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Has piracy EVER resulted in a developer getting shut down? That is, has piracy ever been so detrimental that it brought about the downfall of a game studio? If I were to release a game, should I be extremely wary of pirates and plan accordingly, or is it safe to assume that it won't damage me or my studio whatsoever?

yuritsuki
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    A very succinct and interesting question. I would like to see if anyone has any real world examples! – Tom 'Blue' Piddock Apr 30 '13 at 09:10
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    I don't think this question can be answered, as it is only speculation how many of the pirated copies are actually lost sales. I am certain there are developers that could have survived with the extra sales but it is impossible to proof really. – Archy Apr 30 '13 at 10:23
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    @Archy Well as you can see you can give real life examples which involve not direct sales being affected but actual services which answers his question "Has piracy ever resulted in a developer getting shut down?". The answer is yes. – Tom 'Blue' Piddock Apr 30 '13 at 10:27
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    it leads to developers going for the "safe" type of games which will guarantee a fan following buying surge (FPS shooters for instance) instead of the experimental new stuff (which is now reserve for indie titles) – ratchet freak Apr 30 '13 at 11:31
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    Removed the lengthy PR-bomb from the question. It was irrelevant to the question being asked. – Trevor Powell Apr 30 '13 at 12:50
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    My bad. I thought my question wouldn't make sense without an intro, but I guess I overthought things and added more than I should have. – yuritsuki Apr 30 '13 at 17:49
  • Here is an article about how piracy affected PSP games/software dev http://www.playstationlifestyle.net/2010/10/27/god-of-war-dev-claims-piracy-almost-makes-psp-development-pointless/ – user1075940 Apr 30 '13 at 20:24
  • This is an economic question, and economic questions need to be answered ''at the margin''. At the margin, every development studio that is ''not quite'' profitable could be said to have shut down as a result of piracy. You don't really need any data to see this, beyond "piracy exists and is bad for developers" and "some developers don't quite make it." – Evan Harper May 02 '13 at 23:50
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    I just came across an interesting article here that reminded me of this question. – Martin Smith May 04 '13 at 09:58
  • Well it depends. As far as people are willing to pay for your work, you shouldn't be concerned about those people who get pirated versions of the same. Every good software is pirated these days, but then, there are people who are always willing to pay for something worth to be paid –  May 01 '13 at 09:35

12 Answers12

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After a little running around the internet I found an interesting article that shows a good example of how pirating can affect a game directly and shutdown a project.

iOS Game, Battle Dungeon, Forced To Shut Down Due To Piracy

In this article, Hunted Cow, the developers behind the iOS game Battle Dungeon ended up shutting down their servers. The reason they gave as quoted:

“Unfortunately we have taken Battle Dungeon down for the forseeable future. This was due to high levels of server load created by large numbers of pirated copies of the game. The high load revealed technical issues which we don’t feel we can fix to the level that our paying customers deserve.”

I found this interesting because it shows that the piracy directly affected the performance of the servers rather than the revenue the developers were receiving to continue with development. Essentially (for those just wanting to skim the article) the pirated copy of the game hit the torrents of the web and multiplied the number of active players on their servers so drastically it reduced performance to a non playable standard. This resulted in them shutting down the project on December 3rd 2012.

Since then they have upgraded their server hardware and rereleased the app on the iTunes Store on April 8th 2013. However the piracy is what caused them to make these changes, costing money to company, down time of more than 4 months for the paying players and a reworking of their website which would have taken up valuable resources from their planned work.

Piracy may not affect companies directly from losing money from the initial sale, but as with Hunted Cow it can really set you back and potentially enough to shut you down. Hunted Cow were able to readjust and solve the problem after it happened, potentially with user based access to servers being validated for paying customers - however that is my own assumption.

It is something that you can prepare for in many different ways (DRM, payment authentication, server load access restrictions) and still be affected in ways you won't predict. Do your best to estimate what can happen to your services with extra pirated copies (extra load on servers, potential player griefing etc) and account for it as best you can within your budget so it doesn't affect your fair paying customers.

