"Make no mistake," said SEGA this week, "if one quarter of the people that usually pirate [Football Manager] switch to purchasing Football Manager 2012, the sales of the game worldwide would more than double." That was the eye-opening statistic used to justify Football Manager 2012 requiring Steam to play. In other words, more than 80 per cent of people playing Football Manager are doing so with a pirated copy.
Is PC piracy really that bad?
"Piracy levels, depending on country, range between 40 per cent and 80 per cent," Reinhard Blaukovitsch from Sony DADC, the company responsible for SecuROM, told Eurogamer as part of an investigation into the true impact of PC game piracy. That means that between 40 and 80 per cent of total copies of a game being played are pirated. "The commercial value of global software piracy is growing by 14 per cent annually."
In January this year, UKIE - a consortium of UK game publishers - revealed that for every one game sold, four were being pirated.
"We looked at quantifying what the real losses are," says Christian Svensson of the PC Gaming Alliance and Capcom, "and it's incredibly hard to do, because you end up having to do a set of cascading assumptions that you have no real ability to validate in any meaningful away."
"It's impossible to know how bad piracy is," agrees Michael Pachter, Wedbush Morgan analyst, "but it's pretty bad. [Clarification - Michael Pachter heard from Ubisoft that piracy rates were as high as 90 per cent per title.]"
Hard facts and figures are difficult to come by, then. Eurogamer asked various publishers for statistical data and input, but our enquiries were fruitless. Sony DADC cites "various sources". Other companies we spoke to mentioned research by companies like the ESA and DFC Intelligence; others monitor BitTorrent statistics; and others use data provided by game sellers. And it's not uncommon to use them all together.
"Let's turn the discussion away from sales to how many copies are sold legitimately versus how many copies we see downloaded illegitimately," Svensson continued, "irrespective of how many could actually be converted to a legitimate user. I would say that at the low end of the threshold - and it varies greatly from territory to territory and brand to brand. Bigger brands see higher levels of piracy - it tends to be 50/50. That's the lower end."
"At the higher end you can see 90 per cent illegitimate usage to 10 per cent legitimate," Svensson says. And they're not, what he calls "victimless crimes". He says Capcom had support calls from people playing pirated copies of the game. "There's a dollar cost to that. They're not even aware of what they're asking being wrong," he shrugs, "they're not aware it's theft. It's a cultural issue. And you'll find that the sensitivity to it or against it really varies a lot, a lot, from country to country."
"Ubisoft told me that their PC game sales are down 90 per cent without a corresponding lift in console sales."
Michael Pachter, analyst, Wedbush Morgan
For some time, publishers have tried to protect their games from the rope-worn hands of pirates. Elite used the Lenslok, a device through which a corrupted image of a number on a screen could be correctly viewed. Some publishers even drilled holes into floppy disks at known locations to throw pirates off. Then there was the flicking through manuals to locate specific words and sentences based on coordinates given on screen. These days, companies opt for DRM - digital rights management.
But does it have any effect on piracy?
"[There's] no public data to suggest that DRM works," says Pachter, "but the fact that more companies are imposing it strongly suggests that they believe it works."
Svensson is convinced that it does work. "Through the use of DRM, a publisher can meaningfully improve profitability on a project. But I would also argue that it has as much to do with an ecosystem where content is not unilaterally available, which means that DRM is really only effective if a broad number of participants are actually employing it. The reason being that the habitual PC pirate, or pirate of any platform, if there's one piece of content that they can't pirate, that's OK, they're going to move on to the next piece of content they can."
"There's some sort of element of solidarity being required amongst publishers to really have those investments. And I say investments because it does take time and money and effort to implement DRM in a meaningful way and minimise the impact to the consumer. What you've asked is a very thorny question. The reality is, it would take converting three per cent of those people who pirated that game to be paid users - a very nominal amount - to meaningfully impact the actual revenue and profitability on the title."
Svensson's remark about minimising the impact to the consumer is key; DRM, perceptively, has had a rough ride. Two years ago, SecuROM DRM ruled the roost. This gained notoriety through games like BioShock and Spore for restricting installations per game - the thinking being that a communal, pirated, torrented version of a game would soon lock out.
