How?

By selling people who grab games digitally — without paying for them — post-release downloadable content.

"They can steal the disc, but they can't steal the DLC," he said.

The opportunity to discuss how one of the world's largest publishers might see software-pirating gamers as a potential revenue source emerged last week when Kotaku sat with Riccitiello for a wide-ranging interview about EA's games and future.

Riccitiello spoke energetically about the popularity of the company's downloadable content add-ons. Some of EA's DLC has been free, such as the launch-day offerings of a new town in The Sims 3 or a nudity option in The Saboteur. Others, such as the paid DLC for November's Dragon Age Origins, generated a million downloads in its first week, according to an EA spokesperson.

"The consumer seems to really like this idea that there is extra stuff," Riccitiello said, while expressing surprise that some of this DLC is downloaded so soon after people start playing the games. "The consumer wants more, and when you give them more or sell them more it seems to be extremely well received."

Some of the people buying this DLC are not people who bought the game in a new shrink-wrapped box. That could be seen as a dark cloud, a mass of gamers who play a game without contributing a penny to EA. But around that cloud Riccitiello identified a silver lining: "There's a sizable pirate market and a sizable second sale market and we want to try to generate revenue in that marketplace," he said, pointing to DLC as a way to do it.

The EA boss would prefer people bought their games, of course. "I don't think anybody should pirate anything," he said. "I believe in the artistry of the people who build [the games industry.] I profoundly believe that. And when you steal from us, you steal from them. Having said that, there's a lot of people who do." So encourage those pirates to pay for something, he figures. Riccitiello explained that EA's download services aren't perfect at distinguishing between used copies of games and pirated copies. As a result, he suggested, EA sells DLC to both communities of gamers. And that's how a pirate can turn into a paying customer.

Riccitiello also hopes some of those pirates will come around and become not just DLC purchasers, but game purchasers. He said the music industry erred in "demonizing" its consumers rather than reacting to them. He believes that EA has an obligation to make it enticing for people to play games legitimately. And he hopes that services such as EA Sports' community hub or the BioWare social site that hooks into Dragon Age will make it so alluring that it will be "increasingly less likely that people will pirate because there is so much value on the other side of the door."

Until the pirates are converted there's some DLC they can buy, if they want their game to be more fun and if they'd like to show the people who made the game a little more support.

NOTE: Several readers have commented that PC-based DLC is indeed pirated by some gamers. While this may be the case, I believe Riccitiello's statement that DLC can't be pirated may at least be accurate for console DLC (He hadn't specificed). As noted in the original story above, he hopes that post-release community and content incentivizes pirates to turn into legitimate consumers.

Because if anyone from Nintendo of America had bothered to watch the latest episode of "Modern Family", they may have seen this kid. "Oh great!", they probably thought at first. "Free advertising!"

But the more observant of staffers would have noticed the odd colour of the cartridge stuck in the back of the DS. And then the cartridge's funny shape, smooth on one side, a hole on the other.

Yup, the hole where a microSD card goes. Meaning it's very likely the kid (don't watch the show, don't know his name) was using either an R4 cart, or a similar device. We don't for sure - I am also not involved in the show's production - but take a look for yourself.

Which doesn't necessarily mean he's a pirate! After all, the R4 isn't just for pirating games; it's also for enabling homebrew, a noble endeavour if ever there was one.

Not that Nintendo would care to make the distinction.

[thanks Greg!]

According to GamesIndustry.biz, Tero Virtala, the RedLynx CEO, said that the pirated version his team sent out did not include leaderboard support, which Virtala called the "soul" of the game. In other words, the pirate version functioned as a kind of demo without being a demo, encouraging downloaders to grab the fully enabled version if they enjoyed the illicit one.

"Piracy is here, so how can we take advantage of that? What we did actually, on day one, we put that game immediately on all the torrent networks ourselves," Virtala said at the Develop Liverpool conference.

The 150,000 copies the game has sold since its launch matches the number of users with access to the leaderboards, Virtala said, so if the gambit didn't work, at least it didn't hurt. "At least people have not cracked our leaderboards yet," he said.

RedLynx: We put Trials PC Game on Torrent Sites [GamesIndustry.biz]

It all started with a Craigslist post, as many seedy stories these days do. Last Thursday a listing popped up for a Modern Warfare 2 Xbox 360 bundle, nearly two weeks before the eagerly anticipated game was supposed to hit store shelves. Activision hired Dallas private investigation firm IPCybercriume.com to track down the sale. A little investigative Facebook work later and the firm uncovered two men who had stolen a crate of the bundles from the back room at a video game retailer. They turned the criminals over to the store's loss prevention department, but that was only the beginning.

