As I investigate the history of computer and console game copy protection, I find myself looking for figures measuring illicit copying over time. There are of course "lost revenue" type projections. These measures essentially entail counting (or intelligently estimating) the number of illicit copies and assessing the value of each copy. These measures must contend with the point that not every illicit copy would have been a "sale" if the pirated copy had been unavailable.

Having noted this, the question is, where does one wondering about the economic impact of piracy go from there? One certainly can't assume that none of the illicit copies would have been a sale. Some studies attempt to go a step further and assess what percentage of illicit copies would have been a sale. One survey of console games concluded that 73 percent of illicitly copied games would have been bought within a month if not pirated. If this measure is correct, that means that the "lost revenue" projections based on counting illicit copies don't have to be discounted all that much. But the percentage that "would have been" a sale probably varies pretty widely from sector to sector and even from product to product.

Arguably, one does not need a great deal of precision here to get an idea of the impact of illicit copying on the economy more widely. A large part of where that impact will be felt is *not* on the copied game itself. It is on the next generation of similar games now being considered by developers. Even if not ever illicit copy would have been a sale, everyone who acquired such a copy is certainly a part of a future game's potential market. To get an idea of the impact of piracy on investment, one need have no more certainty than the investors do--it is their perceptions that matter.

Furthermore, it is often overlooked that someone who would not have bought a copy at the retail price even though they acquired an illicit copy might very well have rented a copy. This consideration affects products for which relatively secure DRM has enabled a rental market (console games, movies) but not music or computer software.

What I've concluded so far--the question of whether every illicit copy would have been a sale is relevant if one is thinking about calculating the actual damages of the actual producer of the actual product in a court case, for example. But in thinking about the economic impact of illicit copying more broadly, that argument doesn't matter so much. Unless someone comes up with something better, we're stuck trying to count downloads and counterfeits and proceed from there.

Happy New Year.