Reply to post: Re: Quantify losses...

UK ISPs must block access to Nintendo Switch piracy sites, High Court rules

Electronics'R'Us
Holmes

Re: Quantify losses...

I agree; to expound a bit...

Piracy (as defined by the software industry) occurs for the same reason as smuggling - economics.

If an item is locally highly taxed, then either:

1. A person goes to a locality it is not heavily taxed, purchases the item and returns home with local government none the wiser although there have been occasions state police set up at the state line for this type of thing (there are many examples of this *)

2. A person goes into business to buy the same items more cheaply and sell them into the market (avoiding the local taxation). With a connected world, this is easier than ever.

Game piracy is the same; the higher the price of an item, the fewer will choose to buy it at full price (there are exceptions of course where an item may be required) but it may not reduce the total demand for the product and hence an industry pops up to satisfy that demand.

I am not looking at whether this is right or wrong; it is simply rational economic behaviour.

This is one of the reasons that the so-called 'harm' to game publishers is a lot lower than actually claimed; if the game were not free (or at a significantly lower price) the publisher would have no revenue stream anyway for those copies.

* This happens a lot in the USA where sales taxes are set at state (and even county / city / municipality level just to make things more confusing). Massachusetts residents regularly popped across the state line into New Hampshire for things like alcohol and cigarettes in the late 90s due to the very different levels of taxation. When I lived in Pennsylvania and worked in New Jersey I would always fill the tank in NJ (fuel was much cheaper there even though fuel stations required attendants!).

I seem to recall that the denizens of northern Michigan would routinely flock across into Canada for the same reasons.

Another amusing one is that Delaware has a 0% sales tax, so residents around Philadelphia (a short drive really) would pop down to the very conveniently located mall just inside the state line to buy high value stuff.

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