Double Buffered

A Programmer’s View of Game Design, Development, and Culture

Piracy, Customers, and Making Money

Posted by Ben Zeigler on March 20, 2008

Stardock Software developed and published one of my favorite games of the last few years, Galactic Civilizations 2. If you’re not a fan of totally awesome turn-based space conquest games (and if you aren’t you should be), you may have heard about their stance on DRM. Specifically, they’re against it and ship all their games without it. Starforce (a leading DRM provider) decided it would be nice to encourage people to pirate Galactic Civilizations 2 in order to send a message. Classy that. Anyway, Brad Wardell (CEO of Stardock) recently posted a great essay on Piracy.You should go read it now, it offers a really interesting perspective.

As Brad outlines, the PC Gaming industry’s insane focus on anti-piracy comes from a fundamental misunderstanding of the marketplace. The basic business plan of PC gaming is two phase: Get as many people as possible to want to play your game, and then get as many of them as possible to pay for it. The concept of “Conversion Rate” in the casual gaming space is an example of this sort of process. DRM makes perfect sense in this context, because it limits the number of people who can play your game without paying for it. Surely the increase in sales totally justifies paying some shady software company or large conglomerate high rates for DRM protection.

If only that worked. Copy protection is always beaten, and fairly quickly. In the most important point in the essay, Brad argues that you should make games for people who will buy your game. The absolute number of people who play your game is important for developer ego and bragging to our relatives, but it doesn’t necessarily make you money. The solution Stardock has is to make games within a profitable genre. There may be fewer fans of turn-based space conquest games, but almost all of them are willing to pay for their games, as opposed to FPS or RTS fans. Stardock also makes an explicit effort to cater to the needs of their paying customers as opposed to potential users. This is the same reason that the subscription-based MMO model works. Our job in the MMO market is to serve our customer base and give them something valuable and unique for the money they give us. Our job is not to sell packaged goods to people who don’t need them. Some people will steal your game, but basically you’re better off just writing them off as a lost cause.

It’s not safe to totally ignore pirates, though. Pirates perform one important task relative to your game: they talk about it on internet forums and to their friends. Early adopters in the PC space are often pirates, and they can be effective for word of mouth advertising. There are other ways to get this kind of publicity (demos and free trials are just as good), but pissing off pirates will just make them angry and spiteful. Michael Fitch, head of the recently closed Iron Lore Entertainment, posted his own essay about piracy. It’s an interesting read and offers a counterpoint to Brad Wardell, because they basically totally disagree. One of the points Michael made struck me as absolutely insane though: the copy protection on Titan Quest caused random crashes on pirated copies and didn’t inform the pirates of why it crashed. Let me make this clear: This is the worst idea ever. Apparently pirates started talking about their crashes on forums and the game became known as unstable. Michael blames the pirates for this, but I’m going to have to say that I blame whoever mandated this decision (probably someone at the publisher) for killing their own word of mouth.

The last important point Brad makes is that all of their games purposefully target lower system requirements. World of Warcraft also does this very successfully, and I strongly believe that the days of targeting only high-end systems is now over. It turns out that people who buy expensive high end systems are early adopters who all know how to download cracked games from bittorrent sites. They’re also the kind of people who don’t tolerate the restrictions of DRM. And there aren’t that many of them. So if you’re targeting higher-end systems, you are targeting the small set of users who have those machines, have enough money left over to buy games, and who are willing to jump through hoops to buy instead of download your game.  This is totally obvious from a business standpoint, but it’s still hard to convince many in the game development community to buy in. The whole industry is still addicted to shiny new toys.

On a personal note, CD-based copy protection is basically the stupidest thing ever. You know what I do to every single game I purchase? I immediately download a no-CD crack and install it. I then return the CD to the packaging and never touch it again. Sometimes this fails, so I basically only download games from Steam these days.

