Ha-ha, just kidding. I’m not going to be arguing for piracy, but I do want to make one observation about how our industry is dealing with this issue. Some commentators have been talking recently about the massive piracy afflicting the launch of Demigod. According to Stardock’s Brad Wardell, of the 140,000 connections to the main server during the game’s first week, only 18,000 were by legitimate customers. This ratio compares favorably (or is that unfavorably?) with the 90% piracy rate reported by the developers of World of Goo. I don’t want to comment on the viability of various DRM schemes, but – needless to say – unless a game is server-based (WoW, EVE, EverQuest), piracy is a bracing reality for game developers. However, I have an unscientific theory about the root of the problem:

For any given game, only around 10% of players are ever willing to purchase an original retail product.

Obviously, this proposition holds up for PC gaming, but I believe the same is true for console gaming (housemates sharing a copy, renting from Blockbuster over a weekend, friends loaning each other games, grabbing a cheap used copy from Gamestop) and even board games (one gamer buying a copy for a group of friends). This reality is immutable – if DRM was perfect, the percentage would go up somewhat, but it would never come anywhere near 100%. Too many games exist for consumers to afford even a small percentage of them, and – more importantly – players’ individual interests in a specific game are always on a continuum. People on one extreme found a website about their favorite game while gamers on the other end might play it only once on a random Tuesday night at a friend’s house.

The interesting thing about this percentage is that it mirrors another important percentage – the number of players willing to pay money on so-called free-to-play game usually hovers near 5-10%. (RuneScape, a F2P example on the higher-end, has reported figures around 12%.) The important thing about the free-to-play movement is that the business model turns the theory I posited above into a founding principle. In fact, the smartest F2P games use a dual-currency system so that the 5-10% cash-rich players can subsidize the time-rich ones. Ultimately, this model works because a place exists for everyone on the continuum, from gamers who just want to dip a toe to ones willing to drop thousands on microtransactions. Launching a traditional retail game and hoping to change your “piracy conversion” rate is fighting the current; launching a free-to-play game built from the start with multiple levels of player commitment is sailing with the current.