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Piracy and the underground economy

February 26, 2008
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In all the hubbub over Piracy and its effects on the game industry, little has been said about the underground economy that it supports.  I’m a blogger and have no use for hard facts, so let’s replace it with supposition.  Suppose there are 50 malls and commercial centers in Manila.  And lets say that there are 20 pirate stalls in each of those malls, a rather conservative estimate.  Let’s suppose that there are 2 people manning each of those stalls, and do some math.  50 malls times 20 stalls times 2 people equals 2000 people whose livelihood depends on piracy.  That number is miniscule, but I’m sure the actual numbers are far greater, and shed light on a problem that, for all of their bravado and claims that they’re defending people’s rights to earn money, have never touched on.

I’m not saying it’s right, but the fact of the matter is that if you do manage to completely stymie pirates, you’ll be leaving thousands of people without jobs, and not giving them alternative ways to earn a living.  Just think about it.  The numbers start to get even larger when you factor in all the countries in which piracy like this is practiced.  What will you do with a jobless populace around the world?  Aside from that, the money these people earn is used to buy very legal and even necessary things, like food, water, and shelter, thereby making them just as necessary as any citizen in a healthy economy.

The solution I offer is to simply lower the prices of games, and make them more easily accessible to small shops and stall owners.  Perhaps the best way to defeat piracy is to beat them at their own game.  Make the prices so low that it would almost be silly to buy a pirated game over an original one.  This way you effectively defeat piracy but sustain the underground economy that it’s engendered.

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5 Comments leave one →
  1. February 29, 2008 1:19 pm

    Makes sense enough.

    But isn’t it really the fault of the MSRP, or whatever it’s called elsewhere? Nintendo and Company sell their games to retailers, not consumers. Once there, each store sets their own prices. What’s the reasoning behind that for these poorer countries? I know that even here the mom&pop shops sell their games for about 5 or 10 dollars extra. And with what we know about Brazil, Mexico, Venezuela and the Philippines from the other post, this leads me to believe that there’s a worldwide epidemic of a trend of exasperating the markup of a game when the manufacturers aren’t looking (which is never) and the level of interest is so high.

    Can’t Nintendo, Sony, or Microsoft say anything to a country’s gov’t to quell those inclinations? I’m pretty damn sure something can be done, but then again no. I’m not. However, we’ve seen the pressure a manufacturer can place on a retailer here. Why not make the effort instead of just complaining about piracy? I think the manufacturers have more to do with the problem than it seems. They probably treat every economy like it’s the US and sells their wares to them for US-esque prices.

    What i think they should do is slash prices by 75%-90% in countries where piracy is rampant. They could slash prices in the big 3 territories as well, but it’s not necessary. For other countries where piracy is profuse but not quite outta control, they can adjust that percentage accordingly. There’s my solution; run with it.

  2. March 1, 2008 9:36 pm

    That’s been discussed before, third world pricing. The problem is that its easier to complain about piracy than to look for real solutions.

  3. March 2, 2008 2:27 pm

    Explain to me the reasoning behind 3rd world pricing.

  4. March 3, 2008 12:48 pm

    The pricing in 3rd World countries makes no sense: even with rich kids, the prices for games here in the U.S. have already been brought as high as the market can bear, so why would any retailer think that doubling those prices abroad will make good business sense? Like I said before, they are just begging the consumers to look for a pirated copy!

  5. March 3, 2008 9:36 pm

    3rd world pricing is basically aligning the price of a piece of software to that particular country’s standard of living. Charging 60 dollars for a game may make sense in the US, but not so much in say, Bangladesh.

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