Tom 'Blue' Piddock
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    Why was their game even allowing pirated copies to authenticate? – Vaughan Hilts Apr 30 '13 at 12:57
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    And yet they admit that piracy only exposed the flaws. Had they sold all of those copies, they would have had the same problems and would have had to apply the same solution. – Hackworth Apr 30 '13 at 13:07
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    @Hackworth But they would have had the money to actually try and alleviate the problem had they all payed. However it's hard to say exactly what would have happened. – Rangoric Apr 30 '13 at 13:16
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    Also, had they sold all these copies, they would have seen a gradual influx of new users while checking the sale stats, instead of just getting broadsided out of nowhere. – mikołak Apr 30 '13 at 13:18
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    Essentially the flaw occured because of the piracy, the piracy as far as I could tell would have originated from the iTunes authentication being cracked, there were news posts at the time that showed apps that would let you get paid apps for free. I would say it could be closely related. – Tom 'Blue' Piddock Apr 30 '13 at 14:01
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    Any time I thought about piracy, I thought about "loss of sales" and didn't think it mattered much. The people that stole the game probably wouldn't have purchased it anyway. But, in the SaaS world we live in, I see the importance of server load when thinking of these pirated copies. – TecBrat Apr 30 '13 at 14:54
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    A minor point of skepticism here: in certain jurisdictions, poor server infrastructure that cannot handle the load of sold products opens a publisher up to criminal prosecution. ( Blizzard's South Korean offices were raided by the SK "FTC" due to server instability at launch. ) So a little proactive spin *might* also be an explanation. – horatio Apr 30 '13 at 15:54
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    @Vaughan Hilts. My thoughts exactly! That was a major flaw in their architecture... – Emiliano Apr 30 '13 at 17:21
  • I'm curious though, anything you download can be pirated, but as soon as you need the official server, they should be able to control it somehow, of course someone could create a pirate server or whatever but the main issue seems solvable. – Trufa Apr 30 '13 at 17:51
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    This doesn't seem like a piracy issue, but one of application security and server stability. ANY game that depends on server interactivity should require authentication that would preclude the use of a pirated client. – LJ2 Apr 30 '13 at 20:31
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    Gotta love that daily rep cap eh Blue? – House Apr 30 '13 at 22:15
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    You are missing the key sentence in that paragraph: The high load revealed technical issues which ___we don’t feel we can fix to the level that our paying customers deserve.___. So there were failures on 2 fronts: 1) They did not protect their servers from or somehow track who was legit and who was not legit (ban illegit users). 2) ___They don't want to fix___ the flaws. Because they feel the amount of time they need to put in to fix their product will be more than the money they get out. – bobobobo Apr 30 '13 at 23:12
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    All in all a story of bad software engineering and not taking the basic steps (of user registration and purchase validation) to protect yourself. I'm glad to hear they recovered. But with a server-based game, the burden of authenticating users is squarely on the developer's shoulders. – bobobobo Apr 30 '13 at 23:13
  • Looking at it from another point of view, could the take away be: (1) Build in the ability to allow pirated copies on specific servers. (2) Use them to test and lock them out when done. – Carl Apr 30 '13 at 23:27
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    @bobobobo I didn't miss that sentence at all, it is in the quote. – Tom 'Blue' Piddock May 01 '13 at 07:13
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    With an iOS game it's very tricky to check which client was buyed and which was pirated. Normally you can create an account for legal users and they have to authenticate the client by their username&password but if you are selling the game through app store, where you can't see who paid for the game, it's almost impossible to check. – Sulthan May 01 '13 at 10:17
