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	Title: (EDITORIAL) Thoughts on Software Piracy
	Source: The New Zork Times, v4(1)
	Date: Winter 1985
	Transcription by Steve Derby
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At Infocom, we take an unusual approach to the prevention of software
piracy. Rather than spending large amounts of time, effort, and money on
designing ever-better anti-piracy techniques (our games come virtually
unprotected on a number of machines), we spend our time improving the
games and the packaging in order to make them more of a value. Our thinking
is that a game which provides a lot of enjoyment will be worth spending
some money on, and we feel that our games are somewhat less likely to be
pirated on that account.

We are in a fortunate position. Our technology allows us to create sophisticated
works of interactive fiction in less time than others might take. In
addition, our "machine independence" — our ability to develop a game that
will run on dozens of microcomputers — allows us to spread our very large
development costs (over $300,000 per game) over a larger number of total
units to be sold. And lastly, consumers consider our interactive fiction to be
the best on the market.

Unfortunately, most of the other companies in our industry don't have it so
easy. They tend to buy their products from independent developers, who get
an advance against royalties and a percentage of the revenues; they have trouble
differentiating their products from competing ones, increasing advertising
costs; and they must translate each product from machine to machine if they
are to sell large volumes, which is both costly and time-consuming. All of
this has led to the present sad state of affairs in which very few software
companies are profitable. The end result of this trend will be fewer new titles
released, more me-too products, and less innovation, none of which are in the
consumer's best interest.

When pirates offhandedly joke about the "absurdly high price" of software
as if it were some tremendous windfall to software manufacturers, they fail to
realize that computer software is not a mass-market item. If each game sold
millions of units, then the six-figure development and marketing costs would
be lowered to less than a dollar per unit. However, very few games sell as
many as 50,000 units (most sell far fewer), often leaving a cost per unit of $5
to $10, not even including the cost of manufacturing, which can easily reach
$3 to $4 in the small quantities produced. And don't forget the overhead
involved in running a business: sales staff, product support staff, and the costs
involved in getting information (ads, press conferences, trade shows, sales
literature, newsletters...) to the retailer and consumer. This overhead easily
adds another $5 to $10 in cost per unit. Adding all these costs together results
in games that cost the manufacturer $13 to $24 to produce. Since the manufacturer
receives an average of 40%, a retail price of between $32 and $60 is
required for the product to break even. You can easily see why prices are
what they are and why most software companies still can't seem to make a go
of it.

Ironically, software piracy hurts not only the companies whose games are
pirated but all of today's honest consumers who will have fewer good titles
from which to choose. In short, piracy threatens to destroy the industry,
pulling down the good companies and the bad companies alike. The person
who feels a game is too expensive can do what the rest of us do when faced
with the same problem — vote with his wallet and not buy it. How many of
us would steal a car (even with the keys in the ignition) simply because it's
overpriced?

Software and its documentation are subject to copyright protection; nearly
every country in the world provides this protection of "intellectual property."
Without it, there would be little incentive to invest time and effort in writing
games, books, movies, or music. The copyright promotes these activities by
assuring those who undertake them that they will be able to reap their rewards
(if any). Penalties are clear: violators are subject to fines of up to $50,000 and
prison terms of up to 5 years. Since violations are a federal offense, the FBI
has become increasingly involved in the enforcement of the laws.

Earlier this year, Infocom was instrumental in the formation of the Software
Publishers Association (SPA). A prime concern of the SPA has been to combat
piracy. We ask our consumers to help Infocom, the rest of the industry,
and software consumers in general, by reporting flagrant violations of the law
to us directly or to: Software Publishers Association, Suite 1200, 1111 19th
Street N.W., Washington, D.C. 20036, (202) 364-0523. Please include any
relevant information, such as price lists, phone numbers, and passwords, if
such information is available.

We at Infocom take great pride in producing what we believe to be the
finest-quality interactive fiction available on personal computers. We have
always tried to create the best-value product possible, and we are grateful for
the support of our consumers, whom we consider our partners in our efforts.
Only with the good-faith efforts of both manufacturers and consumers can we
all look forward to an exciting future for home computer software.
