The rampant level of piracy in China gives us a perspective on the problem in our own backyard, explains Patrick.
By Patrick Vuleta on January 30, 2014 at 3:34 pm
Heard of Legend of Crouching Dragon? Made in China, it’s the uncanny valley version of Blizzard’s Hearthstone collectable card game. Just replace “version” with “exact rip off” and you’re there. Blizzard just sued its creators for 1.65 million in the Chinese courts.
This comes after we discussed Battlefield 4′s banning in my “write about China” month. It’s interesting, because I don’t remember Chinese shenanigans ever making the news so much as they are now. Previously, publishers were content to treat China as a gaming black hole, without making serious efforts to crack the market. And why bother? Games would either be censored by the State, or pirated up the yin yang.
However, times are changing. China is striding into the global economy (okay, rolling), making trade deals with America and other western nations. A decade-long ban on mainstream consoles has just been lifted. In this light, Blizzard’s lawsuit is significant as part of efforts to make the Chinese games market profitable for publishers.
The question is… will it work, or is China’s piracy problem too far gone? And is it even relevant to us in Australia?
It’ll suck the internet dry
Piracy is huge in china. So huge, in fact, that a Chinese zoo once tried to pirate a lion (people noticed when it started barking). That’s just funny. But things aren’t much better on the gaming front. We don’t have exact figures, but it’s estimated that up to 80% of software is pirated in China.
More serious, however, is the effect on what games get actually made. Games that have the highest publisher support and marketing in China are MMOs. These games address piracy by being free to download, but supported by a huge range of microtransactions. Far from the “cosmetic items only” promise that western MMOs often make, microtransactions in China are central to gameplay, and are the main source of industry profits. In one popular MMO, Perfect World, you need to spend money just to access global chat.
The reasons for this high level of piracy are many and complex. Technically, China does have decent copyright laws. They’re just not enforced. The use of the courts is discouraged at all levels of society. Fines are low anyway, making being fined for piracy just a cost of doing business. Local protectionism can make it difficult to gather evidence.
But most importantly, many of China’s people simply expect to get software for free. It’s hard to get people to pay for stuff when they see nothing wrong with doing so. Don’t get me wrong— public awareness campaigns are not an answer. Even when people know it is wrong, they still do it anyway. The “Would you download a car” advertisements only ever gave us hilarious parodies, not stop piracy.
The only way to stop piracy is a combination of enforcement and alternatives. Enforcement means taking the most blatant examples of piracy offline. Alternatives mean giving users a level of service they like, at a price that’s right.
In this model, Blizzard suing its imitators is a smart move. Although 1.65 million seems trivial for this kind of case, it has resulted in Legend of Crouching Dragon been taken off the iOS and Android app stores. Blizzard will probably just release Hearthstone for free in China anyway, and support it with extensive microtransactions. The result is effective enforcement that’s denied the imitation profits from the western market, while giving Chinese users an alternative that fits with their expectations of how much games should cost.
So what effect does this have on Australia?
I’ve come to realise that Australia just doesn’t need strict DRM or other harsh anti-piracy protections. At a total piracy rate estimated at only 23% of all software by the most biased reporters, Australia is one of the three lowest-rated countries on the piracy ladder. The lowest is actually America, estimated at about 19% by the conservative Business Software Alliance. We have working copyright laws, and we’ve shut the major distribution networks down. Harsh DRM is not where the money lies, here, or there.
But we do need piracy to stay down — and that includes piracy in China. The reason is quite simple. In a world where some of the biggest economies have high levels of piracy, there is only one financial model for games that makes global economic sense: Always online with extensive microtransactions.
An offline Sim City could never exist in China. A Diablo 3 that didn’t milk the online auction house for all its worth could never exist in China. If nothing else, combating piracy in China is important to address the growing desire of publishers to make “piracy proof” games. With China becoming more and more relevant in the global market, the buying preferences of its gamers will be important even for the games we play. With its extensive microtransactions and a planned release in China, Hearthstone is just one of the first examples.