All the Things You Want

Another View on Piracy

Published on July 26, 2004 By Amitty In Gaming

I have seen that the piracy controversy goes through it's ups and downs. We are coming out of the P2P issues and moving back to warez. Microsoft has sent out a internal memo that got sent to all it's past and present contract members and employees. I am assuming there is one somewhere deep in my own inbox, but a friend called me up with it. The jist of it is this:

" If there is any indication that a employee of Microsoft, or any of it's defined Workgroups, are using pirated software, or downloading warez, they shall be immediately investigated."

That is nothing new, is it?
Nooooooo...
But, look at the consequences. A couple of old friends from MS told me that they aren't truely investigating people, they are summilarily voiding their contracts and sending them packing. Microsoft, which estimated that it lost a 'Significant amount" in sales due to piracy, * Can't find a solid answer---sometime reported 450 Million*, have cracked the whip.

Take Windows XP. Surely, most of you out there that pirate have heard that the Non-activation crack will no longer work with the installing of SP2 * Still in RC stage*. This means that, if you have a invalid Product Code, you will not be able to visit Microsoft Windows Update to download some of the very needed Critical Updates. * Like the Update to stop RPC issues through Agobot 32*

But, if you set automatic updates to be downloaded automatically, you getthem without the Update Computer checking the validity of the Product Key. Microsoft has apparently addressed this issue. Most of the important crits will be included in SP2 and it actually looks good. Microsoft has taken it's time with this one.

So, this is all in the name to stop piracy? It's interesting that, as a technician, I have been given free, new product keys from Microsoft by asking for them, when working on computers that have been pirated. Their stance on piracy is funny and flexible.

So, Microsoft is not the only big company to do this. Many of you that have had faith with the Symantec offering of Norton's Antivirus might have been disappointed with the latest offering: Norton's Antivirus 2004. Not only has Symantec popped up and joined the ranks of the Product Activation Movement, it screwed up it's award-winning program, part due to the inclusion of code changes brought on by Product Activation.

On the first week of release, the Symantec lines were busy, busy, busy with calls of non-valid product keys, major software glitches, and critical errors occuring in both Windows 98 and Windows XP platforms. The earlier version, NAV 2003, was flawless for the most part, and could be re-installed over and over again. Like Windows XP, 2004 only allows us to install a limited number of times under the current product keys. Extra keys are available for a set price.

So, how much do these companies really lose? If the war on piracy has taught me anything, these measures are only pushing people to upload and crack these programs more. If man can make it, man can break it. The movie industry has been spending money on PSA to stop piracy, yet the best quality of movies are from DVD screeners that they release themselves to thousands of video shops around the nation.

And who doesn't want to get the latest and greatest videogames for free, instead of shelling out tons of money on a game they might not like? Some game companies are making it clear that they don't want this to happen. They have gone to lengths in the past to write errors in the discs so that you can't copy CD. That didn't last long. Hell, if you want a copy of the newest Tom Clancy game, push through the porn banners and download it. The actual losses from the gaming industry have, apparently, been lack of sales. That combined with people put it out there on the net, well, that spells trouble.

Console game have almost dropped the copywriting issue. They seemed to be ok with that also.

DVD rippers have been banned from the USA due to copywrite law. The case of DVD XCOPY is the prime example. They included a flawless *near* DVD ripper for copying DVDS, under the statue law of " Owning one, legal, archival copy" of media. While it was a small blow to the makers of DVD XCOPY 321 Studios, they complied with the ruling and pulled the ripping tool. Now, there seems to be a new copy write protection on 2004 DVDs that makes previous, ripper copies of XCOPY faulter. Not one new movie past Pirates of the Carribean * that one included* seemed to be able to be copied.

So, is this where it stands? That every few months the repective companies will change their copywrite procedure to block pirates? Is the loss that much to them?

According to Linux News: Software Companies lost more money in the Europe sectors than in any other region last year. The reported loss is $25 million worldwide. http://www.linuxinsider.com/story/35029.html
So, if this is the case, where is the big numbers from Sun Micro and Microsoft coming from?

Smartkey had this table to add to the confusion: http://www.smartkey.eutron.com/ENG/smartkey_overview_stime.asp

Whether that is independant gathered, or from the companies themselves, it doesn't really say. Apparently the USA says that only 35% of all the software out there is pirated, buy lost $2,876,000,000. Is that right? The numbers seem a little skewered.

later on, it gives you a breakdown from independant Software companies from the Software Publisher's Asscociation survey. It claims that that Latin America has over 361 Billion in pirated software, but that is nothing compared to the 1.1 billion in the US.

