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Thursday, September 21, 2006
 
A Pirate Story
So here's a pirate story. Unfortunately, it's not the kind with swashbuckling and buried treasure and men yelling "Arr, Matey!" It's the much more boring kind about digital media. But it's a personal story from my own life, and my career as a videogame developer.

In was October, 1996. We were just entering the 72-hour "burn-in" testing for our two new games, "Twisted Metal 2" and "Jet Moto." We were exhausted, as the last several weeks involved mainly 70+ hours of round-the-clock work finishing the games and fixing the bugs. The office was regularly at nearly full-staff at midnight most evenings, and weekends were things we fondly but vaguely recalled from earlier days.

I had a baby girl who I hadn't seen much of lately, and I was feeling guilty about it. Travis Hilton, who did the physics engine for Jet Moto, was in worse shape. He'd heard that his young sold (I think he was around 4) had started pretending that daddy was home. Daddy had become an imaginary playmate. He was freaked out, but the light was finally at the end of the tunnel. The games were about to go to gold master, and we'd be done. Back to 40-hour work-weeks (or possibly even less) for a little while, plus maybe some well-deserved comp time. Oh, there was still a lot of work to do - we had the PC versions of both games to finish up, and new games ready to go into full development.

But at least for a couple of months, we could get our lives back in order, and try to make up for the sacrifices we'd made for these two games.

I got home early one night during the final testing stages. Early meaning before midnight - it was about 10:30 when I came in through the door. I felt like a slacker. I loved it. But I got to actually talk to my wife before she went to bed. Then I decided to hit the Internet and see what the buzz was about our two upcoming games. We had been an unknown developer when our first two games, "Warhawk" and "Twisted Metal," had been released as near-launch titles for the brand-new Sony Playstation. But those games had become hits, and for our new games (especially Twisted Metal 2) we were actually getting some hype and media coverage.

I expected TM2 would be getting a lot more interest on the USENET forums than JM (yes, back in 1996, the World-Wide-Web was still in early childhood stages, and UseNet was where the action was). But I decided to check them out searching for posts about our games and see what people were saying.

About every third message was an offer to sell a pirated copy of Twisted Metal 2. They were being offered for about $15, on "HK" (Hong Kong) Discs - so named after the source of a lot of pirated games. The discs needed to be played on a modified console, or using a trick with early Playstation models to fool them into playing a game from a different region or without copy protection.

The messages advertised how you could get the game NOW before it was in the stores, and at a huge discount. The "HK Disc" warning, if it existed at all, was the only clue in most messages that you'd be buying a pirated version of the game. And not just a pirated version, but a pirated BETA, complete with nasty bugs and possibly even incomplete content. After all, even *I* hadn't played a "final" version yet (unless our candidate version actually passed). So quite possibly the person buying the pirated version might justify themselves by saying, "Well, this game sucks, good thing I didn't buy the real version." Of course it sucked, you bought a broken beta that we had distributed to our testing teams to help us fix it!

I was depressed. Yeah, I was excited to hear the good buzz the remaining messages were revealing about our impending releases, but I was infuriated by these jerks on the internet making $15 a copy off of OUR sacrifices. I wasn't missing part of my baby daughters life so some jackass in California could make thousands of dollars for doing nothing more than running a CD-burner, all the time joking with his clients how they were "sticking it to the man." *I* sure wouldn't mind seeing a bonus of a few thousand dollars!

As it stood, I did see a bonus that year - a total of a few hundred dollars. I did a calculation of my total time (including all the overtime I worked) that year, and realized that I was making a per-hour wage of something just barely north of minimum wage, if you assumed Mr. Minimum Wage got paid time-and-a-half for overtime. The pirates selling my game were undoubtably making much more money than I was for their time.

But what could you do about it? Not much. Sure, we informed Sony. I'm sure they got their legal departments in on it to do what they could. Who knows how much they accomplished? In an unrelated event, we found out after-the-fact about a sting operation done internally as part of GT Interactive to catch a QA person who was secretly pirating discs that were in late-beta stages, and selling them to a "ring-leader." They got the guy to rat out who he sold the games to. I expect that happens frequently, but it's kept quiet. A publisher doesn't want that information to destroy their reputation. (I feel safe mentioning GT Interactive, as they no longer exist). But that's a whole 'nother story. We didn't hear back from Sony one way or another.

Anyway, that experience left a scar. I'm a lot more hardcore about piracy than most of my peers, and I let them know I disapprove. If they don't understand, I share this story. Now I'm not a saint - when it comes to abandonware or other media where there's no longer a reasonable legitimate way to recompense the original authors (or even the publisher), I tend to treat it as a gray area.

