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Published on March 10, 2008 By Draginol In GalCiv Journals

Recently there has been a lot of talk about how piracy affects PC gaming. And if you listen to game developers, it apparently is a foregone conclusion - if a high quality PC game doesn't sell as many copies as it should, it must be because of piracy.

Now, I don't like piracy at all. It really bugs me when I see my game up on some torrent site just on the principle of the matter. And piracy certainly does cost sales.  But arguing that piracy is the primary factor in lower sales of well made games? I don't think so. People who never buy software aren't lost sales.

Is it about business or glory?

Most people who know of Stardock in the gaming world think of it as a tiny indie shop. And we certainly are tiny in terms of game development. But in the desktop enhancement market, Stardock owns that market and it's a market with many millions of users. According to CNET, 6 of the top 10 most popular desktop enhancements are developed by Stardock.  Our most popular desktop enhancement, WindowBlinds, has almost 14 million downloads just on Download.com. We have over a million registered users.

If you want to talk about piracy, talk about desktop enhancements. The piracy on that is huge.  But the question isn't about piracy. It's about sales

So here is the deal: When you develop for a market, you don't go by the user base. You go by the potential customer base.  That's what most software companies do. They base what they want to create on the size of the market they're developing for. But not PC game developers.

PC game developers seem to focus more on the "cool" factor. What game can they make that will get them glory with the game magazines and gaming websites and hard core gamers? These days, it seems like game developers want to be like rock stars more than businessmen.  I've never considered myself a real game developer. I'm a gamer who happens to know how to code and also happens to be reasonably good at business.

So when I make a game, I focus on making games that I think will be the most profitable. As a gamer, I like most games.  I love Bioshock. I think the Orange Box is one of the best gaming deals ever. I love Company of Heroes and Oblivion was captivating.  My two favorite games of all time are Civilization (I, II, III, and IV) and Total Annihilation. And I won't even get into the hours lost in WoW.  Heck, I even like The Sims. 

So when it comes time to make a game, I don't have a hard time thinking of a game I'd like to play. The hard part is coming up with a game that we can actually make that will be profitable.  And that means looking at the market as a business not about trying to be "cool".

Making games for customers versus making games for users

So even though Galactic Civilizations II sold 300,000 copies making 8 digits in revenue on a budget of less than $1 million, it's still largely off the radar. I practically have to agree to mow editors lawns to get coverage. And you should see Jeff Green's (Games for Windows) yard. I still can't find my hedge trimmers.

Another game that has been off the radar until recently was Sins of a Solar Empire. With a small budget, it has already sold about 200,000 copies in the first month of release. It's the highest rated PC game of 2008 and probably the best selling 2008 PC title.  Neither of these titles have CD copy protection.

And yet we don't get nearly the attention of other PC games. Lack of marketing on our part? We bang on the doors for coverage as next as the next shop. Lack of advertising? Open up your favorite PC game publication for the past few months and take note of all the 2 page spreads for Sins of a Solar Empire. So we certainly try. 

But we still don't get the editorial buzz that some of the big name titles do because our genre isn't considered as "cool" as other genres.  Imagine what our sales would be if our games had gotten game magazine covers and just massive editorial coverage like some of the big name games get.  I don't want to suggest we get treated poorly by game magazine and web sites (not just because I fear them -- which I do), we got good preview coverage on Sins, just not the same level as one of the "mega" titles would get. Hard core gamers have different tastes in games than the mainstream PC gaming market of game buyers. Remember Roller Coaster Tycoon? Heck, how much buzz does The Sims get in terms of editorial when compared to its popularity. Those things just aren't that cool to the hard core gaming crowd that everything seems geared toward despite the fact that they're not the ones buying most of the games.

I won't even mention some of the big name PC titles that GalCiv and Sins have outsold.  There's plenty of PC games that have gotten dedicated covers that haven't sold as well.  So why is that?

Our games sell well for three reasons.  First, they're good games which is a pre-requisite. But there's lots of great games that don't sell well.

The other two reasons are:

  • Our games work on a very wide variety of hardware configurations.
  • Our games target genres with the largest customer bases per cost to produce for.

 

We also don't make games targeting the Chinese market

When you make a game for a target market, you have to look at how many people will actually buy your game combined with how much it will cost to make a game for that target market. What good is a large number of users if they're not going to buy your game? And what good is a market where the minimal commitment to make a game for it is $10 million if the target audience isn't likely to pay for the game?

