Piracy is one of those things that is pervasive throughout video gaming. It has become a force of nature, a fact of life. While many companies attempt to fight piracy of their works through DRM or complaining loudly, others are taking a very different approach. Last year we posted a story about a company called tinyBuild that decided to embrace piracy rather than fight it. It released a special pirate themed version of its game on the Pirate Bay and saw a positive response from it. When discussing the move, tinyBuild stated, "I mean, some people are going to torrent it either way, we might as well make something funny out of it." By having a positive sense of humor in the face of piracy, one indie game developer was able to cope with it and succeed despite it.

This sense of humor is catching on too. Gamasutra highlights another indie dev, Paul Greasley, that, when faced with the realities of piracy, decided to approach it with a bit of tongue in cheek. The developers of the game Under the Ocean released the game under three different options. The first was early, cheap access to the game for $7. The second was a more feature rich and personalized version for $25. The third was a hat tip to piracy.

The Cockroach edition was actually not an attempt to cut down on piracy. It was just one of the liberties of being an indie developer, with nobody to answer to. The elephant in the room is that 90 percent+ of people are going to pirate your game on the PC (and ours is no exception, based on the traffic logs). We just thought it would be fun, and frankly honest, to point that out!

To further seal the deal, Paul had originally included a link to the Pirate Bay. Unfortunately, some wet blankets in the indie scene overreacted to the inclusion of the link. Those developers had claimed that the inclusion of the link was Paul condoning piracy, something he denies. So, to put out the fires and save his cred with those developers, he removed the link while leaving the rest of the option on the site.

It is quite interesting that he even included the link to begin with. Most developers, especially those from large studios, try to do their best to pretend that such sites don't exist in the off chance they accidentally convert a potential customer into a pirate. Including the link was a massive show of openness with fans. By showing that he knows what the competition is, he was showing fans that he understands what it takes to build up a loyal following.

We're going to be releasing a whole bunch of frequent updates, with lots of feature additions. If you want to stay up to date, buying it is much easier than pirating it. The users win, because it's DRM free and they get a bunch of cool new updates for Under the Ocean, and we win, because the updates get us new ways to promote the game outside our game forums.

Make a product people want and will talk about, make that product as good as you possibly can, and treat your customer base with respect.

By recognizing the reality of piracy, Paul was able to identify features and services that will build loyal fans, things like avoiding DRM and providing frequent updates, not just for the game but from himself. What this means for Paul and his game is that players get a great experience from someone who is open, human and honest and in return they will spend more money on his game.

We've covered a number of stories dealing with ebooks and their disruption of normal publishing. There have been a lot of growing pains in the industry as the ebook market continues to expand, replacing physical sales (and their associated margins and intentional bottlenecks) and knocking down a healthy number of barriers to entry.

Allegations of ebook price fixing are still in the air, pending the Department of Justice's investigation. No matter the final decision, publishers will still be free to set ebook prices as high or low as they want to. But if they insist on pricing themselves out of the market, they'll be seeing an increasing number of their authors decide to write their own tickets, as others have done with great success.

Mark Coker, founder of Smashwords, breaks down exactly how traditional publishing houses are shooting their own authors in the foot with pricing "strategies" that run in direct opposition to how people purchase ebooks. With ebooks expected to compose nearly 30% of trade book sales (in total dollars) in 2012, authors may be doing serious damage to their careers by selling their ebooks through traditional publishers.

Coker quotes from his RT Booklovers convention presentation, showing that there are certain "sweet spots" in ebook pricing—ones that show marked sales increases and, sometimes counterintuitively, higher author earnings than others.

One surprise, however, was that we found $2.99 books, on average, netted the authors more earnings (profit per unit, multiplied by units sold) than books priced at $6.99 and above. When we look at the $2.99 price point compared to $9.99, $2.99 earns the author slightly more, yet gains the author about four times as many readers. $2.99 ebooks earned the authors six times as many readers than books priced over $10.

If an author can earn the same or greater income selling lower cost books, yet reach significantly more readers, then, drum roll please, it means the authors who are selling higher priced books through traditional publishers are at an extreme disadvantage to indie authors in terms of long term platform building. The lower-priced books are building author brand faster. Never mind that an indie author earns more per $2.99 unit sold ($1.80-$2.10) than a traditionally published author earns at $9.99 ($1.25-$1.75).

This isn't news to anyone following along here at Techdirt. For some reason, though, many traditional publishers still feel that higher prices equal higher profits and fail to see that lowering prices will increase their sales and profits over and above what they can expect at their normal price points.

Certain members of the traditional publishing crowd argue that lower prices are unsustainable given built-in costs and that pursuing these price points will somehow "devalue" the written word. First of all, selling your product for more than the public is willing to pay is what's actually "unsustainable." And any explanations involving fixed costs will fall on deaf ears because consumers don't make purchases based on what they think the product is worth to the company selling it. They purchase based on what they feel the product is worth to them.

Secondly, if people aren't buying at $9.99 but they are at $2.99, then the product isn't "devalued." If you're selling many more units at a lower price, then your price point is closer to "dead on" than "undervalued."

The picture painted augurs well for indie ebook authors, but indicates that authors who continue to publish with traditional publishers might actually be damaging their careers. Look no further than the bestseller lists at Apple, Amazon or Barnes & Noble to see that indie ebook authors are taking eyeballs from the authors of NY publishers. As I write this, seven of the top 30 bestsellers in the Apple iBookstore are distributed there by Smashwords.

In the short term, existing publishers would do well to follow Coker's advice and start maximizing sales by lowering prices. Most publishing houses have already had the term "price fixing" pointed at them, and thinking that you can somehow outlast the consumers in a price war is just going to shove you to non-existence that much faster. Exclusive deals with authors won't mean much when no one's buying, and those authors are going to swiftly tire of minimal sales and miniscule royalties, especially when they can plainly see better opportunities outside the gates.