a PVR really any different?Sure that's leagal under "fair use" but it could potiently cost sales.

Posted:2 years ago

#30

Julian Cram
Project Manager

49 27 0.6
Interesting that this is all such a nice and lovely piece of legislation that hopes to simplify and standardise copyright control.

I'd be all for it, if only the USA Government, directed by the big players in Copyright ownership, didn't already do this by essentially forcing small nations like New Zealand into drafting extra laws which further prosecute and threaten copyright breakers:

http://www.zeropaid.com/news/93326/new-z...

Posted:2 years ago

#31

Tin Katavic
Studying MSc-Games Technology

44 3 0.1
It should be stated that in a way pirate games serve as demos.
Hypotheticaly speaking I got a pirated version of Nexus the Jupiter Incident cause it wasnt for sale back home. Played it, loved it, and when I got the chance - bought it. Would I have bought it if I didnt play a pirate version? No. Why? Cause the demo was very, very sucky. The demo level I played and went "meh". Same story for Vampire the Masquerade. Hypothetical of course.

Posted:2 years ago

#32

James Prendergast
Research Chemist

735 432 0.6
You know, given all the unlicenced games that Codemasters made for the NES it seems a bit ironic that people who worked there (albeit in a different time period) are complaining about people "stealing" their revenue.

Honestly, if you can't get companies to act in socially acceptable ways then why do companies expect people to act in those same ways? Everyone, everywhere (it seems) is just as guilty. It's just that those with power and influence are able to get the ears of those who can change other people's lives.

Posted:2 years ago

#33

Preet Basson
Studying Mathematics with Statistics

92 13 0.1

Posted:2 years ago

#34

Bruce Everiss
Marketing Consultant

1,692 594 0.4
@Nicholas Pantazis

"Furthermore, the primary cause of piracy is a lack of service and reasonable pricing."

You are demonstrably wrong.
Why is there such enormous piracy on iOS when games are typically $1 and it is one click to purchase a legitimate game? Whilst the thief has to jailbreak their phone to use stolen games.

"Indeed there is little evidence outside of poor anecdotal correlations that piracy results in major decreases in profits."

I have seen this with my own eyes during the 8 bit home computer era with tape to tape copying. And towards the end of the PS1 cycle with mass illegal duplication by thieves. And look at the decline in boxed PC products. At one stage they filled half a game store, but with 90+% piracy the publishers don't bother any more and they have become a niche. And don't tell me that there are less PCs out there.

"Stances like Bruce's and Fran's are the reason piracy continues to thrive. "

During the 8 bit era I moved from full price to budget. Now I have moved to free to play. I am a businessman who reacts to the realities of the market.

"Furthermore, the primary cause of piracy is a lack of service and reasonable pricing."

I don't know what planet you are on. You cannot really believe this. The primary cause of piracy is that people can get something for nothing with no chance of getting caught.




Posted:2 years ago

#35

Klaus Preisinger
Freelance Writing

1,129 1,161 1.0
Why are we even arguing about piracy. Fighting piracy is not the thing people opposing Acta/Sopa/etc. take issue with.

It is the unprecedented and one sided shift of accountability and the total destruction of privacy. If playing on your PS3 required letting a cop into your home to watch that nothing wrong happens, you would think of it as crazy. If the law conscripts your ISP into doing the same, it is suddenly supposed to be ok?

Posted:2 years ago

#36

Bruce Everiss
Marketing Consultant

1,692 594 0.4
@James Prendergast

Codemasters stole nothing and copied nothing.
All they did was to reverse engineer the ability to make games for the console platforms without needing to pay a license fee. This is totally legal as proven in court.


Some reading for you: [link url=http://en.wikipedia.org/wiki/Freebie_marketing
]http://en.wikipedia.org/wiki/Freebie_mar...[/link]
http://en.wikipedia.org/wiki/Intellectua...

Posted:2 years ago

#37

James Prendergast
Research Chemist

735 432 0.6
Somehow that didn't stop the R4 from getting banned both in the UK and US. I bet today, with the increased pressure from companies like those you mention, that anyone reverse engineering and breaking encryptions and whatnot would be liable under the broad definition of what is considered "piracy" today.

