Demigod, Piracy And Good Business Models...

from the let's-walk-this-through... dept

Lots of folks have been submitting variations on the story about how Stardock's new game, Demigod, has been widely pirated, and that's resulted in server troubles for the company, as many of these unauthorized users try to connect to Stardock servers. Many are claiming that this shows that Stardock's customer friendly approach to video games fails. But, that's not true or accurate at all. It's just an issue of properly lining up the incentives and the infinite goods vs. the scarcities. In this case, one of the key scarcities was server access -- but Stardock set things up such that unauthorized copies could drag that down. The good thing, though, is that the company quickly got on top of the problem and has been implementing a technological fix rather than screaming and complaining about pirates. Meanwhile, some others have sent in links to the Demigod forums, where people recognize that many of the unauthorized users got the game to test it out, and are encouraging people to buy it to support Stardock and its fan-friendly attitude.

In the end, though, it does seem like Stardock has set this up a bit as a "give it away and pray" setup, which we tend not to agree with as a good business model. Since a big part of the game is the mutliplayer aspect, where you have to connect to a server and play against other players, why not give away the software itself (many people are getting it this way already) and charge a nominal fee for access to the server. That access is a scarcity -- and then you can scale based on users, since more users means more money. It seems like that's a reasonable business model that aligns everything much more nicely.
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Filed Under: business models, demigod, piracy, video games
Companies: stardock


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  1. identicon
    Joel, 17 Apr 2009 @ 9:55pm

    important thing that was missed by Mike

    ARS did a write up of this as well and according to an update to their article from Stardock -

    'On Day 0 there were around 140,000 concurrent users, with 18,000 validated users. The pirates couldn't update their game or play online, but they could still "touch the servers."

    So the pirates couldn't play the game online but that still forced their hand on the server side because they were planning for 50, 000 users and got about 150,000 users.

    Also, Gamestop started selling the game earlier than planned and I know that they didn't sell the majority of 150,000 copies but still each adds it's own weight.

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