This debate has taken a weird turn, I think its pointless to discuss the right and wrongs of piracy. It’s pretty clear it’s wrong and akin to stealing though the effect is not as profound.
The problem is 2 fold. One is the funding of original creation of IP for example cost to make a movie or rent out studio to record a song. The other is distribution. Right now the company is putting all the effort into preventing piracy instead of improving their own distribution method which in my humble opinion is just retarded. Why is it that Apple came up with itune not Sony? and why didn’t Times Warner that start something like Netflix? For some strange reason these companies always been highly resistant to changes in technology. Same things happened with cassette tape and VCR. The genie is already out of bottle and it’s impossible for the government to make laws to stuff the internet back into the bottle on behalf of companies because their own laziness to improve their own distribution channels.
I think the solution is that the artist royalty is a certain percentage with nothing taken out. even if you make it 40%, it’s still better than the 91 cents they make on a CD that the record company sells for 10 bucks.
I wonder if those that believe all information should be free and available and no one should be able to limit the distribution of their own work also believe that no one should not be forced to give the police the password to their computer.
Not sure I understand the comparison. Would you care to name any position of yours in four words (“information should be free”) and see what happens when I push those four words to ridiculous conclusions?
To me the issue is one of the marginal cost of production. There are two views here I’ve had, and I’ve not been able to settle on one over the other.
Stuff is already about as cheap as it can be. You’ll notice the latest straight-to-video horror flick is pretty close in price to the latest blockbuster release. CD or DVD doesn’t matter too much, movies and music are all around $10-$15 with a few exceptions due to buying at Target versus some overpriced coffee shop. Since difference in price can reflect difference of quality in any number of products, I don’t see why this should be any different.
Stuff is too expensive, and people that would make it more cheaply are just milking the cow established by the big guys. Furthermore, games are especially more expensive than DVDs or CDs even though the marginal cost of production is the same or similar. Since the rise of Steam and XBox Live the marginal cost of production has dropped significantly. Copyright monopoly has allowed content creators to extract rents, but then the supporters of this (like actors, directors, guilds, artists, …) have then gone on to extract rents from the rent-extractors too, leading to “entertainment inflation”—the ultimate effect of copyright, which is good for no one and we should pop the bubble.
Please explain how do you think games companies should price there products?
Back when I was buying games for my Amiga the typical price of a game was between $130 and $160. Now the average game is about $89.00, I can’t find a game over $110, and I can go to places like Good Old Games and buy some fantastic stuff for only $5.00!!!
How on earth can you say the games industry is too expensive when I am spending 50% less on games now than I was ten years ago?
It IS stealing. As a society, we have decided that Intellectual Property is valuable. This is not something that comes out of a vacuum. WE have decided that IP is valuable. And WE have decided that copying works without permission IS stealing.
Why? Because we want to encourage innovation and creativity. Now, you may want to disagree with that. However, that leaves you with the following problems:
[ul]
[li]Authors, writers etc. can no longer profit from their activities. Why even write things up when they can be copied without attribution?[/li][li]Composers can no longer profit from their activities unless they can perform the music themselves. Same question.[/li][li]Singers, Musicians etc can no longer profit from album sales; they would only profit from live performances. If it’s okay to copy information from an album, how could they profit from album sales?[/li][li]No one will do research and development because it will not be profitable. Same reason.[/li][/ul]
Now some jokers here think that those consequences are okay. Most reasonable people are not okay with that.
…how do you think that game companies should price their product?
Ummmm, so what? How many things out there for sale are priced at the same price as it cost to produce? Why would a company create something if they couldn’t make money off it?
What is the marginal cost of making a game? Can you give me an example?
What is the typical marginal revenue that game makers make on a game? Can you give us some figures?
Have you ever bought a cup of coffee from Starbucks? A fountain softdrink from McDonalds? It only costs a few cents to make a post-mix drink, yet here in NZ they charge $4.00 for a large glass! Do you protest outside McDonalds because the marginal revenue from a glass of coke is significantly greater than to cost to produce it?