Hell, lending games is piracy, making mix tapes is piracy. Especially in the broad definition cast about up above. Just look at the fight against VHS, HD recording (how many uncontrolled [Sky+ doesn't count] HD recorders are there that use HDMI? Not even that many with composite) time-delay and fast forwarding facilities that content industries all balk at. If anyone has done any of those things and then comes out against "piracy in all its forms", backing what some consider insane measures then they are hypocrites and only complain when things are not how they prefer or when it doesn't apply to themselves. You can make the same arguments against all of those. All the above cost jobs and revenue.... should we expend ridiculous amounts of resources to stop and control them? Shall we shackle and cause unnecessary costs to other industries because of problems in one or two pretty minor (when taken as a percentage of GDP) industries?

One problem with piracy and revenue correlations is that there is no provable correlation. You have oversaturation of many of the popular genres, you have a recession, you have management and production issues, you have (perceived) quality of the end product, you have different markets and marketshare, you have competing services and entertainment.... all these things affect that correlation.

Tell me that revenue has decreased, jobs have been lost and companies closed as digital piracy has increased and i can show you other correlations that are just as compelling as that assertion.

I would argue that piracy has remained proportional to the market for such items throughout time. Since the late 70s/early 80s the market has expanded exponentially and so has piracy - if anything, through regionalisation, lack of tail-pricing and other measures the market isn't as large as it should be.

Posted:2 years ago

#38

Bruce Everiss
Marketing Consultant

1,692 594 0.4
@James Prendergast

Codemasters were taken to court and won. This is what is known as a legal precedent.

[link url=http://simple.wikipedia.org/wiki/Legal_precedent
]http://simple.wikipedia.org/wiki/Legal_p...[/link]

So this is now the law. And, unless parliament pass a new law it is still legal to publish your own console games without paying a license fee to the platform manufacturer.

Posted:2 years ago

#39

James Verity

132 25 0.2
@Bruce Everiss

so if you so sure that you won't be breaking the law in producing a title for the 360, PS3, Wii, 3DS or Vita console without the need for a license, why haven't you or come to it anyone else done it...

so come on Bruce Everiss produce a game on a console without a license... show everyone your smart and can really do it, over 10 years on... I would have a guess you would be stamped on really hard by the owner of the console...

Edited 1 times. Last edit by James Verity on 21st February 2012 6:11pm

Posted:2 years ago

#40
The reason people don't pay $1 for an iPhone app is because most of the time it's either rubbish or you then have to pay more once you have it

Posted:2 years ago

#41

Boris Evieux
Tech project manager

2 0 0.0
@bruce : So what you're saying is pirates should use what income they save by pirating, and rather than buying whatever they enjoyed the most (which is what at least some do), they should group that and hire a bunch of lawyers and lobbyists, to set a legal precedent that piracy is not, in fact, theft? Every study about piracy, (including one by our very own HADOPI) has proven that there is a type of "pirate" that will buy more IP stuff (movies, games, music or whatever) than anyone else, and that the best customers for games are also pirates. I personally don't pirate games, but have on more than one occasion downloaded things that I had bought legally, because the DRM was driving me mad, or slowing the game, or the CD wasn't readable.



To be honest, you have to admit that "we'll see when you lose YOUR job" is a crap argument. Being a victim clouds anyone's judgement, which is why you don't want rape victims as jury in a rape trial. And as every fallacy, it can be reversed : "we'll see when YOU have to choose between paying the rent and a night at the movies with the family". Unless you really think that culture and entertainment should be for the rich only? The argument is really low, I know, but definitely part of the issue here.

Edited 1 times. Last edit by Boris Evieux on 21st February 2012 12:30pm

Posted:2 years ago

#42

James Prendergast
Research Chemist

735 432 0.6
@ Bruce. You speak as if legal precedent (especially for a limited number of cases) is not able to be overturned or affected by the modern legal framework. Judges are not required to follow precedential cases - especially when there is no "body" of rulings. One ruling 10-odd years ago does not a proper precedent set - especially with the modern legal framework in place around DRM circumvention and also coming into place with various trade agreements.