On the 30th of October, Activision directed IPCybercrime to an individual going by the handle cedelamo" and "cdelamo815," who had posted on an Xbox 360 ISO site requesting donations to buy one of the bundles so he could duplicate Modern Warfare 2. The investigators checked the email address used in the posts against Facebook users, which led them to a site offering console mods. From there they brokered a deal, acquired the culprit's cell phone number, and tracked him down at the address they had acquired through Facebook.

The investigators identified the culprit as 18-year-old Christian Del Amo, a modder known for selling hacked Xbox 360 hard drives filled with pirated games. IPCybercrime turned the investigation over to the Miami-Dade police department, which purchased a copy of Modern Warfare 2 from Del Amo, arrested the runner who had delivered the disc, who then led him directly to the Del Amo home, where the pirate was arrested.

"It all happened very fast," said Rob Holmes, owner of IPCybercrime. "If these guys get their stuff out, then they can do some major damage to sales and spoil it for everybody. We plug leaks every day, but this was one of the biggest ones of the year."

While the investigation didn't do much to curb the piracy already plaguing Modern Warfare 2, it is an excellent example of the lengths that publishers will go to in order to protect their property, as well as being proof that no matter how well you think you covered your tracks, they're probably not covered.

Hit up the link below for the full story.

How investigators tracked down a Modern Warfare 2 cyber pirate [VentureBeat]

Last week Microsoft launched a string of Xbox Live console bans on Xbox 360s that had been modified to play pirated software, which naturally cause an uproar among people who have modified their Xbox 360 consoles to play pirated software. Go figure. Major Nelson explains that it's all for the sake of the community members that actively spend money on games.

As you may have read online, we've been actively banning consoles from Xbox LIVE that have been modified to play pirated games. Our commitment to combat piracy and support safer and more secure gameplay for the more than 20 million members of our Xbox LIVE community remains a top priority. All consumers should know that piracy is illegal, and that modifying their Xbox 360 console to play pirated discs, violates the Xbox LIVE terms of use, will void their warranty and result in a ban from Xbox LIVE. The health of the video game business depends on customers paying for the genuine products and services they receive from manufacturers, retailers, and the third parties that support them.

It's all common sense, really, but then the Major raises a very important point.

This would also be a good time to remind you that the warranty on an Xbox 360 console is not transferrable and if you purchase a used console that has been previously banned, you will not be able to connect to Xbox LIVE.

Since most game retailers don't check to see if a 360 can connect to Xbox Live prior to taking it in used, you very well could wind up with a system that is unable to connect to Xbox Live at all. Luckily most retailers return used consoles without much hassle. Just make sure you check your Xbox Live connection within the return period and you should be fine.

Xbox 360 Console Bans [Major Nelson]

IGN noticed scuttlebutt about bannings in technical feedback forums and asked Microsoft about it. A spokesperson confirmed they banzored some modded consoles. Said the spokesperson to IGN:

"We have taken action against a small percentage of consoles that have been modified to play pirated game discs. In line with our commitment to combat piracy and support safer and more secure gameplay for the more than 20 million members of our Xbox LIVE community, we are suspending these modded consoles from Xbox LIVE."

Microsoft wouldn't say exactly when the action was taken, although IGN speculates that, from the chatter, it's been happening over the past week.

Microsoft Performs Mass Xbox Console Banning [IGN via Hot Blooded Gaming] [Image from KnowYourMeme]

On day one, according to Neptune Interactive, the number of illegitimate copies of Tap Fu submitting high scores to the game's leaderboards was more than 50%. Two days later, it was more than 90% by Neptune's figures. Worse? Neptune's findings indicate that zero percent of the pirates playing ill-begotten copies of Tap Fu ultimately became legitimate purchasers of the app.

The full post, which covers just how pirated copies are tracked, how iPhone owners can game for free with their Jailbroken phones and a nice dissection of pirate justification for stealing is at the developer's blog.

