
'How piracy works' according to Minecraft creator - Luc
http://notch.tumblr.com/post/1121596044/how-piracy-works
======
rsbrown
"why fight the biggest revolution in information flow since the printing press
when you could easily work with it by _adding services that actually add some
value_ beyond the free act of making a digital copy?"

This is very intelligent insight on the author's part. It's also the same
argument that has been staring the RIAA in the face for over a decade: you
can't fight the future, so you'd better figure out a better way to earn
revenues.

With Minecraft, Mojang has an opportunity to monetize illegitimate users by
creating incentives through community play and online rewards that may not be
available using pirated copies of their product.

~~~
mattmaroon
You certainly can fight the pirates. You perhaps can't win the war, but you
don't really have to to make it worthwhile. That's why they keep being fought.

I would guess that whatever the RIAA spends on fighting piracy is recouped
tenfold in iTunes sales. iTunes would not exist if nobody fought piracy and
legitimate business models could be built on it. (i.e. if What.cd had the
ability to be a venture-funded startup.) Just keeping piracy underground, no
matter how successful it is there, is a positive ROI.

Granted all of that is still not as good, from the RIAA's perspective, as the
old model. And it's maybe not as good as some potential future model that
nobody's discovered yet. But it still generates large revenues and will
continue to fight for it's own existence.

~~~
ZeroGravitas
Strangely, for many years iTunes did _not_ exist _because_ people were
"fighting" piracy while Steve Jobs and Apple were repeatedly rebuffed for
telling them that they couldn't fight it, instead they had to compete with it.

This is covered in his Rolling Stone magazine interview:

www.keystonemac.com/pdfs/Steve_Jobs_Interview.pdf

~~~
mattmaroon
The problem is they have to fight it and compete with it. Doing one without
the other will lead to disaster.

~~~
chc
I don't follow. If you're effectively competing, why will not fighting it in
other ways lead to disaster?

------
wccrawford
Sadly, pirates don't actually convince their friends to buy it. They help them
pirate it.

He's right about doing what he can to provide features that pirates can't take
advantage of, though. That's the only way to actually combat piracy.

~~~
storm
> Sadly, pirates don't actually convince their friends to buy it. They help
> them pirate it.

Pirating software is often a pain - find a proper release, install, replace a
binary, generate a key, avoid online services, seek out cracked updates (or go
without them). If your time has value, it's hardly free. Do you really think
everyone pirating anything is going through this process for every Tom, Dick
and Harry they know, as opposed to just saying, "Yeah, it's $50 at
Gamestop..."?

What the author is talking about sounds like the far more common scenario --
friends will see a pirated game being played (or just hear it being praised),
and make a purchase later if they so desire (perhaps on services like Steam,
where hordes of people who used to exclusive pirate games now periodically pay
for the simple conveniences of being legit). And the pirates themselves are
occasionally 'turned' by the kind of value-adds that the author is taking
about. How many people who _really_ liked the single-player modes in their
pirate copy of MW2 didn't go legit so that they could play multiplayer?

Piracy can unquestionably lead to expanded mindshare and buzz, it's silly to
assert that it merely spawns more piracy. Piracy of Photoshop isn't destroying
Adobe's profit, it's securing it. How many legions of designers and
photographers cut their teeth on a pirated version, in the process trained
themselves to all its concepts, quirks and idioms, and later became a paid
seat in a professional context (where using a pirated version is astonishingly
stupid behaviour)?

Edit: This is clearly an emotional issue. Parent is getting a steady stream of
upvotes for blithely making a generalization about how all pirates behave,
whereas I saw a downvote faster than what I've wrote could even have been
read.

~~~
lhnz
I agree with others that the OP really over-promised by saying that pirates
will convince friends to buy. However, you don't deserve to be down-voted. A
large number of people pirating something often causes it to become popular
enough to get many sales. Word-of-mouth is not always a pirate explaining to
others how to get something for free, it's often them just saying something is
'good' (which for many people implies worth buying).

~~~
_delirium
It's especially true in the indie-game sphere, where people get their
recommendations from random reviews on blogs, mailing lists, wikis, forums,
whatever. Lots of those reviews are not by people who paid for the game, but
some people who read them might pay. Maybe not most of them, but often non-
zero. It's useful enough that some indie-game devs are pretty liberal with
their "review copies"; if you're going to write up even a blog blurb on a
medium-traffic blog, they'll just send you a free copy and save you the hassle
of pirating it.

Really the biggest likely pitfall facing indie-game developers is that they
release their game and _nobody notices or cares_ , not even enough to pirate
it. There are a ton of indie games that come out every year that never rise
out of obscurity, which is the main thing publicity attempts have to overcome,
at least early on. Enough people pirating it to generate some forum/blog buzz
is one possible way, like underground musicians who get their initial
publicity via people trading mix tapes.

------
Das_Bruce
Am I the only person who has bought a game after pirating and playing it
through? Also I'd be more inclined to buy more games first if there was some
way of getting my money back if I really don't like it. I'm looking at you,
GTA4, you blurry, poo sandwich.

