Piracy, Copy Protection, and the Evolution of PC Gaming

By Loyd Case of notes from the lab at ExtremeTech

I'm a PC gamer.

There, I've said it. These days, saying that seems to have an nostalgic, almost anachronistic sound. I predict that calling myself a PC gamer will be like someone today bragging about their 8-track collection.

That's not to say that PC gaming is doomed. But the days of PC gaming as I knew it is probably coming to an end, and something very different will be replacing it. One reason is the ongoing battle between game publishers and pirates.

Piracy is rampant in PC games. Piracy also exists in console gaming, but it's far more risky. Console game pirates have to burn physical media or even mod the consoles, which can result in legal games being unplayable and the modder being booted from online services, like Microsoft's Xbox Live.

PC gaming piracy, on the other hand, is easier. Crack the game, feed it to the world using Bittorent or other file sharing schemes, and the game is available to the world. In the past, the game publishers and developers have used a myriad of schemes to combat piracy. In the old days, you had games that literally booted from the floppy disk. Other games forced you to enter text directly from the manual to continue playing. Then there were the infamous code wheels, such as those shipped with some LucasArts flight sims.

Once optical drives became prevalent, various schemes were created to check for the presence of the CD. In addition, CD keys—essentially password checks to legally install a game—have become common. As pirates became smarter and more aggressive, copy protection became more elaborate. Schemes such as Starforce and the more recent versions of SecuROM created headaches for legitimate users, introducing compatibility and performance problems. Sometimes it's just too much of a headache to get a game running.

How rampant is copy protection? It's certainly very common in AAA games. Take this tidbid, snatched from Robert Bowling's blog. Robert is the community manager for Infinity Ward, creator's of the highly popular Call of Duty 4. In his post, "They Wonder Why People Don't Make PC Games Any More", Robert notes:

On another PC related note, we pulled some disturbing numbers this past week about the amount of PC players currently playing Multiplayer (which was fantastic). What wasn't fantastic was the percentage of those numbers who were playing on stolen copies of the game on stolen / cracked CD keys of pirated copies (and that was only people playing online).

Not sure if I can share the exact numbers or percentage of PC players with you, but I'll check and see; if I can I'll update with them. As the amount of people who pirate PC games is astounding. It blows me away at the amount of people willing to steal games (or anything) simply because it's not physical or it's on the safety of the internet to do.

On a related note, Iron Lore Entertainment shut down. The reasons are complex, but part of the problem may be lost sales of Titan Quest due to piracy. Michael Fitch, who worked closely with Iron Lore, offered up his thoughts:

So, ILE (shut down. This is tangentially related to that, not why they shut down, but part of why it was such a difficult freaking slog trying not to. It's a rough, rough world out there for independent studios who want to make big games, even worse if you're single-team and don't have a successful franchise to ride or a wealthy benefactor. Trying to make it on PC product is even tougher, and here's why.

Piracy. Yeah, that's right, I said it. No, I don't want to re-hash the endless "piracy spreads awareness", "I only pirate because there's no demo", "people who pirate wouldn't buy the game anyway" round-robin. Been there, done that. I do want to point to a couple of things, though.

One, there are other costs to piracy than just lost sales. For example, with TQ, the game was pirated and released on the nets before it hit stores. It was a fairly quick-and-dirty crack job, and in fact, it missed a lot of the copy-protection that was in the game. One of the copy-protection routines was keyed off the quest system, for example. You could start the game just fine, but when the quest triggered, it would do a security check, and dump you out if you had a pirated copy. There was another one in the streaming routine. So, it's a couple of days before release, and I start seeing people on the forums complaining about how buggy the game is, how it crashes all the time. A lot of people are talking about how it crashes right when you come out of the first cave. Yeah, that's right. There was a security check there.

…

Two, the numbers on piracy are really astonishing. The research I've seen pegs the piracy rate at between 70-85% on PC in the US, 90%+ in Europe, off the charts in Asia. I didn't believe it at first. It seemed way too high. Then I saw that Bioshock was selling 5 to 1 on console vs. PC. And Call of Duty 4 was selling 10 to 1. These are hardcore games, shooters, classic PC audience stuff. Given the difference in install base, I can't believe that there's that big of a difference in who played these games, but I guess there can be in who actually paid for them.

