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Inside Game Piracy, Part 1: Crushing Discs, Pushing Education
Inside Game Piracy, Part 1: Crushing Discs, Pushing Education Exclusive
December 3, 2008 | By Leigh Alexander

December 3, 2008 | By Leigh Alexander
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    16 comments
More: Console/PC, Exclusive



[Game piracy is still a major issue, and in this first part of a Gamasutra special report, we talk to the ESA and PC Gaming Alliance -- discussing why cracking down on physical goods piracy and "making people think just one more time before they click download" may break the vicious cycle.]

When 2D Boy recently claimed that the piracy rate for its PC independent game World of Goo was something like 90 percent, it raised two interesting issues.

First, it demonstrated that the methodology for actually quantifying piracy is a long way from stability, as many debated the saliency of such a figure.

And second, it proved that although piracy is unmistakably a major obstacle for an industry where profitability is already highly challenging, there's little that can be done about it until the methods for measuring its impact are clearly defined.

The PC Gaming Alliance is a group of industry leaders including reps from Microsoft, Dell, Activision, Capcom and many others, who meet to work on solutions for challenges facing the space and promote the health of the platform - and piracy is a particular problem for PC in particular.

With that in mind, the PCGA has formed a new subcommittee to start examining ways to take the crucial first step of learning to quantify piracy and its material impact.

Christian Svensson, senior director of strategic planning and research at Capcom, is a member of the PCGA, and tells Gamasutra that the new impact-oriented subcommittee is just now getting off the ground. There's a complicated road ahead with a good many factors still up in the air, but the subcommittee knows that quantifying that impact is a key first step.

"We're just starting to lay out the groundwork," Svensson says,"I would hope within the next three months we have started to make some progress toward that."

Enforcement In The Non-Digital World

Meanwhile, the Entertainment Software Association, as the trade body that represents the industry's interests, has also been tackling the problem. "Part of the problem is it's vast, it's happening in different parts of the world where the ability to measure activity is difficult," says the ESA's Ric Hirsch, senior vice president of intellectual property enforcement.

"And that's exacerbated by the internet, which has the effect of anonymizing a lot of activity, and a lot of it is done behind closed digital doors, if you will, so it is difficult to estimate. We see a piece of that, and the piece that we see can be somewhat alarming at times, vis a vis the volume and intensity of activity, particularly around new releases."

Hirsch admits that the ESA and the PCGA have not formally aligned to collaborate on anti-piracy initiatives. Instead, the ESA approaches the problem through various international programs focused on enforcement and training.

It works with local authorities to bust hard goods piracy rings - for example, the ESA's enforcement program in Mexico, established in 2005, has helped it build a "positive working relationship," as Hirsch says, with authorities in that country.

Recently, with the help of Mexican law enforcement, the ESA targeted a large Guadalajara shopping center where investigators had identified several vendors selling pirated games. "Based on the evidence selected, we went to authorities, explained the problem, and were ultimately able to arrange for them to take an action in seizing a lot of illegal game products," Hirsch says.

And Hirsch adds the ESA has programs in six other countries: Canada, Brazil, Paraguay, Malaysia, Hong Kong and Singapore. A new initiative in Korea focuses largely on that country's thriving online games biz with a takedown program. "We use an outside vendor through which we monitor instances of infringing activity involving our members' game product," says Hirsch.

"Based on the reports... once we verify that infringement is infringement, we will transmit a takedown notice to the ISP requesting their intervention in procuring cessation of the pirate activity. And that's something we do globally; we send takedown notices to ISPs all over the world."

Of course, to benefit from the ESA's enforcement activities, companies need to be members of the ESA. "We need specific authorization from members, as rights-holders to engage in this activity," Hirsch explains - so for example, when it comes to companies like Activision who have left the ESA, "we don't have any specific authorization to undertake specific activities on their behalf."

The Online Factor

But while the ESA has met with a great deal of success putting out hard goods piracy fires where it finds them, Hirsch admits that disc copying is less and less the major problem, these days.

"We pretty much recognize... how much infringing activity is moving more and more to the internet," he says, citing convenience and availability online as a primary driver.