Not only this but common law (as defined as precedent set by agreement between various judicial parties) can and will change given time.

Posted:2 years ago

#43

Diane Lagrange
Founder and Consultant

6 0 0.0
This can lead to very long arguments, but I think the fundamental issue here is that we have switched to an attention economy in a context of abundance, and can't reason in terms of scarcity any longer. The fact now is that the value of a finite digital product has dropped tremendously, no matter how much it costed to produce in the first place. The real value lies in the convenience of access, the quality of service, the relationship with the community, and finding what committed fans will agree to buy. The online games industry emerged in Korea in response to the heavy piracy there. Fighting piracy is a waste of time and money, and is alienating the potential fans as it worsens their experience. Legislation and agreements like ACTA will only make the legal context uncertain for web services providers at the expense of innovation and growth, and may have too big an impact on privacy and fundamental rights.

Posted:2 years ago

#44

Michail Mavronas
3D artist

12 2 0.2
I guess one way to put it is that piracy in the digital age is an expression of need for wider and better democratisation in the availability of digital media and information.

All these PIPA/SOPA/ ACTA etc. are badly-written, semi-legal, back door attempts of the mass media lobbyists to control the so-called despicable/damaging piracy by regulating (censoring) the free flow of digital information. Unfortunately creative industries being part of the digital content creation guild have been affected by this "torrent" of free flowing information. However,If we look closely at these legislations, they have a devastating effect on our digital life's and the many freedoms we have been enjoying (with or without piracy).

I personally think that if there are 10 reasons for the UK gaming industry not doing well, piracy would be at number 11 and at the very top we have luck of published creative innovation and capital-craving publishing regimes.Piracy in the digital age is a very good teacher showing us the need for different business models, different mentalities in the application of digital media and fairer methods of creation and distribution.

Edited 2 times. Last edit by Michail Mavronas on 23rd February 2012 12:47am

Posted:2 years ago

#45
Spoken in the first person, meant hypothetically, not things I've actually done:
Theft: I walk into a record store or walmart and physically take a copy of a CD, game, or other merchandise.
Copyright Infringement(according to the RIAA): I buy a copy of a CD and rip it to my computer to put on my mp3 player.
Theft: I hack into a software developer's computer and copy a piece of software that hasn't been released yet.
Copyright Infringement: I copy a few important pages from my math textbook that I want to take notes on without the express permission of the copyright holder.
Theft: You go to a photo lab, print your own pictures, then leave without paying.
Copyright Infringement: You go to a photo lab and print a picture of your dead grandmother for her funeral, taken by a professional photographer, without a release from the photographer(despite the fact that you can't get it because the photographer's been dead a year)

Not clearly defined: I loan my Gamestop Now account to my wife so she can play some of my games.
Not clearly defined: I install a steam emulator, fed up with needing to be online all the time to play games I legitimately bought.
Not clearly defined: I install software to remove DRM from both my music and books, so I can use them on a device I choose, rather than a device the publisher chooses.
Not clearly defined: I reverse engineer DRM on software I legitimately bought, or download cd cracks for software I legitimately own, so I don't have to deal with bs DRM or terrible anti-theft protection like secuROM or safedisk.
Not clearly defined: I pirate a game that I've bought twice, because my brother ran off with the disc and broke it.

Defining the crime helps determine how enforcement shall work. Language is important. Copyright law favors big industry right now, not consumers, and definitely not most content creators. It needs reform just as much as anti-piracy law does. The RIAA and MPAA have no desire to change that, as their member corporations make a lot of money between copyright trolling and owning the rights to make movies/books/tv shows about their IPs, despite in some cases, like Lord of the Rings, their creators being dead.

source for RIAA: http://arstechnica.com/tech-policy/news/2007/12/riaa-those-cd-rips-of-yours-are-still-unauthorized.ars

Posted:2 years ago

#46

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