Team Meat, creators of the wildly successful Super Meat Boy, have discussed on their blog how financial loss through piracy is impossible to accurately predict, making sums, at best, guesses.
“I think I can safely say that Super Meat Boy has been pirated at least 200,000 times. We are closing in on 2 million sales and assuming a 10% piracy to sales ratio does not seem unreasonable. As a forward thinking developer who exists in the present, I realize and accept that a pirated copy of a digital game does not equate to money being taken out of my pocket. Team Meat shows no loss in our year end totals due to piracy and neither should any other developer,” said Tommy Refenes, of Team Meat.
“For the sake of argument, some of those people that did pirate Super Meat Boy could have bought the game if piracy didn’t exist but there is no actual way to calculate that lost revenue. It is impossible to know with certainty the intentions of people. With the SimCity fiasco and several companies trying to find new ways to combat piracy and stating piracy has negatively affected their bottom line I wonder if they’ve taken the time to accurately try to determine what their losses are due to piracy.”
Refenes argues that, since there’s no way to assess the intentions of those who pirate (if they do so merely to demo, or as an academic curiosity, or if they outright want to play the game without paying, etc,) there’s no way to assess the loss. A pirate isn’t necessarily a potential customer, so there isn’t necessarily a potential loss. He claims, as others do, that the loss through piracy was never a potential sale in the first place.
The developer goes on to deliver his philosophy on digital worth: “In the digital world, you don’t have a set inventory. Your game is infinitely replicable at a negligible or zero cost (the cost bandwidth off your own site or nothing if you’re on a portal like Steam, eShop, etc). Digital inventory has no value. Your company isn’t worth an infinite amount because you have infinite copies of your game.”
“Loss due to piracy is an implied loss because it is not a calculable loss. You cannot, with any accuracy, state that because your game was pirated 300 times you lost 300 sales. You cannot prove even one lost sale because there is no evidence to state that any one person who pirated your game would have bought your game if piracy did not exist. From an accounting perspective it’s speculative and a company cannot accurately determine loss or gain based on speculative accounting. You can’t rely on revenue due to speculation, you can’t build a company off of what will “probably” happen. Watch “The Smartest Guys in the Room” and see how that worked out for Enron.
The clearly passionate and well grounded developer offers little in the way of a solution, but does state: “So what should developers do to make sure people don’t steal games? Unfortunately there is nothing anyone can do to actively stop their game from being pirated. I do believe people are less likely to pirate your software if the software is easy to buy, easy to run, and does what is advertised.”
He goes on to discuss how refunds and community apathy (ostensibly referring to EA), cost more than losses through piracy.
We recommend reading the full blog post, since it’s so titillatingly intelligible, and well argued.