~~~
KoZeN
I personally haven't done this but you bring up a good point.

What is so crazy about releasing a fully playable free demo that lasts 10 days
that enables you to save your progress and pick up where you left off after
purchasing the full version?

No doubt a system like this would have multiple weaknesses but if this system
existed I can guarantee you that I would own more games.

~~~
nuclear_eclipse
Sony is starting to implement this sort of feature with the PS3. You can
download the entire, full version of the game to your console, and then you
have 24 hours from the first game start to play the game, including saving
your position, as much as you want. Once the 24 hour period is up, you can
keep your game saves, and either delete or purchase the game, at which point
you can continue from your game saves.

It's just too bad so far that you can only do this with an _extremely_ limited
selection of games that have already been on the market long enough that I
would have bought them if I was actually interested in them.

But the concept is great.

------
ErrantX
_But what if that person likes that game, talks about it to his or her
friends, and then I manage to convince three of them to buy the game?_

This is _as bad_ as the logic spouted by the media industry that a piracy =
one lost sale.

If not even worse (because it is just plucked from thin air)

~~~
lhnz
Yes, I'd love to see some statistics for the probability of a pirate actually
convincing somebody else to buy.

------
YooLi
All he did was describe the freemium model.

<http://en.wikipedia.org/wiki/Freemium>

~~~
maushu
Not exactly. More like the freemium model but with the free part "hidden" for
most users.

~~~
gregpilling
It is not hidden. They can see that if they pay, they get the extra features.
If they don't pay, then play the restricted version without the online stuff.

~~~
Vivtek
Except the "restricted version" is the product that is actually being _sold_
to most users.

------
Revisor
What he describes can be summed up as "Don't sell games, sell services". And I
wholeheartedly agree.

Games-as-a-service in the future?

~~~
Groxx
Present. There are a number of games that require internet access - MMOs, some
where your save file is online, and some which simply phone home frequently.
ie, Assassin's Creed 2.

~~~
Revisor
Not considering MMOs, those other examples sound more like a nuisance (DRM)
than an extra service.

~~~
benologist
It absolutely is a nuisance - I regret buying Command and Conquer 3 because it
is intrinsically tied to EA's servers, you can't even play single player games
without being signed in and online. Even your saved games only exist on their
servers.

But I bet it was more effective than any other form of DRM they've used over
the years.

------
Dove
_If someone pirates Minecraft instead of buying it, it means I’ve lost some
“potential” revenue. . . . But what if that person likes that game, talks
about it to his or her friends, and then I manage to convince three of them to
buy the game? I’d make three actual sales instead of blocking out the
potentially missed sale of the original person which never cost me any money
in the first case._

I hate this argument.

People who want to pirate games or music frequently say that by pirating, they
are actually providing a benefit to the author by giving him exposure. That's
true sometimes, but I don't think it's always true.

In general, with any creative product, you want to try to turn some portion of
it into exposure and some portion into money. You might divide things up 10/90
or 50/50 or 70/30 or even 100/0-but-I-charge-for-support, depending on what
you think is optimum for your goals.

But pirates presume to make that decision _for_ you.

(Though I agree that smart authors will embrace the fact that copying is free
and easy rather than trying to fight it. The piece of your product you want to
use for exposure can be copyable, but the piece you want to sell shouldn't be.
Or if it is, you should be honest about your income being from donations or
exceptionally honest people.)

------
barkingcat
Perhaps then the goal is to have a mutable pricing structure that responds to
market pressure. If it really doesn't cost anything to produce 1 additional
electronic copy, something like this might work.

At launch date / first to market, there is a high price tag for the digital
good (whether it be music, game, movie, etc). This is so that the
vendor/author can make sure that they can sell at a high price to those "first
movers" that actually want to pay $1000 to be the first person on the planet
to have that special ring tone, ahead of everyone else in the market, for
example.

As time passes, and as more people buy the "product" (which is done via a
download or a file transfer) - the price of the product goes down - because
the as demand rises, the cost of production actually doesn't change - and the
author already made some money, so there's no point being greedy, because then
people would go and pirate it.

Once this price goes down, it goes down for EVERY SINGLE customer, including
those who bought it during the high initial price. I mean, the vendor does
have the customer's credit card numbers. Do a residual, scaled, periodic
refund for every single customer, based on the differences between the current
discounted price and the original price at which the customer bought the good.

As the # of units sold increases, the price of the product decreases - of
course the relative rates can be tweaked so that the vendor is still making
more money than they are discounting, because as an electronic/digital good,
there are no factories or warehouses - it's easier to make money at mass
scales when it comes to digital goods (vs physical goods like bicycles).