The ESA still plans to focus on hard goods, which Hirsch says still remains a significant problem, especially in developing nations where internet access is not widespread.

"In a lot of established markets with greater broadband access to the internet, we do tend to see upticks in download activity involving pirated games , and obviously there's a concern about that," says Hirsch.

"We are trying to pursue some of the principal players who are involved in this activity in terms of the people at the top of the piracy food chain, members of warez groups who within days of a game's release and sometimes before, manage to get pirate versions of games available out there on the internet for download."

So as the ESA focuses its investigative efforts on online groups while continuing its ground-level enforcement initiatives, Hirsch says the issue of IP protection is also enjoying increased support from the U.S. government. "Over the last eight to 10 years, the U.S. government has stepped up its efforts in addressing IP piracy, in which game piracy is a small but growing part," says Hirsch.

And that's allowed the ESA to contribute an "extensive" training program to help investigative and law enforcement groups increase their knowledge and sophistication when it comes to recognizing pirate software, education efforts it continues to expand as part of its international enforcement initiatives.

"Part of our mission is to make law enforcement understand better the problems that game piracy creates for the development of local game markets and how it impacts businesses and tax revenues from the game sector," says Hirsch.

And at least on the PC gaming side, the PCGA's committee to evaluate this impact in more specific terms is a promising idea. Capcom's Svensson finds 2D Boy's 90-percent figure for World of Goo a bit high, though.

"I think most of us on the software side that have any kind of reporting capability, and any kind of tracking mechanism for authorized versus unauthorized server data... 90 percent is high. There's no question that's high, probably a little higher than what we normally see."

And what's normal for Capcom? "For what we have seen with our own games, 50 percent would be the low end," says Svensson.

Of course, it may depend on the size of the game and the resultant ease of piracy, with Reflexive's Russell Carroll recently estimating that around 92% of the people playing the full version of his company's PC casual game Ricochet Infinity pirated it.

How Education May Help

It may seem a surprising number - which is why it makes sense that when the PCGA convenes to start forming its new anti-piracy plans, one major goal will be to look at ways to increase consumer awareness.

"I think if we can actually educate people on the impact, and how prevalent it is, I think that will eventually have a positive impact on many people," says Svensson. "It may help make people think just one more time before they click download."

Education plays a key role in the ESA's anti-piracy initiatives, too, and not just the training it offers law enforcement. Says Hirsch, "Several years ago, in discussions with member companies, we tried to sit down and think about how we impact the demand side, as opposed to the supply side."

The ESA decided that in that respect it would be best served addressing the segment of the gaming audience most open to receiving messages about the rights and wrongs of unlawful downloads: elementary school students.

"Many of them are starting to use computers and internet at earlier age," says Hirsch. "And we're trying to give them some guidance with respect to what IP is, and why taking stuff without permission is wrong. These are things that oftentimes children do not learn as they learn to use the internet."

So the ESA worked with an educational curriculum company called LearningWorks -now known as YoungMinds - and developed an age-appropriate curriculum to be used by elementary schoolteachers, designed to complement other core lesson plans they may have.

The program they developed is targeted at various age groups from kindergarteners to 5th grade, and is designed to introduce to them on a basic level the value of intellectual property. Curriculum materials are housed on the web at JoinTheCTeam.com.

"Having the kids work on things and develop things -- their own pieces of intellectual property... they get to understand that after working on something, they have certain privileges of ownership with respect to what they created," says Hirsch.

"It ties in with plagiarism themes... and teachers respond very well to that, because they're looking for materials about plagiarism, particularly through the use of computers and the internet."

In particular, parents are included in these school-based initiatives, as an important part of the equation is helping parents understand their children's online behavior.

[Tune in tomorrow for the second part of the piracy special, focusing on counter-measures, copy protection schemes, and new solutions for piracy-related issues.]


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Comments


David Saunders
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Interesting - basically D.A.R.E. for IP.

Peter Olsted
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You always talk about things that are bad or wrong. Why not try to be positive for once? Teach the kids about that it is right, you earn from good products and ignore that copying them is bad. The carrot is more powerful than the stick. Especially since many people don't care about that is it wrong.

