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Mutant Mudds for 3DS

Piracy is a sensitive issue in video games, and it’s not going anywhere. Early this month, hacker Neimod found a way to enable custom code on the Nintendo 3DS, which could make the nearly 2-year-old handheld victim to homebrew software and the illegal copying of games. Developers are in a huff, but the mindset of pirates hasn’t changed: If they can hack it, it’s theirs to play with.

Jools Watsham of Renegade Kid, the developer of Mutant Mudds on 3DS, responded with a threat of his own: “If piracy gets bad on the 3DS, we will have no choice but to stop supporting the platform with new games,” he wrote on his blog.

Could piracy really ruin the 3DS’s future? What is the full scope of consequences? And if it is dangerous, what can we — gamers, developers, and publishers — do to prevent it?


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Piracy harms sales, which can cripple developers

Dementium II for DSWatsham argues that piracy has a clear negative impact. In the same blog post, he cited the success of his studio’s mature-rated DS game Dementium: The Ward — which sold over 100,000 copies worldwide — but pointed to rampant piracy as a reason why sales of Dementium II fell to half that.

“Some say that piracy leads to more game sales, claiming that it enables players to try before they buy,” he wrote. “Bullshit. The percentage of people who will spend money on a game that they already got for free is surely very small — especially with so many ‘free’ games already in the market.”

For a small developer, that kind of effect on sales can be crippling. Watsham is hoping that Nintendo can fight pirates with its system updates for the 3DS, but the more developers lose sales to piracy, the harder it is for them to thrive.

“Game developers and publishers, particularly the smaller ones, may suffer the most as they depend on the legitimate sales of their games in order to survive,” Nintendo told GamesBeat. It’s legitimate sales, not theoretical sales when piracy is accounted for, that matter to a company’s health.

It’s not just about sales — it’s about diversity

“Many developers rely on funding from publishers,” Watsham told us. “If publishers are worried about piracy, they will limit the number of original games they release.”

That’s not the case with licensed games, which are based on movie tie-ins or brands that appeal to a large audience mostly consisting of casual players, who wouldn’t typically pirate games, says Watsham.

Zen Pinball 3D“Original games, on the other hand, are riskier as they cannot rely on avid fans of an existing brand for the majority of their sales,” he said.

If we want the industry landscape to be creatively diverse, gamers need to support the developers of new intellectual properties by purchasing copies of their games, not resorting to piracy. Sales matter — that’s why we have so many Assassin’s Creeds and Halos — and bigger, proven franchises are safer bets for publishers. But piracy is a much bigger issue for publishers when dealing with games from smaller studios, where the guaranteed return is already much less significant.

“The issue is with the publisher’s perception of how piracy will affect sales and where they want to invest their money,” said Watsham.

Neil Sorens, the creative director at Zen Studios (the maker of 3DS games like Zen Pinball 3D and 3D Solitaire), agreed that a big downside of piracy is seeing less of the games people like to play.

“Before Steam came along, PC role-playing games and turn-based strategy games had become almost extinct because the threat of piracy rightly or wrongly led publishers to conclude that these games were not worth the investment,” Sorens told GamesBeat. “Now we see a similar shift in investment into essentially piracy-free mobile and social games that rely on in-app purchases for revenue. Unfortunately, it’s very rare that one of these games will provide the game experience I am looking for.”

Epic Mickey: Power of IllusionPeter Ong, the cofounder and creative director at DreamRift (Epic Mickey: Power of Illusion for 3DS), expanded on this concept — where companies might favor the popularity of a game’s license or previously successful designs over “the risk of innovation and experimentation”:

“If a publisher or developer thinks that a certain type of audience is most likely to forgo purchasing in favor of piracy, it only makes business sense to tailor the game’s design away from that group,” he told us.

So casual and mainstream buyers, for example, might be less in touch with gaming and wouldn’t typically know how to go about acquiring pirated games.

“This translates to a situation where the type of game that is [made will be the one] perceived to be best received by nonenthusiast gamers,” he said, echoing what Watsham said. “It doesn’t matter whether the theoretical example of mainstream buyers being less likely to pirate games is true” as long as the perception exists.

Publishers respond negatively to piracy in other ways

French publisher Ubisoft instituted aggressive digital rights management (DRM) policies in 2010 that forced gamers to connect to an online service. You couldn’t play games like Assassin’s Creed II for PC offline, and you couldn’t sell them used, either. Disconnect while playing and you would even lose saved progress.

Asssassin's Creed II PCUbisoft altered this policy in 2011 because its stance hurt fans more than it hurt pirates. The people who had bought the games were the ones suffering.

Tyrone Rodriguez, the founder of developer Nicalis (Cave Story on WiiWare, DSiWare, and 3DS), believes that developers are just as responsible for their fans as publishers are. He disagrees with Watsham that piracy could put an end to support of the 3DS.

