VIDEO GAMERS IN EUROPE

VIDEO GAMERS IN EUROPE - 2007 Prepared for the Interactive Software Federation of Europe (ISFE) By Nielsen Interactive Entertainment

CONTENTS EXECUTIVE SUMMARY 3 BACKGROUND AND METHODOLOGY 5 SECTION 1: USAGE OF VIDEO GAMES 7 SECTION 2: VIDEO GAMES AMONG OTHER LEISURE ACTIVITIES 12 SECTION 3: USAGE OF AND ATTITUDES TO PIRATED GAMES 17 SECTION 4: DIGITAL DOWNLOADING 30 SECTION 5: THE PEGI AGE RATINGS AND GAME DESCRIPTOR SYSTEMS 37 2

EXECUTIVE SUMMARY Gaming As an Entertainment Option: This study demonstrates that gaming accounts for a significant proportion of leisure time when placed in the context of wider media and entertainment consumption, cementing its status as a mainstream media option. More than one in six (15%) European gamers spend in excess of 14 hours playing video games per week, which is less than the time spent surfing the internet, watching TV or listening to music, but accounts for a greater proportion of time when compared to watching DVDs, listening to the radio or reading books or magazines. Video games are also differentiated from other media options, such as watching movies or television, in terms of their ability to offer a greater degree of creative and cerebral stimulation: 55% agree video games stimulate the imagination (compared to 51% for movies and 36% for TV), while 47% feel that video games make you think (compared to 41% for movies and 38% for television). However, gaming fares less well in comparison to movies in terms of the social experience offered (27% vs. 59% for movies and 34% for TV) or as a constructive use of time (34% vs. 42% for movies and 24% for TV), while television is seen to be the more educational of the three (51% vs. 37% for video games and 34% for movies). Outside of gaming, these Europeans also engage in a wide variety of activities in their spare time; friends play a central role in their social lives, while group activities such as going to the movies, shopping or going out to eat or drink also feature highly (more than half claim they participate in these activities at least once a month). Playing sports, either outdoors or at a health centre are also important component of leisure time. Further emphasising the diverse profiles of European gamers, respondents within the survey encompass a wide variety of individuals; from teens to adults to parents, men and women, and include a broad spectrum of occupations and income levels. In terms of gaming preferences, the majority either play on their PC (72%) or the PS2 (), with ownership of the newer platforms such as the PSP and Wii, peaking in the UK. Demonstrating their enthusiasm for the category, these gamers commonly buy between 1 and 6 games per year (71%), while the average size of collection has doubled since 2005 to reach 49. It is this level of engagement with the category which has helped the European games industry reach a value of 7.21 billion per year (2006). Video Game Piracy: Representing a significant threat to the success of the games industry are the endemic levels of piracy reported by these European gamers. Four in ten European gamers say they have obtained a counterfeit game, and furthermore these gamers claim to own on average 19 pirate games, representing a third of their total collection. Piracy is particularly prevalent among certain segments, especially males, teens and heavy gamers, whilst also appearing widespread among parents, indicating children may be exposed to pirated product within the home. Encouragingly, fewer European gamers admit to personally producing counterfeit games (one in six). Looking beyond personal involvement, and further emphasising the prevalence of counterfeit games, half are familiar with someone who owns a pirate game, while a relatively high proportion (four in ten) know someone who owns in excess of ten illegal games. The PC is the most at risk when it comes to pirate games (75%), while the primary source of illegal games is friends and relatives (52%), followed by peer-to-peer sites (26%), street traders (19%) and downloading direct from websites (). 3

Levels of piracy vary markedly across the countries surveyed: counterfeit game ownership reaches particularly alarming levels in Latvia (three quarters own a pirate game, with the average number of illegal games owned totalling 48), while over a third of Latvian gamers also claim to have to have personally made or supplied games to others, apparently fuelled by the belief that piracy is both acceptable and legal. Counterfeit game ownership and distribution also skews towards Spanish and Scandinavian gamers (average number owned stands between 21 and 23, and over two in ten have made or given illegal games to others). In comparison, UK and German gamers claim to be the most law abiding when it comes to piracy (- own a pirate game, average number owned stands at 5). Encouragingly there do appear to be positive actions the industry can take to combat the problem: awareness that buying counterfeit games is a crime only stands at six in ten, while only half believe it is illegal to copy games, with those who currently own pirate games much less likely to agree with these statements. This suggests that education and public awareness campaigns can play a key role, in particular addressing the ongoing issue of distribution of counterfeit product among peers and relatives. Additionally, the links between pirate games and the wider issue of organised crime is less well known: four in ten gamers who currently personally produce or obtain pirate games for others consider this to be a deterrent, followed by threat of prosecution (a quarter), suggesting that raising awareness of these elements of piracy and a greater degree of enforcement may prove effective. Downloading Video Games: Within the context of piracy, it is noticeable how Internet-based illegal activity appears to be growing, with three in ten claiming to have downloaded a complete video game from the Internet, primarily sourced from unofficial websites (73% of all complete video games downloaded are reportedly from unofficial sources). However, this presents an ongoing issue for the industry not only in terms of illegal downloading, but also legal distribution through this forum. Experience from other media appears to be influencing gamers perceptions and usage of Internet downloads: currently, music is the most popular media downloaded (seven in ten European gamers have done so), while four in ten have downloaded a video game demo, all mainly from official sources. Looking to the future, among those who currently download games, three in ten feel they will increase the number of games they download, while half feel they will not modify their current downloading behaviour. Furthermore, a third of those who do not currently download games feel they will start to do so, particularly in the UK. While this suggests there may be a great deal of potential for making games available for download through official sources in the future, it is also important to note that these potential increases in Internet-based activity may also represent a rise in illegal downloading. PEGI: While awareness of a European age ratings system stands at six in ten, familiarity with the name PEGI is much lower (three in ten are familiar). However, recognition of the PEGI age rating symbols is near universal, indicating that the visual marks of the system are well know, but that gamers are much less familiar with its name. The age ratings system is felt to be broadly useful when purchasing games (three in ten find it helpful), with parents placing an additional premium on the system, with half finding it helpful. In comparison, European gamers are much less familiar with the descriptors for bad language, violence and fear (just under half). The symbols also appear to be relatively ambiguous, with only two in ten finding their meaning clear. Consistent with these lower levels of familiarity and understanding, only three in ten consider the descriptors a useful tool when buying a game for a child, somewhat lower levels when compared to the PEGI age ratings. Awareness of the PEGI website is limited, with just over one in ten claiming to have heard about it, and few (one in ten) European gamers claim to be familiar with the process of filing a complaint if they disagree with a rating. 4