Piracy seems to be biting into the profits, doesn't it? At least, from the prospective of the information given above. But, what does that mean to the individual companies? Nothing. These are abiguitous numbers at best, with not real, hard information.

What is the total loss? The company might take a hit in sales, but does that dent the bottom line? Maybe to the smaller guys, the ones that aren't really trying to stop it from happening. The billion + a year companies seem to be more revved up for this grab. I guess we'll just have to see what really will happen.

* This article doesn't cover that RIAA, that is a huge deal in itself, or the Movie Industry. Look for future articles*"

Comments (Page 1)

Abe Cubbage

on Jul 26, 2004

To my knowledge, they estimate the cost of piracy by estimating the number of illegal downloads of their product. Then they assume that every single one of those downloads would be a paying customer. This is of course bullshit. I really don't think piracy currently costs companies that much money at this time, but I can see that it could. These companies need to rethink how they are approaching the problem. I think Brad Wardell is on the right track with Stardock.

Amitty

on Jul 26, 2004

Actually, I got ahold of three major software companies.

First: Electronic Arts of Canada: They submit that they assume that 25% of their yearly profit is the number, generally, that they lose to Piracy. The person I talked to, being a friend, concluded that they don't have a lot of hard numbers, mainly since they are console makers.
Second: Our old Friend Microsoft. Their formula is a little more complicated. Their numbers are from various sources, including their own Windows Update site. Just recently, they caught on to a bunch of software retailers that had been selling pirated copies of their operating system. We got a phone call ourselves saying that we should no longer buy from a set of names on their list becasue for over a yearm they had been selling perfectly ligit looking copies and making a hug profit. The problem started showing up when, literally, hundreds of product keys started turning up bad during product activation.
Third: Blizzard. Now, Blizzard isn't a company that cares about piracy to a extent. They have always had a stance that people will do what they want, and because of this, they have no real tracking.

The point is, that there is no way for them to track all the illegal downloads, hard copy passing, and so on. The numbers they post are estimates at best. They look at last years fiscals, look at this year, look at the market trend, and then just, when all is said and done, pull numbers out of the air.

And yes, I agree that Brad is on the right track with Stardock too.

Lotherius

on Jul 27, 2004

The service pack 2 anti-piracy changes have already been cracked, btw... just not widely known knowledge (yet).

on Jul 27, 2004

Brad is on the right track..

I have and still do pirate some games and applications. For the majority I would NEVER have bought them in a store, because for the most part they were one week wonders at most and I will never play them again.
I have bought two games recently. Those were GalCiv (recently upgraded to TotalGaming.Net) and Final Fantasy XI. Both games which I KNEW were good and worthwhile purchases.
I live in the country and it can take me a while to work a convenient time to head into the local city during working hours to purchase a game if I wish to. Stardock are on the right track with online painless distribution, it takes the hassle out of getting a game, making pirating it more painful than not! Companies that include copy protection and activation shoot themselves in the foot. I just want a working copy as quickly and painlessly as possible.

totalgaming and object desktop are brilliant as both networks let you actually BUY the products, not just subscribe to them. there is no activation and time limits, just easy to access and easy to use software. That is the way software distribution should go, make it more painLESS than pain FUL, this will incrase sales rather than decrease them, cause the likelihood is that almost ANY game can be cracked. The harder it is to crack makes it all the more piratable once it is cracked. Making access easier legally is the way to go for the convenience of customers.

Go Stardock!

Amitty

on Jul 27, 2004

Exactly. But, you see, a lot of products are sold in stroes because of volume sales up front. Regardless that the profit is not much compared to the " Wholesale" price, they are still selling a bunch of games and reaping first release benifits.

As far as the SP 2 crack, I know it's cracked, I cracked it myself..or at least the RC 2 version.

Winterblade

on Jul 27, 2004

This is just my opinion where they get some of there numbers from. We know the number is "pulled out of thin air" value, but how do they get it? EA of Canada justs takes 25% of their yearly profit according to Amitty. I think for most companies that's only a part of the formula.

We know that companies like profit and like to show growth for their shareholders, with the U.S. being a capitalistic society and all. Public companies have become profit mongering entities. They always expect growth. So lets say ABC publisher (remember this number is usually based on what the publishers say) had a profit of X dollars last year. The gray beards (I'm not insinuating all top execs have gray beards or are old) in the executive office expect to see a growth for this year; say 15%. When the profits for this year come in they see they made 1.05 X, or a 5% increase. Well where did that %10 we expected go, well ABC did put out a couple bad games this year, so we'll say 5% went to bad games. That leaves 5%, well that must be because of those "dirty stinking rotten freeloading internet kids" pirating our top games. They go and publish their estimated pirated loss this year, by taking 25% of 1.05X which I'm too lazy to figure out. Now they include the new loss they got by estimating the 5% growth they were expecting to this value, so they say 30% of their profits.

