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The gaming industry has witnessed extensive discussions regarding the influence of piracy on legitimate game sales. On one hand, certain publishers contend that each pirated download equates to a “lost sale,” which they would have otherwise recorded in an ideal scenario devoid of piracy. Conversely, some skeptics argue that many individuals who pirate games would not have purchased them even if they were available for sale, suggesting that piracy might serve as an effective promotional tool through word-of-mouth.
Determining the exact financial repercussions of piracy on game sales remains a complex challenge. However, a recent study has shed light on this issue by analyzing post-release cracks of Denuvo’s Digital Rights Management (DRM) as a natural experiment to assess game sales before and after piracy incidents. The findings indicate an average revenue loss of approximately 19 percent during each week following release when a crack is accessible, highlighting the significant role effective DRM can play in safeguarding publishers’ revenues.
Analyzing the Data
In the research paper titled “The Revenue Effects of Denuvo Digital Rights Management on PC Video Games,” published in the esteemed journal Entertainment Computing, William Volckmann, a research associate at UNC, investigates 86 different games protected by Denuvo that were initially launched on Steam between September 2014 and December 2022. This selection includes numerous titles where Denuvo protection remained intact for at least 12 weeks—typically when new sales begin to decline significantly—and several others where earlier cracks facilitated widespread unauthorized access.
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