BACKGROUND AND METHODOLOGY Background This survey was commissioned by the Interactive Software Federation of Europe (ISFE) in order to examine consumer attitudes and usage of video games across ten European and Baltic countries the UK, France, Germany, Italy, Spain, Sweden, Norway, Czech Republic, Poland and Latvia. The purpose of this study is to provide both general consumer insight into the usage of video games, placing them within the wider context of other media and leisure activities, and a more specific understanding of the prevalence of and attitudes to video game piracy. The study also follows on from consumer research conducted for ISFE in 2004 and 2005, which is referenced in this report where appropriate (please note: comparisons should be exercised with caution as previous studies were conducted using face-to-face methodologies rather than online and among a more restricted set of countries. Methodology A 15 minute quantitative survey was administered online in the ten countries concerned, based on 400 respondents per country. Please note that while online interviewing is increasingly prevalent, especially in Western Europe, the technique is not yet as widespread in the Baltic states and Central and Eastern Europe, and as such results from these territories should be taken as directional rather than absolute. Fieldwork was conducted in January 2007 using a questionnaire designed in conjunction with ISFE and its membership. Sample The sample comprised 4000 respondents, based on 400 per territory (UK, France, Germany, Italy, Spain, Sweden, Norway, Czech Republic, Poland and Latvia). respondents were required to play video games on at least one of the following, PC, home-based or portable console, and to have personally purchased at least one legitimate video game in the last 6 months. This sample should be taken as representative of a broad cross section of active gamers. Respondents were aged between 16 and 39, with 8 being male and being female (please note, whilst representative of a widespread gaming audience, the data does not include the attitudes of gamers under the age of 16). The sample was broadly divided into four age quartiles: 16-19 year, 20-24 year, 25-29 year, and 30-39 year. Minimum quotas were applied for usage of consoles, although allowing for cross-ownership and usage. Overall, 68% of the total sample play video games on consoles (X-Box, X-Box 360, GameCube, Wii, PS2), 72% play games on PCs, and play on handheld platforms (GameBoy Advance, GameBoy Advance SP, Nintendo DS, Nintendo DS Lite, PSP), although this varies by country. 5

Terminology Respondents aged 16 to 24 may be referred to as younger respondents, while those aged 25 to 39 may be termed older respondents. For the purposes of this study, heavy gamers are those who play video games in excess of 10 hours per week, while medium gamers play for 6 to 10 hours in an average week, and light gamers play for five hours or less. Within the course of the survey, respondents were asked the extent to which they agreed with a number of statements. Where a five point scale was used (ranging from 5 representing strongly agree to 1 representing strongly disagree ), those answering with a 4 or 5 to any given statement have been classified as agreeing. Similarly, in questions where future interest was asked using a 5 point scale (ranging from 5 representing definitely interested to 1 representing definitely not interested ), respondents answering 4 or 5 have been classified as expressing positive interest. Full country specific data sets are available on request. For further information please contact Patrice Chazerand (Secretary General, ISFE): Patrice.Chazerand@isfeurope.org 6

SECTION 1: USAGE OF VIDEO GAMES KEY POINTS PCs are the most prevalent platform for playing video games among these European gamers (72%), followed by the PS2 (): o UK gamers are leading adoption of the newer consoles and handhelds (particularly the PSP, X- Box 360, and Nintendo Wii). Heavy gamers (in excess of 10 hours per week) comprise a quarter of this sample, lead by males and younger respondents: o Latvian gamers demonstrate the most commitment (half play for more than ten hours per week) The majority (71%) of European gamers buy between one and six games per year: o UK respondents are the most prolific buyers. o of pirate games purchase relatively few video games, which when coupled with the reported size of their collections, indicates that this group choose to obtain a good proportion of their video games through illegal channels. The average number of video games owned by Europeans has more than doubled since 2005 to reach 49: o Latvian gamers claim to own an impressive 150 games on average, with further analysis suggesting that the majority of these have been obtained illegally, in many cases through downloading. o As to be expected, heavy gamers are the most avid collectors. 7

