PC Video Games Thriving... But In Different Ways Than You Might Expect

from the business-models-change dept

Tue, Jul 22nd 2008 11:23pm — Mike Masnick

Recently, we had a story about a lawyer who was suing a bunch of folks for uploading a pinball video game, with some questionable statements about how piracy was destroying the PC gaming industry. Of course, that's not actually true. An excellent post by Cord Blomquist explains how the PC gaming business is actually growing, but in different ways than most people expect. Sure, it may be harder to find certain types of video games that you see on consoles these days, but other games are thriving. But they're doing so by adopting different business models that aren't so impacted by unauthorized distribution. For example, they involve online services (ongoing MMO type games, where the payment is for service, rather than the software) or they focus on making money through other means, such as advertising or upselling premium editions. So, once again, we find that so-called "piracy" is really just a business model problem, not a legal problem -- despite what some lawyers might say.

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Filed Under: business models, pc games, software, video games

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PaulT (profile), 23 Jul 2008 @ 12:20am

Expected
DRM and ridiculous system requirements are helping to kill games like Mass Effect and Crysis, but of course there's areas where the PC is a superior, and therefore more popular platform.

I've been hearing "OMG piracy is killing everything" cries since I loaded my first cassette onto my first ZX Spectrum computer in 1985. What was then a cottage industry is now a multi-billion dollar industry despite these claims. Give people a reason to buy, and they will.
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Grokk, 23 Jul 2008 @ 12:27am

Re: Expected
Give people a reason to buy, and they will.

Seems kind of obvious doesn't it, but so many companies fail at providing something worth paying for, or they release their product with other things (eg: buggy DRM) that people don't want to pay for.
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Yosi, 23 Jul 2008 @ 1:24am

Refused to sell
I actually tried to buy recent version of Neverwinter. Result - Amazon (and bunch of other stores) refused to ship software to Israel.
What kind of crap is that? Books and DVD's are OK, but software is not?
OK, giving up, back to torrent client.
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Shohat, 23 Jul 2008 @ 2:03am

Actually...
PC Gaming industry has an insane failure rate, I remember statistics talking about only about 15% of the games breaking even.
The reason is not DRM, since all games get cracked, and DRM is irrelevant. The reason is that the audience is simply not the kind of people that can afford the game, especially considering the fact that you CAN get it for free via torrents.
The truly successful games are mostly the ones which have a good protection system set for multiplayer (Valve, Blizzard for example ) , but this , again, is a niche. People don't tend to spread themselves across multiple multiplayer games, and this creates another high entry barrier for the industry.
Some of the best games ever made, simply don't have (and shouldn't have) multiplayer mode. And there is very little chance for such games to succeed nowadays. Not because people won't play it, but because people won't buy it.
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Anonymous Coward, 23 Jul 2008 @ 2:26am

Re: Actually...
Which is why Sins of a Solar Empire has done so well, with it's DRM and charging for multiplayer. Oh wait . . .

Make a product customers want, don't piss them off with stupid DRM and the like, and you'll do fine. It's not rocket science.
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Anonymous Coward, 23 Jul 2008 @ 2:50am

Re: Re: Actually...
Ha. that's the last game I torrented!
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Shohat, 23 Jul 2008 @ 4:48am

Re: Re: Actually...
Yeah, Anon, I can totally relate. Audi recently released a totally messed up Q7 model.
Sells here for around $110,000, horrible MPG, and is too wide for its own good.
So I stole one. If Audi would listen to its customers instead of having this obsolete "sells as-is, don't want it, don't buy it" attitude, nobody would steal their cars.

Easy process:

1) Find product
2) Find flaw
3) Find out price isn't what I'm willing to pay
5) Accept the fact that I still want the product
6) Steal it
7) Bash the company for making the product with a flaw.
8) There is no (4)
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Liquid, 23 Jul 2008 @ 4:59am

Re: Actually...
Well yeah, because multi-player is the way the industry has forced people to focus. It was readily accepted by the majority of gamers out there. hence why XboX, and PS3 are big for multi-player games like halo, CoD, etc... People like to get online, and own others just like they would if 4 of their friends were sitting in their living room playing on the same machine. Even now-a-days that games are costing $60 a pop people want their games to do more then just be played. It doesn't matter about substance for a lot of people it's all about what the game can do then other than just be played.
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Chronno S. Trigger, 23 Jul 2008 @ 5:28am

Re: Re: Re: Actually...
I would like to see citation for that 15% because I think you're full of it.

STEALING A CAR IS NOT COPYING A GAME. Get that damn analogy out of your head. A better analogy would be that you want the car, don't want to pay Audi, so you make an identical copy of that car down to the logo on the front. What would Audi do in this situation? They would sue your ass for COPYWRIGHT INFRIGMENT not throw your ass in jail for theft.
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Anonymous Coward, 23 Jul 2008 @ 5:43am

Re: Re: Re: Actually...
Hoping that was sarcasm as the logical fallacies are staggering.

If you download a game you do not prevent anyone else from buying or downloading the game. The game is an "infinite good" in the sense you can literally just right click and select "copy" to get a duplicate.

If you steal a car you are preventing someone else from buying that car. Maybe they needed it, maybe they didn't. The point is, its a "scarce good." To get another car you have to manufacturer it, which is a little expensive.

Anything that can be transformed into a digital format (such as video games or music) can't be thought of as a scarce good. The economics just don't work.

Note, that this does not mean you don't compensate the creator. That's where anti-piracy advocates get it all wrong, I suspect on purpose in some cases.

All it means is you need to adjust the way you think about the product. MMO's are one example of this. Take EVE Online for example. The game itself is completely free.