Alan Youngblood
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Sorry if I steal your thunder for part 2 Leigh, but there's something I have to chip in to this issue's debate.



I used to laugh in my economics class when the professor said we'll assume that people are rational. I used to think sarcastically, "yeah right, people are rational, that's why we have stealing, piracy, and companies that screw over their consumers." I was wrong. People are rational. If your live options are steal food/money for food or starve, which do you choose?



Back to the issue at hand with a simple solution: lower the price that consumers have to pay for games.



If the marginal benefit of a game is $25 to consumer x, but retailers charge $60, the marginal cost outweighs the marginal benefit. Ordinarily, consumer x will just not buy the game. Here's where our problem comes in: there's still $25 worth of marginal benefit from the game, which is to say that consumer x will have a positive net increase of enjoyment if s/he acquired the game. Being able to download the game free and easily, we are looking at a marginal cost/benefit ratio of 0:25 vs the 60:25 earlier. Basically, it's stupid for consumer x not to pirate the game in this situation. Hence, basic economic theory explains my simple solution. (I realize in practice it may be anything but simple, but at least we know something that could solve the problem if we worked at it).



This solution will also help this growing worry about resales of games. If reasonable prices are charged, people will buy new. If value holds at the original retail price fairly well, there will be no reason to sell played games.

Eric Scharf
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Alan,



Well-stated and thunder certainly worth stealing.

Arthur Times
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Alan,



You present a well thought out argument however the cynic in me can't help but think "a game could get great reviews, be a blast to play, only cost $5 and have every cent go directly to the developers of the game (and not a publisher) and it would STILL be pirated to the high heavens".



Remember this article piece is referencing an indie game that cost $20 and yet the reported piracy rate of the game is 90%.



As long as people can get something for free with very little consequence they will.



The biggest thing about piracy that annoys me is pirates justifications to call it anything BUT stealing.

Roger Guseman
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Alan,



By your justification, I should steal a car instead of paying for it. I understand your point, and agree that the current pricing isn't necessarily the best, yet this is hardly a justification for piracy. As I'm sure Arthur is getting at, a large part of the price inflation issue is the outmoded distribution channels used.



Regardless, the reason for piracy is not that people are rational, its that people are greedy.

Jeremy Wynn
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Alan makes a good point and I think this idea holds up pretty well. The only thing its missing is the reason as to why people don't go to the actual store where these games are being sold and attempt to steal it off the shelves; or like Roger said and go steal a car.



Why don't we go steal a car if we get all kinds of benefits for driving while not having to pay a dime? Because we'll go to jail. It's that simple. If the vast majority of people that steal games online, could steal a car without any worry whatsoever about getting caught or found out, or anything... stealing a car to them gets much more attractive.



It's consequences that online piracy needs. I can go download a torrent file and rip off any game currently available. Heck, you can even find games that have been leaked even before they're released and download them at a click of the button. I can sit back and steal away knowing full well that I won't get caught. Therefore the cost/benefit ratio truly is 0:60. But when we factor in someone going to the store and getting arrested for trying to pry one of these games off the shelf at Walmart and boldy walking out the door with it in hand, we realize that the ratio is now drastically different. Not only is there possible jail time/fines to pay, there's also the public humiliation of being caught and arrested. Not very many people actually risk stealing from a store, especially when such goods are readily available on the internet.



While the fix might not be simple and it raises many ethical questions, there has to be a way to bring accountability to online piracy. Until people actually start getting caught, the cost/benefit ratio will always be 0:60, or whatever the amount of enjoyment one gets out of gaming. I have several friends that stopped pirating music when the lawsuits starting making the news. These people that steal games have dubious morals, the only way to stop them is by making the stealing painful.



This goes back to maritime piracy in the 16th-18th century.. It didn't stop until the governments of the day were able to bring consequences to the seas.



People back in the day had a very simple but harsh fix for theft. Cutting off hands deterred people from stealing as well has reducing repeat offenders... I don't want to go back to that but there's a lesson there somewhere... If people downloading games,music,movies etc. knew without any doubt that there was a 50% chance that someone was going to come knocking on their door to give them a fine or jail time for stealing a game, they wouldn't do it.

