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
    spoRk, 18 Apr 2009 @ 3:31am

    software authoritarians are like loathsome missionaries

    @KB: So nice of you (and others) to offer others your recommendations for business models whether they have their own ideas for monetizing their own products or not. Paticularly when you're not too familiar with their costs (development and any possible licensing costs they have, servers, etc.; it may or may not be similar to what you've seen in your "15 years" of experience). So don't pretend "in no way is this a loss." You really don't know how long it would take them to recapture their investments in the game.

    Re your attempt to be a devil's advocate, you can't quantfy how many of the 100k "potential buyers" (aka thieves) would ever buy the game. I can quantify how many of them haven't and if they "move on" (to steal some other "free"/stolen game) then Stardock suffered the vagaries of the demands of freeloading thieves rather than paying thieves, which equates to theft of that large magnitude anyway. So what is already certain is that their product's value has been dilluted by rampant theft, whether they want to come right out and call it that (I will).

    Why should a company leave it up to thieves to determine if/when they'll pay to play? People who rob banks don't get to dictate interest rates. It's fundamentally authoritarian to demand others change business models to accomodate criminals, to give away their property on someone else's terms.

    I don't begrudge anyone the right to determine how they license, monetize, or run their operations. It's their choice if they want to give it away, like Linux, to build mass interest and adoption. It should also be their choice if they want to charge exhorbitant prices and protect their properties with DRM and thereby restrict their base to a smaller group of people who are comfortable with the contractual terms the product is offered. Live and let live.

    It's authoritarian to dictate (or suggest) terms contrary to what others have already chosen for themselves. I find it as unseemly as when Jehovah's Witnesses or Mormons come to the door without knowing anyone at the house and informing them that this is their golden opportunity for salvation, joy, and everything else. You don't know better than anyone else what's right or wrong for them. Who the hell are you to make important decisions for other citizens?

    Appealing to realities of the market (such as the rampant, viral nature of piracy that reduces the value of assets and makes it much more difficult to gain any ROI) only proves that pirates are dictating what a company like Stardock does rather than Stardock having any control and freedom to do what they want with their product. Stardock may accede to such pressures (in the same way p*ssy shipping companies pay Somali pirates ransom), but that shows they're no longer free to operate as *they* choose -- they're only hostages to thieves. The end result is the only "freedom" is enjoyed by the thieves, the leechers, those who are a drain on businesses and society. Everyone else is a hostage.

    I love freedom, so I hate you authoritarians. Stop knocking on everyone's door like a freaking know-it-all, burning-bosom Mormon missionary, and stop trying to get everyone to conform to your worldview. The world will be a lot better off for it because you're probably no less screwed-up than anyone else.

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