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    @Sulthan The number looks about 10% of iDevices are jailbroken. This suggests a way to detect a jailbroken phone. Banning all jailbroken users isn't a bad idea. Also, could you not verify the app was purchased every launch?, also signature checking. – bobobobo May 01 '13 at 12:00
  • For those that are jailbreaking, there was a crack for in-app purchase but this has been fixed for iOS 6. – bobobobo May 01 '13 at 12:16
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    @bobobobo That will make the hacking only a bit more difficult. It will take slightly more time and then the result will be exactly the same. – Sulthan May 01 '13 at 12:31
  • Wait, thats not due to piracy! Thats from bad development, bad design and the in general the group not knowing what they were doing! Also, they said they took the game down, not the company. – AthomSfere May 01 '13 at 13:18
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    @AthomSfere it is safe to assume in their situation as a small company that they didn't have the resourcse to cover every jailbroken vulnerability, especially when publishing under an iOS platform. As Sulthan mentions - "it's very tricky to check which client was buyed and which was pirated". Also they were doing absolutely fine with their hardware until it was pirated showing their design and approach were absolutely fine. They are also clearly know what they are doing as the game is back up and running with new hardware for the servers able to take the strain. – Tom 'Blue' Piddock May 01 '13 at 13:24
  • The problem is still their lack of foresight and due diligence though. Difficulty does not negate responsibility. – AthomSfere May 01 '13 at 16:23
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    @AthomSfere: I'm not against file sharing at all, but I have to disagree with you. The servers are real (and therefore scarce) property of the company, which was unable to use it as it saw fit. You're essentially blaming the victim; that they didn't prevent unauthorized access doesn't give anyone the right to use those resources, anymore than you forgetting to lock your house gives anyone the right to go in and eat your food. – André Paramés May 02 '13 at 10:09
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    @AndréParamés there is a big leap between self-inflicted wounds and giving the right to do something. It was the developers fault, they should have invested the time to do it right, hired a contractor... There are many things they should have done. That's why the fault lies on them. The people who stole the game certainly did not have the right to play the game though, or access the servers. Its the same if I leave my car unlocked and my golf clubs are stolen, its my fault for leaving the car unlocked, it was preventable. But the thieves do not have the right to steal / sell the clubs. – AthomSfere May 02 '13 at 11:09
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    @AthomSfere However now imagine your car has a lock on it, its the lock that the car manufacturer made and you are happy with it, it is locked when you go to the store. You come back, the car has been stolen. You got the cheapest car you could get because you couldn't afford anything more at the time - getting it means you can drive to work and get a better car in a few months. You couldn't afford the bigger and better things. This is the same situation for the developers, they needed the revenue for upgrading the servers and authentication before they could have done anything to stop this. – Tom 'Blue' Piddock May 03 '13 at 07:15
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    If they could not afford to build a simple authenticator but could afford to build an entire MMO esque game... they are in the wrong buissness and obviously need to learn to budget a tad better. – Vaughan Hilts May 03 '13 at 17:27
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    @VaughanHilts Their authentication is based off the iOS platform - they were relying on that to authenticate paid users. Once it was pirated on the iOS iTunes store platform they then started to have issues. I don't think it is overly presumptuous to think a multi million dollar IT based corporations app authentication wouldn't be secure. – Tom 'Blue' Piddock May 05 '13 at 19:16
  • @Blue I do... since it was never secure to begin with. Nothing was server simulated and it's applications were pirated long, long ago.