Existing customers feel validated - the more people they recommend to buy the
product, the more money they get back.

New customers don't feel like they're getting ripped off - the prices are
falling all the time, and you "buy into" a whole discounting structure.

The original vendor/producer can finely tune the ratio at which the prices
fall in order to control profitability, popularity, and sales rate as a factor
in promotion and marketing.

Again, if you take advantage of the fact that if you sell 10 copies, the cost
for building the software/digital good is no different from when you sell
100,000 copies, then you can exploit that "efficiency gap" if you can call it
that between the existing pricing structures and a variable pricing structure
that I describe.

At some point, you will reach a "price floor" at which the producer is
comfortable reaching their target cumulative total profit. Since altering the
price changes the price for every single customer since the beginning of the
lifetime of sales for the product, you can actually say - I want x million for
this product in 3 years time - and actually be able to hit that target by
planning out the way the price changes. OR if you believe in the long tail, go
ahead and have a constantly decreasing price - as you reach the hundreds of
millions of people in the long tail, you can charge 1 cent - and you would get
hundreds of millions for a product you made - providing usefulness for all
those people at a great price - AND being able to protect your livelihood
during those critical first few sales.

Of course, this requires every single sale to every single customer to have
its own merit, its own tracking system, its own values. BUT personalized sales
is exactly what we are looking forward to in the future.

And I think technically, it's not super hard - I mean we have nonstop systems
and mainframes and clusters of all kinds - that analyses the trillions of
collisions in the LHC - what makes us think that we can't track six or seven
billion consumers who are alive on this planet, who might be making 5 or 6
million transactions a year? It's not that bad when you consider the scale
that google / national science foundation / CERN operates at.

~~~
FooBarWidget
> New customers don't feel like they're getting ripped off - the prices are
> falling all the time, and you "buy into" a whole discounting structure.

But then don't old customers feel ripped off for having paid "too much"?

~~~
mquander
_Once this price goes down, it goes down for EVERY SINGLE customer, including
those who bought it during the high initial price. I mean, the vendor does
have the customer's credit card numbers. Do a residual, scaled, periodic
refund for every single customer, based on the differences between the current
discounted price and the original price at which the customer bought the
good._

------
abronte
I think Notch's biggest way of combating piracy right now is his price point.
The game is only $13 USD and has endless amounts of playtime and creativity.

Time and time again, all these big publishers keep putting out big name titles
with only 8-16 hours of gameplay for 60$. No wonder their games get pirated...

------
bryanh
Once again, by moving a crucial portion of the game online, you can mitigate
the effectiveness of a pirated game while being able to deliver content that
enhances the game for everyone.

The problem is, what if I want to play it on a flight? Enabling this enables
pirates. So, is this worth it?

------
nlawalker
"I can offer online-only services that actually add to the game experience."

It doesn't matter what they are, what they do, or whether or not the network
aspect of these services/features is integral to them - pirates and consumers
who insist that any features not on the disc at install-time are an
inconvenience will still cry DRM.

Are these "online services" integral to the game? If they are, then what
happens when they go down? It's really not much different than what happened
when the Assassin's Creed 2 validation servers fell over. Are they not
integral to the game? Then pirates will do without them or find ways to
replace them, and some people will still bitch that they shouldn't be so
inconvenient.

There's no getting around the fact that creating copies of a digital work is
free, and so there's no solution that's going to make everyone happy. It's
unfortunate, because every developer now feels the need to create online
services as a part of their game, even if their idea doesn't really call for
it.

~~~
higher
It is pretty easy to distinguish DRM from net-enabled features. You simply
need to ask "Could the feature exist without an internet connection?" You
claim that users will conflate the two regardless, but I doubt this.

Imagine an alternate dimension in which StarCraft shipped with LAN support but
never supported online play over Battle.net. The StarCraft community would be
based on gamer-oriented VPNs, and would likely be about as healthy as it has
become in our dimension. If, when StarCraft II was announced, players learned
that LAN play would still be supported, but play over Battle.net had been
added, I don't think very many people would complain that the product had been
deliberately crippled.

In our world, StarCraft supported LAN play and Battle.net play, while
StarCraft II does not support any type of multiplayer other than over
Battle.net. Battle.net play has resulted in half-second latency for all
players and several days of downtime since release. Additionally, it is known
that a "Professional" version of StarCraft II exists that supports LAN play -
the feature has simply been removed from the retail version.

I think it is pretty clear which of these is a feature and which is not.

------
njharman
Article had absolutely nothing to do with how piracy works. (I expected
details of "couriers"/cracking/distributers/etc) It was about author's opinion
that the copyrights of copying and distribution can't and should not be
enforced in digital "age".

