Causes of video game piracy
There's been a lot of talk recently about why PC gaming is "doomed", mainly because of the ever-growing amount of PC game piracy. I don't necessarily think that PC gaming is doomed at all, although I do think there will be a significant shift in the way the PC game market works - towards a more controlled distribution model, perhaps, like Steam.
This is what I think about piracy, however. It's a self-sustaining cycle, in a way: high video game prices encourage gamers to pirate games instead of buying them, "forcing" video game manufacturers to raise prices or keep prices high in order to not lose revenue. Those high prices in turn continue to encourage piracy. This loop is not necessarily unbreakable, though there are several factors that, in my opinion, contribute to its sustenance:
Too much push for realism. High quality graphics is not necessarily photorealism, but the obsession with photorealism basically ensures that developers and publishers spend enormous amounts of money on game development, and are subsequently extremely afraid of "lost" revenue. This keeps game prices high. I think perhaps a better "marketing catchphrase" would be believability. Most games are not realistic at all in any way except for graphics - after all, why play a game if you could do the same thing in real life? Games are, almost by definition, unrealistic. That's what makes them fun. Games do, however, need to be believable. They need to produce suspension of disbelief in the gamer, just like a good movie.
Anti-consumer policies. This includes schemes such as DRM and copy protection. It is helpful here to categorize piracy into two groups - "distribution" piracy and "consumption" piracy. Piracy consumers are often somewhat ignorant of their actions - they are simply looking for a cheaper way to play a game. Consumers are not necessarily skilled at manipulating computers or games. Pirate distributors are completely aware of their actions, and are usually the ones who break the encryption schemes on most games. They are usually very computer-saavy.
Which group is targeted by game copy protection schemes? Publishers would like to think the consumers. Copy protection prevents "casual piracy", they say. However, in my opinion the reality is, "casual piracy" occurs when a piracy consumer unknowingly downloads a pirated product from the Internet, that already has the copy protection removed. I'm pretty sure that publishers lose much more money from widespread Internet distribution of pirated games than they do from, say, JoeBob giving his buddies a copy of the game so they can all play together. Copy protection really targets pirate distributors - it supposedly makes it harder for them to distribute games illegally. Does it? Definitely not. Current industry copy protection schemes (Securom, Safedisc, etc.) are easily broken by pirates. "No-CD cracks" for games are released by piraters sometimes even before the game is released. Worst of all, copy protection schemes convince pirate distributors that the game publishers are evil and greedy and don't deserve the profits from video game sales. This leads them to continue pirating video games.
What's the lesson here? Copy protection doesn't work, it's easily broken, and all it does is make things worse.
Some solutions have been proposed to these problems. Centralized content distribution systems, like Steam, propose a seemingly almost-perfect way to control these factors. The built-in "activation" system prevents gamers from installing games that they do not own (as long as those games are Steam-exclusive), giving publishers peace of mind in knowing that their products will have to bring in revenue to be played. However, Steam is installable on as many computers as the user wants, along with its games, so it does not preclude small groups of friends from playing a game together. (Its activation system prevents multiple copies of a game to be played online simultaneously.) The nature of having an account with a username and password makes many people hesitant to freely give away their credentials, making rampant piracy much less appealing.
Its only flaws are this. One is purely technical - Steam does not work through proxy servers, making life extremely difficult for some gamers behind proxies. This can surely be resolved, easily, through some future Steam update. The other is something of a market flaw - Steam only allows games to be purchased new, then kept or gifted. There is no "used games" market on Steam. Some gamers (including myself) buy most games used, which is cheaper and very appealing for those willing to wait for a period after a game's release. eBay prices for many old games are exceedingly affordable. However, because of Steam's lack of a used game market, all game purchases on Steam are at somewhat inflated prices. A game that one could buy on eBay for less than $10 might still sell for $40 on Steam. Gamers who no longer wish to play some game do not have the option to recover some of their expenses in purchasing it - their only option is to give the game away to another Steam user. This means that second-hand transfers of games on Steam is very limited.
I think, with the resolution of these minor issues, platforms like Steam will become the ubiquitous method of distributing games on the PC. Lest developers feel that console distribution is the only way to go, let me put forth my opinion that console gaming is even more anti-consumer: it forces the consumer to buy entirely new, unflexible hardware if some game is exclusive to one particular console. There are currently no such things as cross-console standards. And do not think that console games cannot be pirated. Simple encryption schemes and specialized media do not prevent console games and emulators from being distributed widely on the Internet, as they are even now.