A good recent example-- Pandemic.

Yes, they've made some bad games, some really bad games, but they've also made some good games like The Saboteur and they just went under.  Now I doubt that's due to piracy, but I'm sure if people hadn't pirated their previous, who knows, they could have stayed open long enough to pull themselves out of their slump.

Anyways, so how do you judge before a game is even made how much it should be?  Do you think a publisher says hmm, I want to make a semi-shitty game so lets make a $30 game.  No, that's retarded.

Games are about making money and nothing else.  Games are sold for $50-60 because they cost a shit load of money to make and that $50-60 goes A LOT of different places.  The developer actually only sees a *very* small fraction of that money if any.

You can quote games that got their price cut by so much, but those sold so much because they were *really* good games for *really* cheap.  Of course people are going to take advantage of that.  Do you think that if Mirror's Edge, a middle of the road game, released for $30 it would fly off the shelves?

No.

It would sell more yes, but it wouldn't sell enough to cover that kind of price cut right off the bat and they would lose even more money because they would have to sell even more copies to just break even.

Your average game last gen needs to sell about 700-750k to just break even.  Budgets for this gen have nearly doubled so that means a normal game needs to sell well over 1 million copies to break even. 

If a publisher releases an average game, something in the 70-80 range, and decides to release it for $30, do you think it would sell more than 2 million copies?

What games in the last 10 years have sold 2 million+ copies within the first year of release?

Not many in the 70-80 range.

In a perfect world what you say about the price makes sense, but in the real world, it's just flat out stupid and doesn't work.

-edit-

And it's funny how you keep saying you wouldn't care if you made a bad game that didn't make money and your indie studio got shut down because of it.

I assume you like to eat and since it's a wee bit harder to buy food you want some sort of pay check.  When your indie groups go under I'm sure you'll be eating those words.

I'd think a record group as big as Virign would dedicate enough resources and would be able to provide enough data to help them make a somewhat conclusive study, especially cncerning piracy. If they were just gonna half-ass or make up bullshit, they would have benefitted much much more if they just said piracy cost them 200 million, not made them 200 million.

As for indie games, maybe they went under because I haven't even heard of them. Part of selling games is making sure people know he game exists in some way shape or form. With indie games it's the indie festival and viral marketing as well as word of mouth.

At your edit point:

"Three quarters of all adults bought some kind of music in the last year (65 percent paid for a physical CD or LP, 30 percent paid to download individual tracks and 16 percent bought an album via download)."

Towads the end of the first article, so I'm guessing that they did count physical CDs. Also I'd imagine music and video games to be more or less equivalent in terms of piracy. I'd guess music is even in a worse bind than video games, but I have nothing to support said guess.

I actually hear The Saboteur is pretty tame. Haven't played it so its all word of mouth, but I haven't heard anything great of it. I would also not put any of their games above tame as well. Their best ones were the Battlefront ones nd they were just Battlefield clones, literally. Furthermore, they got shut down by EA, they didn't just close down. As you remember Microsoft shut down Ensemble and I'm fairly sure they were making enough money.

The grading thing is not for the consumers to figure out, it's for the developers to figure out. It's not our burden to solve a producer's problem, it's for the producers to figure out how to sell their iems effectively. As such, many developers/publishers have failed miserably at that task and are now blaming piracy (which may even actually help them, going by the music studies). It's also heir own fault they spend so much money on games, also maybe if they spend more money on making the game and less on advertising (didn't MW2 have only 1/4 of its budget dedicated to development and 3/4 to marketing?) then they would make a game that's actually worth the money.

I can't speak for Mirror's Edge, but if it had gone up for $30 I would have been a hell of a lot more willing to buy it than its original $60. I recently just got it for like 5 bucks off a deal on Steam. I'm fairly sure there would also have been a lot more people willing to buy the game for $30 than they did knowing it was a medium-grade game at $60. I guess we will never know though. I can't say it would have made hem enough money, but neither can you say that it wouldn't have.

Again, it's not the consumer's fault budgets have gone up, so why should we be paying for that? As Blizzard has consistently shown, making games not graphically impressive actually makes you more money (at least on the PC). I swear I can probably run WoW on my toaster.

