Video Game Pirates Are Behind Indonesia's Thriving Gamer Culture

Back in 2013, Grand Theft Auto V wore the crown as the most-successful entertainment product ever, breaking $1 billion USD in sales in a matter of three days. Today, it's sold more than 75 million copies across five different platforms.

The game was also a hit for Welly, a video game seller from Bandung, West Java. Not that GTA V developers Rockstar Games and Take-Two Interactive saw a cent of Welly's sales. He sells pirated videos games, a practice so common in Indonesia that, for many, it's the only way to play the latest releases on PS4 or Xbox One.

"I made Rp 25 million [$2,000 USD] because of GTA V," Welly said. "That Rp 25 million was only from GTA V sales."

Imported video games can cost as much as Rp 680,000 ($51 USD) in Jakarta—a city where minimum wage pays Rp 90,000 ($6.70 USD) a day. But counterfeit games available in cheap plastic sleeves at most mid-market malls sell for as little as Rp 20,000 ($1.50 USD). It's a market that's allowed millions to play some of the hottest releases from foreign game developers and allowed gamer culture to establish a foothold in one of the world's most populous nations.

But piracy's success comes at a cost for video game producers. Welly typically earns Rp 8 million ($700 USD) a month selling pirated games he downloads off the internet and burns to DVDs. When a cracked version of a game like GTA V hits in the internet, his profits can more than triple. None of that money filters back to the companies which invest years and hundreds of millions of dollars developing a hit game.

Welly runs his entire operation from his childhood home in Bandung. The whole business is just six DVD drives and a PC. The closest thing he has to employees are his mom and his sister. He fell into the industry back in 2009, when he started selling counterfeit PC games on online forum Kaskus. Welly quickly discovered that he had two things that were in short supply in Indonesia: high-speed internet and a fast DVD burner.

"I've been in this business for about seven years," he said. "At first I did this just for fun, but it turned into a serious business and now it's my main source of income."

The specifics are pretty simple. Welly goes online and downloads a cracked version of popular video games. He burns the files to DVDs and charges per-DVD for the bootleg games. So when he can buy a blank DVD for Rp 5,000, it only costs him less than the price of a large pizza to make a game like GTA V—which requires eight DVDs to house the whole thing.

Welly doesn't bother cracking the games himself—that's the work of hackers he said. His business is instead to sell already pirated games. It's a business that exists because of a quirk in the Indonesian market. Internet speeds are abysmally slow, and much of the country's much-lauded growth in internet penetration is driven by smartphones, not broadband connections. It's why bootleg DVDs of Hollywood movies and US TV shows are still so popular when streams are freely available online.

"It's simple," said Welly. "This business will always be here as long as the internet exists."

And unlike computer software or Hollywood movies, video games are subject to an unique legal loophole that makes game piracy an illegal, but unlikely to be prosecuted industry. Welly believes game piracy is perfectly legal. "If it's not pirated software or movies, then there is no law that regulates it," he told me. He's wrong: video game piracy is illegal. But that doesn't mean there's much of a risk of Welly getting caught.

"It's already protected by the law," explained Hilman Fathoni, an intellectual property rights expert at the non-profit Creative Commons. "The law specifically mentions computer games, and within that are the rights of video game developers."

But these developers don't have an office in Indonesia. And the police aren't going to get involved without the companies themselves first filing a legal suit. Under Indonesian law, a company has to file a complaint if its products are being pirated. Most of the sellers involved in the pirated video game industry are small fish burning copies of games already cracked and posted online by someone else. Few game companies are prepared to file a costly legal suit against someone who makes less than $1,000 USD a month on pirated games.

'"You want to know why bootleggers are still all over the country?" said Hilman. "The answer is that the law doesn't work if no one from the game company reports it or files a lawsuit."

Most lawsuits are settled out of court in Indonesia, another quirk that makes a legal challenge unlikely. Hilman told me that he's never heard of a game company filing a piracy lawsuit in Indonesia, despite the fact that the country was listed as one of the world's worst in a report on global intellectual property piracy by the US government.

For Welly, he's prepared for the day when the bootleg game industry falls apart. He's been importing legitimate releases from Singapore and selling those online. The margins are razor thin, he complained, but the original games are still a better product.

"If in the future the law says that everything about piracy is forbidden, then at least I already started selling the originals," he said.

But until then, Welly will spend his days stuffing burned DVDs into thin plastic sleeves.

"The pirated game industry will always exist as long as there is a demand for it," he said.