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Casual Games and Piracy: The Truth
Casual Games and Piracy: The Truth
February 12, 2008 | By Russell Carroll

February 12, 2008 | By Russell Carroll
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More: Console/PC



[Just how rampant is piracy in PC casual gaming? In a startling instalment of his regular Gamasutra column, Reflexive's director of marketing Russell Carroll (Wik, Ricochet) reveals the 92% piracy rate for one of his company's games, and what worked (and didn't work) when they tried to fix it.]

“It looks like around 92% of the people playing the full version of [the pictured] Ricochet Infinity pirated it.” It’s moments like those that make people in the industry stop dead in their tracks. 92% is a huge number and though we were only measuring people who had gotten the game from Reflexive and gone online with it, it seemed improbable that those who acquired the game elsewhere or didn’t go online were any more likely to have purchased it. As we sat and pondered the financial implications of such piracy, it was hard to get past the magnitude of the number itself: 92%.

In the casual games space, where the majority of the industry is tied to an internet-distributed product, piracy is a common problem. Search for any casual game through Google, add the word ‘crack’, and the search engine will help you find and illegally acquire every casual game you can imagine.

One way to fight the search-engine facilitated piracy is to work to remove the ever-expanding number of links to illegal copies, but in many cases improving the Digital Rights Management (DRM) system to be more secure can be more effective as it renders a large number of those links obsolete. This is tricky to be sure, because improving the security must be done without making the DRM so onerous that it keeps honest customers from purchasing games.

Reflexive, where I work, is in a peculiar position in this regard. Whereas most of the casual games industry licenses their DRM from a vendor, Reflexive has its own in-house DRM. Over the years it has undergone many improvements, including several changes made specifically to combat piracy.

With that background, my penchant for actual numbers, and a lot of help from Brian Fisher, Reflexive’s king of number crunching logic, let’s tackle the question of the 92% piracy rate on Ricochet Infinity. Could we realistically assume that stopping piracy would have caused 12 times more sales?

Beating the DRM

Pirates beat DRMs through Exploits, KeyGens and Cracks. Each of these approaches is distinct, and requires differing amounts of effort. A brief description of each, in order of least to most effort involved to make them work, can be found below.

Exploits
Exploits are holes in a DRM that can be circumvented without downloading anything to the computer. For example, going into the registry to delete a time limit on a game demo, renaming a hidden .exe file, or using task manager to ‘quit’ the DRM are all things that have been done in the past or can be done currently to circumvent casual game DRMs.

KeyGens
Most DRMs work around an encryption system that delivers the full game to players but limits them to a 60 minute trial. The full game can be unlocked by entering in a serial-type key into the game. Keygens are programs that illegally create serial keys to unlock a portal’s games. They are distributed in multiple ways, often shared among friends, as well as being sold or provided free of charge on websites around the internet.

Cracks
Cracks are perhaps the most commonly mentioned type of piracy. In this case the entire game is made DRM free by the addition of a file that impedes the DRM. Closely associated with cracks are ‘cracked games.’ This refers to a DRM-free version of the game that was cracked and then distributed by pirates. Obtaining a crack or a cracked game requires downloading files to the customer’s computer from locations that are clearly illegitimate.

Fixing the DRM
Over the last 2 years, Reflexive has made a number of security updates to its DRM that were designed to make one or more of the existing DRM workarounds obsolete and thereby turn the people pirating games into purchasing customers. While the updates haven’t made the system unbreakable, they have made it so all known or search-engine-findable piracy tools ceased to function.

Fixing The Holes - The Results

Below are the results of Reflexive.com sales and downloads immediately following each update:

Fix 1 – Existing Exploits & Keygens made obsolete – Sales up 70%, Downloads down 33%

Fix 2 – Existing Keygens made obsolete – Sales down slightly, Downloads flat

Fix 3 – Existing Cracks made obsolete – Sales flat, Downloads flat

Fix 4 – Keygens made game-specific – Sales up 13%, Downloads down 16% (note: fix made after the release of Ricochet Infinity)

From the results above, it seems clear that eliminating piracy through a stronger DRM can result in significantly increased sales – but sometimes it can have no benefit at all. So what does that mean for the question about whether a pirated copy means a lost sale? The decreases in downloads may provide a clue to that

As we believe that we are decreasing the number of pirates downloading the game with our DRM fixes, combining the increased sales number together with the decreased downloads, we find 1 additional sale for every 1,000 less pirated downloads. Put another way, for every 1,000 pirated copies we eliminated, we created 1 additional sale.

