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Friday, 11 November 2011

Behind the headlines: illegally downloaded games 'up 20% in five years'

BBC reports that illegally downloaded games are 'up 20% in five years'. A few things are worth noting on this.

First and foremost, the figures are attributed to "research" firm Envisional. Envisional sell services to companies to help them defend themselves against threats like online piracy. From their own website:
"Envisional provides the services, expertise, intelligent systems and actions necessary to keep your brand and revenue safe from fraudsters, counterfeiters and online criminals."
This is sloppy reporting from the BBC, who should have used the term "anti-piracy firm" rather than "research firm", so that the reader could be alerted to why the firm was keen to get its story and its name into the press; namely, publicity for its services.

(Yes, I spend my working life doing the same - it takes one to know one, and I'd like to think Open Digital operated in a transparent way as to our funding, motives and services.)

Secondly, a tipster has emailed me with a suggestion that "physical" unit sales of games (as opposed to downloads and games played online) have increased by approximately 20% over the same period, suggesting that piracy as a proportion of demand has remained pretty constant over the same period.

Whilst my source is trusted, I'm currently in the process of trying to verify this claim, but figures are hard to come by.  One link to a report sent my way that might have answers would cost me $2,450.00 to read.

And here's a major rub with evidence-based policy. How do we fund the evidence? Industry-funded models such as Gartner rely on charging hefty fees, making public scrutiny all but impossible.  Much of the "evidence" used by lobbyists on digital policy issues over the last few years is not available to the public.  Is it right we should be basing public policy on data that is not open to public scrutiny?

But the alternative is perhaps as bad.  Firms with a vested interest such as Envisional can carry out their own research, or pay think tanks to do it for them.  Either way, evidence is tainted by the funding.  Think tanks are painfully aware an unfavourable conclusion could jeopardise future funding.

So back onto what I could establish.  2008 alone saw a 15% rise in US sales, but also that growth in "physical" sales has not continued this strong trend.  Some say it has slowed, others plateaued, others say unit sales have dipped slightly 2008-2010 but grown again during this year.

What is universally accepted is that total sales growth (ie takings) from the whole video games sector (including downloads, online gaming and in-game purchases) has seen very strong growth.  Here's a NY Times summary of the Gartner report I can't afford to read.

What we can say is that gaming has continued to get a lot more popular, and piracy being up by only 20% is probably a good news story.

Second hand sales, not piracy, is the real problem, say games execs

One thing I hear time and time again from the gaming industry is their belief that second hand games, and not piracy, is causing the biggest headache.  Whilst I am yet to be convinced of their argument with actual science, I see their point.

Walk into almost any video games' store and you're faced with a choice of buying many titles for around £10-15 less from the "pre-owned" section. With very little deterioration in experience when buying pre-owned (there's a chance the disc might be damaged, but most stores offer a robust guarantee), who'd want to pay full price?

Of course one could argue that the market in second hand sales has introduced competition, keeping the market "honest", bringing-down the cost of new games in order to compete with pre-owned.  And the lower pricing structure, brought about by competition, may have actually helped drive sales.  Without a proper study we can't start to test this premise.

Another side-effect of the pre-owned problem could be better games, which people want to play for longer, discouraging resale.


1 comment:

  1. Good summary James.

    I see nothing wrong with buying pre-owned. I just don't believe how narrow minded some of these big publishers are. It's a common practice for practically all commercially sold goods, from cars to games and clothes, to be resold. This is a part of how our capitalist market functions, it's not evil, it's supply and demand. One sure way to encourage piracy is to clamp down on used sales and thus make the market even more inaccessible to children and those on lower incomes.

    Not everybody can afford to pay the £30-£50 price tags for new games, so those of us who can live for a little longer without doing so will thus hold out to pay £15 to £20 instead for a "used" copy. Such games can be damaged, might be missing manuals and the boxes will be scruffy so it's all fair game.

    More to the point it makes content more accessible to those who live on lower incomes and, as personal wealth usually increases with age, those "used" purchasers will eventually be hooked on franchises that they end up buying as brand new later in life. I'd never had bothered with the God of War series had I not picked up the original PS2 game for £5 in a used game sale, since then I've brought the last game brand new. I did the same with Gears of War and Halo. Funny that.


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