Piracy and the App Store [Smells Like Donkey via Waxy.org]

OK, I didn't. Time was, copy protection didn't inspire such anger in power consumers, probably because the schemes were too ridiculous to be taken seriously. Oh, they were a nag. But holding up a piece of colored film to your screen to read off a secret code, Transformers tech-specs style, was kind of a novelty. My brother and I also repurposed a few codewheels for our own stabs at cryptography

Royal Pingdom took a look back at early forms of PC game copy protection. I'd have to guess that the reason none of these ever raised the kind of anger that DRM does today is because there's no real big brother aspect to it. There were things like parameter codes and read-only copy protection, but nothing was ever put on your machine (although, without a hard drive, I guess it's a moot point). Furthermore, some of these methods - such as the code books or history guides - were at least themed to the game, making them seem like real life extensions.

But it's probably because we were dealing with PC gaming before the explosion of the Internet, and the copying and file sharing over it made publishers get tough, some to the point of heavy-handedness, with protecting their sales.

Wacky Copy Protection Methods from the Good Old Days [Royal Pingdom]

We've been following the Pirate Bay sale saga rather closely since the sale was announced this June, with Global Gaming Factory declaring its intention to purchase the site for approximately $7.8 million and convert it into a legitimate distribution point for multimedia content. In July, former Grokster president Wayne Grosso left Global Gaming Factory, citing "very strong doubts" that the financing for the deal was there. CNET now reports that an AktieTorget disciplinary committee seems to agree, finding that Global Gaming had "provided false information," shown a "lack of accountability," and violated the transparency policies of the exchange.

A report issued on Wednesday focused on falsehoods present in Global Gaming Factory's press releases, citing that the company didn't have the money to purchase Pirate Bay and the company was never close to closing a content deal with a major publisher, also pointing out the adverse effects such statements had on the stock market.

Hans Pandeya, Global Gaming Factory's CEO, still contends that the money will be there when the deal closes, calling the competence of the exchange itself into question.

"It will be difficult for Aktietorget to explain when we close the deal in two weeks since the funding is not supposed to be in place," Pandeya wrote to CNET News. "People will start asking questions about what has been going on. I don't think Peter Gonczi (vice president and head of market surveillance at Aktietorget) will then be as active as he has been with the press."

Pandeya's confidence isn't being felt by the Swedish people, however, as pictures of his property being repossessed have been appearing regularly in newspapers across the country.

Perhaps most telling is a statement from Wayne Rosso, the former Grokster president who left Global in July.

"He kept pushing for press releases," Rosso said. "He would say, 'Can't we put out a press release that we're talking with this content owner,' or he'd say 'can't we announce we're going to do a deal with that content owner?' I told him we couldn't and then I asked him, 'You don't have the money, do you?' He said, 'Well, I do and I don't.' I told him, 'That means you don't.'"

This can only end in tears.

Pirate Bay buyer 'misled' investors, booted off exchange [CNET]

"You won't be able to rip your games and play them on the [PSPgo] system, the firmware precludes that," Koller told PlayStation Insider. "There's no external battery, so there's a number of protections put into place on the system."

The drawback? When that battery starts to go, you can't swap it yourself. Back it goes to Sony for replacement, at a fee if it's out of warranty.

Why You Can't Remove the Battery from the PSPgo [PlayStation Insider]

In this clip, the R4i appears to be apparently running on the latest DSi firmware, 1.4. That was quick! If this is true, don't worry Nintendo, there's always firmware 1.5.

Thanks, JY!

Back in November of last year, it seemed as though R4 cartridges would not work in the then new DSi units. However, by May of this year, dedicated DSi piracy devices had hit the streets. Multiple R4-type DSi-dedicated devices began appearing as well, making it possible to load downloaded games on to the DSi.

This latest DSi update seems to have once again nixed piracy devices for the DSi. According to one Japanese site, the update makes it impossible to use the following cartridges: DSTTi, Hyper R4i, ak2i, R4 Ui, R4i Gold, EZ Vi.

Last year, Nintendo and 53 other companies took action against the makers of the R4 cart, a device which allows, among other things, the pirating of games on a DS.

DSi　FW 1.4J　人柱 マジコン対策 [NET ゲーム裏技徹底解説]

Wayne Rosso, the former Grokster president brought on by the company hoping to turn The Pirate Bay legit, has cut his ties with Global Gaming, saying that he has "strong doubts" that the company has enough money to complete the deal.

"I and my colleagues have very strong doubts that the funding is in place," Rosso told Cnet. "And there are other issues regarding Mr. Pandeya's credibility that trouble us greatly."