If the game is free, what are you paying for? Well, it is sort of like a service. But to me I tend to think of it more like a movie theater; they are selling an experience.

You pay monthly so you can join other players in a virtual universe. All together. No different servers to play on or anything, just the single universe. You also pay for that experience to be maintained and improved.

This of course won't work for single player games. But there is something odd about paying nearly 100 USD for a game with a single story that can't expand and change. People do, so I guess more power to the industry.

The various industries do need to stop doing one thing though. They need to stop trying to take advantage of their customers. If it costs you next to nothing to create something, the price of your good should go down after a little while. Love how CD's haven't gotten any cheaper . . .
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Anonymous Coward, 23 Jul 2008 @ 5:54am

Just because you make a PC game (or console game for that matter) doesn't mean it should automatically cost the "going rate" for a game. My biggest problem is when a game of little content costs the same as a game with a lot.

Not to change the subject, but why do I have to pay top dollar for Madden Football every year, when most of the time the differences could be included in a patch? I see this year might be a big change, but from 07 to 08 they could have patched it. Give me a reason why I need to spend money. Give me SOME quality.
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Anonymous Coward, 23 Jul 2008 @ 5:58am

Re: Re: Re: Re: Actually...
Exactly, the Original car STILL exists.
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Just Another PC Game Player, 23 Jul 2008 @ 6:03am

Make it Good and They Will Buy It
People who play games will buy a good game rather than just copying it for several reasons: one to get the manual/box and second many do so to support the game developer so that they will continue to make good games.

There are so many crappy bad games out there, so that when a good one does come along, buying the game is like leaving a tip. Something you don't have to do but do anyway. Many will buy the game even after they have a broken copy.

Do all do this, no, but I and many other game players I know will do so. Same as with music, some do, some don't.

However, what sets us off is if the game, even a good game, has a stupid copyright or DRM protection that prevents us from playing the game. One that especially angered players was the one proposed that the user would have to call the game mfgr to reload the game on their computer (can't remember company name). Games get deleted, HD's crash and so on, and mfgs aren't always there in the future. Apply something like that, piss off your customers, and everybody will just crack the game.

Good games will get buyers. The electronic software industry has to learn how to maximize sales, but that won't be by forcing customers down a road they don't want. There will always be those who will get the game for free by getting a cracked copy, but the mfgr would never get those sales anyway.

On Line games and MMORPGs make their money by the monthly fee and is where the PC game industry is headed. Single games will be few in the future or only be available on a console. Unfortunately, the old style PC games will be a thing of the past.
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Shohat, 23 Jul 2008 @ 6:10am

Re: Re: Re: Re: Actually...
My analogy has nothing to do with copyright or scarcity.
This isn't fair use, distribution, modding/hacking, decoding or backing up issue. I've written more OSS than you have ever used.
The issue is simple - if an idiot wants to make a PacMan game and sell it for $50,000, it's his right. And it's your right to call him and idiot that ignores market, and not buy his product.
But it's not your right to take his product anyway, and not pay him because he's an idiot that doesn't understand the market.
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Chronno S. Trigger, 23 Jul 2008 @ 6:25am

Re: Re: Re: Re: Re: Actually...
Well then, please use an analogy that fits the situation to avoid further confusion. From your post it sounds like you're perpetuating the myth that downloading unauthorized software is theft.
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Just Another Game Player, 23 Jul 2008 @ 6:36am

Re: Re: Re: Re: Actually... by Shohat
Suppose an idiot makes a PacMan game and displays/advertises it as PacMan, then it is doubtful anyone would buy it or crack it. If he is honest, nothing would happen, it would be like selling hot dogs for $20 each, no buyers.

If same idiot makes a PacMan game and adverstises it as a new game and people do buy it, then he is being dishonest with the customer and deserves to be electronically slaughtered.

If it is not our right to take his product and not pay him, is it also not our customer right to return an inferior product and get re-imbursed when it was advertised as being something else, including being bug free.

If you are selling electronic "snake oil", you deserve to be "tarred and feathered and run out of town".
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Anonymous Coward, 23 Jul 2008 @ 8:15am

Re:
because people pay. if people stopped paying for it every year, they'd stop re-selling a patch.
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Anonymous Coward, 23 Jul 2008 @ 8:17am

Re: Re: Re: Actually...
is "ShoHat" an alternative spelling on "Ass Hat"?
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James, 23 Jul 2008 @ 8:56am

Re: Re: Re: Re: Re: Actually...
Actually it would seem that idiots who ignore the market are the ones who are most likely to have their game pirated.

Pirating is not stealing, and infact, many times a person will check out pirated content to avoid wasting money on truly horrible content.
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Freedom, 23 Jul 2008 @ 10:11am

Better Options...
If you take an average $30 to $60 title for a boxed PC game title and you make it available only for $4.95 or $9.95 but without the DRM BS, you'd have a ton of buyers.

Most people don't like Torrents, don't trust them and would prefer to get their software direct from the source.

The problem is that the fear of getting it via the Torrents is less than the $50 for a game. Make the game cheap enough via online distribution and you'll get back a lot of those lost sales.

In the end, those using Torrent are telling you that they don't like your distrubtion method and have chosen another - one frankly that has its own costs (virus potential, being sued, learning curve, etc.) You may not like it, but the market is telling you that the games aren't worth $50 - find a way to sell them at a price that makes sense in comparision to the options available.

Freedom
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James, 23 Jul 2008 @ 10:51am

Re: Better Options...
Hmmm.. or make the games so good (and w/o DRM), people will be GLAD to pay $50 to get a copy?
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دردشه, 5 Jul 2009 @ 2:32pm

telling you that the games aren't worth $50 - find a way to sell them at a price that makes sense in comparision to the options available
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