Installation limits are yesterday's news; today the online check embodies DRM. One company that has antagonised the PC community more than most is Ubisoft, for requiring an always on internet connection (which in most cases was later diluted). Driver: San Francisco developer Ubisoft Reflections said a company has every right to protect its investment. And it does.
But whether it's punching holes in discs or requiring an online check, the question remains: why should someone who has bought the game have a more fiddly, frustrating experience with online checks et al than a pirate?
"Consumers are right to complain about DRM, since it impacts both legitimate and illegitimate users," reckons Pachter. "The problem is that the companies think it limits piracy, and an industrious and determined hacker can work around DRM, while a normal, legitimate user must deal with a hassle. I'm not sure where to come down on this, as I respect the companies' right to protect their intellectual property, while acknowledging the legitimate consumer's complaint about the problems created with DRM."
"The challenge nowadays is to reward loyal users," GOG.com's managing director Guillaume Rambourg believes. "If you make the whole gaming experience more complicated and more frustrating for people who buy the game; if it's easier to play a game that is pirated because they removed all the technical restraints, then I think there is a big issue on the plate now. It should be easier to play a game that you bought legally than play a game that you pirated."
"Through the use of DRM, a publisher can meaningfully improve profitability on a project."
Christian Svensson, PCGA and Capcom
"There's good DRM and what we call bad DRM," explains Svensson. "There's a huge breadth of parameters and technologies available, and no one technology is bad - it's the implementation that can be bad, the communication around the implementation that can be bad. What we try and do - and we haven't always been successful in this - is never hurt the legitimate user. If the legitimate user is ever going to have a more negative experience than a pirate, you've done something wrong.
Of utmost importance, says Svensson, is "being upfront with fans". And he himself has been on the receiving end of fan backlash before.
"We had a semi-bright idea at the time to try and restrict content to if you were offline, you had a game experience but it was a lesser game experience. Let's say you had a restriction in characters in the case of Super Street Fighter IV Arcade Edition. And if you were logged in and we knew you were legit then you would obviously have access to the whole thing. And there were a whole number of fans saying that approach was not a good approach. And we took it back and talked about it and kicked it around and said, 'You know what? They're right.' So we undid it," he recalls.
"And we provided a better experience than the pirate experience, that was, quite frankly, running a virtual machine to emulate network response that impacted performance. In this case, legitimate users got a better product than the pirates did. That was the case of the fans putting up a really cogent and smart argument, and us reacting and being able to remove that DRM - in one case before launch, in the case of the rest of the versions, within a week-and-a-half, which was not easy to do."
A perverse reversal of DRM is the suggestion that it can encourage piracy. Minecraft creator Markus "Notch" Persson cheekily offered a "pro-tip" that "if you pirate Ubisoft games instead of buying them, they will work fine if your internet connection goes down". His point, he argued, was that using a DRM system that encouraged piracy was "insane". Rambourg is of a similar view.
"Consumers are right to complain about DRM, since it impacts both legitimate and illegitimate users."
Michael Pachter, analyst, Wedbush Morgan
"Piracy is some kind of ghost enemy, and chasing a ghost enemy is a pure waste of time and resources. The only way really is to make the whole gaming experience easy, convenient and rewarding for the users - this is the only way to fight against piracy," says Rambourg.
"If you make an experience troublesome or if it's a pain in the back for the users, they will be tempted to give piracy a try. You really have to make sure that whoever buys a game, whether digitally or in retail, is starting the game and playing it straight away. Nowadays we're in a very fast-paced society, and anything taking more than five minutes is seen as a trouble by anybody.
"If you make the process too troublesome - even if you are a good hearted gamer, you will be tempted to give piracy a try. This should be the obsession to fight piracy. Putting restrictive measures, putting any kind of technical restraints can only encourage piracy, whether it's DRM or anything else."
Rambourg is a man of his word. The Witcher 2 was sold on GOG.com with no DRM, and DRM was quickly patched out of other versions (it was there originally to prevent pre-release leaks) - a bold experiment. And a successful one?
"Honestly, we are very satisfied," he tells me. "I'm not doing some corporate blah blah right now - we are really happy. Just to give you an idea - of course I cannot disclose sales numbers: in the first two months of release we have sold more units of The Witcher 2 than of any other game on GOG.com in the past. Even when we released Fallout, Duke Nukem 3D or any triple-A back catalogue title, we never sold that many units within the first two months."
