Intellectual Property : Pirates FTW or FTL?

Is piracy detrimental or beneficial to game developers?


Though let me preface by saying this is topic by saying this topic involves a lot of conjecture, and as such I doubt it's an efficient expenditure of your time or mine.

  • This topic is VERY broad, meaning focus will be difficult.
  • To accurately address or understand this concept requires an entrepreneur-level understanding and experience of this, or a related field.
  • Without experience, arguments on this topic (for/against) will by a collection of inconclusive appeals to authority, personal experience, conjecture, and opinion. Yes, that includes this article.
  • No conclusive arguments exist. Nearly every example (pro or anti) has a counter example. If one has a strong bias, cognitive dissonance will overvalue that which supports one's side, while undervaluing that which goes against it.

In short, pursuing this topic will likely be a huge time investment and not very productive.

Benefits from Pirates?

Some pirates sometime help publicize the game, or buy the games later.

The above statement has some truth to it; you will occasionally find instances where the actions of pirates results in increased sales. I propose that such instances are rare and minor, but lets consider this topic from another angle.

A common tactic businessmen use to rip off naive artists and coders is to say, "Well, my budget is limited, but I can give you loads of future publicity, stock options, and royalties." I've often said "Potential publicity and promises of future payments are worthless forms of currency." This is something nearly ever professional freelance artist or programmer knows well from experience; and the cases where this has paid out are extremely rare. For a tiny insight into the world of freelance art, I suggest this video: "Fuck you, Pay me"

Presuming these theoretical benefits actually did exist, then entrepreneurs who release games "here is the full game free/legal, but please pay" should be greatly rewarded. However examples of this are few and entrepreneurs remain unconvinced.

Marginal Cost?

The marginal cost of an act of piracy tend to be low. Sure, pirates do sometimes stir up trouble and cost producers resources in other ways, but it's fairly accurate to say the marginal cost is approximately zero.

That's only a tiny piece of the puzzle though. A much bigger piece is known as "opportunity cost."

Opportunity Cost

Two Concepts:

  • Opportunity Cost is the cost *(not restricted to monetary or financial costs)* of any activity measured in terms of the value of the best alternative that is foregone. It is the sacrifice related to the second best choice among several mutually exclusive alternatives.
  • That Which is Seen, and That Which is Not Seen: This concept is best explained by Bastiat at this link.

In order to accurately discuss the subject of costs, it's important to consider compared to what? The alternative forgone in the context of piracy is that persons adhere to the license agreement of all software, often implying purchasing content they wish to consume or not consuming the content.

Perhaps to give a sense of perspective, lets take a specific example:

  • When I used to pirate, I played every major AAA-game on release, paying nothing. As a result, I might have offered some publicity to those titles, by talking about them.
  • Since I stopped pirating, my gameplay habits shifted significantly, often playing independent titles, games fairly priced, or games on sale. I don't play AAA titles much anymore, or wait for a good demo, review, or significantly discounted price. Instead, I've discovered games which have far superior gameplay, if only lacking in comparable budget. I've rewarded these developers by both contributing resources (in the form of payment) and by publicizing their titles.

The first example provides no advantages to producers over the second. The above also provides an example of "that which is not seen." To take a cue from Mises on resource allocation:

  • Producers who create quality products at a fair price are rewarded.
  • Consumers seen an increase in quality products priced fairly.
  • Consumers will have to decide whether to buy a video game, or something else, thereby choosing where resources are allocated.
  • Within the gaming industry, resources will be allocated towards those whose product quality and prices are *"efficient"*
  • *Counter point:* Pirate-before-you-buy helps prevent purchasing bad products, based on hype.

Part #4: Conclusions

In conclusion, this topic is an inefficient expenditure of time, where no one wins. I only wish the reader to recognize that the counter argument exists, and move on to more productive pro/anti I.P. or piracy related topics.

Lastly, before responding, let me save you time: Yes, the author is quite aware of long lists of counter-points and counter-evidence. [1] The above article is based on appeals to authority, personal experiences, conjecture, and opinion. [2] Your response will be based on appeals to authority, personal experiences, conjecture, and opinion. If you remain unconvinced, the above cycle will continue indefinitely until one of us opts out.

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