Crushing the pirates

I believe in most of the basic tenets of capitalism, including the one that says that companies making profits is a good thing, because without profits they'd fire all their employees and can't reinvest into new products. Where it gets tricky is when you look at the reasons *why* a company makes no profits. I strongly suspect that the recent news on the company that made APB firing most employees has something to do with APB not being a very good game and having received lousy reviews. That is something I can live with. Schumpeter's theory of creative destruction says that capitalism *must* have bad companies failing, so the resources are liberated for good companies to make good products.

I get a lot more angry when I see good game companies having made good games that everybody likes to play go belly up, just because the majority of players who love to play those great games nevertheless refuse to actually pay for them. Of course the numbers quoted by the game industry are exaggerated, simply multiplying the number of pirated copies by the retail price does not give you the correct number for lost revenue. But that there *is* lost revenue through video game piracy is undoubted, and as a consequence some good game studios aren't around any more, because their games were too widely pirated.

Now MMORPGs are somewhat harder to pirate than single-player games, because they need not just a running client, but also a running server, and the official servers aren't going to let you play with your pirated copy. To which the pirates reacted by creating pirate servers, so they and their thieving friends could all play World of Warcraft for free. But not only are those pirate servers not fully functional, they are also a lot easier to find and legaly persecute than all those individual small time thieves.

Thus the news is that Blizzard was able to get a ruling against one such pirate server for World of Warcraft: The court awarded them $88 million in damages, payable by the owner of the WoW pirate server. Not that they are actually likely to ever get that money, but this sets a legal precedence, and should discourage other people from running WoW pirate servers. Good news!