The True Cost of Game Piracy: 20% of Revenue, According To a New Study 106
A new study suggests game piracy costs publishers 19% of revenue on average when digital rights management (DRM) protections are cracked. Research associate William Volckmann at UNC analyzed 86 games using Denuvo DRM on Steam between 2014-2022.
The study, published in Entertainment Computing, found cracks appearing in the first week after release led to 20% revenue loss, dropping to 5% for cracks after six weeks. Volckmann used Steam user reviews and player counts as proxies for sales data.
The study, published in Entertainment Computing, found cracks appearing in the first week after release led to 20% revenue loss, dropping to 5% for cracks after six weeks. Volckmann used Steam user reviews and player counts as proxies for sales data.
19% of revenue on average (Score:4, Interesting)
Re: (Score:2)
Also, it's not the true cost.
It's the cost of privacy on a new cracked game.
Presumably the cost of zero friction piracy (not needing to find the crack) would be a little more.
But also the true cost, as in what it actually costs, is lower because not all games are cracked in the first week.
Re:19% of revenue on average (Score:5, Insightful)
Re:19% of revenue on average (Score:5, Insightful)
Also, many people using pirated stuff would never pay a dime for it either because they can't afford it or consider it not worth.
Re: (Score:1)
Re:19% of revenue on average (Score:5, Insightful)
Yeah, +20% maybe. People who pirate the game often buy it later unless it sucks.
For a long time I used a cracked version of an audio editing program. Then the company lowered the price from $499 to $99 with no reduction of features or functionality. I immediately bought a copy.
The entire software industry is full of shit. Sell a good product at a fair price and people will buy it. No need for DRM.
Re: (Score:2)
People who pirate the game often buy it later unless it sucks.
[citation needed]
It sucks != doesn't worth the money
Re: (Score:2)
Re: (Score:2)
Yeah, +20% maybe. People who pirate the game often buy it later unless it sucks.
This is the problem game publishers found out when they fucked around with exclusives with Epic.
Fewer people bought the game period... and by the time it was released in a non exclusive format everyone knew how badly it sucked. So the publisher lost the sales they would have gotten in the days before everyone knew how much it sucked.
Even if the game is good, they still lost sales at full price as no self respecting PCGMR member is paying full price for a 6/12 month old game (the fact we get cheaper ga
Re: (Score:2)
And some would never pay a time for it because if they can't download game A cracked, they'll download game B instead.
Re: (Score:2)
Or you want to try-before-you-buy - because you can't trust reviews - <speculation>big-budget productions realise it's a challenge which does not correlate with the amount of money you throw at the task, to make something which is genuinely perceived as a quality experience - whereas, there's a very strong correlation between a response generated by paid-for reviews</speculation>
Re: (Score:2)
Or you want to try-before-you-buy - because you can't trust reviews - <speculation>big-budget productions realise it's a challenge which does not correlate with the amount of money you throw at the task, to make something which is perceived as a quality experience - whereas, there's a very strong correlation between a response generated by paid-for reviews ....and the amount of financial inducement for the reviews</speculation>
Apparently you're supposed to read the preview not just press the but
Re: (Score:3)
Also, many people using pirated stuff would never pay a dime for it either because they can't afford it or consider it not worth.
And I'm sure I'm not alone in pirating games that I would happily part with money for but cant due to some restriction or another (geographic locks, DRM, activation limits, 3rd party account requirements). I will pay for games, I do pay for games... However I expect to own said game, that's the deal and piracy's my option if you don't want to hold up your part of it.
Re: (Score:2)
That's true - but those people are supposed to _go without_. They don't have a right to play stuff they can't afford or don't like all that much.
Let's say you can afford a $100 game, but your best friend can't. Your best friend downloads a dodgy copy and gets to playing it, but decides it's not such a great game after all. Does that make you think "wow, I really want to spend my money on that game now!" or does it perhaps make you think "I'll do the same", or at the very least "I'll buy it because it's the
Re: 19% of revenue on average (Score:1)
Also, are there any current games where you can even open a customer support request without having verified your license on an account with the publisher?
Re: (Score:2)
Or pirate it and once you've established it's worth the money (and you now have the money) buy it.