If the target demographic for your game is full of pirates who won't buy your game, then why support them? That's one of the things I have a hard time understanding.  It's irrelevant how many people will play your game (if you're in the business of selling games that is). It's only relevant how many people are likely to buy your game.

Stardock doesn't make games targeting the Chinese market. If we spent $10 million on a PC game explicitly for the Chinese market and we lost our shirts, would you really feel that much sympathy for us? Or would you think "Duh."

 

You need a machine how fast?

Anyone who keeps track of how many PCs the "Gamer PC" vendors sell each year could tell you that it's insane to develop a game explicitly for hard core gamers.  Insane.  I think people would be shocked to find out how few hard core gamers there really are out there. This data is available. The number of high end graphics cards sold each year isn't a trade secret (in some cases you may have to get an NDA but if you're a partner you can find out). So why are companies making games that require them to sell to 15% of a given market to be profitable? In what other market do companies do that? In other software markets, getting 1% of the target market is considered good.  If you need to sell 500,000 of your game to break even and your game requires Pixel Shader 3 to not look like crap or play like crap, do you you really think that there are 50 MILLION PC users with Pixel Shader 3 capable machines who a) play games and will actually buy your game if a pirated version is available?

In our case, we make games that target the widest possible audience as long as as we can still deliver the gaming experience we set out to.  Anyone who's looked at the graphics in Sins of a Solar Empire would, I think, agree that the graphics are pretty phenomenal (particularly space battles).  But could they be even fancier? Sure. But only if we degraded the gaming experience for the largest chunk of people who buy games.

 

The problem with blaming piracy

I don't want anyone to walk away from this article thinking I am poo-pooing the effect of piracy.  I'm not.  I definitely feel for game developers who want to make kick ass PC games who see their efforts diminished by a bunch of greedy pirates.  I just don't count pirates in the first place.  If you're a pirate, you don't get a vote on what gets made -- or you shouldn't if the company in question is trying to make a profit. 

The reason why we don't put CD copy protection on our games isn't because we're nice guys. We do it because the people who actually buy games don't like to mess with it. Our customers make the rules, not the pirates. Pirates don't count. We know our customers could pirate our games if they want but choose to support our efforts. So we return the favor - we make the games they want and deliver them how they want it. This is also known as operating like every other industry outside the PC game industry.

One of the jokes I've seen in the desktop enhancement market is how "ugly" WindowBlinds skins are (though there are plenty of awesome ones too). But the thing is, the people who buy WindowBlinds tend to like a different style of skin than the people who would never buy it in the first place.  Natural selection, so to speak, over many years has created a number of styles that seem to be unique to people who actually buy WindowBlinds.  That's the problem with piracy.  What gets made targets people who buy it, not the people who would never buy it in the first place. When someone complains about "fat borders" on some popular WindowBlinds skin my question is always "Would you buy WindowBlinds even if there was a perfect skin for you?" and the answer is inevitably "Probably not". That's how it works in every market -- the people who buy stuff call the shots.  Only in the PC game market are the people who pirate stuff still getting the overwhelming percentage of development resources and editorial support.

When you blame piracy for disappointing sales, you tend to tar the entire market with a broad brush.  Piracy isn't evenly distributed in the PC gaming market. And there are far more effective ways of getting people who might buy your product to buy it without inconveniencing them.

Blaming piracy is easy. But it hides other underlying causes.  When Sins popped up as the #1 best selling game at retail a couple weeks ago, a game that has no copy protect whatsoever, that should tell you that piracy is not the primary issue.

In the end, the pirates hurt themselves. PC game developers will either slowly migrate to making games that cater to the people who buy PC games or they'll move to platforms where people are more inclined to buy games.

In the meantime, if you want to make profitable PC games, I'd recommend focusing more effort on satisfying the people willing to spend money on your product and less effort on making what others perceive as hot.  But then again, I don't romanticize PC game development. I just want to play cool games and make a profit on games that I work on.


Comments (Page 1)
on Mar 10, 2008
I will have to agree with you on pretty much everything you wrote down here. (Unlike your previous post about DRM.)