    Putting their servers they relied on for their company in the hands of a huge target was definitely not a good idea.

     – Vaughan Hilts May 06 '13 at 00:50
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I've never heard of this happening as a loss of sales. There are situations where a company has had a direct loss of money that can be attributed to piracy.

Project Zomboid faced issues with this a few years ago when their updater was cracked. The updater was hacked to allow pirates to download the latest release of the game from Project Zomboid. Since Project Zomboid was using Amazon Cloud services to distribute their updates, the additional downloads were costing them money. This resulted in them taking the game down for a while.

This example, including the example in Blue's answer both show situations where, if the conditions were right, it could have caused the game company to go under.

These examples show that when a company offers a service as part of their business (online servers, or even direct download updates), this service can be taken advantage of and cost the company more money than it generates.

These examples show that it's possible to lose money directly as a result of piracy. This means it is possible to go out of business as a direct result of piracy, but as with both examples, the companies can take measures to avoid the continued "unauthorized expenses".

Community
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House
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    +1 Exactly my sentiment! It may not actually be the loss of the sale that directly brings down a company. These "lost sales" are hard to track but the implication and affect on hardware is very easy to analyse. – Tom 'Blue' Piddock Apr 30 '13 at 14:14
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    worked in support for a game company about a decade ago. We got inundated with support requests from people buying pirated versions of our products on eBay who couldn't activate those copies because the fake license keys they got would bounce on our license servers. In addition to that we got a pretty stable percentage of support requests from people with no known registration (each licensed copy was registered to a specific key and email). We got a pretty good feel for the number of pirated copies out there that way. It was roughly 30%. – jwenting May 01 '13 at 05:33
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    [ctd] we didn't shut down because of that, but it seriously affected out revenue, slowing down releases, hurting profits, eliminating expansion plans. Nobody lost their jobs, but there was no money to hire people either. And I do know people who did lose their jobs in other companies due to piracy, their employers simply giving up on the market and shutting down departments to focus on areas where piracy is less of a problem, business software and custom software. – jwenting May 01 '13 at 05:36
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A case where it didn't take down the studio, but it must likely hurt sales and cost money:

Demigod by Stardock was pirated before launch and had a massive server load - 18,000 validated users and 140,000 concurrent users. This prevented everyone from playing:

"Our stress tests had counted on having maybe 50,000 people playing at once at peak and that wouldn’t be reached for a few weeks by which time we would have slowly seen things becoming problematic... So during the day today, people couldn’t even log on, and in some cases, the Demigod forums, which use one of the affected databases for some piddly thing were even down," he wrote. "Even getting the game running was a pain today because a simple HTTP call to see what the latest version would get hung leaving people looking at a black screen. Stuff of nightmares."

The game took a huge hit in reviews - it was a multiplayer game where the multiplayer didn't seem to work.

As I remember, Stardock had to call people in over the weekend ($ for overtime), they had to spin up the servers sooner ($$ and time), and they had to sink more man hours in patching (probably would have happened anyway, but maybe not on "no one goes home tonight" urgency).

thegrinner
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  • Interesting item that I did not know about Demigod. I apparently purchased it late enough after release to miss this entirely. That being said, I think it still could have been successful if it weren't for its limited hero pool causing duplicate heros in a single match. – SpartanDonut Apr 30 '13 at 14:15
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    I'm somewhat shocked about these--it's like the games are being written by a pile of monkeys. How could you possibly write a game with a server component that didn't tie the ability to log onto the server to paying? I can't even... wtf? Who are these companies hiring? – Bill K May 01 '13 at 05:35
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    @BillK easy. The login would require credentials. Due to privacy regulations in many countries you can't store personal data, so they only store a license key. The pirates all register with the same license key, just as if a single person had installed it on multiple computers at home (you do NOT want to prevent that). The only flaw I see is that they didn't detect multiple simultaneous logins by the same license and log out all but the last of them. And another scenario: each login attempt generates traffic. Enough simultaneous attempts can shut down the network even without anyone playing. – jwenting May 01 '13 at 05:41
  • If you read the Correction: pirated users couldn't update or play multiplayer, but the pirated games would still send requests to server/services (ie. check for updates etc.) – Holger May 01 '13 at 13:13
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It's actually saved companies before! Leisure Suit Larry was not a very popular game before it was passed around on pirated floppy disks. I remember Al Lowe saying that they sold more strategy guides than copies of the game.

There were no plans on a second game until the piracy eruption(pun intended).

Captain Skyhawk
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I would be quite wary of such reports, if there are any. Unless you have been or have worked for such an unfortunate developer and know the reason first hand, there is always the possibility that piracy is being used as a scapegoat, or a convenient quarter- to half-truth.

After all, "Our game is SO awesome that it was crushed by its own success and because people are scumbags." sounds a lot better to future customers and/or investors than the myriad reasons for why companies usually fail - all kinds of mismanagement, poor quality or desirability of the product, insufficient marketing, wrong time and place for the product, etc. etc.

