Piracy Isn’t Theft – A Challenge for Japanese Game Developers

Domestic Japanese game companies have all started looking toward more and more high-level anti-piracy systems. The Nintendo 3DS, released this year, has an extremely complicated anti-piracy system implemented. However, even with a copy guard in place, there will always be people who are going to find ways to remove this. Unfortunately, the problematic game of tag between those creating pirate copies of games and those having pirate copies of their games created continues to rage on.
However, some smaller game studios in the West – most of them indie developers – don’t see piracy as theft due to the fact that nobody loses their copy through piracy, and so they take the opposite path and purposely publish games without any copy protection. And thus they suffer bootlegging rates of up to 95%, as for example with the well-received game And Yet It Moves. (A rate of 95% basically means that for every game sold there are 22 cracked versions being played.) But why do those indie developers not curse piracy? What reasons drive them to offer DRM-free – and therefore piratable – games? The answer to this question lies in a different understanding and approach towards piracy.
Piracy doesn’t necessarily mean a profit loss
The common industry assumption is that developers are losing most of their revenue through the piracy of games. But since there’s no easy 1:1 conversion, not every game cracked actually means a lost sale. That would apply if pirates would have bought every single game that they downloaded. But the reality is that pirates download more software than they could ever afford if they were to purchase them all. That means that the average pirate doesn’t behave like an average consumer, and that he downloads games he wouldn’t have bought in the first place. And so most games are not downloaded by the expected target user, and piracy among those users is much lower. So far, this is the common understanding among indie developers.
In some cases, piracy can even have the opposite effect: increasing sales, as long as the gamer community appreciates the game and spreads the word about it. For instance, if thousands of users end up pirating a game, but hundreds buy it as a result of hearing about it from their pirate friends, the developer could find himself making more money than he would have without any pirated copies being made at all. But this all depends on one thing: the game’s content. The average gamer buys about three games a year and plays them for a long time. The understanding is that pirating without any intent to purchase a game mainly comes from the lack of fun of the game, or a bad porting of games between different platforms. So instead of putting effort into the development of copy protection systems, indie developers concentrate on improving the game experience and fun factor, and creating games that average players would want to buy.
Not all pirates are bad humans
Just as Broken Rules did with And Yet It Moves, indie developer Amanita Design suffered from a high piracy rate (90%) on their game Machinarium last year. As a reaction to this high “loss”, Amanita took a surprising step: they offered amnesty to pirates by offering a 75% discount on the price for a limited time. Founder Jakub Dvorsky mentioned that he is “quite forgiving” because he was once a pirate as well, and that he believes that pirates can’t refuse such a good offer. Besides this understanding of “human nature”, this thinking also comes from another fact: most indie developers are able to build and distribute their games thanks to the Internet, and piracy is simply a part of it. So blaming the Net and its inhabitants for piracy would mean blaming potential customers as well by default.
Amanita piracy picture ?
As for most pirates, pirating video games doesn’t come from any deeper conviction or belief – e.g.: the Swedish Pirate Party believes that all digital content should be free – but from the simple fact of the free availability of those games. Studies show that most pirates are young males with a high level of computer literacy, who can easily access pirated games and don’t have the money to pay for games and/or feel that they are too expensive. Most pirates are aware that they are doing wrong and that the more they pirate the greater harm they are doing to the industry. Therefore indie developers in the West believe that players will change their attitude towards video games once they grow older and earn enough income to pay for video games, or if they reach out to them and approach pirates in a more friendly manner – as Amanita did with their amnesty campaign – rather than vilifying them. Players that like a certain game will realize its value, start thinking about piracy, and stop stealing and begin supporting development by buying the games they favor.

Indie games: just download and play
One of the most important reasons for indie developers to go without DRM is the “download and play” philosophy. Indie fans are concerned that due to high piracy rates developers may change their minds about DRM-free games and adopt a more corporate approach by implementing complex copy protection systems. But indie developers seem to be resistant, because they don’t want to bother players by forcing them to input serial codes or create profiles for online authentication. Copy protection systems grow more and more complex and players are required to fulfill certain steps before they are actually able to play the game. This – or so the belief goes – reduces the joy of playing the game, especially for smaller titles. The philosophy is that adding DRM or any similar systems “makes the download experience worse for generous contributors in the name of punishing pirates”. This doesn’t really fit with the spirit of those games.
Apart from the costs involved with DRM, it gets more difficult for developers to make cross-platform indie games, which reduces their chances to approach the target users and those people actually paying for the title. “Bootlegging” is a reality for games available for PC, and no game has yet been proven to be uncrackable. No matter how often developers try to protect their games or implement highly-sophisticated protection systems, there will always be hackers finding ways to crack it.
Humble Bundle
The belief of developers in good-will among fans and pirates has even led to an interesting pricing approach: the “humble bundle”, or “pay as much as you like” system.
The first Humble Indie Bundle, initiated by indie developer Wolfire Games, was a bundle which contained five very well-received titles, including the award-winning indie game World of Goo. All games separately would have cost around 80 USD, but players were free to set any price they would like to spend on the bundle. With an average contribution of 9.18 USD and a total of 1,273,613 USD, the “experiment” was such a great success that other bundles have been released and it stood as a model for similar projects among other companies. As part of the humble bundle, users could also support charity by setting a share for how exactly the purchase is divided among developers and foundations.
(Note: The second Bundle registered an even higher contribution rate, with single contributors paying up to 2,000 USD. Three bundles have been released thus far.)
By opening the sources of their indie games, developers even go even further and invite supporters to help port their games to even more platforms, or add new features in games. This approach shows that indie developers around Wolfire Games seem to prefer to work with – rather than against – pirates. The intellectual property of those games is seen not as something that belongs to a single person or organization, and therefore must be protected by all means, but as something that should be shared with the community to improve games and the gaming experience. The idea is to build a relationship with the player, and to build a game around a community – not the other way round. Games are made for their fans after all, and the more players can contribute to or support their favorite games, the more they will identify themselves with the game. By inviting the community or asking for help, developers educate the users’ attitudes, and move towards changing the digital rights management system from restrictive (copy protection) to supportive (open).
The move to offer games in a price and manner that consumers are willing to agree with differed vastly from larger software publishers who place artificial limitations on their content. Players had real reasons to buy, rather than just feeling entitled to define the terms under which they buy a game and looking for ways to limit those who want to interact with you in a different manner.
Piracy is a Message from Users
Of course, it goes without saying that we should not justify game piracy. However, it is true that Western developers, by changing the way they view this problem, have been coming up with more and newer ideas and ways of improving sales.
Pirates are also game fans. The problem of game piracy can also be said to be an ardent message from gamers to the game industry. From here on, domestic Japanese developers must face the fact that instead of focusing their energies on implementing more strict forms of copy guards alone, they may have no choice but to create new services and systems with which they can coexist with and even embrace pirates and piracy.

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