The worst problems aren’t caused by getting the wrong answers. The worst problems are caused when the wrong question is asked. Ubisoft needs to stop asking “how can we decrease piracy”, and start asking “how can we derive maximum revenue from our products?”
I’m going to let them have a little formula:
We’re going to assume that a “unit” is a title, and for simplicity’s sake, we’ll pretend that title doesn’t have DLC.
1) We’ll start with the average revenue (to you, the rights-holding company) from each unit sold. Let’s call that “ChaChing!”. This number is simply what retailers kick back to you before any of your own costs are brought into consideration.
2) We’ll discover the average amount time players spend actually playing your game. The real number, not the marketing number on the back of the box. No one plays a game for “infinity”. We’ll call that “PlayTime(tm)”. The camelbacked capitalization lets me trademark that phrase.
3) Now we’ll find out how much the DRM solution costs for per minute of PlayTime(tm). Call that number “DirtyRottenPiracyRepellent”.
4a) Let’s next find out how many copies of your game were not bought because of the DRM. You didn’t know that people refused to buy some of your games because they didn’t like the way you treat them? Well. That explains a bit. So yes: that’s a thing. Some of us hate DRM so much that we won’t buy games we otherwise would. We’ll call this number the “OopsieDaisy” co(in)efficient.
4b) The OopsieDaisy coefficient can be estimated by seeing how many copies of a same-genera game with similar metacritic rating, but lacking your DRM solution, sold.
5a) Let’s figure out how many people who would otherwise have pirated the game decided to actually buy it instead. This number shall be called the “Jefferson” factor– named after US President Thomas Jefferson, a man who actually won a war against pirates.
5b) The Jefferson factor can be estimated by comparing the piracy rate of the game chosen in 4b to the piracy rate of your game. Simply subtract the percentage of pirated copies of their game from the percentage of pirated copies of your game. Warning: if the number ends up being negative (if your game has a higher piracy rate than theirs), you’ve already lost.
6) I think we’re ready to go! Take (Jefferson – OopsieDaisy) to find out how many extra copies we ended up selling. Call that number “Bonus”.
7) (PlayTime(tm) * DirtyRottenPiracyRepellent). Call this “TheRentIsTooDamnedHigh”. This is the cost of your DRM.
8) (Bonus * ChaChing!). This is the extra revenue that DRM brought us. We’ll call it “SecurePayCheck”
9) Now we (SecurePayCheck – TheRentIsTooDamnedHigh) and voila! We know how much it costs to bring in each additional sale.
10) Analysis. Obviously, I don’t have access to any of the numbers that would go into your calculations, but you- I hope- do! So let me ask: is the absolute value of Jefferson bigger than the absolute value of OopsieDaisy? If not, your DRM turned into a giant black hole. Is Jefferson bigger enough than OopsieDaisy that it offsets TheRentIsTooDamnedHigh? Was Jefferson actually a positive number? If it was a negative number, then your DRM actually managed to drive otherwise paying customers into the piracy ecosystem. Good luck fishing them out.
Notice what’s not included in this math: stopping piracy. Creating conditions under which people will not pirate your games is easy: either don’t release games, or release ones that are so bad people won’t invest their time. If piracy drops to zero, that doesn’t actually make your game a cent. The only reason that piracy hurts is when it takes would-be buyers and stops them from giving you money.
And Ubisoft digital boss Chris Early? Remember: “[it] Is [not] fair for [you[ to enjoy [my] content without [me] receiving some value for that”. So give me some value for this post. The rest of you can enjoy it without remuneration.