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Piracy can reduce sales revenues by 20%, a sizable loss for publishers and developers

A new study indicates that Denuvo DRM helps protect 'total revenue from piracy by a mean of 15% and a median of 20%' on the initial impact of sales.

Piracy can reduce sales revenues by 20%, a sizable loss for publishers and developers
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Senior Gaming Editor
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Digital rights management software like Denuvo might be pesky for consumers and gamers, but it apparently helps reduce the impact piracy has on game sales by a significant amount.

Piracy can reduce sales revenues by 20%, a sizable loss for publishers and developers 1

A new study has some pretty interesting info on how Denuvo DRM can help stabilize piracy as it relates to full game sales. The study is called Revenue effects of Denuvo digital rights management on PC video games, and was published in volume 52 of the Entertainment Computing journal.

The study surmises that piracy and illegal sharing of software can actually have a sizable and noticeable impact on initial PC game sales during a title's critical launch window. The idea is that publishers and developers use Denuvo DRM to shield their games for the first 12 weeks on the market, which is enough time to alleviate most of the revenue losses.

The paper's author, William M. Volckmann II, explains:

I exploit the randomness with which Denuvo is cracked to estimate the effect Denuvo has on protecting revenue from piracy displacement.

When Denuvo is cracked very early on, piracy leads to an estimated 20 percent fall in total revenue on average relative to an uncracked counterfactual, but that effect is weaker the longer it takes for Denuvo to be cracked.

When Denuvo survives for at least 12 weeks, piracy leads to nearly zero total revenue loss on average. The results suggest that Denuvo does protect legitimate sales to an estimated mean of 15 percent of total revenue and median of 20 percent, but there is little justification to employ Denuvo long-term (i.e. for more than three months), especially given that Denuvo can have negative technical side effects and is generally disliked by users.

  • Denuvo DRM protects total revenue from piracy by a mean of 15% and a median of 20%.
  • Piracy causes mean total revenue to decrease by 20% when Denuvo is cracked quickly.
  • Piracy causes zero mean total revenue loss when Denuvo survives for 12 weeks or more.
  • The characteristics of a game cannot explain its likelihood of being cracked.

This explains why publishers typically only use Denuvo DRM on a temporary basis, and will often remove the protections months or so after the game is released. The teams clearly want to absorb as much initial sales revenue as possible before the game rotates into an evergreen catalog title.

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Senior Gaming Editor

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Derek joined the TweakTown team in 2015 and has since reviewed and played 1000s of hours of new games. Derek is absorbed with the intersection of technology and gaming, and is always looking forward to new advancements. With over six years in games journalism under his belt, Derek aims to further engage the gaming sector while taking a peek under the tech that powers it. He hopes to one day explore the stars in No Man's Sky with the magic of VR.

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