Every couple months, an industry veteran comes forward and decries used games sales as a huge issue that is ruining the industry. I certainly agree with many of the arguments – the less money developers get from sales of their games, the harder it is for them to take risks further down the road, let alone stay in business. Nonetheless, a few words should be said in defense of used games.

Gamestop IS part of the games industry

An odd thing about the typical used sales debate is the assumption that the industry is not getting a cut of the profit from pre-owned games. Of course, Gamestop is an actual part of the games industry. One has a hard time imagining how the overall games market would be healthier without a strong retail chain dedicated purely to gaming. How many pure music retailers are still around? I’m sure I’m not the only one who misses Tower Records. If used games are a core piece of the puzzle for Gamestop, so be it.

Market segmentation helps our industry broaden its base

Our industry is notoriously poor at market segmentation. Being able to sell essentially the same product at multiple price points for different groups of consumers is an important tool for maximizing revenue. Think of the “Home” and “Professional” version of Windows or lower airline prices on weekends (for non-business travelers). Or consider the movie industry, which segments the market into full-price tickets, matinee tickets, pay-per-view, DVD rentals, and broadcast rights, each with a progressively lower price point per session. Used game sales are the primary method by which the retail games market is segmented. For quite a few gamers, especially younger ones, used games are their only option for buying games instead of renting them. Keeping these price-sensitive consumers – who will often be tomorrow’s full-price customers – in the retail system and away from piracy is a good thing all around.

The more players the better

By opening up retail sales to a larger segment of the market, used game sales mean that more people are playing our games than would be in a world without them. Beyond the obvious advantages of bigger community sizes and word-of-mouth sales, a larger player base can benefit game developers who are ready to earn secondary income from their games. In-game ads are one source of this additional revenue, but the best scenario is downloadable content. A used copy of Rock Band may go through several owners, but each one of them may give Harmonix money for their own personal rights to “Baba O’Riley” or “I Fought the Law”. Further, a move is currently underway by companies such as Epic and EA to give special bonuses only to consumers who buy the game new. For example, every new copy of NBA Live 09 will include a code redeemable for the NBA Live 365 service, which provides daily stat updates for players over the course of the season. Purchasers of used copies need to fork over $20 for the same feature. This situation actually means that the more times the game is resold, the better it is for EA’s bottom line.

The used games market increases the perceived value of new games

Many factors come into play when a consumer decides if a specific game purchase is worth the money, and one of those factors is the perceived value from selling it back as a used game. In other words, people will pay more for a new game because they know they can get some of that money back when they trade it in at the local Gamestop. Importantly, this perceived value exists whether the consumer actually sells the game or keeps it. Wizards of the Coast has long admitted that the existence of the secondary market for Magic cards has long helped buoy the primary market because buyers perceive that the cards have monetary value.

Of course, the greatest threat to the used games market comes from digital distribution. Games purchased over Steam, Impulse, PSN, or Xbox Live are tied to personal accounts, which means they cannot be resold. However, game publishers need to take an important step for digital distribution to finally matter. Games purchased digitally need to cost less than their boxed, retail counterparts. A digital version of Civ 4 currently cost $29.99 on Steam, yet the boxed version costs only $24.25 at Amazon. Thus, with various volume or loss leader discounts, the retail version can often be cheaper than the digital one! Because the ability to resell my boxed copy of Civ 4 increases its value to me as a consumer, digital distribution has limited appeal unless publishers are willing to give me an appropriate discount to make up for that difference in value. Obviously, part of the problem is that publishers don’t want to offend their retail partners. Sony tried crossing the Rubicon by pricing the PSN version of WarHawk at $40, which was $20 cheaper than its retail counterpart (which did, at least, include a headset) but eventually retreated to a single price point.

Given their inherent lesser value, digital downloads should be priced to compete with used retail games, not new retail games. If publishers want to solve the used games problem, the answer is not to bluster about it in public and hope things change. The answer is to bite the bullet and lower the cost of digital game downloads.

