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Valve: Pirates are "Underserved Customers"

By - Source: Tom's Hardware US | B 49 comments
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Software pirates are the bane to the developer’s existence, particularly for the PC game maker. Valve Software, makers of the popular Half-Life series and Steam online games service, have a different view on pirates.

Most anyone who makes his or her living off the sales of software could understandably see pirates as vermin, but surprisingly Valve Software sees those who steal software in a different light.

Valve is one of PC gaming’s strongest supporters, not only designing and releasing all its games with the PC in mind, but also creating arguably the best digital delivery platform of the industry.

In a time when developers and publishers are all looking to consoles for the bulk of sales, Valve keeps the faith in the PC. And rather than seeing those who download PC games illegally as pure filth, Valve views them as a potential opportunity, according to comments from the Game Business Law summit.

"There's a big business feeling that there's piracy," said Jason Holtman, who serves as director of business development and legal affairs at Valve. He then adds, "Pirates are underserved customers.

"When you think about it that way, you think, 'Oh my gosh, I can do some interesting things and make some interesting money off of it.'"

Holtman gave the example that gamers outside of traditional game publisher territories as some being “underserved.” Gamers in Russia, especially those who follow PC games intently, often have no legitimate option of purchasing a game on the same day as their U.S. or even western European counterparts.

Due to publisher agreements, or perhaps just indifference, publishers sometimes would bring the game to Russia six months following the first release. By that time, even pirated copies of the games would be old news. Valve, on the other hand, chooses to release its games day-and-date in Russia.

"We found that our piracy rates dropped off significantly," Holtman said, leading for him to conclude that the PC gaming market still has "tons of undiscovered customers."

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  • 3 Hide
    curnel_D , January 20, 2009 6:20 PM
    Even though there will always be people who either just cant afford to buy the games, or 'wont' afford to buy the games, if publishers evolve how they market and publish their games based on the type of gamers who would rather download a game for free to play it for a bit or even just test it out, they'd do a whole lot better than they do now. Now all they do is waste money on more and more DRM schemes that are broken game day anyways.
  • 0 Hide
    xTalent , January 20, 2009 6:20 PM
    Bit old, but I agree, if people are pirating a game offer them something that there willing to go to a store and buy, heck I pirate games but every game I really liked I've paid for Bioshock, Team Fortress 2, Call of Duty 4, etc which are all Steam Titles.
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    azxcvbnm321 , January 20, 2009 6:29 PM
    Let me repost a response since it seems to fit many pirates who try to justify their actions.

    Maybe you can explain to me why the people you know will go and buy the game they just pirated. I think I understand what you mean, they will buy it if they get X amount of hours playing it and know that they'll keep on playing it forever. But a game that only gets them 60 hours of enjoyment, quite a lot I might add, but has no replay value and they'll never buy that game right, because it doesn't fit into their "good enough" category. Yet 60 hours or even 24 hours of enjoyment is quite a lot. A concert only lasts 3 hours or so if you're lucky, yet people pay hundreds of dollars just for that ONE TIME experience right?

    So you're robbing developers that might want to create a cool game that has no replay value like Myst or some other game like that. What's wrong with a game that is set to be an one time experience like a concert or a movie? You've destroyed an entire category of games. So if you and your friends do what I think you do, which is only buy games that have great replay value, you've hurt the industry by pirating. Why would you buy a game that you've already finished thanks to pirating?

    And there are demos out there for you to try, but of course the demos won't satisfy the pirate thief, the purpose is not to sample but to steal and get enjoyment. Then after playing for 30 hours and finishing the game, he can say the game sucked (even though he just spent 30 hours playing it) and justify not buying it. Yes, it's standard psychology for criminals to justify their immoral behavior. Look at Bernie Madoff, he hasn't apologized or looked sorry because he's somehow justified stealing $50 billion of other people's money. He's not wrong, what he did wasn't bad, maybe he gave money to a charity, so he thinks the rich people who he stole from are stingy and he's a modern day Robin Hood. Thus the criminal justifies his theft.

    Companies don't want DRM either, but the damned pirates forced them to, blame the pirates. Wouldn't it be great if we didn't need car alarms and locks on our doors either? But damned thieves force us to and so when I hear an annoying car alarm, I blame the carjacker, not the owner who is forced to protect himself and his property.
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    that_aznpride101 , January 20, 2009 6:32 PM
    Very interesting article, I never thought of pirates as people who are "underserved." If the statistics are true that releasing new software early in Russia, this could definitely curb piracy and hopefully reduce DRM.
  • 1 Hide
    donkeypunch , January 20, 2009 6:57 PM
    I can't blame the pirates for broken DRM measures. Pirates didn't code DRM software like a rootkit thats almost impossible to erase from your HD without a reformat. I also can't blame pirates for games that force me to install steam or windows live just to play an offline game. The kicker is now many games limit how many installs you get on your own computer. It's ridiculous and doesn't slow down piracy in the least.