Though many of the pirates may be simply shifting to another source of games for their illegal activities, the number is nonetheless striking and poignant. The sales to download ratio found on Reflexive implies that a pirated copy is more similar to the loss of a download (a poorly converting one!) than the loss of a sale.

Though that doesn’t make a 92% piracy rate of one of our banner products any less distressing, knowing that eliminating 50,000 pirated copies might only produce 50 additional legal copies does help put things in perspective.

The Future of Piracy in Casual Games

Certainly in casual games the issue of piracy isn’t going away anytime soon. As the casual games industry continues to combat piracy, there are many battles still to be fought. The question most of the portals ask themselves isn’t whether or not to fight piracy, but what is the best way to fight it.

Casual games is an industry still in its adolescence, and certainly as it matures, more and more lessons will be learned about what the best approach is to fighting piracy, and what the realistic returns are of doing so.


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Comments


Christian Johansson
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Very interesting article, abit short perhaps?

Anonymous
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...so, a 70% increase in sales resulted in piracy dropping to...86% piracy rate (from 92%). Its wonderful how people can make "70%" sound like something significant; a 70% increase of an original 8% isn't anything to write home about. Now if they said it increased 700%, *now* I'd be more convinced. *shrug* Sounds to me like another 'marketing scheme' to make piracy sound like a viable reason to increase the price of their games to me...

Lo Phat
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A high piracy rate is exactly what drove the adoption of the Free To Play model in Asia. Securing the game at point of operation on the server is a durable security solution over time whereas DRM is not.

Anonymous
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Clearly as a business man I’d like to see no piracy and every person playing my games having had to purchase them so I’d make a few bucks. As an individual, I realize that many people who pirate games are simply not interested in buying the game or can’t afford the game (which would lead to no sales with or without piracy). One trend I have noticed among people who pirate games is that quite often by playing a game that they were not interested in they actually develop and interest and go out and buy the game simply because it becomes a worthy purchase in their eyes. This also leads to them buying sequels. I guess in this respect piracy leads to free advertising. (just throwing it out there as another way of looking at things)

Anonymous
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@Anon above-- That is exactly what it sounds like to me also. It's common place to immediately blame piracy, torrents, usenet, crack sites.. whatever, in order to further your own agenda. That being increasing sale prices or "scaring into buying" as it sounds like in this case, with the added publicity by simply naming the game in the article.



The bottom line is that piracy, no matter what form it comes in, will never be stopped in its tracks. I see so many articles about this each and every day and it's a pipedream. Think of it as 1 company develops a new DRM system, 10,000 crackers are waiting for it to come through their fingers. 99% of it is challenge and usually not even a desire to play the games they crack. Who do you think will win?



Even my own company knows piracy can't be stopped, because we are a part of it, so we don't even protect our games with anything more than a simple installshield serial, which can be cracked in 10 minutes.

Jay Barnson
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Well, don't ignore the 70% increase in sales while gaping at both a 12:1 ratio of illegal-to-legal copies or the 1-in-1000 pirates who go legit when their preferred avenue of cheating dries up. 70% sales increase is awesome, and well worth it.



But I think Russell makes a great point here that while it may be impressive, it's far from the 1150% increase scaremongers would have us believe. And it may not be the best use of resources. Putting that time & effort into creating a better demo that converts better, or into advertising, or any number of other places MIGHT be a better option and get a better than 70% increase in sales.

Anonymous
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Piracy is not much more than a scapegoat that game publishers and developers rely on to draw attention away from their own failures. You almost never hear talk about piracy when a game is successful. You only ever hear it used as an excuse for why a game is not posting the sales figures that people wanted.



The 1000:1 ratio should be obvious to anyone who is familiar with basic economics. If price falls, demand typically increases (non linearly), and since supply is infinite in the digital world, so purchases increase. It's a pretty simple principle. If the price is 0, demand is at its maximum, so lots of people will take one. When the price jumps to $20 for what amounts to a glorified game of pong meets space-invaders, fewer people will take one, A LOT fewer.



Reflexive sells this game for $20. $20 is a fair amount of money to spend on a game for the market they are targeting. If Reflexive wanted to increase its sales numbers, they should have produced a product that they could sell for less. That would be far more likely to have a positive impact on their bottom line than spending more money to create DRM that will just be rendered ineffective over and over again.