Reported Platform hip and Usage Total European Breakdown by Country: Which of the game systems for playing video games do you currently use for playing games? And which do you use most often? 8 Game systems currently used Game systems used most often 72% 26% 15% PC PlayStation 2(PS2) 4% PlayStation Portable (PSP) 6% Microsoft Xbox 360 4% Microsoft Xbox 9% 9% 8% 7% 6% PlayStation 1 1% 1% 2% 1% Game Boy Advance Nintendo DS Nintendo Gamecube 3% Nintendo Wii Game Boy Advance SP 1% 2% Nintendo DS Lite As seen in the 2005 survey, PCs are the most prevalent platform used for playing games, cited by 72% of respondents ( in 2005), followed by the PS2 (), although reported usage of the PS2 console has dropped since the 2005 survey (61% in 2005). However, as would be expected, platform usage varies considerably across the countries surveyed: Among Latvian gamers, PC usage is near universal (94%), whilst reported ownership of the remaining handhelds and consoles is minimal. The PS2 overtakes the PC in the UK (64% vs. for PCs), while the UK also leads in terms of ownership of the PSP (), X-Box 360 (27%), Nintendo DS (22%) and Nintendo Wii (): The platform used most often to play video games mirrors ownership with PCs and PS2s dominating: half () claim to play games most frequently on a PC, while a quarter (26%) name the PS2. The balance between the PC and PS2 in terms of console preference has shifted since the 2005 study where the PS2 was used more regularly (44% vs. for the PC). 8

Reported Gameplay Hours Total European Breakdown by Country: In a typical week, how many hours do you spend playing video games? Less than one hour 1-5 hours 6-10 hours 11-15 hours More than 15 hours 10 9 8 12% 12% 12% 9% 9% 7% 9% 9% 9% 9% 12% 9% 8% 15% 33% 34% 33% 28% 28% 49% 42% 36% 42% 38% 43% 46% 46% 46% 41% 26% 6% respondents 18% 2% 5% 4% 4% 5% 8% 6% 6% 4% UK FR DE IT ES SW NO CZ PO LA Just under half (48%) of these European respondents claim to play games for five hours or less per week (classified as light gamers for the purposes of this study), on average, while three in ten () play for between six and ten hours each week, falling into the category of medium gamers. Just under a quarter () could be classed as heavy gamers, reportedly playing games for eleven hours or more on a weekly basis. Within this sample, gamers in Norway are the least active (57% playing for 5 hours or less per week), whilst Latvian gamers are the most committed, with half () playing for more than 10 hours per week. Demographically, the heaviest gamers skew towards males (26% play 10+ hours per week vs. among females), and the younger group (27% vs. among older respondents). Total European Breakdown by Demographics: In a typical week, how many hours do you spend playing video games? Less than one hour 1-5 hours 6-10 hours 11-15 hours More than 15 hours 10 9 8 12% 15% 28% 12% 9% 8% 9% 12% 5% 8% 28% 12% 33% 42% 37% 42% 43% 46% 39% 34% 6% 5% 6% 6% 8% respondents 16-19 year 20-24 year 25-29 year 30-39 year Males Females Console PC Handheld 5% 6% 5% 4% 9

Purchase Behaviour and Video Game hip Total European Breakdown by Country: On average, how many games do you usually buy in a year? Between 1 and 3 Between 4 and 6 Between 7 and 10 Between10and12 More than 12 10 9 8 7% 6% 15% 15% 4% 5% 6% 5% 4% 4% 3% 3% 7% 4% 4% 3% 3% 7% 15% 12% 21% 19% 7% 7% 5% 33% 26% 39% 33% 34% 37% 36% 36% 21% 38% 39% 34% 34% 38% 49% 47% 34% 48% respondents UK FR DE IT ES SW NO CZ PO LA The majority of Europeans (71%) purchase a game every two months or less (between one and six games per year). In comparison, fewer than one in ten (7%) buy in excess of twelve games per year. UK gamers are the most prolific when it comes to purchasing games (15%- purchase more than 12 per year), consistent with the 2005 study, as are teens (9% buy more than 12 annually) and males (7% vs. 3% among females). Based on console ownership, those who own handheld devices are also more likely to purchase games frequently ( purchase 12+ per annum). 10

Size of Collections Total European Breakdown by Country: How many video games would you estimate that you own in your current collection? 160 Mean number of games owned 149.8 140 120 100 80 60 40 48.6 48.1 25.6 44.3 37.5 51.2 44.5 36.9 47.5 47.9 20 0 respondents UK FR DE IT ES SW NO CZ PO LA In 2005, the mean number of games owned across the five countries surveyed stood at 19, but this has now increased to 49 based on these European gamers. Whilst the average collection stands at around 50 in the majority of countries, this falls in France (26), Norway (37) and Italy (38), but Latvians claim to own an impressive 150 games on average, over three times more than their European counterparts. Given that Latvians demonstrate relatively low purchase frequencies and high levels of counterfeit game consumption this suggests that the majority of games in these collections are obtained illegally, primarily through downloading (see Section 4). As to be expected, heavy gamers own the largest collections on average (100 vs. 41 among medium gamers and 29 among light gamers), along with handheld owners (67 vs. 54-56 among PC and console owners), and owners of pirate games (58 vs. 40 among non-owners). Demographically teens (59) and males (52) are the more avid collectors. Total European Breakdown by Demographics: How many video games would you estimate that you own in your current collection? Mean number of games owned 110 100 100.0 90 80 70 67.3 60 50 40 48.6 58.5 48.2 45.1 41.8 51.7 36.3 54.0 56.0 40.5 30 28.8 20 10 0 16-19 year 20-24 year 25-29 year 30-39 year Males Females Console PC Handheld Light Medium Heavy 11

