Gabe Newell: Anti-Piracy Tech Not the Best Way to Stop Piracy
Piracy isn't a pricing issue
Valve's Gabe Newell is, well, one of the few remaining characters in the ever-more market-lead world of video game development. He's been talking piracy and pricing. We should listen.
Speaking in Seattle recently, Gabe actually managed to shock Microsoft's Ed Fries... here's what happend.
Gabe said, "It’s interesting to touch on a number of pricing and service issues, because it will help convey the complexity of what we’re seeing in the entertainment space, and there’s probably also going to be lessons in it for other people trying to create value on the Internet.
"One thing that we have learned is that piracy is not a pricing issue. It’s a service issue. The easiest way to stop piracy is not by putting antipiracy technology to work. It’s by giving those people a service that’s better than what they’re receiving from the pirates. For example, Russia. You say, oh, we’re going to enter Russia, people say, you’re doomed, they’ll pirate everything in Russia. Russia now outside of Germany is our largest continental European market."
Ed Fries, former VP at Microsoft during the birth of Xbox, was surprised, "That’s incredible. That’s in dollars?"
Indeed it is. Gabe continued, "That’s in dollars, yes. Whenever I talk about how much money we make it’s always dollar-denominated. All of our products are sold in local currency. But the point was, the people who are telling you that Russians pirate everything are the people who wait six months to localize their product into Russia.
"Instead what we saw was our gross revenue increased by a factor of 40. Not 40 percent, but a factor of 40. Which is completely not predicted by our previous experience with silent price variation."
More at Geekwire.
Speaking in Seattle recently, Gabe actually managed to shock Microsoft's Ed Fries... here's what happend.
Gabe said, "It’s interesting to touch on a number of pricing and service issues, because it will help convey the complexity of what we’re seeing in the entertainment space, and there’s probably also going to be lessons in it for other people trying to create value on the Internet.
"One thing that we have learned is that piracy is not a pricing issue. It’s a service issue. The easiest way to stop piracy is not by putting antipiracy technology to work. It’s by giving those people a service that’s better than what they’re receiving from the pirates. For example, Russia. You say, oh, we’re going to enter Russia, people say, you’re doomed, they’ll pirate everything in Russia. Russia now outside of Germany is our largest continental European market."
Ed Fries, former VP at Microsoft during the birth of Xbox, was surprised, "That’s incredible. That’s in dollars?"
Indeed it is. Gabe continued, "That’s in dollars, yes. Whenever I talk about how much money we make it’s always dollar-denominated. All of our products are sold in local currency. But the point was, the people who are telling you that Russians pirate everything are the people who wait six months to localize their product into Russia.
"Instead what we saw was our gross revenue increased by a factor of 40. Not 40 percent, but a factor of 40. Which is completely not predicted by our previous experience with silent price variation."
More at Geekwire.
People:
Gabe Newell
Read More Like This
Comments
Fred 25 Oct 2011 18:44
1/2
You say its not all about pricing.... It still has an effect! especially when it comes to movies and music... no one wants to buy music or movies because the studios and record labels are greedy ... huge margins ... nothing passed on to the artists (in the case of music). They're charging ridiculous prices and its all about ensuring that the can pay off R&D into Blurays and DVDs .... DVDs paid of R&D costs years ago and on that issue all DVDs should be about £3 ... but they're not because the corporations are greedy... take the Amazon stance.... High volumes small margins ... that's the way it should be!
Fred 25 Oct 2011 18:49
2/2
Don't get me wrong I love Gabe and what he'd done with Steam ... it's awesome I just hink other partf of the entertainment sectors are using their dominance to set prices and eliminating competition!