See FUD for examples of that strategy.

Hackworth
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  • My thoughts exactly. It makes an excellent scapegoat because, often times, it is hard to disprove, particularly for offline games. – MikeS Apr 30 '13 at 14:45
  • As a scapegoat, it loses its power when the person on the other side of the debate says "Then why didn't you have better piracy protection?" Pay the manhours to build the protection or deal with lost revenue and increased server load. – TecBrat Apr 30 '13 at 15:05
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    @TecBrat nice, but flawed argument. If you're suffering from 50% piracy losses and increasing piracy protection would eat up more than 50% of your remaining revenue in order to reduce that loss to 30% (and antagonise 20% of your paying customers into abandoning you because of the increased hassle), you're fighting a losing battle. Which is exactly what many companies have been doing, ending up cutting their losses and shutting down titles and departments that were suffering too much to focus on something else. – jwenting May 01 '13 at 05:43
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    This isn't an answer, ironically it's just FUD. No sources, only speculation. – Matsemann May 01 '13 at 09:46
  • @Matsemann What do you want a source for? Google "Top 10 reasons why companies fail". – Hackworth May 03 '13 at 12:11
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I can think of one off of the top of my head where DRM and piracy caused a game to have poor(er) sales, and the company ultimate went defunct which may or may not have been directly related to the sales of the game.

Titan's Quest made by Iron Lore Entertainment had DRM where pirated copies were extremely glitchy and crashed a lot, and the pirates spread horrible word of mouth about it around and this affected the sales

I'm not sure if it was directly linked to them going defunct, but I'm sure it didn't help the situation.

Tom 'Blue' Piddock
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Roxerio
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    So they used copy-protection to make the game appear buggy and glitchy in the pirated version, and then complained that people got the impression that the uncracked version might be buggy and glitchy too? It seems like their own copy protection hit them much harder than the actual piracy. – Philipp May 01 '13 at 10:12
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    Well to be fair Titan's Quest was actually kind of a crappy game anyway. One of the founders of Iron Lore (Brian something) works as a teacher at my school (Northeastern University) and convinced me to try it. Needless to say it was not really fun, while I am sure it got a lot of negative press from bugs in pirated versions, the game wasn't really up to par (gameplay wise, graphics were actually pretty awesome) for it to have been a success. You should also note that this company was founded on a super tight budget and had all their eggs in that one Titan Quest shaped basket. – Benjamin Danger Johnson May 01 '13 at 17:28
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I can't find the article right now but a while ago I read one about how the developers of one of the Spyro games spent 1/5 of the budget and development time on an experemental DRM system.

They calculated that this system slowed hackers down by only 6 days and increased revenue by almost 30%.

Though these are not studio closing numbers it does give you an idea of the effect piracy can have on a game. You should most definitely consider the impact it will have on you and plan accordingly.

yuritsuki
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Skeith
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    Were you talking about Keeping the Pirates At Bay? According to that article, it was 2 months before a successful crack came out, but they did not attempt to estimate how many sales would have been lost to piracy otherwise. They only observed that 30-50% of a game's total sales are made in the first 2 months. – Nathan Reed Apr 30 '13 at 18:10
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    Great link @NathanReed – Tom 'Blue' Piddock May 03 '13 at 08:17
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    To elaborate it was not a 5th of the budget but a 50th. They spent just under 2% of total developer man hours on the developing the protection. The planning and resources that went into it meant extra production and testing tasks were needed but otherwise it wasn't a fifth of the costs. – Tom 'Blue' Piddock May 03 '13 at 08:45
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I should clarify that a developer's job is not lost. Reason: It is not one game that is being pirated, there are loads of it, the piracy of games might increase the word of mouth for those games provided they become popular say GTA series and more. So if a game becomes popular because of piracy and if they achieve the cult status, the requirement of a new version for the same with more graphics, detailing and programming will come as a public demand. Hence a developer job is not lost, but increased.

