Debunking The Ridiculous Claims That Unauthorized Copies Of Handheld Games Has 'Cost' The Economy $41.6 Billion

from the reality-check dept

A bunch of folks have sent in the ridiculous claims from a study done by the Japanese Computer Entertainment Suppliers Association (CESA) suggesting that unauthorized copies of handheld games have cost the industry $41.5 billion over a five year period. Like similar bogus reports, these numbers have little, if any, connection to reality. I was considering skipping posting about it altogether, given that it’s really just the same old thing, but Dark Helmet sent in a nice starter list on why this study is completely bogus:

  1. Every infringing download is counted as a lost sale
  2. CESA took the numbers for Japanese handheld game piracy and multiplied it by four to get the worldwide numbers, because CESA “believes” Japan represents 1/4 of the market
  3. Deviations in piracy levels in different world regions were not taken into account
  4. Pricing for games per unauthorized copies were ALL based on the initial release price, not taking into account pricing fluctuations of games over time

In addition, I’d point out that the study apparently picked which sites to cover somewhat at random and may not accurately portray (in any way) the number of downloads. Also, there’s no attempt to look at whether or not those who get unauthorized copies of some games end up buying other games as well (i.e., do they still spend the same amount otherwise — just on different offerings?). Basically, there’s very little in this study to take seriously.

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Comments on “Debunking The Ridiculous Claims That Unauthorized Copies Of Handheld Games Has 'Cost' The Economy $41.6 Billion”

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Anonymous Coward says:

One major problem with such reports and studies is not just that they are completely bogus and, therefore, the report should be discredited, but the morons that read and believe these reports.

Instead of just downplaying the report, we should downplay those who believe such reports, as the reports are targeted at those idiots who are in a place of political power. (profile) says:

Re: Life, the Universe and Everything

Reminds me of Douglas Adams again:

However, the same event which saw the disastrous failure of one science in its infancy also witnessed the apotheosis of another. It was conclusively proven that more people watched the tri-d coverage of the launch than actually existed at the time, and this has now been recognized as the greatest achievement ever in the science of audience research.

Jay (profile) says:

Oooh, ooh! More about Japan!

Simply because I’m a big fan of Japanese anime (I love One Piece, hated the way 4Kids translated it, and only restarted watching it after it was picked up by Toei), lemme show how Japan wants to fight this:

“According to the coalition, the problem has reached a point where “scanlation aggregator” sites now host thousands of pirated titles, earning ad revenue and/or membership dues at creators’ expense while simultaneously undermining foreign licensing opportunities and unlawfully cannibalizing legitimate sales. Worse still, this pirated material is already making its way to smartphones and other wireless devices, like the iPhone and iPad, through apps that exist solely to link to and republish the content of scanlation sites. “

What they don’t tell you is how most American titles pick up anime titles based on those numbers on sites OR those titles aren’t available in the US. Let’s not forget that this stuff being on the iPhone or iPad is GROSSLY inaccurate to the truth:

Steve Jobs doesn’t like mature anime – Source –


If you read the article, you see that they want to fight the consumer rather than:

A) Produce manga/ anime online
B) Distribute more overseas (their entire belief is to keep it within Japanese Borders all things told, then give the US consumer a substandard product)
C) Not understand their consumer and why they like a series that’s hugely popular, but do everything that the article about handheld games is talking about… Put every last download as a lost sale, multiply it, spin around a few times, then make their bosses happy by saying it’s causing Japanese consumers to lose out.

*scratches head*

Japan has more issues to deal with. Copyright infringement across their borders isn’t the one.

Anonymous Coward says:

Re: Oooh, ooh! More about Japan!

“B) Distribute more overseas (their entire belief is to keep it within Japanese Borders all things told, then give the US consumer a substandard product)”

It’s the battle of the bogus studies. Which country can deliver the most outrageously bogus studies showing that a country is losing ludicrous sums of money owed to it by other countries in hopes that those other countries will just start handing over cash.

Anonymous Coward says:

Re: Re: Oooh, ooh! More about Japan!

China: “I’ve conducted a study showing that Japan owes me 100 Billion dollars in IP infringement damages. They stole from us!!!!”

Japan Retaliates: “Oh Yeah!! Well I’ve conducted my own study and China owes me 200 Billion and Russia owes me 300 Billion”

U.S. : “Well My study shows that you BOTH owe me 500 Billion!”

Russia : “My study shows that you ALL owe me 900 Billion in infringement damages!!”

and with each subsequent study the numbers increase.

ECA (profile) says:

Fun with math

Fun with math..
Lets see..

Take Every person in the world.5,000,000,000
“If we had sold 1 copy to Each at FULL USA retail”.
Subtract SOLD copies..
AND STATE, that ALL the rest is LOST SALES Equal to that amount.

DONT consider ACCESS to the program(5 zones around the world)
Dont consider that Only 1/2 the world, MIGHT have a computer.
DONT consider that 1/2 the computers SOLD into the world are BUSINESS machines and GAMES are not allowed.
DONT consider that there are Different types of users, that LIKE different programs and the choice is 1 in 10 they CHOSE theirs.
DONT consider that there are FREE AVAILABLE programs that COMPETE online. Another 1 in 10.
AND dont consider that PRICE has anything to do with WHO BOUGHT your program.

Anonymous Coward says:

I shouldn’t have to point out the obvious but the study also doesn’t take into account the fact that money not spent on video games could have been spent on other things.

Also, is it just me or does anyone else find it troubling that people not spending money on something, especially video games, should be a big concern. If people don’t want to spend their money why is that such a big deal? Why should people spend their money? So, if everyone goes on a boycott and doesn’t buy video games, how is that such a tragedy? Because there are lost sales? Why is it the governments job to improve the sales of a private entity through legislation?

ECA (profile) says:

Re: Agreed

NOT that there game was worth the money.

If THEY would consider High speed net distribution..
Cut costs on..
Packaging which is 1/2 the cost/price.
To much Stock in 1 store.
NO stock in another store.
Over 1/2 the COST is in these PROFIT EATERS..
If they are using NET distribution, they are GREEDY BASTISHES.. and they want 2-3 TIMES the profit margin.

Anonymous Coward says:

cost the economy what?

It’s much safer to assume that it costs the economy exactly zero dollars. You just assume the money not spent on games is spent elsewhere.

If they wanted to say “cost the video game industry”, they should have said so. But it’s been obvious to me for a while now that the Japanese will believe just about anything they see on TV or in print (and no this is not me being racist).

Danno (profile) says:

Is it just me???

These studies that claim lost revenue really baffle me. Predicting how many copies of a piece of software, a video, a song, etc., a company is going to sell is impossible. The sales predictions are affected by too many variables to be accurate:

a) If your product is no good, even if you believe otherwise, it’s not going to sell;
b) it might not be promoted well enough;
c) economic issues (recession, market crash or upswing) affect people’s buying power; and
d) too many other issues to enumerate.

All this to say that claiming you’re losing money to the “pirates” is akin to my saying “I had an idea a while back but couldn’t sell it, so I’ve lost $50 million dollars!” In other words, pure and utter bunkum!

According to the financial columns I’ve read, these industries are doing just fine financially, after all, they’ve been gouging the public from their inception, as well as the artists who provide them the material for sale. Sooner or later, they’re going to realized they are doomed though, with the availability of the web, artists, authors and any creator of media is going to be able to personally market themselves and their creations.

It’s already begun…

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