Just saying, there are rarely hard-wired reasons why the right thing can't happen by various routes but the industry as a business thinks in terms of a predictable relationship between input effort and output results. Short term wins are rarely precursors to long-term wins. Leaving your customer feeling trapped into one way to subscribe to the experience you provide does not make a lifelong willing customer.
Re:19% of revenue on average (Score:5, Insightful)
The copy of the pirated game costs the company $0, to produce or distribute since I assume its not downloaded from the official channels.
Companies don't charge based on cost they charge as much as they think they can get away with charging.
From the article the cost of piracy after only 6 weeks drops to 5%, that's far less than steam charges, what would it cost after a year? At some point the cost of keeping people out will exceed the return.
Also why such a steep drop perhaps people are trying it out and find out it doesn't live up to the hype the develops are selling, so they maybe the ones stealing by deceptively marketing their game.
Re: (Score:2)
These days with online content and multiplayer, pirate copies so often cost the developer money.
So do legit keys bought with stolen credit cards that then get charged back. A lot of those low cost key sites operate that way.
Re: (Score:2)
I think the best measure would be to compare the demand curve over time for a game that gets cracked to the standard demand decay calculated based on recent history of comparable games.
If there's a measurable increase in the difference at the time of the crack release, there's your reasonable estimate of lost sales.
Re: (Score:2)
I've often wondered if game and movie studios make their products available to download sites - once on there, the implication is that someone thinks the game/movie is worth pirating which adds a certain intangible additional value.
Of course I'm sure, in such a position, one would not want to come-forward and be seen to be making use of free advertising / hosting. Piracy is bad tm.
Re: (Score:3)
...That is what the fine folks in the article actually did. You and alvinrod are responding to the headline alone, not even the summary. It hurts to witness.
Re:19% of revenue on average (Score:4)
Guilty. And it occasionally frustrates me when others do it.
Welcome to the Internet.
Re: (Score:2)
What I wound up with was a precision timing focused game with abysmal frame rates spoiling the experience, Steam Platform features that still don't work, and a 16:10 monitor that cuts off the sides of the screen if I don't use a 16:9 letterboxed resolution. We're at the end of Moore's Law, and this game was "rushed" to avoid Disney's licensing costs, sacrificing respect for the systems o
Re: (Score:2)
For future considerations, Intel's 13th and 14th Gen processors have required a patch due to factory fubaring of voltage, and AMD Ryzens might explode in ASUS motherboards, and RTX 4090s might burn your house down (also, NVIDIA is now courting A.I. not gamers). Since Steve Jobs had to apologize for physics limiting the performance of the IBM Power CPUs in the G5, there doesn't seem much hope for a brighter future for Unreal Engine 4.
I have no clue what this is about.
Re: (Score:3, Informative)
So 13 & 14 gen Intels had a double issue -- first their microcode sucked and could cause overvolting over time. Second, many (perhaps most) of the motherboard manufacturers put in bad values for the voltages in the EFI settings, meaning unless you went in and manually set voltages, even the most conservative anti-overclock preset would overvolt. Combining these two led to many fried CPUs over a short period of time. Even game server VPS's were refusing to use them as it was costing them too much.
As f
Re:19% of revenue on average (Score:4, Funny)
Re: (Score:3)
I know you can't look at downloads to check.
The true cost is less than 19% since that's the cost to the subset of games cracked within 1 week, and other games seem to only lose 5%.
Presumably the upper bounds is actually over 19% though since cracked within a week is some level of friction that free for all would have less friction.
This of course assumes the study is accurate, but it seems like a good faith effort to find true costs was made (and it's less than 19%).
The problem is you're playing old games (Score:2)
Re: (Score:2)
Given piracy rates are often in the 90% range, perhaps all that is taken into account, and had there been no p
Re: (Score:2, Interesting)
Yeah, it's definitely not as simple as 1:1. I've pirated games and never ended up installing or playing them (at some point I was just collecting them to fill my CD binder and making pretty labels). I've pirated games that I already owned because I was too lazy to hook up a drive and dig out my CDs. I've pirated and later purchased games (downloading a game out of morbid curiosity to see how badly it ran on a potato PC, and later buying the game when I was actually able to play it properly.)