So far in the war to stop piracy, the score is Pirates: 8 gazillion, DRM: 0. Yet it has still not become obvious to most companies that complex DRM solutions are a waste of money - and it probably never will, because then they might lose their scapegoat.



If they stopped blaming piracy, they'd have to own up to the fact that the real reason for poor US PC game sales is a COMPLETE lack of mainstream advertising, an inability to really try-before-you-buy (demos are NOT comparable to game rentals), the difficulty in knowing what games your machine can play, and an utterly pathetic amount of shelf space in most brick and mortar stores.

Jarmo Petajaaho
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Fixes 1 to 4 cumulatively increased sales more than 80%. That number is extremely hard to beat with other means (better demo, more marketing etc.) It seems to make a very good case for having strong DRM and keeping it updated.



The 1-to-1000 ratio seems pretty irrelevant compared to the number of actually achieved new sales. The ratio is just a sad reminder of human selfishness, as is the 92% piracy rate. What could drive business decisions is this: 80+% more sales with strong, living DRM.

Tom Beckmann
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There are two fundamental problems with DRM.



1) DRM that crashes your game for even 1% of players is a class A bug. So that's both increased support calls and decreased reputation. I've seen legally bought games with appallingly slow load times, reduced frame rates and additional crashing bugs. Applying a no-cd crack not only made the game faster to load, it also improved the frame rate, and got rid of (most) of the crashing.



So this DRM rewards those customers who seek out the no-cd hacks. Whilst searching for those sites, they'll also find ISOs for other complete games.



2) DRM currently only provides benefit to the publisher at a cost to the consumer.





So what can we do about this? That's simple: provide a DRM that users want to use. An example is Valve's Steam service. It provides players with

a) Easy migration to a new computer without needing the original disks.

b) Easy patching.

c) Friends lists, achievements, etc.

But it also provides the publisher with DRM, and statistics on how people are buying and playing your games.



It is not perfect, but I before buying a game on disk, I check availability of a no-cd fix. If it's a steam game... I just reach for my credit card because I see steam as a positive attribute.

Ondrej Spanel
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Very nicely written article, with very realistic approach to the subject.



To Tom Beckmann - not each DRM deserved the reputation we know many CD / DVD based DRM systems have. The DRM systems used for online sales for both games and tools I have seen so far are mostly very non-instrusive, with no need to use any drivers, or anything like this which would make them any more likely to crash or malfunction than any other part of the application. While there is "cost to the consumer", it may be something which users do not really mind, like having to copy a string into the text field.



Besides of Steam, one example of DRM well done is for me the Product Activation used by Microsoft. They have excellent infrastructure, both internet and phone, the "cost" imposed on the legit customer seems acceptable to me (at least I being end user of their product do not mind it at all).

Ed Macauley
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Sounds to me like a success story for DRM. Sales up 83% is nothing to sneeze at. Sure, they can't realistically expect to sell one copy for every pirated copy they get rid of. That's just common sense. But by taking effective anti-piracy measures they were able to almost *double* their sales. Sounds like a win to me.



As for the comments about Reflexive's pricing model encouraging piracy, so what? It's their right to sell their product at whatever price they choose. "Your game costs to much" is not an excuse for piracy. Frankly, they could cut their prices in half and they'd probably still have the same level of piracy.

Matt Weaver
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It's ALL about marketing trickery. I agree with



"Piracy is not much more than a scapegoat that game publishers and developers rely on to draw attention away from their own failures. You almost never hear talk about piracy when a game is successful. You only ever hear it used as an excuse for why a game is not posting the sales figures that people wanted."



You can go the distance and spend thousands, if not more, on a system like Starforce that breaks more frequently on legit users than on pirated copies, or you can suck it up and know that piracy will always be here. Problematic or otherwise, it's not going anywhere.



And this article is nothing more than a product plug for Ricochet Infinity.

Anonymous
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It is also a well discussed topic that Reflexive has the weakest DRM in casual games and often pirates will just wait for a game to be released on Reflexive rather than dealing with other portals' drms. Would improving a stronger drm have the same results?

Anon Anon
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1. There is NO WAY to stop piracy.



2. 92% is a bunch of crap. What they say doesn't even make sense. They only measure those who downloaded from them. Then what? They cracked it? After you crack it, it no longer calls home. Either way even if it did, they could still be measuring downloads that came from somewhere else. So their percentage would be way off mark. Or are they measuring the fact that only 8% of their downloads resulted in purchases? That would make more sense seeing as how that game sucks.