Daniel Boy
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1. Stealing content is not the same as stealing objects. It is a different kind of action. The scarcity of content is artificial. So you do not take anything from anybody. You "only" deny the designers, programmers, artists etc. any monetary compensation. I think it is dangerous to blur the boundary between stealing an object and the unsanctioned reproduction of content. People feel the difference. That does not mean, that ripping off EA is morally acceptable. Quite the contrary. But the evilness of stealing is only apparent because we internalized it in an early stage of childhood. Everybody tolds us that. We do not steal food in the supermarket because we are calculating the risk of being caught, we do not steal because we do not think about stealing. To reach the same result concerning illegal copies of content we will have to educate the whole society. I hope it is not to late.



2. Being a pirate is cool. A specific aesthetic lies in being a privateer, fighting a war against the oppression by the big corporations, fighting for the freedom of information, blabla. Most pirates download because its cheap. But when you are able to supply your peers with the newest music, movies, games you gain reputation. On the schoolyard. In the dorm. The release groups crack games because it is interesting, dangerous and they get credit and attention.



3. Pirates are lazy and impatient. They want everything now. So it must be easier (or nicer) to get a licensed copy than to use a torrent. So publishers: poison the swarms and st(r)eamline the online services. But pirates are so lazy, that they would use the piratebay even when the game was free. Using torrents is a habit. And habits are hard to break.

Christopher Enderle
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I'm not sure following in the footsteps of D.A.R.E. is the wisest path for success. The conflation of stealing/taking with copying and targeting this education at children is a lot more disturbing to me than the actual problem. Manipulating people's values and ethics by presenting a less than truthful argument might help an industry but hurts society on a larger scale.



Ultimately the solution to the problem lies within the content providers. The game/movie/music industry really dropped the ball when it came to online distribution and allowed file sharing and torrent sites to gain a very strong foothold. It's no longer a matter of offering an equal product (which they still fail to do by clinging to proprietary formats and malicious DRM) but in providing more than warez sites have to offer.



An apparent solution might involve something as simple as offering faster download speeds, but that gets into the mess the US broadband industry is in and Net Neutrality issues. When certain companies push for laws that let ISPs artificially limit your connection speed to any non-top tier internet sites it becomes apparent that they care less about providing a better product to the paying consumer and more about justifying their poor service relative to what can be gotten for free.

Ryan Wiancko
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Chris makes a good point in contrasting the woe's of music and film to the PC world. I think the main solutions would be to stop relying on prehistoric, or pre-internet business models in a business landscape that today is unrecognizably different than it was 15 years ago.



The bottom line: Give your goods away for free and pursue alternative revenue streams. Unfortunately however those revenue streams are galvanized within the industry to the risk factor here to a large company is too large to take a leap with, however the change is coming. There is a general shift in the MMO world towards free gaming, and I've heard reports that it will completely shift away from the Subscription model before 2011(which some exceptions I imagine). The fact is that we are so focused on being creative in the creation aspect of our games but are completely dropping the ball in regards to the creative aspect of our business and haven't changed a damn thing for the most part in 30 years. When one of the single largest, most valuable and profitable companies on the internet gives nearly everything away for free I think it is seriously time that we lift our heads up from creating for a period and put our innovative and inspiring minds towards a unified business model that can move at a faster than prehistoric pace.



Or we can just continue to chill in the smokers lounge with the CEO's of EMI, Sony BMG, Universal Music and Warner, GM, Ford and Chrysler talking about how good things used to be and watch the world pass us by

Alan Youngblood
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Agree or hate what I said, there seems to be a great discussion here.



Christopher and Ryan, I really like your points about putting our innovative minds to work on business models and not going the way of the cited US Corporations that obviously haven't updated to the 21st and are suffering dearly.



Daniel - I like your distinction of stealing content vs. stealing an actual boxed copy of the game.



To chip in to this though, I've heard credible accounts of a local Gamestop being required to buy back games that were shoplifted from a Walmart in the same shopping center. This is all sorts of wrong.