SECTION 2: VIDEO GAMES AMONGST OTHER LEISURE ACTIVITIES KEY POINTS European gamers lead active and varied social lives, demonstrated by their participation in a wide range of entertainment and leisure options. o Friends are key, whilst group activities such as going to the movies, shopping or going out to eat or drink also feature highly, with more than half claiming they engage in these activities regularly. In terms of wider media consumption, it is perhaps unsurprising that these European gamers spend the most time surfing the Internet (four in ten claim to spend more than 14 hours per week on the web): o Playing video games (15% claim to play for more than 14 hours per week) falls slightly behind listening to music (21%), and watching TV (21%), while gamers dedicate much less time to reading (3%) or watching DVDs (5%). In comparison to television or movies, video games are seen to offer the most creative and cerebral stimulation, providing food for the imagination and mental challenges: o feel movies are more conducive to spending time with others and are a more constructive use of time, whilst TV offers the most educational experience. 12

Participation in Other Leisure Activities Total European : If you have a few hours of spare time, what sort of leisure or entertainment-related activities do you usually do once a month, Do you...? respondents 8 Chat or spend time with friends 73% Go to the movies 59% Go shopping or go out to shopping malls Go out to a café, pub or bar 53% 55% Go out to eat 52% Go to a party or go out dancing 39% Play sports or exercise outdoors Play sports or exercise at a health centre 37% 37% Gotoaconcertoragig 26% Go to a museum, art gallery or the theatre Within the wider context of entertainment and leisure, European gamers lead active social lives and engage in a wide variety of activities. As seen in the 2005 survey, friends play an important role in respondents leisure time (73% regularly chat or spend time with friends vs. 84% in 2005). Going to the movies (59% do so regularly) is the next popular activity, followed by shopping or visiting shopping malls (55% do so regularly), skewed heavily towards females (77% vs. 49% among males). Eating and drinking outside the home is also enjoyed (52%-53% regularly go out to cafes, pubs, bars or out to eat). At lower levels, 39% of European gamers regularly go to parties or out dancing, while just under four in ten (37%) frequently participate in sporting activities either outdoors or at a health centre. Live music plays a more minor part in gamers free time (26% regularly go to a concert or gig), although peaking in Latvia (41%), while cultural activities such as museums or the theatre are the least popular option, although still endorsed by. 13

Favourite Leisure Activities Total European : Please rank your favourite activities from 1 to 3, regardless of how often you typicaly do them, with 1 being your favourite activity and 3 being your third favourite. Favourite Activity 15% 9% 8% 8% 5% 6% 6% 5% 1% Chat or spend time with friends Go to the movies Go out to a café, pub or bar Play sports or exercise outdoors Go shopping or go out to shopping malls Go to a party or go out dancing Play sports or exercise at a health centre Go out to eat Go to a concert or a gig Go to a museum, art gallery or the theatre European gamers favourite activities broadly mirror their lifestyle choices above, and as such, engaging in an active social life with friends is by far the most popular way of spending free time (). 14

Time Spent On Leisure Activities Total European : In an average week, how much time would you say you spend? 21+ hours 18-20 hours 15-17 hours 12-14 hours 9-11 hours 6-8 hours 3-5 hours 2 hours or less 8 9 10 Hours spent surfing the internet in an average week 21% 8% 6% Hours spent listening to music on CD/ ipod/ other music player in an average week 4% 6% 8% 15% Hours spent watching TV in an average week 8% 5% 8% 12% 15% 18% 19% Hours spent playing console or PC video games in an average week 5% 3% 7% 9% 19% 19% Hours spent listening to the radio in an average week 6% 2% 3% 5% 6% 12% 18% 48% Hours spent reading books in an average week 2% 1% 2% 4% 8% 12% 52% Hours spent watching DVDs in an average week 2% 1% 2% 5% 8% 34% Hours spent reading newspapers and 1% 3% 5% magazines in an average week 12% 28% 49% In terms of the wider context of media and entertainment, it is perhaps unsurprising that European gamers spend the most time surfing the internet, with four in ten (39%) claiming to be active on the web for 15 hours or more per week, rising to 47% among Swedes, and among heavy gamers. The Internet has overtaken TV (as seen in the 2005 survey, although it is important to note this survey was conducted online), with two in ten (21%) dedicating the same amount of time (15+ hours per week) to watching television as listening to music, with teens ( ) being the most enthusiastic when it comes to music. Playing video games is ranked fourth, with 15% playing for more than two hours per day on average (15+ hours per week). In line with the previous findings, Latvians claim to be the heaviest gamers in terms of number of hours played (33% play for 15 hours or more each week). The majority of European gamers generally dedicate less than five hours per week to the remaining entertainment options, with reading (either books or magazines) accounting for the least amount of leisure time (half spend less than 2 hours per week reading). 15

Benefits of Video Games in Relation to Other Media Total European : Please indicate whether you agree with each statement using a 1 to 5 rating scale, where a 5 stands for Agree Strongly, and a 1 stands for Disagree Strongly - Total agreement (5 plus 4) 8 Video games TV Movies 55% 59% 51% 47% 51% 36% 38% 41% 37% 34% 34% 42% 34% 24% 27% Stimulates your imagination Makes you think Teaches you new things Is a constructive way to spend your time ows you to spend time with friends or family While movies are considered to be the most social activity (59% agree vs. 34% for TV and 27% for video games), and the most constructive way to spend time (42% agree vs. 34% for video games and 24% for TV), videogames are felt to offer the most creative and cerebral stimulation (55% agree stimulates your imagination vs. 51% for movies and 36% for TV, and 47% agree makes you think vs. 41% for movies and 38% for TV). In contrast, TV is seen to be the most educational of the three (51% agree teaches you new things vs. 37% for video games and 34% for movies). 16

