Again cry me a river.
They lose no money either way.
Morality doesn’t belong in this issue because it is subjective.
The argument was initially about the company losing money so I made the argument, that in the situation I gave, they are not losing money.
They are losing money. They put money into the development of a game/movie/album/application. They decided on a retailprice so they can earn the money back and make profit (like any healthycompany). They offer that product on the retailmarket so that people that want to play/watch/listen/use it, can play/watch/listen/use it. So if they want to play/watch/listen/use it, they have to buy it, else they can’t play/watch/listen/use it.
So if they pirate the product, they’re still using the things a company created and funded and need to sell (product/service), but they’re not paying for it. So you’re effectively stealing the service or a product from that company that should (and expected to) get the money because you use their product or service.
Let’s say a product costs $500,000 to produce/develop. the company wants to sell 20,000 copies of that product, so they conclude that they need a sell each copy for at least $25 to cover the development cost. Being a healthy company, they charge extra to make profit. So let’s say that they charge an extra $5 on top of that $25, so they have a retail price of $30. So off they go to sell it.
If all 20,000 copies are -sold-, they’ll receive $600,000, so they have a profit of $100,000.
If all 20,000 copies are -pirated- (and thus they still have 20,000 in stock) (apart from 1 to start the pirating), they’ll receive $30 and will have lost $499,970 in the process.
If 10,000 copies are sold and the other half pirated (and thus they have 10,000 in stock still), they’ll receive $300,000 and will have lost $200,000 in the process.
They’ll have to sell 16,667 copies to meet the $500,000 cost price, and then they’ll only have made $10 profit. So if 17% of the copies are pirated, they’ll only have made $10 profit, which isn’t enough for them to start a new project (and thus can’t stay healthy).
Again, just don’t buy the pirated stuff, isn’t that simple?
Bolteh, you’re making a classic blunder.
You’re trying to say that “unsold product” equals “lost revenue” because their sales figures do not meet expectations (your words “want to sell”). Why not want to sell a hundred billion copies? If they sell a billion, does that mean they “lost” revenue on 99 billion copies?
This kind of thing happened with the Atari 2600 version of E.T. They wanted to market a product and wanted to sell a lot of copies of the game. The game was horrible and did not sell well, leaving them with surplus product. Did they “lose” money? In your world, they did. But in the real world, no. Unsold product does not mean lost money because you were never going to get that money anyway. It was fictional money.
I want to make a hundred thousand dollars yesterday. I made around $100. I think I should get some sympathy because I lost $99,900 yesterday.
Is that how it works? :brow:
Imagine you are selling bread, and somehow people can manage to create copies of it for free, and a person is giving it away in front of your store the whole time. Now imagine how you would feel.
So you’re saying that Atari made profit from the horrible sales of ET?
wat
I didn’t say that. I said that they didn’t lose money because the money was never going to be theirs in the first place. Cutthroat Island was a box office flop because sales did not even begin to cover the cost of development. But it doesn’t mean that they “lost money”.
“Atari earned US$25 million in sales, but netted a loss of US$100 million.”
I’d say they lost quite a bit of money.
Food for thought.
No, they lost no money. They earned US$25 million.
What was?
“wat”
:facepalm:
You don’t “lose” money because you don’t meet sales expectations. That’s the problem with many capitalists; they whine that they “lose” money. Well, let me tell you something:
I lost $500,000 in the shower today. Why? Well, I wanted to make $500,000. I made $0 in the shower. Therefore, I lost $500,000 right?
No, because you didn’t -want- to make $500,000. You did nothing to make even $1, let alone $500,000. You didn’t create anything, didn’t produce anything, you just decided that it would be nice to earn $500,000 today.
If you were in the shower today and you thought of some new revolutionary way of battling baldness.
So you start some research on your idea and you find that it may just actually work, so you start pumping in money and start developing the product to battle baldness. After a few years of development you’ve come to the perfect formula, you’ve spent $300,000 and all of your time to get that formula for perfection.
So now you have to go find someone that wants to put your product on the market, this too may cost you money. After a while, your product is ready to hit the market. Publicity is being made, partners are being acquired and shops are being reeled in, all this costs some more money.
So at this point you go “Hoho, it would be nice if I can get $500,000 in sales so I can cover the development and publicity costs!”… So of you go with 100,000 units, each costing $5… But they don’t sell because some kid created a cheap copy of your product or whatever reason that may cause the product to fail. You sell 0 units. You just lost $300,000 (not even counting publicity and everything related).
Now that with be a scenario that’s worth the comparison.
Right now you just seem to make up reasons to pirate, and just twist and turn reality so you can remain greedy.
Or because it’s fun and healthy?
That’s what you don’t get, the people actually invest money into it.
Investing money doesn’t mean that a lack of return for investment is stolen money. You didn’t lose money, you didn’t meet sales. There is a lot of reasons why products don’t meet sales. In software piracy can be considered one of them. But market factors don’t count as theft.
It’s hardly the point though. Granted, it’s not theft. However, in most any place people on this forum are located, it is ILLEGAL. You can come up with justifications if you like, but it is still illegal. I don’t like the policy of insurance companies, but that doesn’t mean I’m justified in performing illegal acts to get free insurance. Justify it however you like, but performing illegal acts is petty and deviant. We should all respect the word of the law in our countries, as those laws allow us safety. For the most part at least.
Of course not, I wasn’t pointing out that they’re stealing money, I was merely pointing out that if units don’t get sold, that it can result in a loss for the company. Sure it’s not theft, but it is a loss of money.
So piracy (which is theft) makes sure that a potential purchase of a unit didn’t happen, and thus that unit isn’t sold, and thus the company didn’t receive money for it (while the pirate did get his unit), and thus results in a loss for the company, no matter how you twist and turn it.
Wait. What?
No it doesn’t count as a loss on a balance sheet. You don’t count potential sales lost as debit when you balance books. It doesn’t work that way. It’s not loss. It would be the same thing as saying a decrease in market demand is loss. It’s not loss, it’s just a decrease in sales. You can say your sales are down and mention factors. You can say a decline in sales caused your expenditures to exceed your profits. But you can’t say that piracy creates loss because it’s not profit to begin with.
This is why DRM is actually designed to prevent resell. Because when you see that a sale of YOUR PRODUCT is going to someone else, you can actually look at it as a loss because the money you could have earned went to someone else. That person obviously DID buy that game for the price the store charged. So, financially speaking, your company could have had that sale for that price if the store wasn’t able to sell used product.
You’ll be hard pressed for anyone in the business to admit this, because it basically means they are restricting the rights of their customers. Which is a bad idea.
It is the point, we were talking specifically about money loss not theft, if you invest money in something and you don’t get that money back you have a financial loss.
How is pumping in $500,000 and earning $300,000 not considered a loss? How is pumping in $125,000,000 and earning $25,000,000 not considered a loss?
Founded in 2004, Leakfree.org became one of the first online communities dedicated to Valve’s Source engine development. It is more famously known for the formation of Black Mesa: Source under the 'Leakfree Modification Team' handle in September 2004.