In conclusion, trying to convert pirates into paying customers is basically always going to fail. Why would I buy and reinstall a game after I’ve tried it out using piracy? DRM is based on the theory of preventing people from being able to pirate in the first place, but this doesn’t work. Blaming pirates for the failure of your game is a waste of time, because the vast majority of them wouldn’t have bought your game anyway. The way to make money in the PC gaming industry is either to get as many initially paying customers as possible (by focusing on market segments with a lower rate of piracy and providing convenient download services like Steam), or by setting up a business model that is NOT about shipping packaged product. PC Games are not cans of Soup, and never will be.

UPDATE: I originally had a section about how it’s stupid that WoW has copy protection on it’s Cds but I appear to have confused my PC games. I should remember to check this stuff before blogging…

9 Responses to “Piracy, Customers, and Making Money”

  1. Wolfe said

    You have a strange version of WoW. I heard you can even doawnload the whole client from Blizzard if you want to these days. Maybe you got a broken batch of CD’s with some stupid protection on them. When I started playing WoW I just updated the server list file from containing beta servers to point at the live server list and viola. No CD involved until Burning Crusade time.

  2. Darius K. said

    I’m reasonably certain it was THQ and not Iron Lore who put the shitty DRM in Titan Quest. It’s almost always just a part of the standard publisher checklist for Gold Master Candidate: “Does the game have DRM? If not, we won’t publish it.” The sad thing is the GMC stuff is often looked at last minute, so the developer freaks out and lets the publisher put in whatever shitty DRM they want without thinking about the ramifications, or possibly even testing it.

  3. JZig said

    Wolfe; you seem to be right. I have apparently mixed up my pc games. Argh. I’ll correct the article so I don’t erroneously slam a competitor 🙂

  4. JZig said

    Darius; yeah, you’re probably right about it being the publisher who demanded the DRM. Unfortunately it’s basically impossible to figure out who did what, so I’ll soften that a bit.

  5. Loredena said

    I bought Gal Civ 2 in large measure because of the lack of copy protection. I love Civ4, but I wasn’t sure I’d enjoy a space civ game as much — but I gave it a try simply because I wanted to support Stardock. I really enjoyed it, but never finished it — but I bought the expansion anyway.

    I’m over 40, I’ve been playing PC games since the IBM PC came out in the early 80s, and I buy my games. But I play a lot of different games, and I hate having to hunt for CDs, so the first thing I do is load them into Virtual Drive. I BUY my games, I don’t pirate them, (and since my husband and I often play together, we sometimes buy two copies!) but I’m the one hurt by the copy-protection. My husband’s CD drive actually stopped working after he installed a DEMO! with Starforce installed — let’s just say neither of us will buy a game we know uses Starforce now…..

  6. David Hunt said

    I’ve been a loyal Stardock customer since the first GalCiv. I like them, and they treat their old customers well. I bought Space Rangers 2 during its retail launch. I love that game, but it’s incredibly painful to play. It routinely took over 15 minutes to start the game because of Starforce. That’s unacceptable, especially when I only have an hour to play. Now, I’ve been thinking about buying it through Stardock/ even though I already own it… just because of the lack of DRM.

  7. GameSetWatch ran some interesting articles about piracy in casual games (part 2) which are interesting because they show a lot of really hard figures. The interesting thing to take away is that the biggest sales jump came when they broke “exploits” like deleting registry keys – breaking keygens and cracks had little effectiveness. That is, the changes affected no one usually identified as a “pirate”.

    Another thing you didn’t mention is the role of pirates in keeping gaming history – and thereby entire franchises – alive. Do you think Pit would’ve been in Brawl if people weren’t still emulating Kid Icarus?

  8. […] by JZig on April 2, 2008 If you read my recent post on piracy, you ‘ll probably be interested in a recent Games For Windows (The Magazine and not […]

  9. […] on Saturday.  In response, the internet erupted in indignation. Because of what I’ve said before, I’m going to join in. This is a horrible idea. If you didn’t follow it, the summary is […]

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