Report: Piracy Doesn’t Impact Legal Sales

Report: Piracy Doesn’t Impact Legal Sales

European Commission report states that illegal downloads actually benefit sales and not hurt them.

Gamesindustry.biz published a very interesting story, based on a new report from the European Commission. Basically, its authors state that there’s no statistical evidence that illegal downloads affect legal sales for video games or other forms of entertainment. Is piracy no longer a threat for the game development? [Art by Sergi Brosa. The report has very boring images, so here are some cool concepts].

“In general, the results do not show robust statistical evidence of displacement of sales by online copyright infringements. That does not necessarily mean that piracy has no effect but only that the statistical analysis does not prove with sufficient reliability that there is an effect.

For books, music, and games, the price setting alone cannot explain piracy levels because most pirates of those content are willing to pay more than extremely low prices.”

Here are some statistics, from Gamesindustry’s story.

The survey was carried out by research firm Ecorys and the results have been published in a lengthy 307-page report. It investigated the illicit consumption of games, films, TV, books and music across the UK, Germany, France, Spain, Poland and Sweden.

The report found that in 2014, an average of 51% of all EU adults and 72% of all EU minors illegally downloaded or streamed forms of creative content. Of the six countries studied, Poland and Spain were found to have the highest rates of piracy.

Looking specifically at games, there is a table further into the report that shows only 18% of respondents admitted to illegally downloading or streaming games, while only 16% admitted to playing on a chipped console.

The Positive Effect of Piracy

There is even a little section of the report, where the authors actually claim that piracy has a positive effect on legal sales. The displacement rate for video games is +24%, which implies that illegal consumption leads to increased legal consumption. This is not something we haven’t heard before. Sometimes developers said that illegal copies actually worked as demos, but we’re not sure everyone shares this opinion. 

“This positive effect of illegal downloads and streams on the sales of games may be explained by the industry being successful in converting illegal users to paying users. Tactics used by the industry include, for example, offering gameplay with extra bonuses or extra levels if consumers pay.”

What do you think? Does piracy hurt game sales? Or is its effect minimal?

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Comments 2

  • Kirill Tokarev

    Very good point. I do think that streams are much more powerful in terms of advertising value, than piracy. Don't believe that the effects of piracy are that bad, but I do agree that the right pricing and delivery can help eradicate the stealing altogether. Just look at Steam in Russia. They've managed to turn one of the most oppressive pirate regions in the world into a flourishing market. All thanks to the right pricing, billing, and delivery systems.

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    Kirill Tokarev

    ·2 years ago·
  • lysander@parnassianstudios.com

    My experience is that it varies. If your "brand" has less than saturated your potential market, I believe that it helps more than it hurts. People who download software are either those who want to test them out before a major purchase, which only affects sales if your game doesn't live up to your marketing (millenials are broke- this can be seen as prudent), or people who wouldn't have bought the games regardless. For the latter, you would never have made money off of that person, so the issue is moot, and for the former the advertising effect tends to counterbalance losses due to being exposed as making a sub-par game.

    This is different if you're someone like Nintendo, Rockstar Games, or EA. If there's literally nothing to be gained in advertising because everyone who might buy your game already knows about the game (marketing saturation), then piracy can't possibly help, which is why these companies tend to be the most motivated to put a dent in the pirating of their games.

    It's worth noting that I believe extensive game streaming has much the same potential impact, but with completely the opposite public perception. People who love streams/streamers will swear that lengthy streams of your game increases sales, but the reality is somewhat less certain. Twitch reports that streaming can increase sales at an average of about 20%, but this is based on the number of people who watch a stream and then go on within the next day to purchase the game- there's no data on the people who see enough of a game by streaming that they don't feel that they need to purchase it anymore.

    Invert expectations versus reality, and I think you'd have something resembling the piracy graph there. Extra interesting is that the massive developers/publishers who don't need advertising also run into the same issue here as with piracy- they don't need the streamers, so they tend to make things harder for them. Atlus outright banned streaming of Persona 5 beyond a certain point, and Nintendo's been taking issue with YouTube- the Japanese companies seem to know what the score is. This of course doesn't stop people from responding with "you're only hurting your own sales by making it harder to stream", which is completely false- if anything, the controversy likely pushes sales even more.

    *shrugs*

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    lysander@parnassianstudios.com

    ·2 years ago·

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