Before I continue anymore let me say that I do NOT support piracy. I do buy used games.



If pirates weren't going to buy the game anyways then why is it a problem? While they are stealing content that took labor to create, they are not detracting from an actual sale in any way. Therefore, it seems moot point to me.



My last statement is for the cynic in general. (Take this from me, I am very cynical a lot of the time). People are not thieves, pirates, morally corrupt. People are people. They do things that offend other people at times, yes, we all do. People dubbed as "pirates" generally don't wake up and say "I hate that ____[game designer], I wonder how I can screw him/her over and ruin his/her life today, muhahahaha!" Like I said earlier, it is a rational decision that comes through thinking about the options. Negative consequences as stated by many above will help to deter people from considering piracy. However, positive consequences for doing the "right" thing will ultimately be a better motivator. If we can see these people for what they truly are, people, then we have a lot to gain in making them paying customers by enticing them with positive rewards for not pirating games and actually buying them.

Adam Bishop
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I find the ESA's efforts to write curriculum for elementary school children to be offensive and frightening. No corporation or corporate lobby group should ever be writing curriculum, and no school board should ever allow it. We have schools that turn kids into worker drones enough as it is, the last thing we need is corporations in the classrooms. Get advocacy groups out of schools and let teachers educate.

Tawna Evans
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I think teaching school children the difference between right and wrong is practical. I have met children who pirate games and insist that it is acceptable and beneficial to the companies that make the games. I don't know who they got that idea, but something needs to be done to make sure they would know that piracy is wrong.

Wyatt Epp
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I'm not going to jump into any particular side of this, but just a couple things. If I buy a used game it's because I missed it the first time (often from lack of knowledge). What about that? PC games, at least, have a limitless ceiling of distributed copies, but not so for consoles.



The other point that I feel needs addressed is this: "If pirates weren't going to buy the game anyways then why is it a problem?"

There are two major problems. First, it legitimatizes the concept through the creation of a peer group; a "scene," if you will. Second, it helps fuel the reduplication and distribution because the nature of the Bittorrent protocol turns every node into a source.



Another aspect that's far less important to most, but very near and dear to my own heart and time that I'm not working is that, because pirates often use the vectors as homebrew software, they tend to create this conflation of shady connotation.

Peter Vigeant
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I agree that this is a very good discussion.



The analog-hole (with it's cute & obvious nickname) is what kept the pirated digital music and video trade going when hardware was being infiltrated by new DRM technologies. When the iTunes store was announced, many were skeptical that in the world of Napster such a thing could make money.



It did.



There is no sure answer to end piracy without penalizing the end users in some way. The video game business seems to be troubled on both ends - the production side can't seem to make money more than 20% of the time while the other side can't afford to support the industry that they dearly love.



Bill, you bought 20 new games in a month? That's devotion to a gaming trade. I don't know if you are a gamer or a collector. Gamers that I know tend to finish games, not succumbing to more than 2 or 3 titles in any long span of time. Not everyone can make that kind of contribution.



I, for instance, will buy one big title a month... then look for deals. If I can get something used, I will. If I see a WiiWare or PSN title that looks good, $10 is a great price for bite-sized titles.



It shocks me that "World of Goo" would have a 90% piracy rate, but what does that mean? Two developers released something on WiiWare that sold over 44,000 copies legitimately in the US... meaning almost half a million dollars, not including other countries or Steam. Then we account all of the Nintendo SDK & etc fees and what is the net? Still seems like a lot...



And, based on their numbers (which assume everyone has opted into submitting scores online which is off by default) that means 440,000 copies of the game are out there being played.



I do not advocate piracy, but having almost half a million players means that someone is talking about your game. Gamers have come to mistrust critics, especially after the Assassin's Creed debacle of last year. If a friend suggests a game, I'm likely to try it - heck, that's why many in my office bought Spore, because I told them about how much I enjoyed it.



Anyway, the point is to meet in the middle. There's no question that publishers need a better model for making money - you can't just sit around and blame used game sales and piracy. And gamers need a way to afford all of the cool content that's being released...



