Valve Exec: Pirates Are Just Underserved Customers

from the and-then-you-see-the-opportunities dept

We've had a ton of people submitting this, so figured a quick writeup is in order. Jason Holtman, the director of business development and legal affairs for Valve, was speaking a video game conference, when he noted: "Pirates are underserved customers." This is a point that plenty of folks have been making for a while, but having an exec at a company like Valve make it is important. But, even more important was his next sentence:
"When you think about it that way, you think, 'Oh my gosh, I can do some interesting things and make some interesting money off of it.'"
This past weekend at the MidemNet conference (on which I'll be writing much more), I heard a few music industry folks say something at least somewhat similar to the first part of the comment: talking about how they had to learn to bring "pirates" back into being legitimate customers. But, then they missed that second part. As one attendee said, the music industry execs kept freaking out about how much money they will lose, while ignoring how much money there is to be made.

Filed Under: jason holtman, pirates, underserved customers
Companies: valve

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  1. identicon
    Michael Long, 19 Jan 2009 @ 10:40am

    Pirates are underserved customers.

    Perhaps, though one wonders if a "pirate" (visualize a smelly, scurvy-ridden individual with bad teeth) would ever be a customer... at ANY price.

    People complained about album prices, and Apple introduced the buck-a-track system. Then people complained that a buck was too high. Nearly everyone you talk to has a different idea as to what constitutes a "fair" price, and every price point you mention is too high for someone else.

    People complain about game quality, but just how much better could it be if Valve cut prices in half? Or if they cut it down to $20? Would revenues still support the multi-million dollar price tag needed to create a major game title?

    Say Valve listened to it's underserved "customers" and cut the price of a $50 game in half. Would they sell twice as many games, which is still less than the number needed to get back to the same spot? Or would the pirates now say $25 is still too high, that the game companies are still greedy bastards, that there's still DRM, that they still never listen, (insert favorite rationalization here)... and STILL swipe the game?

    The idea that pirates are underserved customers is an interesting idea, but assuming that a significant number of pirates will suddenly become paying customers, at any price, or for anything other than a game, is just that, an assumption.

    And you know what happens when you assume...

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