Revenge after 'Freebies' Are Gone? Effects of Curbing Piracy on Online User Ratings
40 Pages Posted: 12 Jul 2018 Last revised: 17 Oct 2018
Date Written: June 21, 2018
Recently, the advent of Denuvo as a highly effective anti-piracy instrument in the video game industry delivered a huge blow to illegal gamers. In most cases, games that adopted Denuvo were uncrackable for a unprecedentedly longer period of time. By exploiting this natural experiment and some unique institutional features of the video game market, I identify the effect of adopting Denuvo on a video game's user ratings on Metacritic.com using a difference-in-difference (DID) approach. Various estimates suggest that a Denuvo-protected game suffers, on average, a decrease of 0.5 -- 0.9 points (out of a 0-to-10 scale) in mean user rating about its PC version (affected by Denuvo most) relative to its console version (largely unaffected by Denuvo). The decrease in mean user rating seems mainly due to a significant upsurge of extremely negative ratings (ratings with a score of 0 or 1). By conducting a battery of additional identification tests, several alternative explanations are ruled out and the results consistently point to one explanation: Illegal gamers revenge Denuvo-protected games by posting malicious negative ratings about them on Metacritic.com. The findings offer important implications to both owners of online platforms thriving on user-supplied content and digital-good providers' strategies to cope with piracy.
Keywords: Anti-Tamper, Denuvo, Digital Piracy, Online User Reviews, Online User Vandalism
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