My ethical ra
Re: (Score:3)
There are people who pirate something who then go on to buy that thing.
There are people who pirate something they already paid for.
And there are people who pirate something that its impossible for them to buy even if they wanted to.
None of these people represent any lost revenue for the creator of the thing they pirated.
Re: (Score:3)
They weren't looking at downloads of cracked games (and how would you get the numbers, really).
Instead, they were looking at the amount of sales (measured by proxy from other variables, as actual sales numbers are not provided) after the crack is available.
The chart from the article: https://cdn.arstechnica.net/wp... [arstechnica.net]
Sure looks like there are lost sales from the cracks. To me this seems like the correct way to state the impact of piracy on actual bottom lines of the game companies.
Re: (Score:2)
While I agree that you can't assume a lost sale, it's pretty obvious that someone who downloads a cracked version places some value on the cracked version, and that value is lost revenue.
A more relevant study would provide both paid and cracked versions, and drop the price on the paid version until the downloads of the cracked version effectively ceased. Because at that point, you can calculate the area under the curve for the sales and estimate the actual revenue loss to piracy for each price point. A
Re: (Score:2)
It's also not the "true" cost because the methods used to calculate it are based on proxy data, not actual sales figures.
Usually when people talk about "true cost" they're talking about something other than dollars. Like "the true cost of piracy is the all the sailors with missing limbs and eyes, yarrrr"
Re: (Score:2)
There are some people who will never buy your game. If they can't crack the DRM then they just won't buy it. They are not your target audience. Stop worrying about them.
Re: (Score:2)
yep, specially the "if the crack is delayed a few week later" is exactly what happen with denuvo, it takes a few days to weeks to crack it and they want to point that is ok because it saved 15% of the sales!!
I'm one of those that refuse to buy, as much as i can, games with denuvo
Re: (Score:1)
It's irrelevant as the point is presumably to show there's external pressure to increase prices / make it easier for the lawmakers to persuade themselves that accepting bribes to encourage them to create new ways to enslave people using legalese and technology is actually in the public good.
Re: (Score:3)
Piracy is largely a distribution problem. A game that sells for $20 USD, might only sell for 5 in Brazil. If you ask $20USD world wide, then anyone outside the US, who in their currency might see it as like like a weeks pay rather than like a half hours of pay.
Re: (Score:2)
Article says 19% - why change it to 20% on the headline?
No one changed it. The article has 20% in the headline too. The study linked in TFS also says 20%.
0% of revenue on median (Score:1)
What, no one read the article (me neither)?
They say that it is close to 0%. They say IF cracked on 1st week, it is "about 20%". But because most gaes take a long time to crack, almost no revenue is lost:
'The median Denuvo-protected games lose almost no sales to piracy, Volckmann suggests, because the protection "more often than not" goes uncracked in that initial 12-week window.'
Your friendly neighborhood Spyware-man. (Score:2)
Re: (Score:2, Insightful)
Re: (Score:2)
Re: (Score:2)
I tried to determine what the methodology actually was, and since I don't have an Elsevier... subscription?... and don't know where to obtain a pirated copy of the PDF, and also since I'm not a professional statistician, I have a hard time knowing whether the methodology was good or not. (I must say that I am a little suspicious of the impartiality of an anti-piracy paper published on Elsevier--weren't they the ones that killed that Swartz kid?)
But the Ars Technica article does say that "a Denuvo-protecte
Re: (Score:2)
Re: (Score:2)
Name a game that hasn't been cracked. I'd posit that it's the natural pattern of sales for products like this and they're conflating correlation and causation.
The point (if you read the article) is that games aren't all cracked in the same amount of time. The different amounts of time between launch and crack, and observations of sales across those intervals, provide a naturally-randomized experiment to evaluate the effect of a crack on sales.
Re: (Score:2)
I would've said Handball 17, but it took seven years to finally get cracked :)
Re: (Score:2)
Name a game that hasn't been cracked.
Persona 5.
Unless you're referring to games that aren't playable on an emulatable console like the Switch, in which case Lost Judgment. Need more? The mega thread on r/Piracy has it's own list.