The was a little winded so basically companies expect a growth each year, if they don't get it they blame internet downloading, and their estimated piracy value also grows. We all know it never shrinks according to them. Why would they think it's because they put out mostly bad games this year like "Shoot things 5" and "Clone of last years hit" and many others. Or the fact that on the one or two good games they include some obnoxious copyright protection that causes computers with Lite-On drives to crash, or it detects some program the publisher doesn't "approve" of (like Alcohol or daemon tools) on the machine.

We all know returning games these days is next to impossible, especially if the game has some sort of serial number (they all do anymore). So they go onto the internet to look for the crack, and post to some website about the debacle. The information gets out and a percent of people who were going to buy the game either pirate it or don't even bother with it at all.

I wonder if Doom 3 will have some draconian copyright protection on it?

Amitty

on Jul 27, 2004

Bravo! I liked the post muchly Winterblade.

The figure I got from EA of Canada is their ONLY formula. They expect 25% of the total number of sales they make during the fiscal is a separate number, that being the amount lost to piracy. Here, let's look at the numbers:

Let's say they made $25 million in profit. the number from that at 25% and that is the rounded number they believe they lose to piracy.

The trend in profit gross is just part of the formula, but you are right. The movie industry does the same thing to us. They put out hundreds of movies a year, mostly bad, and expect us to buy a ticket for each one. When the projected profit isn't met, then it's piracy. With videogames, it has the potential to be worse. Obviously it doesn't take $ 20 million to make a videogame, and if it did * cough - Enter the Matrix*, does mean that it is good. The production value on games has gone up, but tehy are still cheaper to make, so they come out of droves. I have said in many articles regarding Nintendo, that they are jsut re-releasing older games now for GBA, and that costs them very little.
But for the rest of the pile, for every Final Fantasy VII that comes out, there are nine of something else. Piracy is the ultimate scapegoat, especially since the profits loss is so malible.

Abe Cubbage

on Jul 27, 2004

Yes, good post Winterblade.

telu1

on Jul 28, 2004

Its funny, dont they realize that they are giving piracy a helping hand.

First off, they are advertising for it. Just like the blackbox comercials I see on TV, for stealing cable or whatever they are for. Before the cable company put them up I only heard of blackboxes, never actualy knew what they were used for, and wasent really interested. Right now I find myself debating weather i should look them up on google and get more info or think of the "consecuences" of using them (even though I am stumped about how they will find out I have one unless they come in my home). The big dogs of the software industry are doing the same thing. There is absoultely no way that whatever they do by crying to the public about how much they lost will change anything in their favor, because people are curious and they will fire up google and type in Warez or Piracy if they never heard of it, especialy if they ask themself "wow this is a big deal, i wonder what Piracy is". Who will turn away when they see a $500+ software packet can be just a couple clicks 30 min away on broadband.
The other thing they are doing, is they really have to realize that maby they are spending more time and resources trying to stop piracy with all the latest activation keys, and security patches that they have going, than from what they are actualy loosing to piracy.
Finaly, when will they put themselfs in the shoes of an warez user, and realize that maby the user might have not have bough the software anyway.

Software is a world on its own, xerox-ing a book is probably the closest realistic comparison I can think of. Actualy scratch that, because you can only read a book. Maby trying to build a typewriter from scrap metal as you are taking referances and measures out from a friends typewriter.

messybuu

on Jul 28, 2004

Finaly, when will they put themselfs in the shoes of an warez user, and realize that maby the user might have not bough the software anyway.

Indeed. Since I can warez anything, I don't intend to buy any software. Therefore, they lose absolutely no money if I don't buy anything and I remain the NOBLE PIRATE of the CARIBBEAN!

Amitty

on Jul 30, 2004

Thgat is totally true Helix and Telu1. I personally will buy a game based on it's merits. But, there are a lot of people that i know that do just that...my friend Brenen has all his game boxes proudly on display for all to see, as well as a couple of other people I know. Unfortunately, there are hundred, if not thousands that pirate because, simply, they can, like you said. A good friend of mine has over 200 gigs of music, and doesn't listen to more than 3%..but pirates because he can. Same with all the Warez Ratz that come to the store that revel in the fact that they pirated something.

