The History of Software Piracy

The History of Software Piracy

Video games are a form of intellectual property, like books and film, that, once they have been created, can be copied. Copying a game is a lot cheaper than buying it because the copier is making no contribution to the cost of making the game in the first place. But, obviously, if everybody copied there would be no revenue for games makers and there would be no games.

There are two main forms of game piracy and circumventing DRM (copy protection). There is piracy by the individual game player, these days usually over the Internet, but in the past often by copying using physical media, which is what this article is about. And there is commercial counterfeiting where a professional criminal mass manufactures the game, which is a different matter.

The profile of pirating for different platforms is always different because of the technology, the demographics of the users, the state of the market at a given time, relative costs and a number of other factors. What is for sure is that when piracy takes hold on a platform many hundreds of thousands (sometimes millions) of copies of a game are made. The huge scale of this theft deprives the publisher of vast amounts of legitimate income and quite obviously harms the game development industry. To think otherwise is to be in self denial.

Of course, it is very obvious that not every pirated game is a lost sale. This is because simple price elasticity of demand tells you that far more units will be consumed at a lower price than at a higher price. Yet apologists of piracy use this as an excuse for their behavior. They try and make out that piracy is a victimless crime. But obviously they are wrong because potential sales are being lost. And the lesson of history is that when piracy on a given platform gets out of hand, then it causes huge damage to the game market for that platform. This is common sense really.

Software Piracy in The Old Days

The first mass market game machine in the UK was the Sinclair Spectrum. Software was loaded via a tape interface so games were sold on audio compact cassettes. These were very, very easy to copy from a technical point of view, especially when dual cassette players proliferated and became cheaper. Schoolyard and club copying proliferated on a massive scale and badly hurt the game publishers. Look at a list of games and you can see the many publishers that went out of business or were forced into mergers. A whole range of technical anti-piracy solutions were introduced including, for instance, Lenslok. The publishers would not have gone to the huge trouble of these technical solutions if copying had not been a great threat to their businesses. Another solution was budget games, initially at £1.99, then at £2.99, prices at which they were not worth copying. That these budget games proliferated and came to dominate the market is yet another measure of just how bad the piracy was.

I was a director of the game publisher Imagine software, which went bankrupt in 1984, largely because sales came to an abrupt halt when piracy took off. (Imagine had other problems that made it especially vulnerable to a large and sudden drop in revenue.) Another publisher that was badly affected was Ultimate Play The Game (which later morphed into Rare), one of the most highly regarded publishers of games for the 8-bit home computers. Their initial response to the huge rise in piracy and drop-off in sales was to raise prices from £5.50 a game to £9.95. The idea being that if customers paid more for a game they would be less inclined to give away copies. However, this didn’t work and they labored on for just one more year after the demise of Imagine before switching their attention to the Nintendo Entertainment System, which did not suffer from piracy. The Spectrum and other 8-bit computer owners lost out heavily as publishers put less and less resources into developing for their machine or quit entirely, as Ultimate did.

Then came the Commodore Amiga and Atari ST. Once again, copying was technically easy so it was rife. Once again, it was up to the publishers to come up with technical solutions. So a technology war broke out between the software publishers and the pirates. Measures would include copying in random pieces of text from the manual. The led to a huge amount of photocopying by the pirates until the publishers started using photocopy-proof manuals. Obviously, all this piracy made revenue generation difficult, so the game publishing industry did not blossom in the way we see now. In fact, piracy has often been cited as part of the reason for the downfall of these machines.

Video Game Consoles Arrive

Then came the arrival of game consoles from Nintendo and Sega. These machines had their games held on chips inside cartridges so they were technically difficult and expensive to copy. So piracy didn’t happen at anywhere near the massive extent that it had on the Spectrum, Amiga and ST, and the games industry blossomed into what we know today. This was the time when many of the great key franchises of our industry were established.

Cartridges were expensive to make, so eventually the hardware manufacturers returned to recordable media. This way they could make vastly larger games with far lower production costs. The first to do this was the Sony PlayStation (PSX, later PS1) in 1995 in Europe and America, which used a CD-ROM to load games. Sony had a whole pile of technical anti piracy measures which protected it from piracy for several years. However, with the introduction of modchips and the development of PC CD-ROM burners that could burn data in the same modes that the PSX used, it was game over. Chipping was nearly universal and game sales collapsed. Pirates were selling their copied games door to door in housing estates, at places of work, in car boot sales and anywhere else they could find a customer. This caused huge problems for game publishers. I was working at Codemasters at the time and we were forced to lay off about 60 people. This was terrible as there were no other industry jobs for them to go to, as everyone was having the same trouble. The number of games published shrank dramatically. In 1999 there were 100, in 2000 there were 78 and in 2001 there were just 33. Yet the PSX remained in production till 2006, so software publishing for it collapsed just halfway through its sales life.

The Dreamcast from Sega came out in 1998 and used a special unique disc format called GD-ROM. Once this was circumvented with things like the Utopia bootdisk it was game over. Piracy became rampant and the Dreamcast died after just a couple of years with over 10 million sold. This piracy is sometimes credited with not only seeing off the Dreamcast, but also removing Sega from the console hardware market completely (as ever there were other factors that muddy the waters somewhat, what is for sure is that losing so much revenue did not help). It was a huge loss to the industry.

About Bruce Everiss
Bruce Everiss founded early computer store Microdigital before becoming a director of Imagine Software in the ’80s. He’s marketed #1 games at Codemasters, ran hundreds of computer fairs and consulted for many publishers, plus runs online artist community Artforums.co.uk.

2 Comments

  1. True, Ferraris are expensive, that’s why you buy cheaper cars. A game costs $60, so you go and… oh, wait, they all cost $60. There is, of course, the option of waiting for some months for the price to drop.

  2. I understand that but where does it take us?

    Do not attribute to malice what can as easily be attributed to stupidity. 🙂

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