By Keith Newman
The games industry is missing out on about $30 million a year in sales through pirated software, much of it illegally copied within New Zealand by students and small commercial operators.
According to the Interactive Software Association (Isanz), which represents the major games publishers and hardware companies, 42 per cent of all interactive software sold here is counterfeit. The association, in a newly completed study, alleges the practice is costing retailers $10 million a year and wholesalers $20 million.
Raids organised by Isanz uncovered a high percentage of pirated Playstation titles with much of it produced in US television format and obtained from the US for use in New Zealand Playstations with modified chips. The majority of the PC games had been downloaded from the Internet.
The revelations follow the release of the annual Business Software Alliance (BSA) survey claiming a 32 per cent piracy rate of business software, likely to have cost the legitimate software business $40.5 million in sales last year. The figure does not include operating systems or games.
Isanz president Mike Wynands said the study of the games market showed 40 per cent of the underground trade was made up of teenagers copying games at home using CD-Rom recorders which cost about $1000. Thirty-five per cent was by local commercial or semi-commercial operations with some form of distribution channel. The remaining 25 per cent of pirated product was imported primarily from Asian countries through postal bags or couriers.
Mr Wynands said the study was of interactive software alone, excluding parallel imports, and revealed our games piracy rate of 42 per cent was well ahead of the US which has 30 per cent and Britain with 35 per cent.
Since late 1998 retailers nationwide have been complaining about individuals selling and marketing illegal copies of PC and Playstation games through newspaper advertising and letter box drops.
Isanz hired a private investigator in March to determine the extent of the piracy in Christchurch as a test case. The result was one conviction, three fines of $200 each and another two cases pending. The maximum penalty is three months in prison and $10,000 on each charge. Fines for piracy were increased recently to $150,000 and are likely to be reviewed again next month.
After its discovery in Christchurch, Isanz broadened its investigations into two-month national programme where illegal software sellers and producers were officially warned, or locations raided in conjunction with the police. Hundreds of master disks of the best-selling current titles were confiscated. It is from these disks that counterfeit copies are made and often sold to order.
The focus was mainly on commercial activity, although much of the information came from students caught with product, in a black market business which Mr Wynands said was "close knit."
Widespread computer games piracy sees industry miss out on $30m
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