A groundbreaking study published in Entertainment Computing by William Volckmann from the University of North Carolina at Chapel Hill sheds new light on the controversial topic of video game piracy and its impact on industry revenues. The research focuses on the effectiveness of Denuvo, a popular digital rights management (DRM) solution, and how its cracking affects game sales over time.
The Piracy Debate in the Gaming Industry
The gaming industry has long grappled with the effects of piracy on legitimate sales. While some publishers argue that each pirated download represents a lost sale, others contend that most pirates would never purchase the game legally. Some even suggest that piracy can serve as free advertising through word-of-mouth. Volckmann’s study offers a rare “natural experiment” to examine game sales before and after cracking occurs.
Methodology and Data Analysis
The research analyzed 86 Denuvo-protected games released on Steam between September 2014 and late 2022. This sample included games where Denuvo protection lasted at least 12 weeks and others cracked much earlier. Volckmann used a combination of new Steam user reviews and average active player counts as a proxy for sales data, acknowledging this as the study’s primary limitation.
Key Findings on DRM Cracking and Sales Impact
Using complex statistical models, the study revealed that:
- Games cracked within the first week of release could lose up to 20% in revenue compared to uncracked versions.
- If cracking occurs six weeks post-release, the revenue loss drops to about 5%.
- After 12 weeks, new sales become so insignificant that removing DRM has minimal impact on revenue.
Long-Term Effectiveness of Denuvo Protection
Volckmann’s research suggests that Denuvo-protected games generally do not suffer significant sales losses due to piracy, as the protection often remains uncracked for the crucial first 12 weeks after release. In a hypothetical DRM-free world, such games could potentially earn 20% less profit on average.
These findings align with public statements from Irdeto, the company behind Denuvo. They have consistently emphasized that DRM protection is most critical immediately following a game’s launch, when the majority of purchases occur.
Recent Trends in Denuvo’s Effectiveness
The study notes that Denuvo’s resilience against cracking has improved recently. Of 28 Denuvo-protected games released in 2024, 26 remain uncracked, while two were cracked only after the crucial 12-week window. This trend suggests that Denuvo continues to evolve in its effectiveness against piracy attempts.
As the gaming industry continues to grapple with piracy concerns, studies like Volckmann’s provide valuable insights into the real-world impact of DRM solutions. While Denuvo may not be invincible, its ability to protect games during the critical initial sales period appears to justify its continued use in the eyes of many publishers. As cybersecurity measures evolve, so too will the strategies employed by both game developers and those seeking to circumvent protection mechanisms.