SECTION 3: USAGE OF AND ATTITUDES TO PIRATED GAMES KEY POINTS Specialist game stores are the largest reported source of video games among these European gamers (62%). However, potentially illegal sources of games also feature highly - particularly Internet downloads (one in five), peer-to-peer sites (one in six), and street markets (one in ten). Piracy appears to be relatively endemic among European gamers, with four in ten admitting to owning a counterfeit game (in line with the findings of the 2005 survey): o Piracy is very widespread in Latvia (three quarters own a pirate game), followed by the Czech Republic (56%), Spain (54%) and Sweden (51%), while UK and German respondents are the most law abiding of the countries surveyed ( and, respectively). o Heavy gamers and PC owners are the most likely to own counterfeit games. Although ownership falls among parents, three in ten still claim to own a pirate game, suggesting that children may be receiving mixed messages about the legality and acceptability of piracy. In terms of platform, piracy on PCs is particularly rife (three quarters), perhaps reflecting the ease of downloading games directly to the PC: o Obtaining pirate games for mobile phones is a particular problem in Latvia (three in ten), while Scandinavian gamers are more likely to own counterfeit games for the X-Box (15%-19%). The primary source for pirate games is peers and relatives (half): o Peer-to-peer sites (a quarter) have superseded street markets (two in ten) as a source of illegal games, when compared to 2004 ( and, respectively), with use of these sites peaking in France (64%) and the Czech Republic (67%). o Illegal downloads account for nearly half the pirated games in Latvia. Attitudes to piracy are relatively mixed, with owners of pirate games the least inclined to acknowledge the legal implications of piracy suggesting they are either unaware of the legitimacy of their actions or it is an accepted activity among this group: o Around six in ten agree that buying counterfeit games is a crime, and a similar proportion feel it is damaging to the video games industry as a whole, although a quarter feel piracy does not cause any real harm. Similarly, half believe it is illegal to make copies of video games. Association of piracy with the wider issues of organised crime is less apparent, with three in ten agreeing criminal gangs produce counterfeit games. o There is a sense that pirate games represent good value for money (endorsed by half the sample), although they may be of lower quality than their authentic counterparts. o Three in ten acknowledge counterfeit games are likely to damage their games device, and a similar proportion believe pirate games are more likely to contain unsuitable images for children. On average, European gamers who engage in video game piracy claim to own 19 pirate games, which represents a third of all games owned by this group: o In line with previous findings, Latvians are the most avid collectors of pirate games (48), followed by Spain (21) and the Scandinavian countries (21-23), while their Western European counterparts in the UK and Germany are more conservative (5). o Of note, ownership of pirate games reaches above average levels (24) among parents. 17

Outside of personal involvement, piracy appears to be a relatively commonplace problem across Europe, with one in two familiar with someone who owns a counterfeit game, further emphasised by the relatively high proportion (four in ten) who know someone who owns in excess of ten pirate or copied versions: o Echoing personal ownership, knowledge of piracy is extremely widespread in Latvia and Spain, but much more limited in Germany and the UK. Encouragingly, fewer European gamers admit to personally producing counterfeit games (one in six): o However, this rises to over a third in Latvia and a quarter in Spain, consistent with the high levels of piracy and apparent acceptability of counterfeit games. o Of the options offered, those who currently produce pirate games feel the primary motivation to stop is a reduction in price of authentic product (eight in ten). Four in ten find the relationship between piracy and organised crime a deterrent, while the personal implications of prosecution appear to offer the least cause for concern (a quarter). o In line with their more cautious attitude female gamers are the more likely to consider both the links with criminal gangs and the threat of prosecution a deterrent. 18

Sources of Video Games Total European : Where do the video games you play usually come from? And where do you get your video games from most often? Have you every received or bought games from? Where do you get your video games from most often? A specialist game store (i.e. Gamestation) A supermarket or toy shop From friends or family From a web site, where you order the game to be delivered A music or DVD store (i.e. HMV) From a computer specialist store From a consumer electronics store From a web site, where you can download the game directly From a store that only sells second hand games From a peer to peer site on the internet From a street market or trader other 6% 5% 4% 6% 4% 3% 4% 1% 5% 2% 24% 27% 19% 42% 42% 55% 62% While specialist game stores (62%) are the largest reported source of video games among Europeans, one in five () claim to have downloaded a game from a website, have obtained them from peer to peer internet sites and from a street market. Downloading direct from the internet is most prevalent in the Eastern European and Baltic countries ( Poland, the Czech Republic and 47% Latvia), while usage of peer to peer sites is particularly important in Poland (28%). The sources where games are most frequently obtained from follow a similar pattern. Of note, of Latvian respondents claim they download games from the internet most often (compared to 1%-7% among the remaining countries). 19