(Of course, the real answer may be to ditch sales altogether for a free-to-play, service-oriented approach, but that’s a different story altogether…)

A number of months ago, I wrote about my hopes for Microsoft’s Xbox Live Community initiative to grant my wish for an automated online market for developers to sell their games. I wrote that:

I fear that Microsoft will never allow the XNA developers to charge for their games, treating the Live Community like the minor leagues, from which they will “promote” popular titles to official status.

Turns out my fears were unfounded as Microsoft is, in fact, allowing XNA developers to charge for their games. Of course, the devil is still in the details – why is there a price cap and a fluctuating royalty rate? – but, for the moment, I want to commend Microsoft for doing the right thing. This somewhat imperfect initiative will still change the face of gaming. Bravo.

Gamasutra posted a Spore-centric interview with me recently. Three days earlier, GameSetWatch put up an excellent interview with Tilted Mill founder Chris Beatrice, in which he talked about his company’s interesting decision to buy the right of their Egyptian city-builder Children of the Nile from the original publisher. We also both talked about the games industry in general, and I was struck by how similar our responses were. See if you can guess who said what…

On AAA games:

However, I do think triple-A 3D RTS PC games are exactly where not to be right now.

I would not want to be in one of the classic triple-A franchise battles right now. I think that’s just a very bad place to be, whether that’s fighting games, RTSes, FPSes.

On semantics:

Will RTS as it exists right now be here in 20 years? The classic “Build a base, build some barracks, go attack the other guy…” Part of me wonders if this is just a temporary dead-end, because RTSes could be everything from Railroad Tycoon, SimCity, MULE, Populous… those are all RTSes.

So RTS really means, “real-time war game” to me. It’s funny because the Caesar series was always a “real-time strategy game” long before those others came into existence and eventually dominated both strategy and PC games overall, but it wasn’t called that because the distinction was unimportant for that type of game.

On RTS gameplay:

Unlike the RTS category in general, which has become more and more focused on targeting a core group of players with the skills and experience – and machines – to play what has become a highly evolved, and in my opinion exclusionary, genre.

The RTS genre in general has a big problem, in that it’s one of the most ghettoized. I think there are a lot of players who will play almost any type of game except for RTSes, because people just have the sense of, “There’s a thousand things to do. I’ll never be able to get them all. I’ll never be able to handle it all.” I think your classic triple-A RTS game is going to become less and less meaningful to most gamers, and when we look back in fifteen or twenty years in the future, aren’t going to be the games that helped move the strategy genre forward.

On managing expectations:

Stardock, for example, has made a lot of money with Gal Civ… Just knowing, “Okay, we’re not going to sell a million units, but we’re going to sell 250 or 300,000 copies of it.” It’s not hard to make money. You can make a lot of money doing that if you set your budgets. If you set a realistic expectation for your project, you can definitely make money. You just need to set your budget correctly. But those kinds of returns just don’t interest a lot of major publishers.

Of course we still want our games to look great, but let’s be honest, the last five to eight years or so have really shown the diminishing returns in chasing the screenshot, if you know what I mean. In PC games there’s a ton of opportunity, potential for originality and innovation. And I think there’s also plenty of money in the “middle” – that is, in games that sell 30,000 to 300,000 copies, rather than millions.

A Spore-related interview with Jeff Green went up recently on 1UP.com. Here’s a quote about my history in the games industry:

1UP: You started in the game industry around 2000?

SJ:Yeah, I went from Stanford to EA, where I did a couple of internships, and then Firaxis was my first real job in 2000.

1UP: So does it feel like a lot has changed since then in the game-development community?

SJ: Yes. When I came on, it was like right after very, very high times for PCs. StarCraft was a few years old at that point, but you had stuff like Age of Empires selling boatloads of copies. It still was the age of the PC shooter — it hadn’t made the transition to console yet. Halo was still on the horizon.

1UP: Half-Life was ’98.

