Next Generation - Quakecon: id Targets Pirates

"I would just hazard a guess," Hollenshead said, "Nobody knows – but you may literally have more games being played illegitimately than being played legitimately. So when you’re giving up that much market to people who aren’t paying for the games, or who are buying the games in ways in which the developers aren’t getting paid for it, it creates a big challenge.

"Not only for the developers and publishers," pointed out Hollenshead, "But also for retailers, because they have to make bets when they buy their game inventory.” The result, says Hollenshead is that retailers look at piracy, and decide to place their multi-million dollar inventory commitments on a market that isn’t being pirated: consoles.

"This industry is trying to work on that kind of a problem. And it is a very serious problem. There isn’t any magical solution, or else we’d solve it."

I'm amazed to see this kind of thinking come from id, a company that built itself on file sharing.

If id is serious about competing with pirates, they need to increase the convenience of legitimate channels for purchasing their products: leverage online distribution. Then they can take advantage of the increased efficiencies of online distribution to lower prices.

Sure, that will be an uncomfortable challenge to their existing distribution and sales channels (ie, physical retailers), but id should see that the retailer's business model grows weaker and weaker as entertainment becomes increasingly digital.

Digital distribution does come with costs, but those costs can be defrayed when you let your customers take on some of the burdens for you, as they do with peer-to-peer file sharing.

Then again, perhaps it's a measure of the entertainment software industry's "maturity" when id's CEO sounds like a record company executive.