I would be willing to wager that at some point in his/her life, everyone who reads this has pirated digital media of one form or another. Piracy is a big deal. It has a big conflict surrounding it. Some say it’s fine, others say it’s theft, and still others say at times it is theft and at other times it isn’t. So what is it? I’m ignoring that question
This post is about the Profit and Loss of Profit related to piracy.
In Utopia, Piracy would drive profit through the roof. In reality, however, it causes a decline in profit. That is the cold hard truth. However, not 100% of piracy causes profit loss. The amount of money lost through piracy is probably closer to 56%. Yes, I pulled that number out of rand()%100. Why is it closer to one-half than one whole? Simply put, only about half of the things that most people pirate they would have even been interested in buying in the first place.
To draw from personal experience: When Fallout 3 came out, I was pumped. But instead of going and buying it, I pirated it to ‘test it out’. I have since purchased it, for the record. But other games, Icewind Dale, for instance, I would never purchase. I obtained Icewind Dale from a .torrent approx. 3 months ago. I’ve played through it once since then. Even if I had bought it, I would have gotten it used, so for the developers it was still not a profit loss.
Warhammer 40k: Dawn of War is another example. Great, fun RTS, that one. But I wouldn’t have walked into GameStop and picked it up and bought it. It probably wouldn’t have even occured to me. In this case, it is a profit gain for THQ and Relic, since I bought it when I otherwise wouldn’t have. However, the number of games like this (for me, at least) is nowhere near enough to make up for the profit lost. To say otherwise is to delude yourself.
The whole reason for this post is really that I’m tired of people on both sides of the fence ranting, and needed to vent. Not all piracy is profit loss, but by the same token not all piracy is not profit loss. There is a middle ground somewhere around 50-60% profit loss where the real value lies. In my case, I have one pirated, then bought, that I would’ve bought anyway. One pirated, that there is no way I would have bought, and still haven’t. One pirated, that I never would have bought, but have since done so because I enjoyed it. That is just from my example. Total profit loss for me overall is approx. 50% lost profit (aka 2:1 ratio of pirated to pirated-then-bought games and media).