However, he adds a note of caution. "I presume the first version that was interesting for hackers, let's say, was the GOG version. This was the easiest master to get and make available online. Did it impact CDP Red sales worldwide across all distribution channels - retail and digital? I have no idea to be honest. We do know what is the average number of times that The Witcher 2 has been downloaded [a method GOG uses to monitor piracy levels] and, honestly speaking, the number is anything but scary; it's really in the average we have across the whole catalogue, the whole line-up of GOG. There was no specific spike for The Witcher 2. Users and their temptation to pirate the game is minimal - it's not visible."
The Witcher 2 was near 1 million sales at last official count. That barrier has probably now been crossed - or is at least very close to being passed. That's as popular a traditional triple-A PC game as you're likely to get. So why don't other publisher's abolish DRM?
"I don't think there's an argument to abolish it," says Svensson, "because there is a tangible benefit to content creators [that use it]. The other part of this is, unfortunately, we live in a world where we can't leave all of our doors unlocked. There are some creators out there who are really proud of being DRM-free, or they have sun-setted their DRM, which I think is the smarter, the better way to go, where you protect what you can and then at some point in time open it up or release the restrictions in some way. We've done that on our titles and we tend to get very little complaints, at least on the PC side of things."
"The other part of this is, unfortunately, we live in a world where we can't leave all of our doors unlocked."
Christian Svensson, PCGA and Capcom
"When a DRM has been defeated, being able to remove DRM for all customers - because at that point you are only harming the legitimate customer - is an important ability to have. Keeping a crack-free window as long as possible does result in meaningful increases in revenue, especially in the first 30 days."
"It's all a matter of scale," continues Rambourg. "I would be arrogant claiming GOG's model can be applied by any company in the world, because obviously we have a niche market - we sell old classics. It's a bit easier for us to give no DRM a try.
"When it comes to big publishers, the economical stakes are quite important. They have huge investments, they develop games for several dozens of millions of dollars and they believe that DRM is the only way to protect their sales. I believe there is a certain stiffness here. I have talked to some publishers regarding The Witcher 2's success on GOG, and I show them some sales numbers and explain how our model could generate substantial incremental sales for developers and publishers, and I could see some faces, let's say, getting positive behind the table. I could see some people realising that putting psychology into an offering can be another way to shield sales."
So where do we go from here? The rise of free-to-play gaming helped Asia cure its piracy-riddled PC gaming market. And we can see the same beginning to happen here.
"The reality is that the network is the only thing content creators control," Svensson says. "That is the only thing we have validation over, the only true authentication that we can ever have, because you can never trust the client. Free-to-play games are all network based, because you can't do stuff outside of them. The other part is that free-to-play games benefit from piracy to the extent that they can harness the distribution power and viral nature of pirate networks. In certain applications there's an upside to pirate networks."
"What I think you're going to see happen is an evolution towards an increasingly network centric set of design considerations and business models, because moving forwards that is the only thing that is sacrosanct."
"Free-to-play games benefit from piracy to the extent that they can harness the distribution power and viral nature of pirate networks."
Christian Svensson, PCGA and Capcom
Steam, the embodiment of online authentication, uses Achievements, social hooks and an online log-in to naturally outlaw piracy. And the Steamworks developer tools are installed far and wide by the industry's biggest games today. But there's a reluctance by the market to place its eggs all in one basket, hence EA's new Origin store.
Nevertheless, it's because of free-to-play games, because of Facebook, because of streaming services (OnLive, Gaikai), because of MMOs, because of digital distribution, because of Achievements - that Matt Ployhar, president of the PC Gaming Alliance, believes piracy is finally declining on PC.
"If I were a console evangelist I'd totally play up piracy on the PC," Ployhar says. "But I have to stop and wonder how in the world they can continue to make that argument when a few years from now most games are likely going to be free-to-play anyway.
"Consumer PCs are 10-times the install base of any individual console market. Given that free-to-play is largely dependent on having as large a total available market as humanly possible the PC, for gaming, couldn't be in a better position."