PC Gaming Alliance's Stude On The 'Urgent Imperative' Of Piracy

Piracy is one of the most important issues facing the PC industry, says Randy Stude, president of the PC Gaming Alliance. And recent evidence tends to support his statement -- Ubisoft recently said it wouldn't ship the PC version of Tom Clancy's EndWar alongside the console version because of piracy, which it says is "cannibalizing" console sales. MMO companies have begun eyeing the console as a platform that can round out its PC strategy -- despite its continuing support for the PC, Lord of the Rings Online developer Turbine recently told Gamasutra that the console is the "platform of choice" for many consumers. And Gamasutra recently spoke to EA president John Riccitiello about Spore's launch, plagued by protests of its anti-piracy measures and unprecedented download rates on torrent sites. Stude is not only the PCGA's president, he's the director of the Gaming Program Office at Intel, whose initiatives with the alliance are part of the company's platform support strategies. "A few years ago, several of us came together and decided that something needed to be done to shore up the PC image for gaming in particular," Stude says, explaining the Alliance's roots. Initially, the PCGA planned to look not specifically at piracy, but on improving the consumer experience with PC gaming. Stude says that the varying objectives and tech focus of different companies involved in the PC hardware market was "drawing the attention so far up the performance chain that it was creating a wide disparity between the way games were being developed and what the majority of consumers had in the way of PCs." "The average refresh cycle is in excess of four years. A PC four years ago compared with a high-end PC shipping today... that scenario sort of describes the challenge for a game developer that wants to attract the largest and most relevant audience and be able to support that audience." So the Alliance currently plans to introduce "starting points" that developers can use to ensure the games they develop on PC are usable by the widest possible audience. "We're expecting to close it down within our working group by the end of the year... we'll probably announce it sometime in the first quarter of next year," Stude says. Piracy: The Urgent Imperative Meanwhile, the PCGA hopes to attract game companies to its efforts -- and while potential committee members acknowledge the importance of platform stability, says Stude, "there's a far more urgent imperative they want to see discussion and debate going on around, which is piracy." So the PCGA has formed an anti-piracy and DRM subcommittee which is just kicking off its efforts, starting with an endeavor to try and quantify the size of the piracy issue. "At some point next year, we expect to be able to quantify the potential impact of piracy on the industry," says Stude. Being able to provide hard data on the impact of piracy on the industry is the first step in anti-piracy initiatives, he says. "Assuming that every person that pirates a PC game is a lost customer is not a fair assessment… but at the same time, like music and movies, individual piracy has an impact to the bottom line -- and if there isn’t something that’s done we risk an entire medium being fundamentally changed." Looking East For Examples China and Korea are the top markets for PC gaming, says Stude -- and yet in those Asian countries, there are very few legitimate retail sales of games. "But the revenues being generated just blow the mind," says Stude, noting how online business models and digital distribution are far and away the predominant revenue generation strategy for PC games in those markets. "You're talking almost 5 billion dollars," says Stude. "Almost half the world's PC software revenues are coming from marketplaces that have almost no retail at all." Stude's comments tend to support those of Turbine CEO Jim Crowley, who recently told Gamasutra that the issues plaguing PC were "not a platform issue, [but] a distribution issue." Agrees Stude: "It's not a state of disarray; it's a state of evolution. Those used to making a point-in-time disc that may or may not have piracy issues, may have DRM issues that cause backlash... those classic models for publishing PC games are not necessarily the leading ones in the world today." While in the current climate, Stude believes there's still a viable disc-based marketplace for PC developers, noting Spore and Crysis Warhead as examples of successes despite the potential impact of piracy. "You look at a game like Spore… despite the fact it's pirated out there on torrent networks, its selling great by any standard... it sort of bucks the notion that all games are going to be destroyed because of piracy. That's not the case." Smarter Solutions So while the PCGA's beginning its anti-piracy workgroups, is PC piracy just something the industry needs to accept, weathering the transition into a pure digital marketplace like China's? "I'm not saying that the industry needs to accept it," says Stude. "I'm saying that if there’s nothing that can be done [about piracy], the assumption that gaming will die on a platform is ridiculous." And the argument is even more salient in a poor economy, Stude notes. "There is a 1.2 percent drop n retail spending... how is that not going to impact a $70 video game?" While analysts and console developers remain bullish on the ability for high price points to withstand tightening consumer budgets, Stude is more blunt: "They've gotta be out of their minds," he says. "If there are alternative means to get that content, piracy or legit, consumers are going go find it. They have broadband, they have PC -- but perhaps they can't buy a $70 game every month like the console ecosystem relies on." Consumers who are seeing their disposable income diminish will be drawn to alternative business models on PC, Stude says, citing Nexon's free-to-play FPS Combat Arms as an example. "I think there's things that we can do better," Stude adds. "There may be so much gravity involved in a certain behavior -- that it’s being socially acceptable despite its illegality -- that there may be nothing you can do about it. But I think WoW proves there's something you can do about it. Nexon and Shanda and K2 and all the other microtransactions-driven, free to play-style business models can continue to thrive." And they can thrive better on the PC than on the console, Stude notes. For example, an ad-supported business model on consoles is less useful to developers, since the platform-holders -- Sony, Microsoft and Nintendo -- will want a cut of those ad revenues. "Spending for marketing draws attention toward the console purchase," Stude says, noting Call of Duty 4 as an example. "But certainly, a lot more people are sticking with the PC SKU and playing it longer, "whereas console users "tend to look for that next fix every month." So as far as Ubisoft and EndWar are concerned, Stude urges the company to join the PCGA and help find solution. "If I'm Ubisoft and I say there's nothing that can be done today about piracy, I'm considering, 'let's join the PCGA and lead the discussion,' so that there's a better handshake between hardware and software; so that the future of the optical disc base is better than it is today." One possible solution? "Let's monetize every one of those pirates, and let's advertise the hell out of them." Making it "blatant" to pirates by serving, for example, six times the number of in-game ads on unauthenticated game versions would be a piracy deterrent that also provides revenues to the developer, Stude suggests. "Don't throw [pirates] off [of the server], but show an ad every time a new level loads. The [paying customer] gets a billboard, a passive, less-aggressive ad than [pirates] are going to get."