hip of Pirate or Copied Games Total European Breakdown by Country: As you probably know, a number of video games can be obtained as pirated or copied versions - sometimes called "burned" or "backup" copies. Have you ever obtained a video game which you now believe was pirated or copied? Yes No Don t know/not sure 10 9 4% 9% 8% 9% 7% 21% 21% 8% 8 49% 79% 61% 64% 52% 38% 58% 35% 75% 34% 54% 51% 35% 56% 44% respondents UK FR DE IT ES SW NO CZ PO LA Piracy appears to be relatively endemic among European gamers: four in ten () Europeans claim they have obtained a pirate or copied game, consistent with the findings of the 2005 survey (44%). The number rises to three quarters (75%) in Latvia, and over in the Czech Republic (56%), Spain (54%) and Sweden (51%), while UK respondents are the least likely to admit to having owned an illegal game (). Respondents under the age of 25 (46%), males (43%), PC owners (45%) and heavy gamers (47%) are the more likely groupstohaveapirateversionofavideogame. Encouragingly, ownership of counterfeit games drops among parents, although still standing at three in ten (), indicating that children may be exposed to pirate games within the home, perhaps promoting a culture of acceptance among younger games. Total European Breakdown By Demographics: 10 As you probably know, a number of video games can be obtained as pirated or copied versions - sometimes called "burned" or "backup" copies. Have you ever obtained a video game which you now believe was pirated or copied? Yes No Don t know/not sure 9 12% 12% 8 49% 44% 52% 59% 46% 58% 53% 43% 54% 53% 47% 42% 47% 46% 36% 43% 28% 37% 45% 37% 36% 42% 47% 16-19 year 20-24 year 25-29 year 30-39 year Males Females Console PC Handheld Light Medium Heavy 20

Devices for Which Pirate or Copied Games Have Been Obtained European Who Have Obtained A Pirate Video Game - Total: 9 For which games playing device have you every purchase or otherwise received games which you believe were pirated or copied? This includes "sharing" games over the internet or peer-to-peer services. Base: those who have obtained a pirate video game those who have obtained a pirate video game 8 76% 27% 22% 7% 4% 3% 3% 2% 2% 1% APC PlayStation2 (PS2) PlayStation 1 (PS1) Mobile Phone Xbox PlayStation Portable (PSP) Xbox 360 A GameBoy Platform Nintendo DS /DSLite Nintendo GameCube Nintendo Wii Piracy on PCs is particularly rife: among those who have obtained a pirate or copied game, the vast majority have done so for use on a PC (76%), rising to 92% among French respondents. This may reflect the ease of downloading games directly from the Internet via PCs At lower levels games had been acquired for both the Playstation 2 and Playstation 1 (27% and 22%, respectively), while have received games intended for mobile phones, rising to in Latvia. Scandinavians are particularly likely to have pirated games for the X-Box (15%-19% in Sweden and Norway compared to 2%-9% in the remaining countries). Fewer than one in twenty (1%-4%) claim to have obtained games for the remaining consoles. 21

Sources of Pirate or Copied Video Games European Who Have Obtained A Pirate Video Game - Total: From where have you obtained a video game you believe to be pirated or copied? Base: those who have obtained a pirate video game those who have obtained a pirate video game From friends or family 52% From a peer to peer site on the internet 26% From a street market or trader 19% From a web site, where you can download the game directly From a web site, where you order the game to be delivered From a store that only sells second hand games Other 5% 6% 7% A specialist game store 4% A supermarket or toy shop 3% From a computer specialist store 3% A music or DVD store 2% From a consumer electronics store 2% By far the most common source of pirate or copied games is friends and family (52%). Further analysis shows that this is particularly the case in France (64%) and the Czech Republic (67%). However, Internet based piracy appears to have superseded street markets as a source of illegal games: a quarter (26%) obtained a pirate or copied game from a peer-to-peer website, rising to in France, while two in ten (19%) have purchased them from a street market, particularly respondents in Poland (34%) and Latvia (36%). Around one in seven () have illegally downloaded games from the internet, peaking at 45% in Latvia. 22

Attitudes Towards Piracy Total European : Please indicate whether you agree with each statement using a 1 to 5 rating scale, where 5 stands for agree strongly and 1 stands for disagree strongly. Strongly agree (5) 4 3 2 Strongly disagree (1) 8 9 10 Buying pirated or copied video games is acrime 45% 19% 19% 9% 9% Pirated or copied video games damage the video games industry 33% 9% Pirated or copied video games are good value for money 28% Pirated or copied video games are likely to be lower quality than authentic games 24% 21% 15% It is legal to make copies of video games 19% 15% 35% Pirated or copied video games are likely to contain unsuitable images for children 26% 28% Pirate or copied video games are likely to damage your console or PC 15% 26% 19% 27% Piratedorcopiedvideogamesare produced by organised criminal groups 18% 21% Video game piracy does not cause any real harm 9% 27% 24% Just over six in ten (63%) Europeans agree that buying pirated or copied video games is a crime. While UK and French respondents are more likely to consider purchasing pirated games as a criminal activity (both 78% agree), just 39% of Latvian respondents say the same, suggesting that either piracy is an accepted part of life in Latvia or that respondents are unaware it is illegal. Of note, agreement with the statement skews significantly toward those who don t own a pirate game (71% vs. 55% of those who do own a pirate game). At similarly high levels of agreement (56%), respondents feel that pirated or copied video games damage the video game industry. Similarly, those who own a pirate game are also less inclined to support this statement (47% vs. 63% among those who don t own a pirate game). Around half (48%) agree that pirated or copied video games represent good value for money, particularly those in the southern European countries of Spain (78% agree) and Italy (77%), while UK and German respondents are less likely to hold this view (26% and 27%, respectively). of pirate games are also more likely to agree that the games are good value ( agree vs. 38% for non-owners). Opinions as to the relative quality of pirate and authentic video games is mixed: while 44% agree that the quality of pirate video games is lower, this falls to just 37% among owners of counterfeit games (compared to 51% among nonowners), indicating that gamers with first hand experience have found them to be of relatively good quality, but those who have not come into contact with pirate games believe them to be of poorer quality. Respondents in the UK are more likely to agree with the statement (66%). Perceptions around the legality of copying video games are also confused: while agree it is legal, disagree. Latvian respondents are the most likely to feel copying games is legitimate (57% agree), along with those who own counterfeit games (35% vs. 27% among non-owners). Three in ten () also agree that pirate games are likely to contain unsuitable images for children, rising to 49% in Latvia and 55% in Poland, while Norwegian () and Czech () respondents are less likely to agree. A similar proportion () agree that pirate video games are likely to damage your console or PC, with of Latvian respondents strongly agreeing with the statement suggesting that in their experience, while pirate games may be of good visual quality, they are not without risk, often harming their playing devices. 23