    PC games have implemented security measures from as far back as I can remember but it was something more logical and simple, like having to type in the 3rd word in the 2nd paragraph on the 12th page of the owners manual--and this was long before online piracy was even an issue.

    It's incredibly frustrating to buy a game and have to jump through multiple hoops and install 3rd party software when the pirated version is simple plug and play.
  • 4 Hide
    curnel_D , January 20, 2009 6:59 PM
    I dont remember ever actually pirating a game, but I cant tell you how many times I've downloaded the pirate cracks to get rid of stupid piracy counter measures. Ironic, isnt it. lol
  • 1 Hide
    jrabbitb , January 20, 2009 7:05 PM
    random idea to get a lot of people hooked on your game. suppose you expect 80% of gamers wont be able to get through your game in under a week. so you say "try it for a week, if you get to the end in that time, you dont pay.", but here is the trick, you only have this for the first month. so people will rush to get it and try to beat it in the minimum time, but you will get more sales through the 80% who just cant do it. just a thought i had while reading the article.
  • 2 Hide
    curnel_D , January 20, 2009 7:08 PM
    48 hours would be a little better. Even with a job, a social life, and charity work, I still usually have time to beat a game a week.
  • 1 Hide
    p05esto , January 20, 2009 7:11 PM
    Me too. When I purchase software/games I then always go and download and install the cracked versions - just to avoid CD-checks, activation headaches and all of that. I figure having a valid serial is all I need.
  • 1 Hide
    noahjwhite , January 20, 2009 7:53 PM
    I have to admit that I often download cracked versions of games as well after I purchase them. It's just easier like many have said. The only reason I purchase games these days is because I can afford them. Back in my college days that was not the case. There is NO WAY to stop people from pirating games sans subscription based games like WOW. Every game will be cracked no matter what DRM they use. DRM only serves to aggravate the legitimate buyers. Valve is correct in that many pirates are under served.
    There are numerous reasons why people might chose to pirate a game. One thing that I would like to point out, PC gaming is the ONLY platform where renting a game is NOT an option. If I know that a console game is most likely crap, or I'll finish it in 1 or 2 days, I rent it from blockbuster or gamefly. Maybe a rental service (via a steam-like app) could recoup at least some of the lost revenue. The days of black and white terms needs to end. Marketing and pricing can also go along way towards making PC gaming more attractive. PC game marketing is very poorly done in my opinion. PC gamers generally need to build their own PC's in order to run the latest games. Thus, they are generally tech savvy, and will have no trouble finding, and pirating games. Selling more copies at a cheaper price could be an answer. Downloading a game from a legitimate service like steam should ALWAYS come with a substantial discount over retail. It saves packaging, transport, ect.. substantial overhead.
  • 0 Hide
    jrabbitb , January 20, 2009 8:06 PM
    along with noahjwhite's comments, it is also cheaper to not develop DRM and try to enforce it.
  • -1 Hide
    gm0n3y , January 20, 2009 8:30 PM
    @azxcvbnm321,

    I already responded to this in another article.

    All I have to say about Valve is that I've decided to only buy games through Steam from now on (with rare exception), assuming that their DRM has been removed, which isn't always the case. I definitely less than 3 Steam.
  • 4 Hide
    Anonymous , January 20, 2009 9:14 PM
    To counter azxcvbnm321's argument, let's look at Metallica's attack on Napster as an example.

    In a world without pirating, only Metallica fans and heavy metal fans would buy a Metallica album. Perhaps through constant support from mainstream radio stations, they may be able to lure in a few listeners from other genres to buy they albums. But realistically, only those people into Metallica in the first place would be listening to their music.

    Enter the real world where pirating does exist. Now, a non-Metallica listener can download a song or five, or an entire album and listen to it without having to pay for it. What does that mean?

    Metallica fans will still buy their albums. Heavy metal fans will still buy their albums, so their sales aren't affected by that. But those people, such as 13 year old girls who would never dream about buying a Metallica album, may suddenly be sporting Metallica songs on their playlists. Since these people wouldn't have bought a Metallica album in the first place, this has no bearing on sales. But it does garner Metallica new fans from demographics they may never have dreamed about. And perhaps, these same people may end up buying future Metallica albums.