As far as software suites, and OSs...no problems there. For what you get, and the problems that must be fixed, I'm not too hot on paying big bucks for some stuff. Adobe Photoshop and Office XP doesn't need to be high-priced. XP doesn't need to be expensive, and maybe MS should start compensating people that HAVE to upgrade. What, no support for 98, too bad. A lot of software companies are jsut as guilty. AND, gaming companies not any better. The system requirements for Half-Life 2 and Doom 3 will require over 50% or gamers to buy a expensive videocard. They are forcing them too, in other words. Sure, you don't have to play the games, but everyone esle will..why be left out?

telu1

on Jul 30, 2004

Like i sayd, i dont belive there is anything to compare pirating to. Although it is bad, i dont know in how many ways but i hear so many people cry its bad, so I guess one of them has to be right. With that sayd, will someone please express to me how we will find out if Piracy HELPS or HURTS the industry!?

I could debate for hours with how much it helps it, just by making a few simple points, but so far I am left stumped because none can truly back up their views with hard facts, none of the companys conduct any real research and all of them assume that its bad.

In the end almost every company feels that piracy is bad (there will always be exceptions), but I belive it actualy helps in more than 1 way. First MOST expencive software does not have any real trial software, or software that doesent BUG THE FU#K OUT OF YOU when u startit up or when you try to use certain functions. I mean come on, is this a hastle we have with everyday products we buy at the store? "Im sorry but you can only sit in this chair for 5 minute intervals during the 30 day money-back guaranteed period". Most people, and again I really cant back up anything with hard facts since there isnt any real proff of this, but most people actualy spend money on the software after they pirated it and actualy likeit, speaking from what I see and personal experience. Another thing is that most people are SCARED to buy a $50 game because they will not actualy useit for anything close to its value (a 25inch tv is $150, i dont belive any game can match that. The fastest street legal thing out there (Suzuki 'busa, 215 mph, 0-60 in under 3 sec) is $3000, thats 60 games) So, they would rather TRYIT before they even think about opening up their walets, because even though some of us can make $50 in a few hours, that doesent mean its worthit. Money is money, and games will be just games. Same goes for software, what the ^*#$ will you do with a trial of Photoshop? See how frustrated you can get with it in under a couple weeks? A lot software take over 30 days to figure out if you can handelit or not. You dont rent a car that you know will take you over 2 weeks to figure out how to start, let alone buy one. The last thing that is overly adressed is that ALMOST ALL, (id like to use the 99.9% thing right here) is OVERPRICED. I mean come on, microsoft was found of being a monopoly (biggest ever?) and what happened? I know, they released a few more versions of Office Max with the same price and some more 3DS Max(discreet not micorsoft), all over 1000$ without husteling people for stundet discounts i dont belive u can get those for any reasonable price, its like a 5$ barber going out and selecting from a verry set price range of products : $5000 Pair of Scissors, $4500 Platinum Hairdryer, $1500 Costum Shampoo Treatment, and actualy expect to use them and make some profit.

Comon, show us that what we are doing is bad, hit me with a good comparison so i can set my views right.

BTW, they sayd that because tapes were being copyed sales were droping, I belive, I cannot express how wrong they were.

psychx

on Aug 01, 2004

There are a couple of senators that are trying to fix the piracy issue in the United States with a very broad bill that threatens media period. I don't know if you know about it but I wrote an article on it here is the link...Link

Amitty

on Aug 14, 2004

The point being is that the companies that tote the piracy line are looking for reasons for people to feel guilty about not paying their game. Game companies blame piracy because they continue to put out mediocre crap, software companies blame piracy because they are overbloated and overpriced programs, and so on. The true effects of piracy is hard to fine, and therefore the perfect scapegoat.

mgosh

on Oct 13, 2004

I feel that Stardock sales is proof against the Piracy theory. Everytime someone signs up to totalgaming.net everytime someone purchases a copy of Stardock's software in the store shows you that people will pay for quality software. If a gaming company releases a 1/2 working copy of thier software and expect people to just open their wallets for their shovelware they got another thing coming to them.

Now the legality of the software/MP3 arguement has been discussed back and forth for a while. Pricing has a lot to do with both issues. Microsoft XP want it? Shell out 250 for the non-upgade. Want a song in the store that you really like? 15-20 bucks. For 10-15 I can buy a DVD of a movie that I really like. Guess where my entertainment money is going to. Give you a hint, its been many years since I bought a CD of music, but I've got plenty of DVD's.

Point is that product and price plays the biggest issue here. Why is I-Tunes so popular? Because everyone is scared of the RIAA? No, because the price of the product justifies the purchase of it. When the price level meets expectations you'll have a sale.

Why is Stardock working? Because they don't overcharge for their software, they properly test their software. They don't harass you the customer with their software with Product Activation Keys. They don't assume that their customer base are criminals.

How would you like to have to have the original sales receipts to get into your car. To get into your house you need a permission slip signed by the bank. To be forced not to be able to copy your cd to your computer because you can't copy it due to copy protections. Oh wait they are doing that with the last expample.

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