But something I would like to know is how much the piracy of some game reduces sales for some other game. In short : is someone who have pirated Civ IV less likely to buy GalCiv 2? If it is the case, then piracy could only be tackled by a industry-wide action, which (as a player/buyer) I am afraid of.

Thinking about it, this would even reinforce your point about focusing on markets where players don't pirate. If a genre is very pirated, then don't go there, since you won't be able to survive the competition from the games getting acquired at a five-fingered discount.
on Mar 10, 2008
I'm extremely glad you posted this thread, I had intended to post this reply over at the Quarter to 3 forums in the thread linked to earlier as an excellent discussion on piracy, before I was banned before I could make a single post and all attempts to find out why were ignored. A long one, but I think it contains some points worth recognizing:

Greetings. I am one of the myriad of people directed to this board, and to this thread, by the assorted links to it going around the internet. Much has been said but I joined because I felt more needed to be. I'll be up front in saying I have no connection with the gaming industry. I have no experience making games for retail, I have no experience marketing games, developing games, producing games or anything else. Rather, as far as the people who do fall into those categories are concerned, I am the target, the consumer.

To begin with, let me begin by saying I am a former hardcore PC gamer. For a very long time, I had to be at the cutting edge of computer gaming. I stayed on top of this until after Diablo II came out but since then have steadily drifted more towards console gaming than computer gaming. Don't get me wrong, I still play, tending towards CivIV, GC2, and SoaSE these days, but they are the exception. Further, there are many, many more like me out there; someone noted 5 times as many console sales of BioShock than PC sales. The question the gaming industry needs to be asking is "Why?"

Piracy is an easy culprit to blame, it allows people to use the product without paying for it, and a lot of people are doing it. However, I am going to have to disagree that it is the problem a lot of people say it is. Some of that is because they are too cheap to buy the game, some may be trying to see if they like it before they buy it and decided they didn't, some perhaps because they aren't even sure if it will run on their system, etc. Whatever the reason, piracy exists, and it is always going to.

With that in mind, the industry needs to focus on the piracy problem by worrying about those who would otherwise pay for it if they could not pirate and them alone. Those customers who are bound and determined to get around paying will get the game one way or another. Those who pirate because they can't afford the game won't buy it if you cut them off from the free source. Piracy hurts the industry only in the much smaller subset of people who would otherwise have bought it had they not been able to get it for free.

No, what the industry needs to really worry about is the people who are abandoning PC gaming for console gaming. One reason already touched on in this thread is that it is hard work to be a PC gamer. In order to play the newest games, one must buy new hardware every six months, rebuilding the computer, reinstalling other software, updating drivers, sometimes even reinstalling the BIOS to make the game play. The hardware itself can run into thousands of dollars annually to buy the newest video cards, quad core processors, expanded hard drives, sound cards, etc. Beyond the expense, as noted in the opening post, is making all that work together, the constant need to download and updates to keep it all working together after one of them updates and renders itself incompatible with another bit of machinery.

On the other hand, if I buy a Wii, as I did, I have a reasonable expectation that when I purchase a game for it, I can take it out of the case, put it in the Wii, which I won't have to replace for 3 years or so, and be playing in five minutes, no strings attached. It is simple, easy, and comparatively cheap. Beyond the ease, there are of course other reasons, such as being able to play on a high def screen that factor in as well. As such, unless there are significant differences between PC and console versions of a game, I will opt for console every single time.

The question, of course, is what can the PC gaming industry do about this. By focusing on increasing market base through expanding already draconian piracy protection is a bad idea. People keep hailing the success of Steam as proof of concept of this. The thing is, Steam is the reason I do not own Portal. I considered buying it, my antiquated machine could run it (with difficulty), but in the end, I did not want to have to wrestle with Steam and Valve's copy protection software, which, last time I purchased one of their programs, screwed up my computer. Online activation makes traveling gaming impossible, which, actually, is when I do the majority of my computer gaming anyway. Likewise, should anything ever happen to Steam, the game is a coaster, until someone breaks the copy protection, at which point I risk virus and malware infection so I can play it again.