To further prevent this article from becoming some kind of poster-child for some publishers (yeah, like THAT would happen), I'm going to say that I also disapprove of the draconian measures publishers are taking. The harsh DRM measures that effectively cripple a customer's machine or their ability to enjoy the media on other devices that THEY OWN or control is a horrible, horrible thing. The rights of the creator / publisher should end when there the rights of the consumer begin, and they've been taking it too far (and pushing for bills to get passed that take it further still). I think this is wrong. They are just as bad as the pirates.

I applaud the decision of Stardock to go away from the hardcore DRM that seems to be part of an ever-increasing arms race with the pirates over protection of the creator's rights. I think the people who claim that this is somehow an invitation to piracy are revealing an extreme level of dishonesty and immorality in their own psychology. Is it okay to rob someone's house just because they didn't lock the door on their way out this morning, too? Get real!

How did it effect me, personally? I don't know for sure - I was never privy to the full details of our deal with Sony. The way publishing deals are usually structured, the publisher gets pretty much all the front-end money, using it to pay off the "loan" they give a developer (called the advance) and many of their other costs before the back-end royalties kick in. The royalties are where the REAL money is --- the advance really only pays base salaries and keeps the lights turned on while you are in development. Both games went on to exceed that royalty threshold, by my understanding. So any extra sales that DIDN'T happen on account of piracy (and that's notoriously hard to measure - contrary to industry-touted stats, not every pirated game is a lost sale).

So if I assume that my studio, SingleTrac, made 20% of the wholesale cost (guessed to be about half of retail), That's about $5 per game. I *think* that's a conservative estimate - it might have been closer to $6 or $7. I don't know - again, I wasn't privy to the details of our deal. But let's say $5 per game. The pirate selling the HK-discs probably made a profit of $10 per game, so he was doing much better than we were per sale.

Now, both Jet Moto and Twisted Metal 2 went on to sell over a million copies (though many of these were at a reduced price as a "Greatest Hits" package, so our royalty rate was further reduced). I can only guess as to the number of pirated discs out there. But if I estimate that there were 100,000 sales that were not made for each game because of piracy... well, 200,000 times $5 is a million dollars. That can go a long way with a small studio of only about 30 employees (that's what we were at the time).

Considering the fact that SingleTrac had to accept a less-than-steller buyout deal in order to stay in business, which had further repercussions and arguably contributed to our going OUT of business about three years later, I'd say it had an effect. Maybe. At the very least, a significantly better bonus would have been nice. Especially when it came time for us to try and leave the apartment life behind and get into a "starter" home because the apartments across the street became the scene of a real-life shootout between a SWAT team and some crazy guy with a shotgun who was probably protecting his meth lab. It was a wonderful little neighborhood. But I digress...

It's even worse for indies. Most indies make somewhere between diddley and squat for their games. It is not a highly-profitable business for most of us. Even for the moderately successful indie games. Click those links to see what I'm talking about. And these guys are already bypassing the middlemen to some degree (publishers). They are serving a smaller, niche audience as it is, and usually offering a free demo (or even a free, if more limited, ad-supported web version) for play to anyone wanting to just check it out. And they get hit VERY hard by piracy. They feel every lost sale very directly, especially if it's a one-man (or woman) shop.

Even if you don't want to buy the game (a perfectly reasonable decision - I know as well as anyone how most indie games suck), please do not support piracy of the game. And if you feel so inclined, visit their sponsors or whatever they do to help support their tiny operation. Every little bit helps.

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Comments:
Well, if it's any consolation, I think Jet Moto was the best racing game I've ever played, hands down, bar none (I also loved II :) ). I realize that financial rewards would make it much sweeter, but knowing that you helped make such an incredibly entertaining product has got to be a pretty good feeling all by itself.
-Andrew
 
Oh, we were definitely proud of our games, no doubt about that. :) We loved what we were doing, and we were excited to hear about how popular and well-loved they were. That's definitely a big part of being a game developer - if it was only about the money, nobody would do it :)

It would have been nice to have had our studio succeed for the long-term though. But there was much more to that story than just game sales.
 
The trick seems to be not to follow a sales model. There's a huge advantage in Usenet etc to essentially distribute for free, so the way to go in that scheme is pay-to-play, subscribe-to-play and other similar measures. Let the pirates pass the client around and become your advertisers.
 
That seems to be keeping the major MMO companies in business :) But there are still dodges available with that model.