Rosso said that Global Gaming also hasn't met payment deadlines to he and his staff.

Global Gaming's Hans Pandeya, though, says everything is fine.

"We have plenty of investors that are interested in this and Wayne is just one of our many consultants...he might have been too impatient. We pay everyone we do business with."

So nothing to see here, move along please.

It would be unfortunate if the deal fell apart, because the idea of turning The Pirate Bay into a form of grassroots marketing and retail sales is incredibly intriguing.

Former Grokster exec pulls out of Pirate Bay acquisition

"Altogether on console, the piracy is low," Guillemot said. "On the PC the piracy is quite a lot. We are working on a tool that would allow us to decrease that on the PC starting next year and probably one game this year."

Guillemot didn't say what that solution would be, but it since he talked about it as if it were a new tool and not an existing form of digital rights management, like SecuRom, it stands to reason that it may be an internal solution.

The topic of piracy came up during Ubisoft's quarterly earnings call after Guillemot pointed to it as part of the reason that their DS games haven't been selling well.

He said that piracy on Nintendo's DS is strong, though oddly not as bad on the DSi, and that the company has learned that they can reduce the impact of illegal copies of the game by including physical extras like figurines, with their titles.

The increase in piracy on the DS started in Spain, Guillemot said, where they say "sales going down at a very strong level" last year. That then seemed to move to other countries this year, increasing the most after the month of March with continued impact this summer.

"We see it coming country by country." he said. "We see when we put other things with the product (people) go and buy the game. We need to make sure that the value is better when they buy the box then when they download (the game) from the Internet."

Guillemot said that Ubisoft is working on the problem both internally and with Nintendo's help.

"Nintendo has been able to slow down piracy a lot in Japan," he said. "They are now putting pressure to make sure it decreases in many other countries. We think we will be able to solve this matter."

Ubiosoft was so concerned with piracy on the Playstation Portable they started to retreat from that platform, Guillemot said. But there are now "new ways to control piracy" on the PSP, he said, and the company is reinvesting in the platform.

The expected sales drop is also more than 12 percent lower than initially expected.

Yves Guillemot, Chief Executive Officer for Ubisoft, places much of the blame for the drop on what he calls a "very sharp slowdown" in sales of DS games in Europe and the United States. Guillemot says that DS sales are down 67 percent. He also pointed out that the company's back catalog of Playstation 3 and Xbox 360 titles were also lower than expected.

"We are currently experiencing a very sharp slowdown in our sales for Nintendo DS as well as sales of back-catalog titles, in the context of a market that is tougher than anticipated," Guillemot said. "This will have a significant impact on our first-half showing. Against this backdrop, the solid performance of our Wii titles combined with the successful launches of Anno and Call of Juarez are points of satisfaction and demonstrate that good products are continuing to sell well."

In a follow up question, Guillemot seems to place much of the blame on the drop in DS sales on rampant piracy in Europe.

"Piracy is strong so we are working to put new figurines and new elements in the boxes that will change that in the future… for example in Europe we have the same market share in DS this year as last year…," Guillemot said. "We see a different attitude toward piracy in the U.S. than Europe. We did a survey that said our consumers will be more willing to buy products than pirate them. "

The news came during today's first-quarter report by Ubisoft. In the report the company also announced that they would be delaying four games: Splinter Cell Conviction, Red Steel 2, Ghost Recon and I am Alive.

Since R4 piracy devices use cartridges with SD Card slots, it was possible

Gpara deployed on trains last week — and did profiles of the DS players it spied on the train. Those profiles include the approximate ages, gender, type (student, salaryman, etc), what platform the individual was using and the approximate time window.

On the first day, Gpara spotted 106 individuals on the train playing the DS throughout a chunk of the day. Out of those, five of them were using R4-type piracy devices — four of them were men, and one was a female college student. One of those five, a businessman, was using the piracy device to play Dragon Quest IX.

During the second day, Gpara observed 109 individuals on the train playing the DS. Out of those 15 individuals were using a R4-type device to play DS games with only one playing a pirated version of DQIX. The pirates varied from middle school students to college students to female office workers to businessmen.

And you thought all pirates looked piratey, ha! Wrong!