As for those 70-80 range games, then maybe it would be a better idea for developers to figure out how to bring development costs down and offer the best experience the medium can provide (for games it's gameplay) rather than inflating budgets needlessly on superficial elements. I'm not entirely sure how a developer feels, but I would venture to guess that sometimes they realize that they just don't have a 90+ experience (and I mean an actual 90+, not the recent bullshit 90s) and then maybe figure out how to make money off of that.

I realize it's not a perfect world, but if anything the huge amount of piracy shows there is a problem on both sides, not just the pirates side. The 2 sides should meet in the middle, asking consumers to conform to business models and products is the exact opposite of what should be happening. Businesses should be conforming to consumers.

What about the people who reseached and developed the formula for the medicine.  Shouldn't they be compensated?

The perfect would you describe has a name.  Communism.  Unfortunately, since this is not a perfect world, Communism doesn't work on a large scale.

Once again, someone is justifying their actions by the wrongs other people do (which I won't admit used game sales are wrong, but that is besides the point).

Oh!  Also, music online is $1 a song.  Yeah, I can pirate 100 songs and still spend a $1 and be counted in the positive section of your survey.  Hell, even an album on iTunes is $10 and a CD is $15.  It's much easier for someone to spend that kind of money rather than $60.  And I know you'll want to come back with saying games should cost less, but games just cost too much money to make to justify a $15 or even a $30 price tag.

There's just no other way around that.  AAA games cost a lot of money to make and they have to make the money back.

But anyways, here are some links for you from a quick Google search:

• The Cost of Movie Piracy in the US
• Software Piracy costs $34 billion dollars
• Music Piracy Costs Money, does fighting it cost more?
• How much did piracy hurt the Wolverine movie?
• Sims 3 downloaded nearly 200,000 times days before launch so we can assume that's about 125k copies not bought from one of your above links

As for the Sabateur, pretty tame is a long shot from a bad game.  Sabateur may not be a game of the year contender, but that doesn't mean it's a bad game (getting a 73-75 at the moment so still a good game).

And Ensemble burned through A LOT of money.  They made good games, but they also cost a SHITLOAD of money to make those good games.

And I'm not sure if these two points didn't sink in but I'll say them again:

1. You cannot predict if a game will be good before it's made.  At the very beginning of the project you have to set a budget and that budget isn't for a $15-30 game.
2. Mirror's Edge would have sold more, but not nearly enough to make money at $30 new.

And do you think Blizzard spent less money with a small team for WoW?

El. Oh. El.

Blizzard spent a crap load of money with a huge team developing that art style.  They were smart because they made something pleasing to look at that could run on most any somewhat modern computer.  Blizzard cost more than most games cost to make and not just because it was an MMO.

As for making games bigger and badder (as in more bad ass), I've talked about this problem a lot mainly regarding Final Fantasy.  Games set bars really high and if you don't hit that bar, you're going to be automatically seen as inferior unless you do something *really really* special.  If a developer makes a game that isn't on par with whatever is new, the game will likely fail.

They are compensated.  By the western world.

Lots of drug companies make back their money on those who can pay and are willing to pay, and then liscense out their drugs at near cost for areas that can't or won't pay.  In fact, such medicines help the areas and make them more economically stable to where one day they may be able to pay for said medicines.

Microsoft has an adage "Don't pirate, but if you do pirate, pirate us."

Microsoft would much perfer you buy their products like Office and Windows.  They would also much rather have you PIRATE their software then say, use linux or open office, or pirate somebody else.

A decent number of pirates can be "converted" into market purchasers later down the line.

For those who don't and instead pirate, the majority of the people wouldn't of bought it in the first place, and instead either went with a free option or just left the arena all together.

What would happen to people who pirate games if they no longer could?  Are they likely to start paying for these games?  Or are they more likely to move into the realms of free games.  Or just stop playing games all together? 

When people pirate... they pirate because the perceived value of the product is not = to the cost people charge for it.  Most people WANT to pay money for stuff.  People are socially conditioned to want to purchase stuff.  Things unpurchased are inherently less valuable to a person.

A game bought is going to be more enjoyable then if you pirated the very same game.