You see, game companies ask a lot of gamers. A $60 game is not just $60... it's a PS3 ($400+) and a big screen television ($1000+) and a nice sound system ($400+). Or it's a new PC (~$600+) with a fancy graphics card ($200+)... oh... and you have to update the hardware every 4 - 5 years.



On top of all of this, critics can't seem to get their heads around the new type of gamers out there. Instead of valuable buying advice, critics pan anything that is outside of the normal hardcore expectations, meaning "experience gamers" or "casual gamers" or the like are often harshly judged. This results in some poor gaming investments - every gamer has gotten burned on a wretched title (Turok for the GC was almost unplayable and I bought it new... shame on me).



This will all be irrelevant soon, because (going back to the opening) gaming will all be online in the near future. Media is dead and the next console generation will be a high-end computer that knows how to access several subscription-based services. GameTap and Steam are inching closer every day... as is the incredibly popular Apps Store.



We want micro-transactions and we want our content now, instead of waiting in line at Best Buy. At that point, DRM won't matter because it will be such a hassle to pirate any of this material that those rates will drop... and advertising revenue from the community aspects (see Home) will help fund bigger and better gaming projects for everyone...



OK, I may have gotten off topic, but my coffee has worn out...

BURLAND BURDETTE
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I'm 35, working toward my Masters in secondary education in Mathematics, a former IT enthusiast, a long-time 'gamer', and a hobbyist. I'm a collector of Atari consoles, the 5200 in particular, and am currently studying assembly code for the 6502 processor for making new 5200 game cartridges. For those who are interested in such an endeavour, visit www.AtariAge.com.



I've read and listened to the increasing concern over piracy in the entertainment industry, this industry comprising of audio, video, and computer gaming; I find it all very interesting, in especial with regard to the PC industry.



The metamorphosis of WAN networking from Gopher -- primarily a hodge-podge of entangled proprietary LANS, mostly collegiate, the root domain being, I believe, the old DOD ARPA-Net lan and mainframe -- to the World Wide Web is really, if you think about it, quite simply amazing.



Back in the late eighties, it was quite simple enough to copy software; but, people still bought King's Quest, Roger Wilco, Obsidian, Realms of the Haunting, etc. Now, someone might put it on a ftp site -- no one, or not many, had their own web page back then, as the 'intranet' was quite proprietary, and mainframes had limited drive space. However, setting up an ftp site usually left a paper trail, and pirating was usually discouraged this way. Applying for domain space for an ftp site was not always an easy process -- anonymity was minimal.



Search engines, lol, what search engines? So, finding the ftp site with all your favourite boot-legged software was difficult to say the least.



Of course, now, on the web, there's a slew of forums hosted by domains that legally waive all responsibility as to their content; and some of this content, of course, is boot-legged material, and with a highly evolved search engine such as google, illegal copies are practically advertised, lol, especially those on Russian domains.



So we have companies, very large companies, hosting users offering boot-legged content, and waiving all responsibility, in a highly complex and evolved intranet environment. It can be regulated, it just isn't; although, I have noticed in the past couple of years, forums and file-share sites have been more . . . thorough in registering site users.



Now, most of us know that human nature warrants that if someone can get something free, s/he will act on that advantage. Anonymity of the user, and a waiver of responsibility of the host, exacerbates the vices of human nature, and software piracy.



As a result, there's a lot of money, especially in ad-sponsored sites, distributing pirated software, torrent-sites in particular. And folks like to make money. And I imagine many of us would be surprised to find out how much stock there may be in a software manufacturers holdings in companies who have subsidiaries running very profitable domains and sites that propagate pirated software, and waive all responsibility to its content.



The fact is, there is no such thing as anonymity, really, in the electronic age. Nearly every bit-processed activity is logged, or can be logged, on a server, and all this activity is backed up over and over these days in triplicate at least. I've observed this while interning in the IT industry. However, allowing anonymity is a very lucrative business. I believe this is why some software companies, companies that remain profitable, focus generating revenue in the gaming console market, as console games require far more effort to 'hack n' crack'. Pirates prefer much easier prey.


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