Microsoft Loses $1 Billion to Russian Pirates and Earns the Same off Legal Sales

Russian Microsoft division has published its report on the corporation’s losses in the country caused by use of pirated software by the Russian users. And the amount is definitely impressive: the company claims that they lose as much as $1 billion every year due to activities of pirates. And while experts claim that this estimation is at least twice higher than the true amount, it is still impressive.

And no matter what the real amount is, it is even more interesting given that the overall annual sales of Microsoft products in Russia generate approximately the same estimated $1-1.2 billion dollars. The thing is that in 2008 the share of pirated Microsoft products was more than a half of the entire consumption - 68%. And while this is 7% lower than in 2007, it is still more than a half.

Microsoft estimations are based partly on their mystery shopping inspections of computer retailers. Such inspections are intended to identify those outlets that preinstall pirated versions of Windows on the computers they sell. The results of the inspections this year are interesting. Out of 3 thousand inspected outlets in 53 towns across the country, 14% actually sell pirated versions of Microsoft operating systems pre-installed while the majority (64%) of outlets only sells license software with their equipment. Also 4% sell their computers without any pre-installed operating system.

At that there’s no denying to the fact that it is hardly enough for Microsoft to simply fight with pirates in courts and in stores hiding behind such mystery shoppers - another appropriate measure would be reconsidering their own pricing policy here. The main problem is that many of Microsoft products are simply too expensive for the local customers and I don’t really know many people here who would pay to buy a license for Microsoft Office package for a price of $200 where they can easily download it from torrents for free. And easy access to pirated software combined with pretty moderate average revenue in the country result in the situation Microsoft has here - and the huge losses.

Via (in Russian)