山手線に"不正利用者"はこんなに居た！「マジコン調査隊」報告No.01／ゲーム情報ポータル：ジーパラドットコム [Gpara]

Maybe download "Dragon Quest IX JPN DSi Enchanced NDS iND" if you'd like a hentai slideshow? Oh, this bricks your DS. Buying it legally does not.

Happy faces courtesy of website DS-Scene.

DS-Scene » Forum Index » Miscellaneous News » Dragon Quest IX - a fake ROM appears! [DS-Scene via Tiny Cartridge]

Kids, if you pirate software, your mother will be dragged into the street and beaten by the police. At least that seems to be the message in the preview video from the Software & Information Industry Association, which features cheeky teens copying games, parents resisting arrest with kitchen utensils, and anime prison tattoos. Double Def DP returns from the 1991 original, still proudly kicking the mildly sexually suggestive name. And just when you think it can't get any more surreal, the Klingons show up.

The SIIA website says that the full video is coming this summer, though I'm betting they showed the best bits in this teaser and the rest of it is perfectly normal and thought provoking. Still, it's good to see that the association hasn't abandoned its fighting software piracy through sheer absurdity strategy after all these years.

Coming Summer 2009! [Software & Information Industry Association via Game Politics]

The solution to the illegal copying of video games perhaps isn't a law enforcement task force or volley of lawsuits, but the legitimization of the act itself.

Last week news broke that The Pirate Bay, one of the largest websites in the world dedicated to the illegal downloading of video games, was being purchased by a business group in Sweden with plans on turning the site into a purely legal operation.

Global Gaming Factory X doesn't plan on stopping the downloading of video games, but rather hopes to make enough money to pay the publishers for those downloads.

"We would like to introduce models which entail that content providers and copyright owners get paid for content that is downloaded via the site, " Hans Pandeya, CEO Global Gaming Factory, said in a prepared statement. "The Pirate Bay is a site that is among the top 100 most visited Internet sites in the world. However, in order to live on, The Pirate Bay requires a new business model, which satisfies the requirements and needs of all parties, content providers, broadband operators, end users, and the judiciary."

The news comes just months after a nine-day trial against Stockholm-based Pirate Bay found four guilty of making copyright content available. The four were sentenced to a year in prison each and were fined more than $3 million.

While heralded by industry lobbying group the Entertainment Software Association, the ruling and even the possible closure of The Pirate Bay would likely have little lasting impact on piracy. That's because it doesn't address the people pirating games, just those making it easier to do so.

Billy Pidgeon, an analyst with Game Changer Research, feels that piracy can only really be dealt with by some meeting of the minds.

"I hate to hear the industry talking about how they have to crush piracy, throwing down the gauntlet," Pidgeon said. "The last thing the industry wants to do is alienate their customer base."

People saying that they deserve to take a game for free, Pidgeon adds, is just as absurd.

That's why Pidgeon was so delighted to hear Electronic Arts' reaction to news of their game, The Sims 3, being pirated.

Three weeks before the game was released for sale, it showed up on pirate sites.

John Riccitiello, the head of EA, told Kotaku that they were initially very nervous about the leaked title.

But because the game relies so heavily on online play, something EA can control, gamers who grabbed an early, free version of the title didn't get the full experience, only a taste.

In the end, Riccitiello said, EA decided to think of it as the publisher putting out a really good demo of the game, instead worrying over lost sales.

"Thats great, I love to hear them talk like that," Pidgeon said of EA's take on the issue. "Super distribution (like piracy networks) can be turned into an advantage. It's not necessarily lost sales."

Using the grassroots networks of pirates could allow publishers to reach a much larger audience, including people in regions they don't yet reach. It could also create a sort of ad-hoc iTunes for game distribution, helping publishers and developers get games to people who can't or won't use the standard distribution channels.

In other words, when you can't beat them, use them.

Well Played is a weekly opinion column about the big news of the week in the gaming industry and its bigger impact on things to come. Feel free to join in the discussion.

The company, going by the name la société SAKURA, operates both a store in Paris and an online outlet, both of which specialise in Anime/Manga/Japanese gaming merchandise. The basis of the lawsuit is that Square "denounces SAKURA for the commercialization of products counterfeiting Square Enix's FINAL FANTASY and FULLMETAL ALCHEMIST trademarks and copyrights to the FINAL FANTASY series".

Which is all well and good! Square rightfully own the IP, and that pirated junk is no good for anybody. But you've got to wonder, why go after a single French retailer instead of the people manufacturing and distributing the goods in the first place?