Let's dig a little deeper there. So, if 90% of your audience is stealing your game, even if you got a little bit more, say 10% of that audience to change their ways and pony up, what's the difference in income? Just about double. That's right, double. That's easily the difference between commercial failure and success. That's definitely the difference between doing okay and founding a lasting franchise. Even if you cut that down to 1% - 1 out of every hundred people who are pirating the game - who would actually buy the game, that's still a 10% increase in revenue. Again, that's big enough to make the difference between breaking even and making a profit.

Casual Games Suffer

It's not just a problem with standard PC games shipping on CD media. Even casual games suffer, as Russell Carroll of Reflexive noted in his Gamasutra column:

"It looks like around 92% of the people playing the full version of Ricochet Infinity pirated it." It's moments like those that make people in the industry stop dead in their tracks. 92% is a huge number and though we were only measuring people who had gotten the game from Reflexive and gone online with it, it seemed improbable that those who acquired the game elsewhere or didn't go online were any more likely to have purchased it. As we sat and pondered the financial implications of such piracy, it was hard to get past the magnitude of the number itself: 92%.

Not all publishers are suffering to this extent. Stardock, the developer of the Galactic Civilizations series and publisher of the well-received Sins of a Solar Empire have achieved success without using any form of physical copy protection. You do need a legitimate CD key to play online, but you don't need the physical disc in the drive. Sins of a Solar Empire sold 100,000 copies in its first three weeks—very good for an indie title with a small marketing budget.

You can argue that Stardock's games are something of a niche play, but one reason for Stardock's success is the constant pushing of fresh content for free to its legitimate users. On top of that, a substantial portion of Stardock's game profit came from direct sales through its online service, Totalgaming.net. Finally, Stardock doesn't make most of its revenue from games; its main focus and primary income are Windows utilities, such as TweakVista and WindowBlinds.

Still, this is one example of how piracy forcing PC gaming to evolve in different directions. Another direction is the increasing use of online services to manage legal content. An example of this is Valve Software's Steam. Steam helps users manage their game installations, acts as a game purchase tool for downloaded content, and provides content protection. It's not perfect, though. For Valve's own games, Steam works fine, but sometimes the content protection required by the original publisher of non-Valve games causes headaches, as occurred at the release of BioShock.

Microsoft is trying something similar with its Windows Live for Gaming, including trying to help develop standards for content protection. Valve is also moving into the arena of supplying their tools to third parties, without requiring distribution on Steam, by offering Steamworks. So it may be that online distribution and content protection through online authorization will be one way PC games evolve.

Other services, such as Wild Tangent, began as causal game services, and is now looking to move into the realm of higher budget, more traditional titles.

Of course, massively multiplayer online games essentially do this already. That idea is somewhat obscured by the monthly fees most MMOs charge, but the success of Guild Wars, which is an MMO-lite that gets its revenues from boxed product sales rather than regular fees, is another example of this approach.

Another model that some companies are considering is free. That is, the base game is free, but new content, or enhanced game play, may cost users additional money. Alternatively, advertising may play a role. EA plans on using a bit of both models with its upcoming Battlefield Heroes.

What's worrisome, though, is that even indie developers are thinking about abandoning the PC, which has long been the haven for small independent shops. Initiatives like Microsoft's XNA, as well as Xbox Live Arcade, enables small developers to participate in the console environment, ensuring greater protection and wider exposure.

This is one of the key issues that was behind the formation of the PC Gaming Alliance, but I have my doubts. But if the PCGA can force some kind of standardization for copy protection, that may be a good thing.

So the future of PC gaming is somewhat hazy. PCs will certainly remain a viable, vital part of the electronic gaming medium, but it's going to evolve into something quite different from the old boxed goods model. In fact, multiple models, such as free (with micropayments or ad-supported), online distribution and MMO-lite, may all coexist.

The monolithic world of PC gaming, then, will be dead. But instead of a single bird rising up from the ashes, we'll see multiple phoenixes, all viable, and all interesting.

Now, if I can just make my game work without having to install a new graphics driver for every hot game that comes out, I'll be happy. But that's a topic for a different column.