One of the reasons I bought GC2 was their copy protection policy, something that would let me keep my CD at home while I take my laptop on the road. Another key point in that decision was the scalability in system settings for it. That is to say, on my higher end home computer, I can play it at the top graphical settings but on my much weaker laptop, I can scale it back, do without some of the shine and pretty explosions, and get my gaming experience just as well. This is a lesson a lot of the rest of the industry needs to pick up on, pushing the limits of graphics and design is great, but while you are doing it, you need to make sure your consumer base can keep up. Not only this, but by the time the next big thing comes along, they are going to have to go even further over the top and push hardware even harder. The point of what I am trying to say is that the gaming companies need to make the higher end graphics available to those who can afford to buy a new video card every six months but for the rest of us, keep the minimum requirements for your games light to keep your market base broad. Otherwise you are going to put people off on the industry as a whole by making them feel like the only way they can game is to pay thousands a years for new hardware.

Another point I wanted to touch on was this push early on for copy protection tied to the OS or the hardware. As with any and all copy protection, sooner or later, it will be broken. The die hard pirates will set up any system modifications they have to make it run, to spoof the game into thinking everything is kosher, and then distribute a neat little executable online so everyone else can too. This executable will probably contain a couple malware programs that will cause bugs to pop up, reduce the reliability of the system, make them complain about how unreliable the software is, then bring down more games with bad word of mouth. I know some think this software protection is virtually unstoppable, but really, it isn't, and time is on the side of the pirates because to them, cracking protection is often more fun than playing the game itself. They will devote weeks or months or years, if necessary, to breaking that type of protection, and, once they have a model worked out and distributed, the individual instances of it will break soon after and the piracy problem will go on as is.

In the mean time, larger and more convoluted piracy protection is just going to feed the main reason I am no longer the PC gamer I once was, adding more bits and pieces and layers and protocols will just add more moving pieces for something to go wrong in, which is going to cause more problems with bugs, drivers, BIOS, hardware incompatibility, and so on. Someone not computer literate is going to throw up their hands, buy a 360, and get their gaming fix there instead, or would if Microsoft could get their red ring problems fixed. That is what needs to be kept in mind when tackling the piracy problem, is your solution going to cost you more customers than it gains you? In an ideal world, stopping all piracy is wonderful, in the business world, piracy should be stopped only to the degree that stopping either more or less will lose you money. Moral principles or no, maximizing income has to be your priority.

Finally, onto this specific instance, I think a lot of the OP's objections are valid. However, I think you glossed over a lot of real issues. For instance, on the one hand you talked about the quest linked security check dumping people who then went on to complain about it. You then determined who was a pirate and who wasn't based on this. However, you then go on to say that someone with a legitimate copy had to rebuild their entire machine to make sure it was clean because they were having the exact same problem? Perhaps some of those you wrote off as pirates were having a problem related to his with their legitimate copy? This reminds me of another post in this thread talking about bad serials being proof of piracy - sometimes we mortals just hit a wrong key or misread an 8 as a B or an 0 as a D or a C as G. Clearly this game had some issues with bugs. Maybe not as crippling as some made it out to be, but there were real issues that people with legitimate copies needed addressed.

It also fell victim to what I described above, copy protection costing more customers than it brought in. In a world where TQ needed word of mouth to survive, you created a system that made a significant group of people complain on buggy it is. Yes, the people who were pirating it were wrong to do so, but you knew they were out there before the game was made. You still chose to insert the copy protection and so while it is not unfair to blame the pirates responsible for the damage done, it is unfair not to hold those who decided to implement that system to blame as well.

Maximizing profits isn't always a matter of cutting your losses, sometimes you have to accept that people are going to steal it and rather than making it such a convoluted nightmare that you prevent an extra 20 people from playing for free, it is wiser to let them steal it and ship an extra hundred units when it doesn't have the reputation for being hard to get running, hard to install, and, in general, a complete pain.

With that said, I'm done. If you read this wall of text start to finish, I salute you.
on Mar 10, 2008
Wonderful post, and I will heartily continue support for Stardock's games. I can only hope your success grows and even more wonderful games come out. Now if only PC game companies weren't so arrogant as to ignore good advice!
on Mar 10, 2008

Our customers make the rules, not the pirates. Pirates don't count.

Nice one, Brad. Someone put this on a T-shirt or something.

on Mar 10, 2008
I've got something to say to those people that are pirating some games right now.
Stop ruining PC gaming!
on Mar 10, 2008
Stop ruining PC gaming!


