The Computer Entertainment Suppliers Association (CESA) has announced its belief that the video game industry lost $41 billion on pirated Nintendo DS & Sony PSP games between 2004, and June 2009 (Source 1).
To arrive at these figures, researchers checked download counts at the top 114 piracy sites for the Japanese versions of the top 20 software titles from 2004 to 2009. They calculated the total Japanese figure by factoring in the price of the games and the ratio of sales for the top 20 to the whole market. To get the worldwide figure, they multiplied by four under the presumption that Japan accounts for 25% of of the world’s software market (Source 2).
Bad Research Methods
To begin with, the CESA’s research methods are deeply flawed. Their sample isn’t even close to random; it’s a sample of convenience. For all we know it was chosen to make the numbers more dramatic; I don’t know.
Regardless, nothing in this research suggests good reason to apply the piracy behavior of individuals who download the Japanese versions of video games, to the remaining population of the world. It would be just as illogical to claim that Japanese television viewing behaviors were comparable to American television viewing behaviors.
I’ve made this point before, and I will make it again…
Just because one is willing to download a game for free, that does not mean that he/she would be willing to pay money to acquire the very same game.
Many pirates download content simply because it is there. They might download a game and never play it, or try it for a few minutes and decide that it isn’t worth playing.
Let’s change mediums for a second. Think about television.
You have access to tons of shows for free via basic cable, or for a flat rate. You can watch as many shows as you want, and it doesn’t cost a dime extra.
Now imagine that you had to pay for each show. Would you continue to view every show that you watched when it was free? Probably not.
I have no doubt that the video game industry loses sales to piracy, however claiming a one-to-one ratio between illegal downloads, and real sales is intellectually bankrupt at best, or a deliberate distortion of reality at worst.