Piracy Boosts Game Sales? Yeah right...

Some pirates in the Canadian Pirate Party are getting all excited about a certain paper, part of which says that file-sharers tend to buy more games more often than non-file-sharers.

First off, let's address some problems with the paper. The paper says that 61% of file-sharers have bought games in the last 12 months, vs. 57% of non-file-sharers. They say that this is evidence that file-sharers buy games more often. I say that there isn't enough information here to say who buys games more often. They don't specify any type of variance in the paper, so you can't actually say if the difference between these two figures is actually significant (this is an example of a difference of means).
The other numbers are 4.2 vs. 2.7, which represents the average number of games bought over the last year by file-sharers and non-file-sharers respectively. Again there is no mention of a variance measure, so you can't really take this difference seriously.

Next, they claim that only 53% of their sample answered questions about games. If their sample was random before, it's probably not anymore! This is an example of a self-selection bias. It could be that all the people who pirate games and never buy them chose not to answer the question, or it could be that people who always buy them and never pirate also chose not to answer (this one I think is a bit more unlikely, but not impossible). Basically you no longer have a guarantee that the sample that actually answered the questions about games is a random sample.

The next problem is with addressing the interpretation of the paper. Some people seem to think that this result shows that piracy causes more sales, and overall is a good thing for the gaming industry. This is a definite possibility, and the paper addresses this and claims it is due to something called the sampling effect - an example of this effect is trying a sample at Costco, you trying the good might increase your demand for it. I completely agree with this, it's entirely true that piracy can increase the demand for a game because they get a chance to try the game before they buy it - I've personally experienced this, I pirated Half-Life 2 and Oblivion and then later bought them because they are awesome games.
However the effect can go the opposite way. A lot of games are only fun the first time you play them. What might happen is that the person will pirate the game, play it through, and then never want to play it again. They may have loved the game, but don't really want to shell out the cash to buy it and not play it anymore. An example for me was Spore - it was kinda fun the first time around, but after I realized that the game wasn't really interesting for very long I had no incentive to buy it (let's ignore DRM-related issues for the moment too). In this case I might also say piracy would be a good thing, since it gives game creators an incentive to make games that don't suck.

It is also possible that there is no causal effect at all between these two. It could be that those hardcore gamers out there who buy a lot of games also pirate a lot of games; while the casual gamer who maybe buys a game once or twice a year has no idea that he can pirate a game or has no desire to "break the law" for something he doesn't really care about.

Anyway none of these points prove the paper wrong, however they show that you shouldn't really trust the results. If I saw several more studies come up that actually show the data that points to the same result then I might be more convinced, but for now I'm very skeptical of whether or not this paper is valid.