If we look at the other way where the popularity too fails, the company making that game will either shut in worst case scenario or will make a new version, but in any case, the developer will have his most precious intellectual property and will invest in a new venture or product. So in this case also, his job is not lost.

NKL
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GreenHeart games was also hit by piracy quite hard, even tough they managed to punch back in a very unique manner.

They uploaded the game themselves to the torrent scene, but it was a modified version. Their game, GameDev tycoon, was modified for this release, so that your virtual game development company would go bankrupt sooner or later because of piracy.

They even had pirates posting at their forums about "piracy ruining them".

Original article

In this article you can also see statistics of genuine vs cracked versions.

While they didn't go bankrupt, I read another article, that I can't find, that stated the game didn't bring any profit, this also had a negative psychological effect on game developers not wanting to continue, in the end they did, and since it seems their game has taken off.

akaltar
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This is impossible to prove because "loss of sales" is a complete fiction. It compares the actual world and events that have happened to an imaginary parallel universe in which all the users who copied the program were forced to pay for the program (whether or not they still wanted to use that program if they had to pay, and whether or not some of them could afford it).

If a game dev fails, whereas others are surviving, this is probably caused by differences between that game dev and others, since everyone is affected by piracy, but not everyone shuts down.

Anon
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    "Unable to be proven" is not the same as "complete fiction". – Attackfarm Apr 30 '13 at 23:26
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    Who said it was the same? X because Y doesn't mean X = Y. The loss of sales doctrine is based on comparing reality to an imaginary universe where everyone pays for stuff that can be copied. – Anon May 01 '13 at 03:24
  • Oh this argument reminds me of Richard Stallman. BTW I consider him as one of the best men in the world. I am a programmer and a fan of Free Software/Open source. – H M May 01 '13 at 04:05
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    you can actually measure it pretty reliably under certain conditions. If you have an older product, with known sales numbers, and release something else appealing to the same audience, then see your sales of that product drop to 50% of the prior, yet see the number of blogs, forum posts, and support requests be the same or higher, you can pretty much assume that that 50% drop is due to piracy. – jwenting May 01 '13 at 05:47
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    The argument might remind you of Stallman, yet I do not agree with a lot of what Stallman thinks. (I think he's a communist twit, for the most part.) But facts are facts. Even though Stallman and I disagree, we both have to rationally recognize that some argument is based on a fictional reality. If you develop software, before you bank the first investment dollar or write the first line of code, you have to plan that there will be piracy. You don't plan for the imaginary universe with no piracy and then cry. – Anon May 02 '13 at 06:01
  • @jwenting Why wouldn't the old product be pirated just as much, though. And even if there is 50% piracy, that agrees with the real universe where there is piracy. In this universe, the new program is pirated 50%. If you can find access to a universe in which it isn't pirated, go live there and be richer. – Anon May 02 '13 at 06:03
  • @Anon read. There would be piracy, but a sudden drop in sales combined with a constant level of support calls and user activity about the product is a dead giveaway. – jwenting May 02 '13 at 06:10
  • @jewnting My argument isn't that piracy doesn't exist, or that there cannot be evidence of piracy. – Anon May 12 '13 at 00:24
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It can be good and bad. The good is it helps to popularize the software (I'm talking in general). Microsoft is the best example. They actually 'allowed' piracy, now 95% of the computers in the world has their software and now, we can't live without them.

Another theory is, don't worry much. If the user is using pirated version, he'll never pay for a non-pirated one, if pirated is not available. I mean, why he is using pirated, because he don't want to pay. So there is not much about lost sales, it may actually increase sales by the popularity and the 'good' people who want to buy. Give an option to register/buy. But the developer will feel bad when they see their software cracked.

Movies is a different game. Pirated will directly attribute to lost sales.

Edit: For those who are looking for source, here is a quote from M$. Just what I was saying about Microsoft. Most of their business strategies are opponent crushing ones.

Bill Gates famously said: "As long as they're going to steal it, we want them to steal ours. They'll get sort of addicted, and then we'll somehow figure out how to collect sometime in the next decade."

