19 replies to this topic

[Sinke]

What I mean is this:

Console costs 500 Euros
Game costs 50 Euros

NO PIRACY CASE:
People don't want to spend that much money on the entertainment. They don't buy the  console, and stick to the systems which can be pirated ( PC mostly ). Because of that only 1000 consoles are sold and 5000 games in all the country.
Console manufacturer earned 500 000 Euros and all 3rd party companies earned 250 000 Euros in total. ( In this example, forget about the taxes )

PIRACY CASE:  
People are anxious to buy the new system, and knowing that ,thanks to piracy, they will have huge and affordable software library, they don't hesitate to buy it no matter the high price. Because of that 10 000 consoles are sold and 7000 original games as well. Profit of the console manufacturer is 5 000 000 euros , while 3rd party recieves total of 350 000 euros.  Apart from 7000 originals, there are 100 000 illegal copies of games in the market. Companies however don't lose money because of these copies since people wouldn't buy originals anyway.

There was a time when people could rent games before modding came to practice. Gaming companies didn't profit from that either, since they only earned precentage when game was sold to the rental store.

[BeefontheBone]

Several problems arise here - primarily, consoles are sold at a significant loss to the manufacturer, their profits come from accessories and games (licensing and in-house titles).

[RyGuy]

Whenever an illegal copy is made and bought, the company suffers. Because out there is a copy of the game that the company paid for, but instead some person has made an illegal copy and is selling it for their own price.

[Potatoe]

RyGuy, on Dec 7 2006, 11:13 PM, said:

Whenever an illegal copy is made and bought, the company suffers. Because out there is a copy of the game that the company paid for, but instead some person has made an illegal copy and is selling it for their own price.

Not the company, the CEOs of the publishing. The makers of the games don't earn that much.

[Sinke]

Beefonthebone

Quote

Several problems arise here - primarily, consoles are sold at a significant loss to the manufacturer, their profits come from accessories and games (licensing and in-house titles).

Actually, console manufacturers start earning money in the final years of generation since they spend a lot of money on projecting and producing of the system. The examples I gave work only in less-developed countries and nobody would care about this business if the whole world would have that kind of piracy level. In any case, the  manufacturers still earn more money with piracy in these countries then without piracy. If one wouldn't buy the console, one wouldn't buy games as well.

Ryguy

Quote

Whenever an illegal copy is made and bought, the company suffers. Because out there is a copy of the game that the company paid for, but instead some person has made an illegal copy and is selling it for their own price.

Yes, however if one can't afford the original copies of games, one won't buy the whole system and the companies would suffer even more. Less consoles on the market lower the ammount of money producing companies earn as well. Since market we are talking about is small and doesn't effect the money scheme a lot, companies usually ignore the whole problem.

I am not defending piracy, by the way. I am just pointing at certain things.