I'd say it's not the pirates ruining the gaming. It's the developpers who aren't targetting the right customer base, or the fancy anti-piracy system (that doesn't work) that can make the game itself unenjoyable.

on Mar 10, 2008
Smart man, that Brad Wardell.
on Mar 10, 2008
One thing I wish Frogboy touched upon was WHAT market is the right market.

How many PC games released in the last few years would you say have even begun to approach the PC gamer market? How many PC gamers, who have been primarily focusing their gaming on PCs, are genuinely interested in Console Franchise Port #482?

I can name ONE I'm excited for, and haven't been let down by: Grand Theft Auto. That's about it. I wouldn't even call that a console port because the PC versions are always more polished and feel more at home. It's usually the console versions that feel ported.

Even games that aren't ports are simply console games on the PC, using console gamer concepts.

Some clueless suit who's experience with games is getting whatever his kids cry for probably don't see it that way. A game is a game is a game. So what if they use different machines? They're all gamers, right? If you can sell X many console games, why wouldn't you sell X many PC games too? It's like selling gasoline - doesn't matter what car you have, they all use the same fuel, right?

How often has that EVER been the case?

Bioshock was a decent game, but it fell dramatically short of PC gamer expectations (perhaps because we remember System Shock 2), whereas it was something new and exciting for the console crowd. Therefore, I expected it to do better and be better received by the console crowd.

When you release a crappy franchise game, trying to chase sales for minimal effort like UT3, well, I can't speak for everyone but even *I* knew that that was just a grab for cash. I'm not going to support that.

When you release a console game on the PC like Rainbow Six Vegas, I'm not going to buy it. The game was funnISH, I guess, but I didn't feel guilty about downloading it. The game was shallow, linear, straightfoward, and about as mentally stimulating as a wad of chewing gum. Just pick the best gun, and play the level just like the last one. It didn't feel creative or exciting or new, it wasn't mentally stimulating, and I'm pretty sure 'TERRORISTS WITH BOMBS' doesn't really qualify as a story.

The PC crowd just wants something beyond what the console crowd wants. Simply comparing who is more likely to buy a PC vs. a console will tell you that.
on Mar 10, 2008
As a response to the critique of PCs vs Consoles, I have to disagree. I've long been a PC gamer, though I've never had enough money to spend to be what one might call "hard core." I've never been a console gamer. Why? The main reason is that console games don't play the way I want them to. All consoles made so far are designed to use a hand held game pad with a small number of buttons (with the exception of the wii, which has its own interface limitations). This was fine back in the bad old days, when all you had enough space for on the ROM was a simple 2D platform jumping game. But platformers never satisfied me. As a strategy gamer, I've never considered consoles to be a serious platform, because they lack a good interface for strategy games and simulations (I use a trackball, but I'd settle for a mouse if I had to). It's all well and good to say, "look, game X sold better for console than PC," but usually that's because the game was designed from the ground up with the understanding that it would be played on a console with a very low precision input device (when compared to a mouse or full size joystick, thumb sticks and direction pads just don't play in the same league). On a PC, modern games are often *less* compelling than older games in the same series, because the console centric interfaces just seem clunky on a PC. The few shooters I've purchased in the last few years (eg. Bioshock, Max Payne 2) suffered from this problem; the games require a lot less skill with the controls, simply because that skill is impossible to achieve with a gamepad.

on Mar 10, 2008
Let's go ask Metacritic if PC gamers are more anal about game quality:

[Metacritic score / User Score]

BIOSHOCK:
PC: [95/82]
XBOX: [96/87]

UNREAL TOURNAMENT 3:
PC: [83/75]
PS3: [86/84]

RAINBOW SIX: VEGAS:
PC: [85/78]
XBOX: [89/87]
PS3: [86/82]

OBLIVION:
PC: [94/76]
XBOX: [94/88]
PS3: [93/82]
(Note that the PC version has the benefit of mods too, which theoretically should raise the score)

COMMAND AND CONQUER 3:
XBOX: [82/74]
PC: [85/71]

(An RTS on the PC was less well-received than its console counterpart?)

