European copyright infringements study lacks understanding of industry sales and economics
In a study commissioned by the European Commission in 2015, the Ecorys research firm quizzically concluded that copyright infringement does little to displace legitimate sales of copyrighted works (except in the case of “recent top films”). This is in spite of the fact that the study's authors themselves note that “not too much significance should be attached” to their estimates of sales displacement rates on account of the insignificance of the displacement-related coefficients. With respect to the video games industry, the study came to the conclusion that the online infringement of games positively generates sales at a ratio of 24 legal transactions for every 100 illegal ones. This highly questionable conclusion is not only counterintuitive, but demonstrates a deeply flawed understanding of games industry sales and economics. The study’s attempts to apply a one-size-fits-all methodology (in terms of analysing consumer behaviour) to the different content industries simply ignores the obvious differences in business models and patterns of consumption.
Despite the games industry’s best efforts, by providing consumers with access to games on a variety of devices and at multiple price points and by taking various technological self-help measures, it is a fact that piracy persists and causes serious economic damage. A methodologically-flawed study that demonstrates a complete lack of understanding of industry sales and economics does not change that fact, and should not be relied on by policy makers.