The FACTS are, it's close to impossible to download from the DEV then try to find a matching crack. You have to find a version of the game that includes the crack as they update the source much too often to combat this issue. So all in all the 92% mark looks a whole lot like a bunch of bull.

electric mayhem
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You're an idiot!

First off, let's discuss why Stardock's games are so successful!!

NO ANTIPIRACY to jack up your computer. Its anti-piracy methods, and overpriced tripe served up by the industry of late, that forces many into piracy.



Get a clue!

Bruce Everiss
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It is self evident that piracy causes massive damage to the video game industry. It is why boxed retail PC games are reaching an end. And why nobody is prepared to invest money in AAA PSP games. To say otherwise is to be in self denial. The facts are so straightforward.



In this instance the 92% who stole the game did not buy it when it was protected for one simple reason. There is so much more out there they can steal for free, why bother paying?



Unfortunately someone has to pay development staff wages. And when everyone just steals there is no money and no games. It is very simple, and this is what has happened to whole sectors of the PC market.



However it is a passing phase. Increasingly games will be server based and so the thieves who steal now will be forced to pay if they want to play.

Anonymous
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What I can't stand hearing is people who blame the victim. "If you didn't do a good game, then you deserve it being stolen. If it was a better game, then people would buy it. If people like the pirated version, they'll go out and buy a legit copy."



BULLSHIT!



Imagine if you went to a school where unless you got an A+ you failed. That's basically what these people are saying. Imagine if you did any kind of work and, unless you were a top-of-your-department performer you were given NO PAY.



If it's wrong, it's wrong. We're here just trying to figure out how to keep people from stealing from us in a realistic manner - but lay off the bullshit that if you get stolen from it's your own fault.

Samuel Chan
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I agree with the above post. Nobody is "forced" into piracy, that's just ridiculous. It's stealing, whether or not they would have bought the game in the first place. This is something people don't seem to understand, its theft, plain and simple. Developers have every right to be upset.



As Lo Phat mentioned, I think the future of PC games is in different revenue models.

Brit C
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@Russell Carroll, the author of this article:

I can't figure out how you came up with the 1 sale to 1,000 pirated copies number. I keep looking at the numbers, and I can't figure it out.



You say that "Fix 1 – Existing Exploits & Keygens made obsolete – Sales up 70%, Downloads down 33%".



Here's my some guess at your numbers (which still fits the data you've given us):

Before making Fix 1

Purchases per month: 100

Downloads per month: 210,000



After making Fix 1

Purchases per month: 170 (an increase of 70%)

Downloads per month: 140,000 (a decrease of 33%)



These numbers would also fit with your statement that 70,000 fewer downloads (assumed to be pirates) equals 70 additional sales. In other words, eliminating 1,000 pirates = 1 additional sale. Also, these numbers don't seem quite right based on conversion ratios I've read elsewhere. I've read elsewhere that conversion ratios (i.e. people who buy) are typically about 1%. Using these numbers, your conversion ratios are only about 0.05%, which is about 1/20th the numbers I usually hear.



I'm not clear on how pirates would know that the exploits and keygens were obsolete until *after* they made the download. So, how could that fix decrease the number of downloads?



I'm also confused about one other thing: you list a number of fixes to the Exploits, Keygens, and Cracks. But, how do you know that pirates aren't just shifting from one method to the other? For example, it looks like exploits are the most common way of breaking your DRM. It's possible that there exploits are a lot easier to find on google than keygens or cracks. Maybe when you fix the exploits and keygens, pirates shift to using cracks (or other exploits you haven't figure out yet). And since cracks are harder to find, 1% of pirates simply give up and buy it, but 99% find a cracked copy instead. This scenario would invalidate your claim that eliminating 1,000 pirates = 1 additional sale. Using my numbers, you would have something closer to 10 pirates = 1 lost sale.



I'm also not clear on how you made "Existing Cracks made obsolete". Cracks are copies of your software on other websites, but they have been digitally altered to remove DRM and not talk to your server at all. So, how is it even possible to make cracks obsolete? And how could you measure anything related to cracks at all?



I had talked to an indie game developer who did some experiments with pirates. He put out a fake registration code on some pirate websites. He would watch the number of people who would try to use the registration code, and then watch those same IP addresses to see who came back to buy it. He said that something like 1/3rd of attempted pirates came back to buy. His numbers seem totally at odds with your 1/1000 number.

