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Archive for Thursday, September 28, 2000

Pirates chip away at game sales

September 28, 2000

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I recently asked a few people I know in the video-game playing community if they could set up an interview with somebody who's engaged in a very special business.

To my surprise, I was granted an interview by a child whose activities center on his junior high school. He copies Sony PlayStation games using a recordable CD drive on his family's computer and sells the copies to his friends.

The blank CDs he uses to burn the copies cost him less than a dollar. He sells the product for $5, and uses the profits to buy new blank CDs, along with new games, which he then duplicates and resells to his friends.

"This is the only way I can get the money I need to buy new games without stealing them," the boy told me.

This kid is, quite simply, a pirate. His scheme is so low-level that it's likely he'll never come to the attention of the constabulary. And really, how much financial harm can this kind of thing do?

I've finally got some hard numbers on that, and they're pretty scary.

An ironic situation

I visited downtown Burlingame, Calif., on a Sunday afternoon where the faithful gather to worship at Network Video Inc., a video-game importer. Owner Nattie Saggi sells video games that aren't meant for distribution in this country; they can only be played on a console designed to be sold overseas. For instance, Dance Dance Revolution, a smash hit playable on the Japanese version of the PlayStation, has only been available as an import game.

You can play DDR through the standard controller, but the cool way to play is with a little plastic mat that you dance on. The mat has sensors; if you dance the right moves on the right beat, you'll advance.

The game, from Konami, will cost you about $60. The mat Saggi sells in her store will cost you about $30.

Saggi estimates that over the past year, she's sold about 10,000 mats. During the same period, however, she's only sold about 900 copies of the game. That strongly suggests that there are about 10 pirated copies of this game floating around the Bay Area for every legitimate copy.

"It is affecting the bottom line very badly." Saggi says. "I don't want to be selling cigarettes. But if I only did video games, I'd be out of business."

Playing pirated video games on a console like the PlayStation normally requires installation of a special computer chip. Saggi will chip your PlayStation for $50. Isn't this part of what's hurting her business?

Well, not exactly. A U.S. PlayStation can only play U.S. games. A Japanese PlayStation can only play Japanese games. "We offer to chip people's machines because that's how you play Japanese games," said Saggi. "Selling import games is our business, so we have to sell the chips."

'I'm stealing back'

How bad has software piracy gotten? The Software and Information Industry Assn. claims $12 billion in business application software was lost to pirates last year.

The fact that people are willing to spend $30 for a mat to play a game but balk at spending $60 for the game itself suggests that this isn't so much a case of "My need gives me the right to steal," as, "I'd be stupid to pay full price for this game if I don't have to." And indeed that's the rationale I've gotten from a number of people who've told me they make or own pirated video games.

"For years I spent tons of money buying games that were crap. Then I just started borrowing or renting games, making a copy, and returning the original. I don't feel bad about it because the developers stole from me for years. Now I can make my own CDs, and I'm stealing back."

I can't say I'm not immune to that fellow's argument. There's a part of me that wants to climb the ramparts with him. But I'm quite aware that piracy leads to higher prices for the rest of us, and, in the worst case, puts good game developers out of business.

It's clear that a lot of people don't see the harm in piracy. They should talk to Nattie Saggi.

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