Communications of the ACM

Vviewpoints

DOI: 10.1145/2594289

Law and Technology
What Happened to
Video Game Piracy?
How video games thrive in a world of piracy.

world completely, it is clear that video developers face nothing remotely close to what the music record industry endured. The video game industry has thus far avoided the immense illegal copying that fundamentally disrupted the ecology of the investments in and distribution of content by the traditional major label record companies.

Looking back at the history of the video game industry, the absence of a piracy watershed moment for video games is remarkable.

The video game market was one of the first content industries that faced the emerging trend (and threat) of decentralized, noncommercial piracy by hacking groups that used bulletin board servers (BBS) and smart modems in the late 1990s. As a sign of the times to come in a world of quasi-universal Internet access and drastically increased bandwidth, the outlook was bleak. The potential threat of widespread piracy was compounded further by the fact that computer game enthusiasts are early and enthusiastic adaptors of novel software applications. More so than the typical music collector, video game users are likely to embrace file-sharing technologies and also more apt at making the most of these technologies; including the circumvention of copy protection and piracy enforcement efforts. Also, video game users often form a relatively close-knit community that is accustomed to sharing information and programs across networks and user groups.

So why did the “Napster moment”

AS HAS BEEN widely docu- mented, online file-shar- ing technologies generat- ed considerable turmoil in the music industry
over the past decade. The mainstream
peer-to-peer network Napster in-
troduced an era of noncommercial
music copyright infringements. Mu-
sic copyright violations reached un-
precedented heights as consumers
illegally downloaded music through
a wide array of decentralized peer-
to-peer (P2P) file-sharing platforms
and torrent Web sites. Compelled by
a marked decline in traditional re-
cord sales, major music record labels
had to downsize and restructure their
business models in order to tap into
alternative sources of revenue, in-
cluding proceeds from concerts, ad-
vertising income, and so forth. 4
While all of this came to pass, the
video game developers … found out
that everything would be all right. Judg-
ing from the overall expansion of the
video game industry, it appears almost
as if the industry skipped the “Napster
moment” of the Internet piracy and
illegal file sharing. In 2013, the video
game industry was on track to gener-
ate $93 billion in revenue (up from $78
billion in 2012) and the introduction of
new home consoles is expected to drive
up revenues further (estimated at $111
billion in 2015). 6 It is clear that Inter-
net piracy has not prevented the video
game industry from prospering.
In light of these numbers, the ef-
forts by video game trade groups to
portray video game piracy as an exis-
tential threat are best dismissed as an
example of the lobbying boy that cries
wolf to Congress. In contrast to the
exaggerated numbers suggested in
most industry press reports, a recent
academic study identified a mere 12. 6
million unique peers of illegal copies
across 200 countries in 2010–2011. Just
about 20 countries accounted for 76.7%
of the total traffic in illicit digital copies
of computer games on Bit Torrent. 2
Instead of combating online piracy,
segments of the video game industry
are occupied with preventing video
game resales and preempting second-
hand video markets by way of one-time
activation codes for new games and
online gaming. What a luxury position
the video game industry finds itself in
today: working hard at preempting the
Copyright Act’s first sale doctrine that
reserves the public the right to resell
their lawfully purchased video games.