SHADOWRUN:
PC: [68/67]
XBOX: [66/79]

HALO:
PC: [83/66]
XBOX: [97/82]

HALO 2:
PC: [72/54]
XBOX: [95/79]

DEUS EX - INVISIBLE WAR:
PC: [80/62]
XBOX: [84/74]

SINS OF A SOLAR EMPIRE:
PC: [89/86]
(Oblivion on the Xbox, Rainbow Six on the Xbox, and Bioshock on the Xbox were the only games to get a higher user score)

I could continue...
on Mar 10, 2008
By Draginol Posted March 10, 2008 20:48:46



Working late? Or can't sleep because of the shift to daylight savings time?
on Mar 10, 2008
Note that I didn't omit any games - I just picked the ones that came to my head first that were dual-releases. There's likely a lot more that I missed, but I don't really keep track of games I know will be console trash.


There's a couple I do want to include since I just thought of them:

GRAND THEFT AUTO 3:
PC: [93/91]
PS2: [97/86]

GRAND THEFT AUTO VICE CITY:
PC: [94/82]
PS2: [95/84]

GRAND THEFT AUTO SAN ANDREAS:
PC: [93/77]
PS2: [95/86]
XBOX: [93/81]

Very interesting....
on Mar 11, 2008
The fellow who posted above about the difference between consoles and PCs is on to something. Compared to consoles, pc's are a pain int he butt. I qualify myself as a medium core gamer. I'm serious about pc gaming. I have spent thousands of dollars over the years on PC upgrade, hundreds of man hours messing with failed installs, driver issues, game crashes, and the like.

PC gaming is hurting precisely because of the practices publishers and developers. It's not about piracy. Yes, piracy makes an impact, one which I personally think is vastly overstated. But really, I think the question needs to be, "why are so many people buying consoles over pcs?"

It's not that piracy is taking a big bite out of the market, it's that developers and their publishers shoot themselves in the foot consistently, time after time.

How do they do this?

They release games that have ridiculously high system specs despite the fact that most people own mid to low range pcs. They release buggy games. Games that don't work with various mainline drivers. Games that crash to desktop for no reason. Games that require 200 mb patches you have to spend an hour to download and often can't even find on the developer's website without a road map. Games that have anti-piracy software that screws up computers. Games that make you muck around in the video options to get a decent frame rate or even a decent image...

Added to that is the fact that all PC's are different. You have thousands of different PC builds out there that people use to play games, all with different hardware. No game developer is going to be able to test for all pc's, and I've gotten the impression over the years that many publishers don't even let them try to cover their bases. So buggy junk gets shoveled onto the market, and people can't play it out of the box. They have to update drivers and download patches and essentially be more than a PC novice.

All of this frustrates customers to no end. To someone like me, who is an avowed pc gamer and knowledgable, it's a pain in the butt to have to deal with this stuff.

To a neophyte who knows little about PCs and drivers and how to go about updating them (involving all those steps of uninstalling them and safe modes and junk that a lot of people would have no clue about) and other such things, it's a frustrating hair pulling nightmare. Worse, who's going to help them if that anti-piracy software screws up the operating system? Not the game publisher, that's for sure. So you bought a game to play it and have fun, but instead you end up spending hours being frustrated and end up feeling ripped off.

In contrast, consoles are easy. Pop in the disk and off you go. Maybe some patching will happen, but you're not dealing with file directories and mucking around. the hardware is the hardware and it's all sight unseen. With what a mess a lot of games for PC are released in, is it any wonder people are fleeing PCs?

Is it any wonder people are moving to consoles?

No, PC game publishers and developers are in large part at fault for the "death" of pc gaming. And it has nothing to do with piracy. Piracy is just an excuse.
on Mar 11, 2008

Great post.  I got turned off long ago to PC games because even though I read the requirements, it still had difficulty working on my machine for the most part.  Also for me I go for console games because they aren't as complicated.  I just don't enjoy controllling a game with the keyboard, some do, but its too much for me to bother with for a game I wouldn't be playing very often anyway.

I'm not the core type of gamer that is true, but even so PC games are usually over complicated and to really enjoy it you need hardware that is beyond what I can afford to get.  So even if I would have interest in a PC game, its not worth the hassle.

on Mar 11, 2008

Re: Brad's original post

Amusingly, a group of friends were having a discussion about this very topic today, and we were pretty much saying exactly the same thing - albeit far less eloquently, and without the authority of actually being game developers ourselves to back it up.

I wish every game developer out there would read what you wrote, and take it to heart. But they won't. They're just in the business to be rockstars, not because they have any sort of business acumen whatsoever.
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