Association of video game piracy with criminal gangs is less apparent, with agreeing that criminal groups produce the counterfeit games, while 39% disagreed. A quarter () agree that video game piracy does not cause any real harm, rising to 42% in Latvia, followed closely by the Scandinavian countries (33% Norway, 34% Sweden), and skewing towards owners of pirate games (27% vs. ). Total European Breakdown by vs. Non-owners of Pirate Games: Please indicate whether you agree with each statement using a 1 to 5 rating scale, where 5 stands for agree strongly and 1 stands for disagree strongly. "agreeing" (5 plus 4) of pirate games Non-owners 9 8 55% 71% 47% 63% 51% 37% 38% 35% 24% 33% 35% 27% 27% Buying pirated or copied video gamesisacrime Pirated or copied video games damage the video games industry Pirated or copied video games are likely to be lower quality than authentic games Pirated or copied video games are good value for money Pirated or copied video games are produced by organised criminal groups Pirate or copied video games are likely to damage your console or PC Pirated or copied video games are likely to contain unsuitable images for children It is legal to make copies of video games Video game piracy does not cause any real harm 24

Size of Collection of Pirate Games European Who Have Obtained a Pirate Video Game Breakdown by Country: How many pirated or copied games would you estimate that you have? Base: those who have obtained a pirate video game 55 Mean number of pirate video games owned 50 48.0 45 40 35 30 25 20 15 19.1 17.2 14.9 20.9 22.7 20.7 13.9 11.2 10 5 5.1 4.8 0 those who have obtained apiratevideo game UK FR DE IT ES SW NO CZ PO LA On average, those who have obtained a pirate video game reportedly have 19 illegal copies in their collections. Further analysis shows that this represents a third (33%) of all games owned among this group. Among the 75% of Latvians who claim to own a pirate game, the average number of counterfeit games in their collections stands at a very high 48. Mirroring previous findings, ownership also peaks in Spain (21) and the Scandinavian countries (21-23). In contrast, gamers in the UK and Germany are more conservative, owning around 5 pirate games on average. Perhaps to be expected, heavy gamers own more than twice the number of pirate games when compared to light or medium gamers (38 vs. 10-15), and counterfeit games are also more abundant among teens (27 on average vs. 14 to 16 among the remaining groups). European Who Have Obtained a Pirate Video Game Breakdown by Demographics: How many pirated or copied games would you estimate that you have? Base: those who have obtained a pirate video game Mean number of pirate video games owned 55 50 45 40 37.6 35 30 27.5 25 20 15 10 19.1 16.3 14.9 14.3 19.7 15.4 20.2 21.3 20.1 10.5 14.7 5 0 those 16-19 year who have obtained a pirate video game 20-24 year 25-29 year 30-39 year Males Females Console PC Handheld Light Medium Heavy 25

Awareness of Video Game Piracy Total European Breakdown by Country: Do you know of anyone who has any pirated or copied video games, including anyone who has made or received copies from peer-to-peer networks or other internet sites? Yes No Don t know/not sure 10 9 15% 7% 12% 27% 21% 8 34% 35% 27% 24% 27% 22% 57% 54% 51% 33% 53% 51% 66% 59% 61% 41% 57% 73% respondents UK FR DE IT ES SW NO CZ PO LA Overall, half (51%) these European gamers claim to know someone who owns a pirate game. Echoing personal ownership of counterfeit games, Latvians are the most likely to know someone with illegal copies in their collection (73%), along with Spanish respondents (66%), whilst gamers in the UK and Germany are the least likely (33% and, respectively). Awareness of others owning pirate games also skews towards medium (54%) and heavy gamers (56%), males (55% vs. 38% among females), and younger respondents (58% vs. 44% among the older group). 26

Total European Breakdown by Country: 10 9 Do you know of anyone who has more than ten pirated or copied video games? 15% Yes No Don t know/not sure 9% 26% 8 45% 72% 68% 42% 35% 45% 37% 38% 26% 18% 35% 59% 53% 47% 37% 69% respondents UK FR DE IT ES SW NO CZ PO LA Whilst piracy appears a relatively commonplace problem, with one in two familiar with someone who owns a pirate game, this is further emphasised by the relatively high proportion (38%) who claim to know someone who owns more than ten pirate games. Awareness follows the same pattern, peaking in Latvia (69%) and Spain (59%), but lower in Germany (18%) and the UK (). 27