    Instead, all Metallica did was shut these people out from listening and getting into their music. Again, these people never would have bought a Metallica album in the first place, and now, they most likely never will.

    There's no stealing involved. There's no resource being consumed. These people are not taking money out of these musicians' or developers' pockets. We're talking about money that never would have been spent on these albums or games. If they were given an opportunity to get into that music or game, without risk or limits, perhaps those musicians and developers might garner more fans and more profits in the future.

    Of course, if you were going to buy a game or album, but instead just downloaded it without paying, then you are denying the developers and musicians or a sale, and thus that would be taking money out of their pockets, and that's wrong. But if you were never going to buy it in the first place, I don't see what's wrong with that.
  • 1 Hide
    jrabbitb , January 20, 2009 9:20 PM
    @clouds

    You need to amend that those non existent album sales become ticket sales on tours (which i believe make the bands much more then album sales).
  • 0 Hide
    gm0n3y , January 20, 2009 9:27 PM
    @clouds

    +1

    I've been saying this for years. Without illegal music downloads, I would only own a handful of the 300+ CDs I own today. I own albums from many artists that have never been on the radio, never been on MTV, and have never been on a major tour, all because I downloaded some of their music online.

    The main problem the industry has with this is not that people won't spend money on music, they know that they will. Its that they can't control which artists make the money, and in effect their own profits may go down as smaller labels or even independent artists start to make their fair share of the profits. Currently large labels get a vastly disproportionate amount of the media exposure effectively relegating other artists to relative obscurity. I have posted many long-winded tirades about how the internet is saving the music industry and I don't feel like posting another one here, but suffice it to say, music as an art and as an industry is benefiting as a whole from so-called piracy. The labels are just seeing their lions share of the industry slowly shrinking away as more innovative, less 'safe' artists take their share of the sales.

    Long live BitTorrent.
  • -1 Hide
    gm0n3y , January 20, 2009 9:29 PM
    @jrabbitb,

    Very true, I spend almost as much money on live shows as I do on buying albums.
  • 1 Hide
    fulle , January 20, 2009 10:43 PM
    Got to love Valve. They've had this stance for a long time now... IIRC, the first article I read with a Valve rep calling pirated "underserved customers" was over 6 months ago. And, while some people will pirate regardless, I have admiration for a company who is willing to look at the problem from the perspective they do. This is why companies like Stardock and Valve succeed, where others just cry like babies that the world is changing.
  • 1 Hide
    bachok83 , January 20, 2009 11:11 PM
    pirates are pirates, there's no running away from them. What if developers run some ads on the pirated games? (registered games would not display the ads).

    This way, instead of losing total business on the pirated copies, they could "at least" get something out of it.
  • -1 Hide
    DJ898 , January 21, 2009 12:41 AM
    I agree. Al least get rid of DRM because its still getting cracked and everyone hates it. I think companies should follow the approach of Valve and Stardock and say, "huh, this DRM thing isn't working, we should think of a NEW way to stop pirates".
  • 0 Hide
    azxcvbnm321 , January 21, 2009 12:51 AM
    Clouds, what the hell are you talking about? Not affecting sales? Are you living in some sort of alternate universe where pirating actually increases music album sales? In case you haven't heard, the CD music industry is dying. There used to be many many albums went platinum in a given year. I believe only Cold Play's new release went platinum last year.

    Where are all the virtuous pirates? I mean in your fantasy world, these "fans" will go and buy the album once they hear the music and support their favorite bands right? See, your ideas belong in a sci-fi novel where humans behave totally differently and buy the same amount of stuff. In this world, you'd see carjackers steal a car for a "test drive" and then return the car to their owners. They'd then walk to the nearest dealership causing car sales to increase. The burglar would break into a house just to "test" the HDTV. Instead of taking the TV, he relaxes on the couch and makes himself some popcorn. Finished with his viewing, he goes to his local store, replaces the popcorn, and leaves the house unharmed in order to rush to the nearest Best Buy for that HDTV.

    Do you see how insane this drivel is? And look at the self justification, the trademark of the thief in denial. No, the music scene is better than ever before...it's better that they can't make money like they used to and now have to charge an insane amount of $$$$ with their concerts. Not that long ago, you could see a mega band for $20 or less, good luck getting that price anymore. Thanks pirates, you've F'd it up for all of us, and that's why pirating hurts ordinary people too.

    DRM, high concert prices, you can thank pirates like Clouds and his friends for that. It's on them, every time you have to deal with a DRM problem, think of Clouds and how his friends forced this upon us all.
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