SJ: It was definitely high times for PC developers. By the time of Civ 4 [in 2005], it was very frustrating. Civ 3 [2001] worked out, but we really learned a lot from it and felt we really knew what we were doing and were going to make a great product with Civ 4. But the Civ franchise was owned by Atari, and Atari needed cash, so they sold it to Take 2. But they talked about selling it to a number of publishers, and a lot of them just were not interested — and that kinda blew my mind.

1UP: Didn’t Civ 4 end up selling pretty well?

SJ: Yeah, I’m pretty sure it sold at least a couple million copies. [According to Take 2, Civ 4 sold 3 million copies as of March 2008 — Ed.]. A lot of triple-A games have a $20 million development budget, but that was definitely not the budget for Civ 4. We were always strapped for resources. We had two artists until a year before we shipped, but we were able to pull that off. So it blew my mind that we have this game that’s not going to cost a lot of money, which is a really big upside. It’s very low risk. But it’s like with every version of Civ — we had to prove it to the publishers all over again. It’s weird, because it’s not like you have to twist publishers’ arms to make sequels to million dollar-selling franchises….

1UP: So let’s say you were just getting into the business now, but you had the same education and interests. Do you still see yourself pursuing this path on the PC?

SJ: Yeah, because I’m still very much a strategy guy. If computers weren’t around, I probably would have tried to design board games. That still, for me, feels like the place to be. If I was 21 now [and] in school, I’m sure I would have some sort of wonky strategy game site doing some sort of hex-based war game or something.

Here’s the interesting thing about this interview – reading the Editor’s Note was the first time I found out that Civ4 sold 3 million copies. Which is great, of course. Our target was 2.5 million as each version of the franchise sold about half a million more than the previous version. Nonetheless, it is an odd feeling not to know – or have any official recourse to find out – how many copies of the game I worked on so long actually sold. Certainly, in other industries, the idea that a director or musician not have access to this information would be very strange.

More craziness from the Spore Creature Creator stepping on the toes of the vehicle editor:

The Spore Creature Creator was released two days ago, and already the online Sporepedia has over 500,000 creatures! I can’t even imagine how large the content pool is going to grow to by early September when the full game comes out. Everyone on the team has their favorite creations, and – for me – the most interesting ones are the creatures made by people who can’t wait for vehicle editor:

Now, here’s a real modern-day magic trick. Download a copy of the Creature Creator, open the app, select “Create a Creature,” and then drag these png’s below into the window and watch what happens.

When I was growing up, access to games was limited. My family had the standard assortment of board games, your Monopoly, your Risk, your Life. However, I remember walking through our local Yard Birds one day, and sitting at the bottom of a bookshelf, hidden in a corner, was a copy of Eric Lee Smith’s Civil War. To a nine-year-old, it was like an artifact from another planet. Two huge hex-covered maps covering the southern US? Hundreds and hundreds of counters, representing everything from Supply Depots to Grant and Lee (not to mention turkeys like Halleck and Burnsides)? An immense, detailed 60-page rulebook?

Of course, I never was able to finish a game of it, but I enjoyed working my way through the game mechanics. Throughout my childhood, wargames held a place of fascination for me – a very important, if largely theoretical, hobby. Wargames shops were hard to come by, so my collection ended up fairly random. My favorites tended to be simpler games that I can barely even recall how I first found them, ones like Raphia, Blackbeard, and Belter. The latter even inspired my gaming friends to develop our own spreadsheets and macros to help us manage the economic data – it was a tycoon game before its time.

It’s hard to say what effect wargames had on me. The ratio of time spent reading rules/collecting games compared with time spent actually playing them was pretty lopsided in favor of the former. No matter how many times my friend Eric and I failed to make it through a game of Third Reich, I always considered myself a wargamer. All the time spent learning rule sets left its mark on me. Wargames were an attempt to simulate combat before computers were capable of managing these mechanics for us, so I believe that my first “gameplay programming” experience came from trying to fit all these rules into my head as a cohesive whole.

Today, of course, things are much different. Computerized strategy games have grown increasingly popular over the years, taking a huge bite out of the old bookcase wargaming industry. Nonetheless, the old games soldier on in relative obscurity. Eric discovered an interesting site called HexWar, which enables online play of a good chunk of the classic SPI wargame catalog. Their system for managing games between players is pretty slick for such a small outfit, obviously a labor of love.