A company that produces something has a right to set the price and sell it to make a profit. If you think that it is too expensive, don’t buy it. Do you disagree with this very simple premise?
Who wants to discourage innovation and creativity? Who says that’s their goal?
Game companies should price their product any way they wish.
So that is how I have defined something being too expensive.
None, I hope.
No one would.
The cost to acquire the next disc, burn it, print the next manual, put it on the next shipment out of the company…
I cannot. But if CDs with inserts or DVDs are priced correctly, then games cost too much. If games are priced just right, then CDs and DVDs are priced so low that everyone is taking a bath.
I think you are confused about marginal revenue and marginal cost.
I expect they would make a profit or go out of business.
I do not disagree with this premise. If you asked, I also wouldn’t suggest that people that did buy it thought it wasn’t worth the money. Monopolies are not assumed to have no customers.
…so I have to ask again: how do you think that game companies should price their products? Saying companies can price their products how they like is a cop-out lazy answer. You think that the prices are too expensive. How would you price a game so that it was both not expensive and make a profit for the game company?
You can’t make claims about marginal costs and revenues for the gaming industry without producing any figures. How about you back up some of your claims?
I sometimes feel that prices are correct. I sometimes feel that prices are too expensive. They are free to price their product however they wish. I believe that without monopoly power, prices would drop considerably. If they wouldn’t, piracy wouldn’t be a problem, because “pirates” couldn’t distribute games any more cheaply (how would they beat the margin?).
DVDs, CDs, and games are not different in marginal cost of production, except possibly by a few dollars. Just look at the packaging. What is there to cite?
…pirates distribute games for free. How on earth is a game company going to beat that margin? Can you give me an example of a correct price and an incorrect price? What makes you determine that a price is “incorrect?”
Well, I dispute free. But this is why I think they’re too expensive.
I don’t think I’ve used that term. But if I had to determine what an incorrect price was, it would be a price which is so high that they cannot do business, when at a lower price which would still be acceptable they would. eta: I see where I used “correct.” I meant that they weren’t unreasonably high. Sometimes I think games could not be priced significantly lower. Such a counterfactual is difficult to put forward with any particular authority. But, evidence (like piracy) indicate that they’re probably too high.
If you accept that pirates can distribute games “for free” then I will suggest that this is a fair starting point. What their marginal revenue is would then be irrelevant. It is too high, because we both agree it could be done for less.
I think it’s been shown that making it easier to get the content legally, and being given the ability to do more with it, can only increase the revenue of the content creators.
Suing customers just isn’t a working business method.
And you don’t want to put out a product that is harder to obtain and harder to use than what’s freely available.
But if you can easily download the real high quality product, without worrying about DRM or Swedish subtitles or whatever, for a reasonable price, many people will prefer that.
To make it even more competitive, add bonus features, feelies, encourage remixes, create a social aspect.
There’s already sufficient laws, perhaps even too many. A legal solution is not what is required. An intelligent business plan is.
…you know as well as I do that you can download games for free with very little effort. How are game companies going to compete on price with a free download?
You used the term “correct” price. There would be an “incorrect” price as well, wouldn’t there?
Oddly, you don’t use the words marginal revenue or marginal cost in your definition of incorrect price.
I’m still a bit staggered with you assertion that pirates don’t distribute games for free. Sure, some pirates do sell counterfeit DVD’s down at the local market: and I’m sure that if you are being a pendant for language, yeah, it costs money for a pirate to provide power to his computer. But you know perfectly well that wasn’t what I was talking about.
And you still aren’t providing any numbers: you are just waving away your obligation to back up your assertions by playing rhetorical games. And you’ve just started a new one: “if pirates can distribute a game for free, why is it so expensive for a game company?”
You have decided to ignore the other costs that go towards pricing a game. You ignore that the final selling price has to cover the thousands of hours of development by programmers, the work of voice talent and actors, artists and musicians. You ignore the marketing a company has to do in order to get a game out there into the public conciosness. And most importantly of all, you are ignoring the risks involved for the game company. Only 20% of games make a profit.