Personal Involvement with Counterfeit Games Total European Breakdown by Country: 10 9 Have you ever made or supplied pirated or copied video games to friends, relatives, etc? 5% Yes No Don t know/not sure 2% 2% 4% 4% 4% 6% 5% 8% 9% 6% 8 79% 96% 86% 87% 87% 69% 72% 75% 74% 75% 59% respondents 3% 9% 9% 26% 21% 21% 18% UK FR DE IT ES SW NO CZ PO LA Despite ownership of pirate games reaching relatively high levels, fewer Europeans claim to have personally made or supplied counterfeit games to others (). Again, Latvians (35%) are the most likely to admit to producing or distributing counterfeit games themselves, consistent with both the high levels of piracy and the sense that it is considered to be acceptable and legal among Latvian gamers. Similarly, a quarter (26%) of Spanish gamers claim to have made or passed on illegal games. In contrast, only 3% of UK gamers have done the same. Again, teens (), males (18% vs. 8% among females), heavy gamers (22%) and PC owners are the more likely groups to counterfeit games for others. 35% Total European Breakdown by Demographics: 10 9 Have you ever made or supplied pirated or copied video games to friends, relatives, etc? Yes No Don t know/not sure 5% 6% 5% 6% 3% 5% 5% 4% 5% 4% 5% 4% 6% 8 79% 71% 77% 81% 88% 77% 88% 81% 76% 81% 82% 8 72% 16-19 year 20-24 year 9% 25-29 year 30-39 year 18% 8% Males Females Console 18% PC 15% Handheld Light Medium 22% Heavy 28

Reasons to Cease Producing Pirate Games European Who Have Obtained a Pirate Video Game: Base: those who have made or supplied pirate or copied video games Yes No Don t know/not sure 8 9 10 Would you stop making or acquiring pirated or copied videogames if the cost of videogames got lower? 82% 7% Would you stop making or acquiring pirated or copied videogames if you found out that piracy is related to extremely serious felonies (including terrorism, organised crime and drug dealing...)? 38% 21% Would you stop making or acquiring pirated or copied videogames if you knew you could be prosecuted under law? 27% 49% 24% Of the three options offered, the vast majority (82%) of European gamers actively involved in piracy claim they would stop obtaining or producing counterfeit games if the cost of authentic product was reduced. This is particularly the case in Italy (95%). Four in ten () claim they would stop their involvement in piracy if they found it was related to terrorism, criminal gangs or the drugs trade. While Spanish (55%) and Czech (52%) gamers are the most likely to hold this view, Scandinavian respondents are more likely to disagree (26%-28% in Norway and Sweden). In line with their more conservative and law abiding attitude, females are more likely to view these links as a reason to curb their involvement with piracy (49% vs. 39% among males). Over a quarter (27%) would be motivated by the threat of prosecution, claiming they would stop their involvement in piracy if they knew they could be prosecuted under law. Respondents appear to lend less weight to the personal implications of piracy when compared to the wider issues of organised crime and terrorism, perhaps driven by the belief that they will not get caught. Females are significantly more likely to consider the threat of prosecution a deterrent (43% vs. 26% among males). 29

SECTION 4: DIGITAL DOWNLOADING A separate component of the study addressed the broader issue of downloading, both from illegal and legal sources, and place the downloading of video games within the wider context of multimedia consumption. Please note, however, that this sample is comprised of video gamers, and therefore their downloading habits are likely to be higher than in the general population. KEY POINTS Music is the most popular media downloaded (seven in ten), while nearly half have downloaded video game demos: o Downloading complete video games is less widespread, although still standing at three in ten. Unsurprisingly, this activity is most common in Latvia (over six in ten), followed by Sweden (four in ten), but more rare in the UK and Germany (only around one in six). While video game demos and music downloads are largely sourced from official websites, complete video games and full length movies are much more likely to come from unofficial sources. European gamers primarily download games because they feel the authentic versions are too expensive. Beyond price, respondents cite the ease of downloading and the convenience as drivers, along with the fact that they mainly play games on their computers anyway. Additionally, there is a sense that downloaded versions are of as good a quality as authentic games: o While half feel they will not modify their downloading behaviour in the future i.e. continue to download as many games as they currently do, three in ten claim they will download a greater number: To note, while UK gamers have previously exhibited a more cautious attitude downloading video games, a high four in ten feel they will increase their downloading activity. The primary reason for not currently downloading video games is that gamers enjoy owning and collecting the actual product. At slightly lower levels, downloading is perceived to be a more laborious process, which takes both time and effort, while there is also some doubt over whether it is legal: o A third feel they will download video games in the future: Again, despite their more cautious attitude, four in ten UK gamers feel they will start to download games. 30

Downloading Habits European with Access to the Internet: Which of the following have you ever downloaded from the Internet? Base: those who have access to the Internet those who have access to the Internet 8 Music 69% Video game demos 45% Movie previews/trailers 43% Music videos 39% Full-length movies 39% TV shows Complete video games 28% None of the above Perhaps unsurprisingly, music is the most popular (69%), but almost half (45%) have downloaded video game demos. Downloading complete video games is less prevalent: overall, three in ten (28%) claim to have downloaded an entire video game from the Internet, rising to 63% in Latvia (consistent with previous findings) and 42% in Sweden, but falling to in the UK, and in Germany. Males, heavy gamers and PC owners are the more likely to download complete games (, 39% and 33%, respectively), while downloading also decreases with age (from 36% among teens to 18% among 30-39 year ). European with Access to the Internet: - Complete Video Games Which of the following have you ever downloaded from the Internet? - Complete Video Games Base: those who have access to the Internet Complete video games 45% 36% 39% 35% 33% 28% 26% 26% 24% 27% 18% 15% 5% 16-19 year 20-24 year 25-29 year 30-39 year Males Females Console PC Handheld Light Medium Heavy 31