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Videogame Industry Pegs Piracy Losses At $3 Billion

The video game industry lost more than $3 billion to piracy in 2005, not including losses attributed to the Internet, Chunnie Wright, senior anti-privacy council for the Entertainment Software Association, told attendees at the Electronic Entertainment Expo (E3) in Los Angeles.

Wright moderated a discussion on game piracy with a panel of experts from software companies and law enforcement agencies. All admitted that most video games either leak during production or find their way to the Internet or store shelves just prior to release.

"No matter what, a game will leak during production or a few days before it gets put on the shelf," said Phil Terzian, director for government and legislative affairs at Activision Inc. Laughing, Terzian said, "If it doesn't end up getting hacked, you have to wonder if anyone wants it."

To attack the problem, Terzian said companies must register trademarks with the United States and European Union. Insist partners sign a non-disclosure. Do background checks on potential employees. "Once something leaks," he said, "I can't stop it. I can try to make it a little more difficult by prosecuting the offenders, but you're really stuck mopping up the mess."

Jasper Smith, director of investigations at intellectual property consultant IPSA International Inc., said Canada's copyright laws are lax. In Vancouver, he said, many retail stores in high-end malls openly sell pirated games and modified game consoles. The dust jacket is photo copied. The consumer looks through a binder to purchase three titles for $40. Either the store has the titles in stock or the consumer comes back in 15 minutes while they burn the DVDs.

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