Removing piracy doesn't actually increase the value of product in most peoples eyes, which is why most studies show that stopping thousands and thousands of pirates doesn't really increase sales.

The way to combat piracy isn't to try and stop it externally, but try and increase the value of your product to a consumer.

Think of it this way.  Have you ever been to a friends house, played a game he bought that you thought was going to suck... but then played it and went out and bought it the next day?

My turn to criticize those. Not a single one of the first 3 you linked even looks at whether the pirates also spent more money than the people who don't pirate or don't. As the actual first article mentioned, the study only tracked the effects when they were negatives, but conviniently left out any positive effects. I also trust the RIAA and the MPAA the least when it comes to credibility on this type of subject.

About the Cnet article, while it's good it neither tells whether pirates also buy more software (in that specific area they probably don't) nor the fact that people try to sell their full priced products in placces where people make very little money (acerage salary in India is $800). That jsut means that the businesses have an utterly shitty business model, and instead of accepting that fact they use piracy as a scapegoat. Pirates are just unhappy customers, offer them a viable option an they will take it.

The third article is irrelevant. It talks about ISPs trying to combat piracy, which wouldn't exist if companies got their heads out of their asses. Also that $200 probably also does not count all the extra revenue they got from pirates who buy more than non-pirates.

The wolverine is also a bad example. You can go with the 15 million and I can use the same article to show it cost them 0. Also that doesn't factor in the fact that if people realized that the movie was not good (I paid to go see it twice, so i liked it a bunch) then they just didn't go to the theater. I can maybe even argue that MORE people saw Wolverine, since it was a workprint and unfinished, so it made people who didn't want to go to go, effectively being positive for the movie.

As for the 200k Sims 3 figure I'll just quote the article on that:

""Sims" games have sold more than 100 million copies since 2000, more than any other titles for the personal computer."

So I doubt those 200k actually did anything at all. I ealize it's all Sims games, but the rule still applies to Sims 3 as well, it sells truckloads easily.

As for The Saboteur, it's not the greatest game, so why should it be priced as much?

Whether they burned or didn't they still made money and Microsoft didn't even try to put an economic spin to their closure, which would have been the easiest for PR.

So fine, companies can't predict initial quality, but they can price drop within a week or two when they do learn. There are still a lot of potential buyers even after that short amount of time. If the game is good or bad it will be known within those first few weeks.

As for Mirror's Edge, I don't know how you can assume that because I can assume just as easily that it would have made enough money.

Finally, for Blizzard. I doubt they spent nearly as much money on the graphical side of things as the people who push polygons. Going by your logic, Retro sepnt as much money on their graphics for Metroid Prime 3 as Naughty Dog did on Uncharted 2, which is simply not true.

It's also funny you bring up the "up the game" part because I have only seen agmes being dumbed down more and more this generation. As an example, compare Neverwinter Nights with KOTOR. Fewer classes, far fewer feats, and far far fewer spells. That's dumbing down, not even matching. World of Goo and Portal managed to wow everything and innovate and truped all games that have been recently released, and they did it on a small budget (well, not so much Portal as much as the initial idea of the developers before Valve snatched them up).

In the end it all comes down to money. What you want is for consumers to adopt to businesses, which even under capitalism is utterly wrong and messed up. You don't make something and then force people to like it, you make something and if people find it valuable then they buy it. Obviously people don't find software as valuable (ESPECIALLY in countries and in places where they make little money) as companies think it is. You have to think those stats on torrent sites are worldwide stats, not just the US and modern countries (in one article you linked it mentioned the US has the smallest amount of piracy actually). I ask you, if people in the US don't find prices reasonable, what do you think people in other countries think?

Edit: It's funny you should mention AAA price tag this generation, because the 2 games I keep repeating are better than just about all AAA games this generation and they had minimal amounts of money. Again if you think of Portal as the game it was before they were allowed to used the Source engine.

You can however.

A) I don't pirate.

B) It's current economic theory.

You may as well lump people who beleive in evolution as "People who just don't want to beleive in god."

The only arguement among legitamite economists on piracy is whether or not piracy inherently devalues a product and if so, what that particular amount it devalues the product is.

It makes more sense in the real world, to have people pirate your stuff rather then not use it at all, if they were never going to purchase it in the first place.'