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Software Piracy as Price Control

Software Piracy as Price Control is a school of thought that says that Software Piracy in moderation is a good thing, as it keeps prices down by providing a rival product (i.e. a pirated copy) to compete with the official version provided by the software company in question.

Given that every piece of software is unique (e.g. you wouldn't want a game that was roughly like Tomb Raider - you would want Tomb Raider itself) it could be the case that each piece of software is a Monopoly, as the only method of getting the game is buying it from the publisher - apart from Software Piracy. Piracy therefore prevents a monopoly and hence stops software publishers from charging too much for their software.

There is evidence to back up this school of thought:

  1. Back in the early 90s, the game Street Fighter 2[?] was released on the SNES, a fairly unpiratable format, for 65 (an unimaginable price by today's standards). No cartridge manufacturing prices (and certainly not before 10 years of inflation) could account for this cost.
  2. Early in 2003, the game Metal Gear Solid 2:Substance[?] was released for the PC, XBox and Playstation 2. On the XBox and Playstation 2, where games are not yet easily piratable, the cost of the game is 40. On the PC, where the game can easily be pirated, it is 30.
  3. In July 2003, Tomb Raider: Angel of Darkness[?] was released for the PC and Playstation 2. On Playstation 2, still fairly unpiratable as of July 2003, the game costs 40. On the PC, just as easily piratable in July 2003, it costs 30. The extra costs involved in producing the Playstation 2 version (programmers[?] who can program efficiently in the console's more difficult architecture and Sony's licensing fees for producing copies of the game) do not amount to an extra 10, plus there are some things that appear or are needed on the PC version of the game (for example the installer) which weren't needed or implemented in the Playstation 2 version.



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