The fact is that despite the movie and games industries bemoaning rampant and uncontrolled piracy of their products, both industries are burgeoning. The movie industry is “suffering” under record revenues, and the games industry revenues have grown more than 300% in the last decade (to more than double that of the movie industry).
And yes, rampant and uncontrolled piracy is happening – yet the industry is getting more money over the counter than ever before. It’s difficult, then, for the industries to show how much they’re being hurt. Would their record revenues be higher? By how much? Nobody knows the answer, but thanks to France, we can take a guess.
You see, back in 2010, France introduced stiff anti-piracy legislation that (after a bit of a rocky start in its early months) reduced online piracy by a whopping 66%. How, you might ask, did this affect sales?
It didn’t. Publishers’ sales curves continued their trends, unaffected.
One sector that is hurting generally, though, would be the big games publishers who develop for consoles. While there’s certainly a lot of PC games piracy, this is eclipsed by the levels of piracy for console games, and exacerbated by the high costs of console games development.
While situations were reversed for many years, PC games sales are taking an increasingly large share of total games sales, and are in the majority, with projections that PC games sales will constitute a full three-quarters (or more) of total games sales in 2013.
Faced with the higher costs of developing games for consoles, the higher levels of piracy for console titles, and the decreasing market-share of console titles in the games market, what do you think the strategy is for big publishers? That’s right! More console titles, and fewer PC titles!
Seriously. I know it makes no sense, but the big games publishers don’t seem to make decisions based on real evidence. They never seem to have. It isn’t their style.
As an aside, more women over 20 play games than boys under 20. The publishers know this – they pay for the research to be done every year, year after year. Just how much attention does that key female demographic get? About 2% of total titles, and no marketing at all to them. That’s the sort of studied business-sense you get from a major games-publisher.
Much of the total games industry revenues, therefore, are starting to come from smaller publishers. The “B-list” publishers, and the “non-blockbuster” PC games.
That’s another sector that’s hurting for profits right now. The publishers that are pursuing the “blockbuster” strategy. That’s been in the works for a few years now, and hasn’t shown any signs of actually panning out. Blockbuster (or AAA) titles essentially represent increased risk. More money poured in on a roll of the dice. That can turn fat revenues into fat losses with a single misstep, with a shortage of B-titles to pay the bills.
“You can’t compete with free”
That’s what you hear said, over and over, but the fact is that every content publisher for the last century has had to “compete with free” and by-and-large have been successful.
Last year alone, we gave the games industry $70 billion US Dollars, despite the relatively free availability of most of their products. Next year, the industry projects new record revenues.
I’m not downplaying piracy here. If you’re a content-creator, it really stings to see your work copied and made available in ways that don’t provide you with royalty payments or income. It hurts, and you don’t want it to happen. It just does, and we can’t stop it. We’ve tried everything technologically feasible to-date, and it hasn’t worked. In years to come, maybe we’ll eventually come up with something that does work.
Will that improve sales? I’m not so sure.
What is clear is that there’s a huge market there that is paying, and one which could be served better and become even more profitable, if only the big publishers start making better business decisions about their costs, their platform targets and their market demographics.
There’s more than 70 billion reasons to reassess publishing and marketing strategies.