A History of Software Piracy and Video Games

Software piracy-that is, the unauthorized copying and distribution of applications for a computer-is, simply put, rampant. According to a 2007 study performed by the Business Software Alliance and IDC, the global rate of piracy is almost 60% (1). In developed countries, the rate runs as low as around 20%. In other countries, a staggering 90% or more of software is pirated. It's no surprise that many software developers take any steps possible to prevent theft of their software.

The issue of software piracy is even more pronounced in the world of video games, for a variety of reasons. First off, as an entertainment medium video games are more desirable to pirate, like movies or music-you're not pirating an office productivity application. Secondly, the way video game markets work opens certain markets up to being very open to pirating. For example, the Sony PlayStation 2 video game console was first released in Japan in 2000-but the console is just about to be released in Brazil, nearly a decade later. Not only are the Brazilians getting last-generation hardware (the PlayStation 3 was released in 2006), the cost for a PS2 runs around $465-more than the cost of a current PS3 in America. This is due to Brazil's extremely high import taxes. Getting outside products for cheap is virtually impossible-and so it's no surprised unauthorized piracy runs as high as 80% there (2).

Many people think about video game piracy in the same terms as music piracy-a result of the internet and peer-to-peer file sharing services or bit torrent sites. But piracy predates the world wide web, and continues in a "hard" format today. Many pirate markets originate in the manufacturing companies of China and the far east, where there are criminal organizations or simple opportunists interested in making a buck. Software locks or copying protections are circumvented by dedicated hackers or script kiddies and "cracked". One popular way of playing these cracked games is to "mod" a video game console, disabling the copy protection on the hardware and then loading it with the cracked software. The Electronic Software Association estimates that this costs the industry a staggering $3.5 billion each year. And that's not counting the file-swapping over the internet (3).

Unlike the pirate markets of China, many of these crackers aren't making a cent off their efforts-they do it simply because they can. The advent of the internet essentially creates a wall of division between the crackers and pirates and the people affected. These people would never shoplift from a store, but wouldn't bat an eye about stealing software. It's a curious but still damaging paradox (4).

Video games have become the dominant entertainment property, exceeding the grosses of the motion picture industry. That is partly responsible for the continued and increasing attention of pirates (4). But the general excuses and rationales from pirates about how they are not "hurting anyone" do not hold up to scrutiny. Software companies are very aware of software piracy, and ignoring it often leads to significant damage.

Take for instance the case of recent game Demigod, a standalone real-time strategy game based on the highly popular WarCraft III mod Defense of the Ancients. The game was released without DRM (digital rights management), software that, for instance, prevents players from playing the game without the original disc in the computer, or from installing the game on more than one computer. It was a gesture of good-will, considering the amount of piracy potential--and the developer Stardock paid dearly. Soon after release, the game's servers were hit by a massive wave of people trying to play the game; as a result, the servers and multiplayer experience became highly unresponsive. But only around 18,000 of the more than 120,000 players were actually legitimate buyers of the game; the rest were pirates who were not only ruining the game experience for those who actually bought the game, but also hurt the game's review scores as game critics could not fully play the game. Demigod saw hundreds of thousands of sales disappear, and their game take a critical beating because of a principled stand against software protections that hurt the game experience for buyers (5).

Larger publishers can afford to absorb such hits, but smaller ones can't. Take for example the Mac gaming market-according to developer Aspyr in 2006, selling 50,000 copies of a game for a Mac was considered a hit (6). When Macs account for slightly more than 5% of the global market, piracy can have a disproportionate effect. As with many PC developers, Mac developers don't release games with DRM because it limits what legitimate buyers can do with the software. In the case of MacSoft however, who developed the mac port of the popular first person shooter Halo: Combat Evolved, they were forced to add a CD-key requirement on starting up the game in a software patch. The reason was that more copies of the game were being pirated than were being sold in stores-and that was tracking less than 10% of pirate traffic (7). Most recently, developer Blizzard announced that the sequel to the highly popular LAN multiplayer real-time strategy game StarCraft, StarCraft II, would not have LAN capability due to piracy concerns (8).

In comments about the StarCraft II fiasco on popular bookmarking site Digg, I noticed many of the comments essentially read as "Well, because Blizzard won't include LAN support, I'm just going to pirate a cracked version of the game." But this mentality is what is further enforcing the necessity of DRM in software executive's eyes. PC gaming has become more and more marginalized in recent years as consoles increase in popularity; but PC gamers' response is to pirate. This not only means more copy protection; it means that more creative, niche titles will never be made because the amount of piracy will affect the bottom line. Piracy is slowly but surely killing video gaming. For those that want to sound off against poor game choice and DRM, the best thing to do is not to pirate but vote with their wallet-buy good games and those without DRM, and don't pirate. Ultimately, it is up to the players to ensure they get the games they deserve-while the United States is heavily involved in stopping piracy, given the global nature of the problem they cannot stop a Russian hacker with an internet connection from uploading cracked games to a server or sharing it via Bittorrent (4). It comes down to an individual choice that requires millions of gamers to accept that they should pay for what entertainment they receive.

Sources
*Business Software Alliance (2008) Fifth Annual BSA and IDC Global Software Piracy Study.
*Kat Bailey, 1UP.com (2009) Sony Officially Releases PlayStation 2 In Brazil.
*Kristin Kalning, MSNBC (2007) Game piracy runs rampant on the Internet (pp. 1-2).
*Andy Chalk, Escapist (2009) Demigod Piracy Running High.
*Arik Hesseldahl, BusinessWeek (2006) Apple Needs to get its Game On.
*Tuncer Deniz, InsideMacGames (2004) MacSoft's Peter Tamte talks Halo Piracy.
*Andrew Burnes, IGN (2009) Unsurprisingly, StarCraft II LAN Cut Due To Piracy Concerns.