Brit C
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One other thing related to the author's inability to make cracks obsolete: it could be that some percentage of pirates don't trust keygens or cracked copies (because they can contain trojans). Thus, it's possible that eliminating the exploits drives up sales by causing some cautious pirates to buy. Meanwhile, he can't do anything about cracks at all. This scenario would also explain why he saw "Fix 3 – Existing Cracks made obsolete – Sales flat, Downloads flat", and also cast a lot of doubt on his claim that 1,000 pirates = 1 lost sale. For all he knows, 99% of pirates are downloading cracked copies - which is something he has no control over. Fix 3 actually does nothing at all to stop the ability of pirates to pirate (since pirates can get an old, cracked copy), so his numbers aren't useful.

Russell Carroll
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The follow-up has some additional information: http://gamasutra.com/php-bin/news_index.php?story=17408



However, it's been so long since this was written (1.5 years) that I'm pretty far removed from everything we did to put it together and I'm affraid I'd mis-inform at this point unless I had a lot of time to dig back into it all (which time I unfortunately don't have).



A couple of points though...

The 1% conversion number is something that games used to aim for, and only more recently (last year) has been something that described anything other than the 'hit' casual games. Lower, and in some cases much lower percentages were common.



More similar to your 1/3 ratio you mention is the Ricochet Infinity info in the follow-up, we also have information from another game that saw a higher ratio of piracy than RI, based on IPs and the online access to the game.



Clearly based on my definition of cracks we were not removing cracked copies from the internet, but we were removing the ability to crack the DRM using the same method in the future. So it is aplicable from that point forward on all new games (we released 5-7 a week during the period measured), but it does lack the ability to check past games. Still, as most of the volume is with new games and not old games in terms of both downloads and sales, the data is not perfect, but very indicitive rolling forward (and the time period and quantities we had were substantial). Cracks would take the longest time to measure, and it is possible that the 8 months we had to measure it was not properly measuring the impact, but I doubt that. I can't imagine that pirates are playing cracks of old games instead of cracking new ones. It's more likely that pirates were simply not cracking many of our games to begin with and instead began cracking the game from other sources. As cracks don't usually impact downloads as much as keygens (they are distributed outside our services), it would be hard to tell.



Your point on pirates not knowing until after they download is only true initially, and only impactful to keygens and exploits which are downloaded by pirates from the source - whereas cracks are not. When the piracy fails, pirates usually find other means, as you mention. Often this means finding, not a different method, but a different source, and pirates will point fellow pirates to other locations to download the game where it is easier to pirate. This does decrease downloads as the links posted by pirates point to other game selling websites. However, it's really a shift of piracy from us to somewhere else, and in that case, our efforts in stopping piracy may actually be over-stated. When considering the industry at whole we may have simply moved the piracy and not positively affected it in some of our attempts to reduce it.



I wonder at your indie game developer in that regard. Is their game available eslewhere? Reflexive records many magnitudes great sales than are represented by the numbers, so we have a very large amount of data available, but we are limited in not knowing how our actions impact other game portals with similar content. If a game has less distribution, it is going to be pirated less. The difficulty in pirating an individual game usually isn't worth the effort for pirates. It's much more worth it to break a DRM and be able to pirate thousands. Additionally, pirates are people too! They may find some place in their heart for an indie developer, while finding none for a larger more faceless orginazation. I would question the information you received from the indie developer. Not its credibility to be sure, but its comparability.



I would state that if the pirates were simply moving from using Reflexive as a source to using some other game selling site as a source, then if we were able to eliminate cracks, exploits, and keygens from all sources we very likely could see a better than a 1/1000 improvement. That doesn't lessen the argument about the amount of pirating at all, but it perhaps gives some direction for a potential solution and perhaps incrases the expected impact. The counterpoint on that is in numbers like those of Ricochet Infinity, which was more limitedly released and showed very similar numbers to the others mentioned in the article.



My hope in doing this article was to encourage other game selling sites to share information as well, I am all for it, and think it gives a lot more to talk about. (and it's much more comparable to each other than trying to compare individual games or game developer experiences to large amounts of aggregate data...I think game and developer data is great too, it just needs to be compared to like data)



Again apologies that the information is so far in the past that I can't engage you in a more thoughtful discussion of the topic, hopefully what info I've posted above may prove useful :).


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