Re:Your friendly neighborhood Spyware-man. (Score:5, Interesting)
According to the article, the study doesn't actually have sales data. The author estimates it based on player count and review count. TOTALLY SPECIOUS!
In all cases there is an ongoing decline in these numbers. And while we might see something that looks like a not-so-smooth dip, we don't really have any way to compare that to how big the dip would have been if the crack had not become available. It's another assumption.
There is also no way to see whether the dip is compensated-for by slower decline further along in the time line.
So, this study really isn't very good. It makes a lot of guesses to come up with that number. It's just not solid. But it certainly fits the narrative that DRM vendors would have us all believe!
Re: (Score:1)
Re: (Score:3)
I think there is probably a rough correlation.
But it's only rough. Making this final conclusion more "estimation" than "observation."
Re: (Score:3)
The study shows what they want to see.
I would say there is more revenue lost by their DRM chasing away regular customers that are tired of fighting with legally purchased games than the revenue lost by pirates who probably didn't have the money to purchase the game in the first place.
Gaming is supposed to be fun.
Re: (Score:2)
The study shows what they want to see.
They laid out their methodology and their reasoning. What did they get wrong?
Correlation and causation? (Score:3)
But even if we take the study at face value the 20% figure is only for cracks that hit in the first week. It rapidly drops off after that.
I remember years and
Abandonware is pretty safe (Score:3)
The problem is gamers playing old games aren't blowing money on DLC in new games. It's just as much about controlling your access to all forms of media and culture as it is anything else.
Uh (Score:2)
"As time goes on, revenue goes down"
Yeah that applies to... Everything in media / entertainment. Sales drop week over week whether there's a crack or not.
Re: (Score:2)
"As time goes on, revenue goes down"
Yeah that applies to... Everything in media / entertainment. Sales drop week over week whether there's a crack or not.
Sure... except the whole point is that this study examined the difference in decline with and without a crack, and it found that sales drop about 20% more when a crack becomes available.
Re: (Score:3)
"As time goes on, revenue goes down"
Yeah that applies to... Everything in media / entertainment. Sales drop week over week whether there's a crack or not.
Sure... except the whole point is that this study examined the difference in decline with and without a crack, and it found that sales drop about 20% more when a crack becomes available.
Disclaimer: I haven't read the article and I don't plan on doing so. How do they control for the actual quality of the game? Do they see sales decline faster when a crack is released for shitty games vs games that are highly rated by players?
Some piracy is avoidable (Score:2)
Some piracy is unavoidable, some people will never buy.
Why worry about the people who will never be your customers, focus on those you can get. Apply measure to make piracy unreliable or require more technical capabilities that the average user can muster up. I've been see such behavior for 40 years, it's pretty consistent. If you can't break the protection without the assistance of your CS
Re: (Score:2)
Or people just don't bother buying the product. Starforce and Denuvo were things that did reduce piracy, but they also killed sales. All the while, GOG with zero DRM is turning a decent profit, and Steam isn't doing too shabby with their relative basic DRM.
Consoles are another item. Yes, they are 100% secure from piracy, and in good economic times, people will pay a scalper 2-3 times as much for a console as they go normally, not to mention pony up for all the microtransactions, mystery boxes, gachas, sk
Re: (Score:2)
Steam isn't doing too shabby with their relative basic DRM.
That's my point. Your leaving money on the table if you let piracy be trivially easy.
Ironically, without piracy (Score:1)
I can't tell how on earth they managed they arrived at that conclusion. Neither the formal abstract nor the Ars article make it clear what methods estimate "20% loss"
We get a completely useless graphic [arstechnica.net] that clearly just reflects the author's model for income-loss, but no real world data. Real data doesn't make neat little lines with sudden cut-offs like that.
The snippets of methodology that science direct determines us plebs are allowed to read don't even hint as to how that number was figured.
To be hones
Re: (Score:3)
Re: Ironically, without piracy (Score:1)
Thank you. I don't know why I failed to find that. Moreover it straight up demonstrates a full robust model. So my concerns were unwarranted.
