The demographics of piracy, PCs and consoles

Game Companies think that by focusing their energies on consoles instead of PCs they’ll be making more secure profits from piracy. If only they understood their audience…

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As TweakGuide’s examination of piracy continues, he takes a look at some of the numbers around file-sharing for each platform and find correlations from there. I will not attempt to dispute the numbers themselves, even though one can make some very valid criticisms about his methodologies which many went ahead and did here ((Simple Example: His number for downloads from Mininova is way, way off. This is the times a .torrent file has been downloaded, not the number of times the full, working game has been downloaded. Very often a particular torrent will not include a working copy, or its swarm will not be fast enough, or simply another torrent will look to be of higher quality. Add to that the file scrapping that Torrent search sites do with each other all the time, and you figure out that his numbers might easily be 1/10th of what he thinks they are. The Torrentfreak numbers are a far better indicator but of course, he interpreted them absolutely wrong.)). The reason there is no point is disputing the numbers is firstly because it’s the impression that game companies have of the numbers (and that would be similar to the author’s) and also because I’ll attempt to show that even when the numbers stand, it’s his analysis of what they mean that is flawed.

The reason for this is that TweakGuide does not seems to realize that the dynamics of the crowd of PC gaming are not the same as of consoles or how those dynamics change when these two overlap. Before one can analyze the situation, they need to recognise the difference in demographics between those two markets and how it affects puchasing behaviour and the rate of perceived piracy.

Here’s what we need to consider

PCs are proliferated all over the world

The fact of the matter is that not all the world has such a big middle and upper-middle class as the USA has, and this means a few things.

First there quite a lot of PCs that are capable of gaming but not purchased explicitly for this purpose. It’s quite often that a family will have a PC purchased for the use of everyone (business, online shopping, social networking, studies etc) which can then easily be turned into a gaming-capable machine by the simply addition of a decent graphic card. Since the need for such a PC can very often be necessary (say for business or school) it’s something prioritized over an explicitly gaming console, plus it’s not out of the budget of most families, even in developing nations ((This information shows that even in the poorer nations, 1 PC per 10 people is not uncommon. Thus Their middle class is very likely to own a gaming-capable PC)). This means that quite a few people who want to game have primarily access to a PC rather than a console.

However most of those people are not wealthy enough to purchase games to go with it. Especially teenagers which are on a limited budget but have an insatiable appetite for new games, not to mention for playing whatever their friends are, are left with the only option to pirate. Usually this is done locally and not via Downloads, although with the proliferation of high-bandwidth lines even in poorer nations, this is changing. Think of it like this, if you have a PC at home only and enough money to buy the latest-greatest game per month, would you give up all the other games? Even when salivating adverts about them are all around you?

That is exacerbated even more when we consider that nations outside the 1st world have far smaller incomes while the prices of games do not tend to drop accordingly. This forces gamers to turn even more starkly towards piracy as a means of getting their gaming fix. This is only to be expected as price is indeed the main reason most turning to file-sharing and not the infantile argument anti-piracy lobbyists use of “they are just immoral free riders”. This is the reason why piracy is largest in the more cash-strapped nations in general.

What I mean to show by all this is that the reasons PCs by far lead the numbers in piracy is because there’s far more PCs available in the poorer countries than consoles and because they are poorer and cannot afford the exorbitant prices of PC Games, they turn to piracy. Thus the numbers of downloads we see¬† are representative of the fact that people download all around the world and not just from the developed nations and primarily for the PC.

Consoles are primarily owned by those with spare income

While a PC is becoming more and more of a necessity in everyday life due to the increasing importance of online communication and services, consoles are instead becoming more and more of a luxury. It has always been the case that the console itself was cheap because it was making the money up via the license for the games sold but the recent consoles have not only steadily increased in price by themselves (to the point where you can get an OK gaming PC for a comparable price) but in order to take full advantage of their capabilities, you currently also need an HD TV, which relatively few can afford.

Originally things were different of course, when the first and second generation of consoles was coming out, PC were still quite expensive and not a lot of people had one at all. Thus to get a complete PC for gaming, including a monitor and peripherals could rise up to the thousands. A console OTOH required a few hundred in investment and you could plug it in your TV. It was a cheaper solution, especially in a time when piracy was not as easy or widespread. Roles now seem to have reversed somewhat, or at worst equalized. A Console along with peripherals and a few new games can easily take you to half a grand (and that’s by being generous and using current console prices), and if you include an HDTV in the mix, you quickly fly over a grand.

As weird as it may seem to those of you still living in a comfortable middle-class bubble, not many can afford this. An expenditure like this, can easily take up the whole recreation budget some have for the whole year. As a result, those who do get such setups, are also the ones who can afford to buy games legally just as well. And this shows in the rates of piracy of course.

Where Demographics collide

Of course, there’s a very big section of people who own both a gaming-capable PC and one or more consoles at the same time and here, the things get even more interesting.

Certainly someone who can afford two or more gaming stations has spare income to be buying games legally in the first place. Someone who gets a console is more than likely to get it as his “legal” and hassle-free gaming station since they also have the benefit that games just work out of the box and they don’t ever have to wonder about virii, serials and DRM, or their OS breaking. Of course the PC could still be used to be able to play those types of games that just don’t work that well on a console. If that person also happens to be a hardcore gamer who enjoys playing a lot of different games, it’s quite possible that he’ll reach time, if not money constraints at some point.