Mathew Joy
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    Microsoft allowed piracy? If I remember my computer history, Gates was very against piracy from the beginning. – House Apr 30 '13 at 14:46
  • He never said. But that is what happened. He had the means, but never did, cause that was 'low' priority. That is another way to crush opponents. – Mathew Joy Apr 30 '13 at 14:49
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    Have a source for that? Long before Windows, Gates wrote An open letter to hobbyists, in which he is fairly critical of pirates. – House Apr 30 '13 at 14:56
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    @Byte56 what he may mean by allowing it is that people have speculated that they don't enforce piracy in third-world countries that much, because when they eventually have money they are accustomed to MS software and MS will thus earn money. I don't have any sources, just trying to point out what he may mean. – Matsemann Apr 30 '13 at 15:00
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    @Mathew as the other answers have shown, it's not just the 'lost sales' that hurt a company, but for instance server load. – Matsemann Apr 30 '13 at 15:01
  • Matsemann pointed out correctly. It is one thing to be critical and another to work on it. He decided to work on it much, much later after capturing the market. Anyway not going to digressing more from the OP. I would agree with the server load. You did not get anticipated revenue to upgrade the server. Yes, an effect cause of piracy. But then you can count those expenditure as capital investment. Your game is popular, try to capitalize on it. – Mathew Joy Apr 30 '13 at 15:12
  • @Matsemann that was the sugar coating for the actual reason to not act more harshly: it simply wasn't cost effective (and in many cases still isn't) to go after pirates in small markets because the volume in those specific markets is too low to warrant the expense. If you have to spend $50m to go after 1000 pirated copies of Windows Vista (which is already written down anyway) that's $5000 per copy which has a retail price of about $250, only about $50 of which goes to Microsoft, and that's before taxes. – jwenting May 01 '13 at 05:53
  • In some cases yes.Look at World of Warcraft.Pirate servers are far from original and only wind up players to play on official servers. – user1075940 May 01 '13 at 10:51
  • @jwenting 50m is a gross exaggeration, and 1000 pirates is gross understated. There are countless other simple ways than to look at the back of the CD cover for the reg #. Simple techniques to prevent mass copying and installing of pirated softwares, not implemented just to capture the market. Clever marketing strategy, which indeed payed off. – Mathew Joy May 01 '13 at 12:51
  • @MathewJoy I used extreme numbers in order to make the point clear. The $50m to combat pirates in say Zaire or Nigeria for a major company like Microsoft who have no permanent presence in that country is probably not overstated. They'd need to hire several lawyers for many years, and in those countries no doubt pay bribes to get cases going, and for everything else. – jwenting May 02 '13 at 05:35
  • @ jwenting It is quite the opposite. From emerging developing countries like China, India, Brazil and South Africa, Microsoft sells in 100s of millions and making it harder to pirate would take max 10s of hundreds. They didn't do in order to, as said by himself, 'aid' stealing. This is 'allowing' piracy as I mentioned first, why?...just to capture the market. You need to look at MS ways of capturing the market, not very good. That is my first point, allowing piracy to popularize the software. India and China alone has more than 500m in personal PCs and > 90% pirated MS OS. – Mathew Joy May 02 '13 at 16:37
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It's not mentioned yet, but some people cite the very piracy friendly CD format of the Dreamcast discs (you just had to burn the iso's, no modding just a bootloader) as one of the major factors in the system's failure. It didn't result in the total collapse of Sega, but we'll never see any hardware from them again.

John
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    Do you have any sources to back this up? – yuritsuki Apr 30 '13 at 18:25
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    It isn't because most Dreamcast games absolutely sucked or anything. This was Sega blaming piracy when the problem was in their own walls. Much like K-Mart blamed self-serve checkouts for their huge losses when everyone know it was Wal-Mart. – Captain Skyhawk Apr 30 '13 at 20:49
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    -1 Please provide sources for your claims – House Apr 30 '13 at 23:08