Re: (Score:2)
Photoshop (Score:2)
Let's be honest. Without piracy, Adobe Photoshop would not have such a foothold in the industry. Most people who learned how to use it early on pirated it and it was through that free education that allowed it to make its mark.
Just like a drug dealer. Give a little bit of it away to get them hooked and once they're hooked, you get them on the come back.
It literally cost nothing to Adobe for the pirates to do their dirty work. If anything it just made the software seem more "cool" because it was "copy protec
Re: (Score:1)
Well, now we know you pirated it. I certainly did not, and I don't see any evidence for your assertions. Also, Photoshop was the only game in town for forever, so I don't believe your story for a moment.
Re: (Score:2)
Photoshop wasn't ever the only game in town, for example in the 90ies, when Photoshop established itself trough piracy, two of the commercial competitors were Aldus PhotoStyler (that ended being bought by Adobe, who killed it) and Corel Photo-Paint (which exists even today), there was also the shareware PaintShop Pro (still exists today, bought by Corel).
Re: (Score:1)
Re: (Score:2, Insightful)
people use windows because of piracy, OS/2 was better but was much spread, only big companies had those and so harder to get a copy. First windows were awful! but we could get copies of windows from many people. Copies of OS/2? only about 4 years later i mange to grab one
people use MS office because of piracy, word perfect, corel draw and lotus were much better but harder to find and you had to pirate 3 software... Office quickly got known because it was soo simple to copy and had software that many people
20% of nothing is nothing (Score:2, Interesting)
Itâ(TM)s a flawed study with poor assumptions (Score:2)
They see on average that when a crack becomes widely public, sales drop by up to 19%. That is a tiny amount of income because the vast majority of sales already happen and the sales volume has significantly dropped.
The 20% cost figure comes from the assumption that the same parentage of people would pirate the software in the early stages of release. These are the people who buy it immediately.
They assume the number of people pirating the game will increase significantly if it happens sooner
so you're telling me (Score:2)
warez, gamez, etc is still a thing?
The people who use cracked software probably wouldn't pay for it if they had to. In my experience as a person who had a "Russian hacker" roommate 20 years ago, they want stuff they can't afford, so they steal it. They're never going to shell out the money to buy it, because they don't respect work/workers/the work put in by developers, artists and others who make the games possible.
They also use the excuse that they're not a corporate user and they're not making millions o
Re: (Score:2)
i used many pirated software and games in the past... i was a teenager, no money, no credit card. Now i do have money and i usually buy all my games and software... i even buy games that i pirated long ago, that i liked and played a lot... so when i find those gens, i do usually buy a copy, even after all this years and even if i don't really plan to play that game anymore
Piracy is not a short term revenue, it takes some time to convert piracy in to sales, some times a very long time
Wrong comparisons (Score:5, Insightful)
it doesn't count reduced sales to customers who refuse to mess with the risk of DRM fucking up their OS installs
it counts so-called anomalies in sales after the initial launch; game sales are notorious for dropping precipitously after the initial few days for many reasons, including freshness, review feedback, other games or products releasing and competing for attention
it doesn't have any way of measuring customers who didn't buy at the offered price because it was a little too high, vs people who simply routinely pirate everything because they were never a potential customer at all
it doesn't have any way of measuring any increase in sales after customers learn of the game after seeing some hype from pirate players
Re: (Score:2)
I think the point was comparing time to crack and how that impacts lost sales, but the article is poorly written and not entirely available.
If this is true, this would be in agreement with the "drm-lite" approach of locking new releases behind scummy unaudited encrypted performance robbing software but only for a few weeks. We've seen this approach from companies like Bethesda in the past with their NeoDoom releases - they know real fans won't tolerate this garbage but still don't want to lose too much of
Re: (Score:2)
it doesn't count reduced sales to customers who refuse to mess with the risk of DRM fucking up their OS installs
This silent majority doesn't exist. There are a few people who do this, but the reality is the number is so tiny it doesn't affect the conclusion which is only given to the nearest percent.
it doesn't have any way of measuring customers who didn't buy at the offered price because it was a little too high, vs people who simply routinely pirate everything because they were never a potential customer at all
As long as the price doesn't change between the DRM period and DRM free period then this is taken into account. Discounts drive sales, that is a given. That also has nothing to do with what is being investigated.
it counts so-called anomalies in sales after the initial launch
No it doesn't. When those anomalies happen in the DRM covered period it is accounted for in the results.
it doesn't have any way of measuring any increase in sales after customers learn of the game after seeing some hype from pirate players
I don't
Re: (Score:2)
So nobody here has access to the actual whitepaper, however the article has this quote:
> The variable timing of different crack releases also helps the relative analysis, since "revenue is highest close to the release date, and therefore a crack that appears close to the release date has a disproportionately large effect on revenue," Volckmann writes.