Now if that person is to pirate (To be able to play the game as a demo or simply to save money,) where do you think he would do it? Would he take his console to be chipped and risk getting discovered and losing access to many of the features of his console? (eg. multiplayer, warranty etc), or would he download the PC version which requires very little effort and risk to get working? I think we all know the answer to that. Thus, even though it’s the same person doing the pirating, and even though this piracy may eventually lead to a console sale (if he likes it enough to play it legally, or on a nice HD TV), the PC piracy gets inflated once more and talks about “economic loss” are once again brought up.

PC Gamers are more demanding

Finally one thing that deserves notice in order to understand why the PC Game piracy is higher is the increased¬† demands of the users of this platform. You see PC gaming had always different and more open standards than console gaming and this grew out of the nature of each platform. Consoles, from the begging have been extremely locked-down and locked-in, even to the point of special custom cartidges incompatible with anything else, modifications to the games adding extra value where practically impossible to make or distribute and in general user freedom was curtailed. This was counterbalanced with hassle-free gaming, low learning curves and initial low costs (i.e. if one does not take into account the increased costs of games.) As such, they tended to attract the kind of user who would be quite willing to sacrifice freedom for convenience. “I know my machine could do so much more, but I don’t personally care for them so I won’t demand it.”

On the other hand, The hackable nature of the PC allowed customization and expansion of games and empowered users to add extra value, far beyond the original. Furthermore, because PC multiplayer was inherently tied to the rise of the internet (as opposed to the living room split-screen in the case of consoles) it also inherited many of the aspects of the distributed, decentralized and free nature of the net. Thus individual servers for FPS, planets, modding communities, balance patches, and of course the more novel, demanding and complex games. All of this meant that the PC gamer had and still generally has quite high standards on what he should be able to do with stuff he is using. The rise in popularity of Free Software and of the more customer-focused companies has only served to increase their expectations.

So when a company attempts to introduce console mentality into the PC market, it is only natural that it faces a backlash which becomes only more intense if and when the company does an action which the PC gaming community opposes vocally. This can easily be seen by the classic by now example of Spore which instated draconian DRM and delivered a sub-par game, based on the notion that marketing alone was enough to carry them through. The most recent example was of course CoDMW2 which removed the ability for custom servers, something which they were warned would create a strong backlash. And so it did as the game soon became the most pirated game of 2009 within a few months. Not simply because it was good or popular, but also because PC gamers, quite explicitly, did it as a punishing act.

Look at the rest of the top pirated games of 2008 or 2009 and you’ll notice the same trend. The top games are those which are released for both PC and console and if anything include many options that PC gamers are not fans of. Restrictive DRMs, Missing basic features, Console-based control systems or setup, DLC-focused etc. This should point out the principled basis for this kind of piracy. It’s not based on simply wanting to get a game for free, but rather on the wish of PC gamers to make companies understand that their actions are unpopular. Unfortunately companies choose to interpret this a different way.

Bringing it all together

How does this all affect the arguments of TweakGuide? He’s basically saying that because of the disparity in the ratio of piracy to legal PC games and piracy to legal Console games, PC game developers are starting to switch their efforts to consoles and even making them their primary development platform. Accordingly we’re either going to stop seeing as many big-budget games for the PC, or they’re going to be developed with consoles in mind and therefore lose in quality, performance or taking advantage of the PC capabilities.

This is of course a bad move for their part as they are only going to worsen their sales and piracy, not increase them, and this of course will further exacerbate the issue, leading to them publishing even worse PC games, leading to more piracy and less sales etc etc.

You see, those who make the majority of pirates, the ones who simply cannot afford the huge prices for games, will not suddenly discover the money to buy a console. They will simply keep looking for the highest quality game they can get for free or for a price they can afford. If the big budget titles move exclusively to consoles, then they’ll simply won’t get them and settle for the indie and open source alternatives. If the big budget titles remove features and worsen the customization, the free or low cost alternatives are simply going to look as a better thing to play. The poor are simply incapable of getting more money for games. Naturally this means that those gaming companies have shot themselves in the foot since even the poor will shell out some money if you give them a reason to buy and the correct price. If you are not willing to do it for fear of losing control, then someone else will. Whatever happens, you’re not going to be making money out of them but rather facilitating others to doing so.

On the other hand, by focusing all their energy on consoles instead, they will start to over-saturate an already full market. Console gamers may have more disposable income but they are relatively few and have only so much time they can spend on gaming. Start churning out more games for the consoles and you’ll quickly find out that it’s the sales per individual game which start to suffer while you’ve now lost all income from the PC market. Sure, some PC gamers will switch to consoles so that they may play the big budget and exclusives but only the ones who can afford to in the first place. I doubt it will be a significant amount.

For those who have already both a gaming rig and a console, not much will change. At best they’ll switch to playing free games, or those who are given at an appropriate price for their value, or they’ll simply chip their console or buy a secondary chipped one so that they may keep pirating for demos or gratis. If anything, console piracy will increase.

And finally, those who are simply demanding of the stuff their games provide, of the modding capacity and the free support and quality service, if anything this will drive them even further away from console-type games and they will turn instead of those companies who know to give them what they expect. Companies such as Valve and Stardock and Runic and Blizzard. And if those alternatives are not enough, perhaps they’ll finally discover the possibilities of Free Software.

The large companies may think they’re protecting their interests and punishing a disloyal crowd, but their inability to understand their demographics is only going to hurt them in the long run. Naturally they won’t realize this as it’s nice to be able to say that the percentage of piracy is low, even while your total profits are lower. After all, they are misguided enough to whine about piracy hurting them…while recording record sales year after year.

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