Is the video game industry getting played by piracy?

The world has come a long way from the archaic arcades to today’s virtual reality video games with 3D simulators. Power packed roadshows such as CES (Las Vegas) and E3 (Los Angeles) are constantly highlighting innovations in the global video gaming industry, with new launches and technologies for multiple platforms. The value of the global video games industry has skyrocketed with time – a report by gaming and interactive media intelligence firm, SuperData has stated that sales from mobile games generated $59.2 billion in 2017. This followed by personal computers at $33 billion and consoles at $8.3 billion, showcasing the enormous opportunity present.

Addressing piracy in a rampant gaming market

Increasing incomes, smartphone and internet penetration, easy accessibility, affordability and local content are some of the key factors that have led to an explosion in gaming worldwide, particularly among the (younger) millennials. Digital natives are inclined to indulge in both casual and complex gaming to unwind. Media reports have also stated that the Indian gaming industry was a staggering USD 890 million in 2017. The annual growth rate is expected to be in double digits, propelled by over 250 developers in the Indian ecosystem. While all this makes video gaming lucrative, piracy is one area of concern which has infiltrated the core of the industry. It impacts sales every year, and developers as well as companies can do little to manage it largely because of a lackadaisical attitude.

The proliferation of pirated video games and content has seen a rapid spike in the past decade. For instance, in markets such as India and South East Asia, users are interested but typically not willing to spend a high amount for entertainment. Narrowing this further, tier II, III and IV markets have a lower per capita income, so intent to pay for video games is even less. As a result, freemium models and pirated content are popular options. Cheap data plans and use of (open source platforms) smartphones have augmented the chance of downloading pirated games. In urban areas, a state of “fear of missing out” and even peer pressure may compel youngsters to turn to pirated games ahead of an official release in India. For instance, popular video games tend to create a lot of buzz on social media ahead of a local launch. The desire to get access and play them “now” can make gamers resort to downloading pirated and sometimes even malware ridden content as it is easily freely accessible. All these have unwittingly helped increase piracy.

Defending the future of gaming

For organizations and independent developers, downloading these pirated versions would affect revenues, quality of output as well as creativity. To overcome piracy related challenges, companies and developers could look to release games through an initial freemium model which could then be upgraded to a paid one (more features etc.) Another option could be working with third party app stores to host their (developers’) games and generate revenues. This may also include regular digital subscriptions.

The larger gaming industry should also take steps to drive anti-piracy awareness initiatives which can be a kill switch in detecting and mitigating risks. The program could cover:

  1. Developing encryption and standard usage guidelines for users
  2. Training and awareness campaigns for employees (at gaming companies) on the need to protect confidential and proprietary information. Password sharing should be avoided and the consequences of any data leakage should be conveyed.
  3. Conducting periodic monitoring of networks, computers and laptops to track any unusual patterns
  4. Using updated software to plug potential gaps that may be exploited
  5. Using computer forensics to identify if the leakage is due to internal threats
  6. Conducting due-diligence on third-party vendors regularly

The future of digital gaming remains exciting, with the promise of new technologies. Today’s virtual reality games might become tomorrow’s almost historic version of arcades as developers are already inching toward creating a more personalized and immersive experience. But as devices get sleeker and gamers get more interconnected, the industry will need to step up against piracy risks to augment in value, maturity and stability.

(Deepak Amarnani, Manager, Forensic & Integrity Services contributed to the above post)

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