So to me it seems they can see that the crack release date coincides with the drop, and elsewhere in the article it is told that e.g. pricing changes or rev
Nonsense (Score:2)
Re: (Score:2)
From the cited study (Score:3)
I would buy a lot more game once Denuvo removed.
Much of Piracy Is Misunderstood (Score:1)
Re: Much of Piracy Is Misunderstood (Score:1)
But, of course, if they hadn't been able to pirate, they'd have spent their allowance on buying $3000 worth of games every month, that much is true.
Piracy is stealing from ships (Score:3)
Re: (Score:1)
They should really come up with a different term to talk about unaproved sharing.
These people don't want accuracy, they want to create alarm over unauthorized copyright violations. I believe this study was done by Elsevier. https://en.wikipedia.org/wiki/... [wikipedia.org]
Researchers have criticized Elsevier for its high profit margins and copyright practices.
Much of the research that Elsevier publishes is publicly funded; its high costs have led to accusations of rent-seeking, boycotts, and the rise of alternate avenues for publication and access, such as preprint servers and shadow libraries.
These are pro-copyright/Digital Restriction Management people.
Re: (Score:2)
They should really come up with a different term to talk about unaproved sharing.
If you want to speak a language where a central authority defines the exact meaning of terms and provides you with unique words for every situation then learn French. In the mean time we are speaking English and you are free to look up the actual usage of the terms in dictionaries:
Piracy
noun.
1. the practice of attacking and robbing ships at sea
2. the unauthorized use or reproduction of another's work.
That's nothing compared to (Score:3, Interesting)
Sign of the economic times... (Score:1)
Every time the economy starts to dip, we start seeing the articles of how piracy is causing issues. Then we see the game companies asking Congress to ban desktops, bank websites at their will, create a GFC like system, demand hardware stack DRM, and other crap.
Yes, piracy happens... but make a good game and people will buy it. The reason games are not selling is that most are hot garbage with the same old IP that has been around for 20+ years. It isn't piracy, but games not worth being made.
If you -have-
Thieves whining about thieves (Score:2)
0% for me. (Score:2, Insightful)
Re: (Score:2)
Re: (Score:2)
Just because some simplistic repetitive grind captivates some people doesn't mean its good.
No way I'm buying a console or bother with pirating a copy of a game and emulating.
Not to mention I wont support nintendo or any of the other console manufacturers where they intentionally kill any third party endeavors.
Re: (Score:2)
And I suppose (Score:3)
All those people who are cracking would buy the game. That's a good assumption.
Re: (Score:2)
That is literally not the conclusion made and not the one possible to draw from the data they presented given their methodology.
Please, read the article and study. You may learn something interesting.
Everyone say it with me. (Score:2)
Therefore, potential revenue loss is not a cost. Maybe the data is right. Maybe there is a decline of 14~20% of digital sales once a crack is released. But the data doesn't seem to (at least, I didn't see it) consider game sales that happened without denvuo. As in, I don't see anything in my quick skimming that says there's data that represents game sales of games before and after a crack is released on games without denuvo.
IP piracy doesn't "cost" anyone anything. (Score:2)
DRM=no rights (Score:1)
What about revenue Lost BECAUSE of Denuvo? (Score:3)
I see Denuvo, I don't pay (you don't buy games on Steam, you only rent them).
Simple as that.
No matter the game, no matter the franchise.
And I don't even want to spend time to find it counterfeit.
So many games, so little time.
Orly? (Score:2)
EDIT: we just went bankrupt. I'm leaving to go get a job at Ubisoft.