Fortunately, most of these games on HexWar are fairly reasonable in scope (we’re not talking about SPI’s notorious monster games here), usually focusing on single battles and sharing a common rules base. More importantly, I am surprised at how fun these games still are! Playing against a real human with the computer handling the details is a real blast. I can’t believe how long I have spent fixating on exactly how I should arrange my front lines or how best to apply overwhelming force to an enemy position.

What impresses me the most about these old games is that they are actually quite simple; I am shocked to realize that “simpler” modern strategy games like Advance Wars are actually significantly more complex than the old hex-and-counters games featured on HexWar. Because the mechanics were built for humans to process, they have a clarity missing from today’s strategy games. Napoleon at Waterloo (the free game) has very little special casing, for example. Cavalry and infantry don’t even have special rules separating them; they are differentiated simply via higher or lower combat/movement values! I can also do the “chunky” math easily in my head – “okay, so I need to get the combat ratio to 12-4 to cross the 3-to-1 threshold.”

With the introduction of computing power, designers are often tempted to obscure game rules under the hood, so keeping wargames this simple is a bit of a lost art. In fact, their minimalism almost reminds me of Go. I’m not sure if these games could ever mean something to gamers who didn’t grow up in that by-gone era, but there are some remarkably elegant and beautiful designs here which have been left behind, hidden away over the years.

Further, Hexwar proves once again the appeal of asynchronous, turn-based play (which is supposed to be all the rage nowadays). Play-by-Email games never really took off, not because of the asychronous nature, but because transferring the save file by hand was such a pain. Hexwar’s system manages everything for you nicely with a downloadable client, but I would love to see a web-native version built using responsive AJAX techniques.

Unfortunately, their business model leaves something to be desired. Subscriptions cost a steep $14/month, and both players need to subscribe to be able to play the games. Only one free game is available. The system is just not built to spread virally as convincing one’s friends to jump in for a subscription is no easy task. If they dropped their price to $5/month and adopted a pay-to-host model, I wouldn’t be surprised if their business went up significantly.

Nonetheless, I am very happy to see the torch being carried for these old, classic SPI games. Aspiring designers could learn a great deal poking around in this hidden corner of the gaming world.

Happy Birthday to M.U.L.E., which turns 25 today! Interestingly enough, M.U.L.E. was actually SKU #1 for EA, marking quite an impressive debut. Although the game was essentially a flop – selling around 30,000 copies for the Atari 400/800 and Commodore 64 – it is remembered today as one of the most innovative, compelling, and fun social games ever made. I have made the comparison before, but M.U.L.E. and its designer (Dan/Dani Bunten) are our industry’s Velvet Underground. The old joke about the Velvets was that only a few thousand people ever bought their albums, but all of them went out to start their own bands. So it is with Bunten. Will Wright dedicated The Sims to her. Sid Meier inducted her (posthumously) into the AIAS Hall of Fame. Warren Spector revised his top 10 to include M.U.L.E. Raph Koster routinely references it as the perfect multiplayer game. The list goes on and on.

Tragically, there is no way to play M.U.L.E. on modern systems. Emulators (or old computers) are the only options. Personally, I’ve been able to get it working on the CCS64 Commodore 64 Emulator. Here are some links for further M.U.L.E. reading:

M.U.L.E. Strategy Wiki

The Gamer’s Quarter interviews M.U.L.E. developers

Salon article on Bunten’s career

Dani’s game design homepage

The Gamers with Jobs crew invited me to do a Podcast with them a couple months ago, and I finally had a chance to join them last weekend. We spent about half the episode discussing the state of strategy gaming today, with some detours into the related-but-often-forgotten field of board gaming. Here’s the link.

If my audio sounds a little odd, it’s because my laptop power supply gave my microphone a weird buzzing noise. Rob was able to remove it in post-production, but that process also took out the low-range of my voice, which gives me that great “tin-can” sound.