And I'm not too keen on requiring a user to "phone home" when they play my single-player game. I don't want them to be denied the chance to play my game if their Internet connection is down. That's hurting your REAL customers for the sake of protecting yourself from pirates, and I don't want to go down that road.
 
I recommend taking a look at Naked War.
 
I saw a video preview of it - that game looks like a blast!
 
just supoorting any other develoeprs who have the guts to speak out against piracy. I feel the same way you do, and go to great lengths to track down scumbags I see pirating other peoples hard work.
 
Thanks for the support, Cliff!

I know that hardcore pirates aren't going to be dissuaded. For them, getting busted is about all that's going to work. But I wish "casual pirates" would understand a bit more clearly how it really does hurt artists / authors / developers. It's not JUST big businesses with deep pockets who won't miss the money.
 
I must concur, the original Jet Moto was fabulous.

When I was younger, I didn't think twice about taking software I didn't pay for...it was incredibly easily accessible, even for a young lad with little patience. However, as I've grown older, I've become much more inclined to pay for it - not because I fear the law, or because I have more money (I realy don't), but because I want to give the developer incentive to continue their work. I'm especially keen to pay for shareware programs, developed by smaller houses or individuals, because I feel like my contribution goes further.
 
Shucks, you just made my day. Not just about the supporting shareware thing... Though that's awesome!

I loved Jet Moto, but it was always very hard not to see it's faults - especially the parts I worked on. I always kinda shrug and start making excuses like, "Well, I had to work within these really tight restraints, see..."

It ALWAYS makes my day to hear how someone really enjoyed what I made. That's the BEST PART about making games.
 
Just to let you know, the only console game my wife has ever played was Jet Moto, she loved it.
 
I suspect your numbers are a bit off. You sold over a million copies of the game, with many of them sold as greatest hits.

From that, you guess you lost 100,000 sales due to piracy. You don't even know how many the HK group sold or made.

Sorry, but you basically pulled that number out of the air. Most people who pirate games wouldn't have actually bought your game if the beta version hadn't been available to steal.

Chances are that people that have the chip to play backup copies wouldn't have bought it anyway, even if the beta wasn't available.

Some perhaps did, in which case you actually made sales you wouldn't have made.

I expect it was closer to a wash. Yes, some slime in hong kong made a lot of money off of your work. However, only a fool would spend $15 on a beta of a stolen game.
 
Well, you are right - I did pull the numbers out of a hat, because nobody can really know the number of sales that WOULD have occured if there was zero piracy.

I deliberately did NOT equate every pirated game to a lost sale. If that was the case, with the estimation of 30%-40% piracy rate in the U.S. and Europe, then we'd have been talking somewhere around 800,000 to 1,200,000 lost sales in those markets. Now, the publishers and ESA and so forth like to bandy THOSE numbers around as the amount of lost revenue. I instead assume that maybe 1 in 4 would have bought the game if there'd been the theoretical 0% piracy.

So that's where the numbers came from, and I don't think I was guessing too high.

How many of those were purchased as pirated HK discs (as opposed to just freely copied between friends)? I don't know. No clue whatsoever.

es, some slime in hong kong made a lot of money off of your work. However, only a fool would spend $15 on a beta of a stolen game.

There are a lot of fools out there. In the aforementioned pirate ring that was exposed a couple of years later, the tester was selling "release candidate" versions of discs to a pirate for something on the order of $1000 per disc. I have no idea what the "ringleader's" profit margin was (or how much of a ring it really was - it could have been just two guys, or several), but he was selling at least a couple hundred of each title.

So there's what numbers I DO have. How much of that turned into real losses on the part of the developers and publishers is anyone's guess. That would require a pretty significant test to estimate, and it would be hard to keep the results unbiased (particularly when people know they are being watched). But I suspect it's a lot worse than "a wash." I think that's mainly a justification.

Again, I don't agree with the industry's numbers, either. Nor how they use it as justification for some pretty draconian DRM practices, stomping over consumer rights to protect their own. Mainly I just wanted to point out that piracy isn't victimless, and if nothing else just kinda share the perspective from my point of view. Take it as you will.

As always, have fun!
 
@hansamurai -

Your wife dug it, huh? That's awesome! Jet Moto had a (I think, probably well-deserved) reputation for being PAINFULLY hard. As in reduce-a-hardcore-gamer-to-tears hard. That might have been the only console game she played, but I think that proves that she has a vicious strong gamer streak in her :) You should both be proud.
 