“Regardless of piracy, we plan to continue supporting the 3DS and other major consoles,” he told GamesBeat. “The 3DS hacking so early in the lifecycle is disappointing, but it’s an issue that’s not going away. Why punish players who actually support us by buying, playing, and enjoying the games we develop by giving up?

“We as developers shouldn’t allow the concept of digital theft [to] distract or deter us from making more games. How do I know someone who illegally downloads a game would actually ever purchase it? I don’t. It’s a problem that is difficult to quantify.”

That doesn’t mean Rodriguez believes piracy isn’t a real problem. “Is it harmful for the game industry? Of course. However, piracy is probably less damaging to our industry than selling games for 99 cents and expecting to subsist.”

But Ong pointed out a potential hitch — that piracy forces developers’ and publishers’ hands when it comes to their freedom in choosing how to distribute a game, depending on what price they think would be most effective.

“Piracy is indefensible,” he said, “because it means that the maker doesn’t have [the] opportunity to choose the distribution price/strategy — even giving it away for free — and instead is forced to deliver their product into a market where distribution has to occur to some extent for free, regardless of what the maker thinks.”

Customers need ‘to have faith in their purchases’

Watsham suggested that while developers and publishers might not be able to do anything to reduce piracy, a good way of restoring gamers’ loyalty would be to take advantage of modern technologies and implement better digital stores and other conveniences.

“Regarding digitally downloaded games, which seems to be the inevitable future of all video games,” said Watsham, “digital stores need to offer a service to players that make them feel comfortable and confident that the games they have purchased can be easily transferred to different devices and/or redownloaded if their device has been lost, damaged, or stolen. Again, it comes down to providing a service that is at least as good if not better than those offered of illegal ROM or torrent sites.

Steam“I realize this creates a new set of issues and complexities in order for the stores to handle such a service, but in the end, this is what the customer wants and needs — to have faith in their purchases.”

Some, like Sorens, think that publishers and developers have already shown as much goodwill and generosity as possible.

“I think that the industry has already done basically everything it can in terms of improving convenience,” he said. “Offering steep discounts, making DRM more palatable by offering compelling online-only features behind that DRM, going after the real hackers and criminals rather than the downloaders, and so on.”

He added, “I don’t see any common ground or motivations that would allow pirates and developers to work together. If we make something free, pirates have no reason to touch it. If we charge money for something, then it’s obviously necessary to make our business model work, and pirates undermine that model by making it free.”

Is a better future possible?

Maybe the answer to how we can end piracy for good is to seek a way to work together as developers, publishers, and gamers. In 2009, Carlos Bordeu of ACE Team appealed to file-sharers of its first-person fighting game Zeno Clash, asking torrenters to consider buying the game so it could “continue making games like this.”

He wrote, “We cannot do anything to stop piracy of the game — and honestly don’t intend to do so — but if you are downloading because you wish to try before you buy, I would ask that you purchase the game, and support the independent game development scene, if you enjoy it. We plan on updating Zeno Clash with [downloadable content] and continuing support for the game long after it’s [sic] release.”

Zeno ClashBordeu also promised that a demo would be available soon so that prospective buyers could try the game legally and for free, and ACE Team delivered. And interestingly, responses were positive.

“We honestly think that ‘converting’ the people who download the game into buyers is a much better strategy than trying to fight them,” Bordeu told TorrentFreak. “We are also improving the original game, so it will include features and content that people who download the game will probably miss.”

But not everyone wants to chance piracy, and it remains a serious issue.

“If piracy becomes as rampant on 3DS as it was on the DS, we won’t be making 3DS games,” said Sorens of behalf of Zen Studios. “Our games are relatively niche and low-margin, and even a relatively small percentage of sales lost to piracy would make the opportunity cost of developing 3DS games too steep.”

Zeno Clash screen 2DreamRift’s Peter Ong dismissed the often-used rationale that piracy is a fair way to evaluate a game before purchasing it.

“There was in fact a time when information and access to games one had not yet purchased — or that hadn’t been released yet — was quite limited,” he said. “However, as modern methods of information-sharing have developed, the ways in which we can access a game prior to purchase have greatly increased and continue to do so.”

Ong mentioned the abundance of high-resolution screenshots and direct-feed videos that you can stream through your computer as well as developer interviews, social media, behind-the-scenes footage, media events, demos, open and closed betas, and — perhaps most damning of all — prompt review coverage.

“Our options for researching games before buying them is only getting better and better,” he said. “With the plethora of modern methods for experiencing games prepurchase, the question begging to be asked of piracy advocates is, how much more do you need to make fully informed decision to buy a game? Will it ever be enough, short of playing through the whole game without buying it?”

We attempted to contact Neimod and another 3DS hacker, Yellows8, about these issues but received no response.

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