I think there's 2 (possibly a few) types of piracy.
There's the people who pirate a game simply because they don't want to buy it, or they want to try it before they buy it (as I've done with many games after being disappointed with a sequel I was eagerly awaiting, I've bought all of the games that I thoroughly enjoyed). Back in the day of Twisted Metal 2, I'd hire the games out from a video shop before buying them. I don't play many console games anymore though.

Then there's the complete assholes who try to make money by selling bootleg versions, which are nothing but scumbags. I'll admit that I've rarely run into them, but when I have, I've portrayed my disgust with what they're doing.

As you're one of the people potentially being stolen from, it's good to make the distinction between the two.
In most cases, if someone who's pirated/hired your game doesn't like it, there's little chance they'll buy it anyway.
However some naive people still buy games before trying them, and are left with disappointment when the store doesn't allow them to return it.

Making the assumption that all people who pirate your game would've potentially bought it is dangerous. As is making the assumption that anyone who bought a bootleg version would've happily paid full price had they not had the piracy option.

People who went to the trouble and expense of installing a modchip simply for cheaper/free games are unlikely to have bought your game in the first place. People who've hired/borrowed/pirated it so they can try it -- and loved it, are often the best kind of marketing you can receive. As they're the "hardcore gamers" who try everything, and tell everyone they know to try/buy the game, after buying it themselves.
I have to admit, I've gotten many friends hooked on games I initially pirated but ended up buying (sometimes multiple copies if I lost the game).

If you put yourself in the eyes of the user, it'll allow you to better understand how they think when buying games.

Some users buy any game they like the look of. (some developers assume all users think like this)
Some users buy games their friends have told them about.
Some users buy games they've hired/pirated/borrowed off their friends.
Some users don't buy the games they've pirated, as they don't think it's worth the money.
Some users happily buy the cheapest copy of a game they find, and don't care about packaging/instruction manuals/etc. (some developers assume all pirates think like this)

One of the biggest mistakes made by Publishers, and the RIAA/MPAA alike. Is thinking in binary, and that you're either a customer or a pirate. But there's much more grey around piracy.

One thing I'm certain of, is that the Shareware sales model worked better than the models many developers currently use. Another thing I've found, is that Demo versions of a game very rarely end up being like the finished product.

I hope this long post helps you understand how a pirate with morals thinks.


On another note, I loved Twisted Metal. However I remember (myself and my high school clique at the time) being disappointed with either Twisted Metal 2 or 3, and deciding it wasn't worth buying it.
TM (possibly TM2 too) was a incredibly fun game though -- like Mario Kart with real cars, and I'll remember it for the rest of my life.
 
I pirate games, less and less as time goes by but I still do let me tell you why. I live in a Third World country that's last on the list of countries to get games released. Obviously I get excited when a new game comes out so I try and get an illegal copy, if the game held my interest for more than an hour when it finally comes out I buy a legal version, this can however take some time. For example I had to wait two and a half years before I finally made my copy of Neverwinter Nights legit.

This is slowly changing as some game manufacturers have moved to simultaneous or near simultaneous world-wide release but its still frustrating, particularly since when the games are finally released here they normally have an exorbitant cost attached, around double the US price.
 
Well, I'm glad to see people "going legit" as it becomes reasonable.

I'm not going to condone casual piracy or accept the theory that it's actually healthy for the industry. If you take that particular train of thought to its inevitable conclusion, you end up with "The Tragedy of the Commons." If everyone took the same attitude, then nobody pays for the development, which means the development doesn't happen. That's bad for gamers, bad for the economy, bad even the pirates.

But I'm in absolute agreement about the RIAA thing. The "black and white" distinction is futile, and shows a complete disrespect for consumer rights.

One favorite story of mine is about a local company here that sold non-game software. They got pirated a lot - and oftentimes those that pirated their software would call up customer support. What this particular software company would do was get the name and contact information for everyone who called up, and would include this "casual pirate" on mailings for new software and upgrades.

What they discovered is that there was a rather large percentage of these suspected pirates (something like 80%) who took the opportunity to "go legit" and pay the existing-customer price for the upgrade to the next version.

The end result? Pirates turned into paying customers. Absolutely brilliant.

Compare that to the tactics of the RIAA.

What we need to do is come to a better understanding in all countries of both the rights of the media creators AND the rights of the consumer. There seems to be too much disrespect and disregard on both sides of the fence. And I guess that was the point of this post - to share a vantage point from the perspective of a game developer.

But I've been a game player / consumer for a lot longer than I've been a developer.
 
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