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
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…)
Mr. Johnson, great post! I’m glad you’ve taken the time to think about this issue.
I’d love to hear your thoughts about the following: what’s keeping digital distribution platforms from allowing transfer of rights for a fee? If Steam were to allow someone to resell or transfer their rights to a game to another Steam user, I would imagine Valve could make a nice chunk of change, not to mention garner many more users because of it. As you say, it would certainly increase the perceived value of new games.
Keep up the good work.
Best,
~Savid
Well, that’s a tricky proposition because there really is no degradation at all with purely digital copies, so I doubt Valve would ever support that. After all, why would I buy a new version of Civ4 from Steam if I could buy a used one on the same service for half the price.
Ultimately, I think it’s more feasible for Steam to just lower their prices than to allow for transfer of rights.
Nice post. Seems to me that several of your points expose a mistaken assumption of developers on the other side of the debate: that a consumer who purchases a used game would have otherwise purchased the game new. From my own experience, this is simply not the case – if you’re excited about a new game that’s coming out, you buy it new (if you actually care, why wait for someone else to get bored of it and risk getting a disk with a scratch on it?). Used games are often bought on impulse, and expose new players that wouldn’t have otherwise played the game at all.
Excellent post Soren!
I must say that it is discouraging when looking at a certain publisher (Electronic Assimulation) in their philosophy that the entire 2nd hand market is evil, and treating them like an illegal child of the market. DRM policies such as seen in Spore and Red Alert 3 plus comments from Riccitiello in regards to DRM, pirating and the 2nd hand market really put a massive dent in the ability for those players to obtain the games legally. In these cases it seems to be pushing these players to illegal methods to obtain those games.
Double that with the current policy of Electronic Assimulation to charge excessive amounts for expansions that add hardly anything, and it’s easy to see why there’s a lot of negativity towards the publisher. Which is a massive shame as they have accumulated a lot of the best of the game industry, and it must be really hurting the developers to see this form of protest against the publisher hitting their games.
Soren, when will you be an exec so you can push companies from self-destructive anti-customer practices to good practices? We’ll let you get away from writing great AI if you promise to do that.
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I need to point out some of the flaws in your argument and you’re welcome to argue back:
I argue that gamestop is not, necessarily, part of the gaming industry when it comes to used games. I know they make controllers and stuff but counting those aside Gamestop does not actually make any of the games. The Publishers see no profit in that resale and all they really get is some name recognition. But in this market, that doesn’t always amount to people deciding to buy their next new game. This arugment doesn’t lead to anywhere really so let’s move on.
Your Market segmentation arguement does, indeed, work perfectly for the movies industry. But here is the overall problem. When a movie company allows it’s titles to be rented out they still make a profit from the sale of the DVD and the sale of a renter’s license on EACH DVD they sell to the store. This means that the movies make a profit from the DVD for the rentals it collects and only after that agreement goes void is the company allowed to sell the DVD as retail. That’s why the prices on lost movies work in a parabola, high at first because a loss of a new movie is the cost of a new movie, dipping lower after the rental agreement dies and the video can be sold as Pre-Played, and going back up again must later on when the company would otherwise be forced to buy a replacement to keep stock.
Gamestop give’s 0% of their resale to the publisher. That is the ethical problem we have here. Beyond this, Gamestop also trains their employees to sell the used first. My friend informed me that she was instructed to check the databank before selling the game on non-busy days so that if a customer comes up with a new game she could offer a used one. And who would pass up a 5 dollar discount for the same product?
I LOVE what EA and all them are doing for the “buy it new get a bonus” thing. But I also LOATHE it because many games out there just aren’t worth the price for new. Why would I pay 60$ for less than 8 hours of play? So if I rent it and don’t get the full content I’m going to be a bit disappointed.
And I make a similar arguement against Magic cards. Of course a collectible card game will work that way. That’s why the word collectible has meaning. The problem is that games aren’t collectible in that fashion. Magic cards vary in rarity (games don’t) and all cost exactly the same for a pack (so Wizards isn’t losing any money they would have normally gained in the resale). Wizards sells all those cards for 3 dollars a pack, they each cost like, what, 20 cents a peice to make? No matter what price is put on that Birds of Paradise, it’s still only cost them 20 cents. Games only work this way when a game is out of print (like Earthbound (which yes I understand is rare, but it’s price didn’t increase until after it went “out of print”)), and by then no one would give the game companies the right to complain.
Like I said, you bring up a lot of good arguments, but I think your ideas are wrong.
HeirToPendragon:
I must disagree with some of your points.
1. Whether you like it or not, GameStop IS part of the gaming industry. It’s a retailer, and retailers have a lot of power (whether intentional or not) over customer purchases. Specials, recommendations, product placement and pushing, etc. And the regardless of whether they are second hand or new.
2. GameStop’s pushing second hand games is NOT an attack at the publishers/developers. That’s simple business profit margining. They would get a higher margin on second hand games than new (which is a very low margin). Walk into any business, and the first thing they will push at you is the highest margin products.
3. You realise one of the big reasons the second hand market is so strong is due to product quality don’t you? Product quality has significantly dropped since 2000. Like you say, why pay $60 for a crap game when you can get it for $20 second hand 6 months after release? I LOATHE and absolutely DISPISE the measures being taken by the likes of EA and MS. They treat paying customer like criminals! (And all of their measures do not work anyways – can anyone say Spore pirated 6 hours after AUS release?). I firmly believe that one of the biggest points to reduce piract AND the second hand market is to increase product quality, and they have a LOT of quality to increase to return to pre-2000 levels.
4. The difference with trading cards to game is what the value is attached to. The value of a trading card is the picture and stats of that card. It’s completely tangible, you can see it, you can taste it. The value of a computer game is NOT the DVD or the box or the manual or the pictures, or even the code itself. The value is the entertainment.
You can probably tell that point 3 is my biggest issue with current trends. Those companies efforts to eliminate the second hand market. It is also destroying a legal avenue for low-income earners (like students, a major part of the market) which will make them turn to piracy. And once they are getting games for free it will be near impossible to convert them into full new game payers later on when they have money coming in. EA et all are quite simply shooting themselves in the foot as they are creating a generation of piraters because they have no other legal method to obtain games.
Publishers are trying to increase their profit margins, which is exactly what Gamestop is doing when it pushes a used copy of a game on a customer. I don’t think you can call what publishers are doing as wrong and not also Gamestop. If you disagree with the practice, stop buying those games.
The co-marketing costs that Gamestop charges publishers is when things really start getting sketchy. These funds are supposedly collected to help sell new copies, but Gamestop still encourages people to buy used instead of new. It’s a two-way-street. Instead of helping one another, the relationship between Gamestop and publishers has become increasingly combative. It was Gamestop which fired the first salvo though, and publishers are now responding with “first-buy” incentives. Personally, I think it’s kind of a neat idea. They’re not forcing Gamestop to stop selling used, they’re only providing a bonus to players who give their money to the publisher. If they were to, say, completely prevent used copies from working, that would be a bigger issue.
While I agree that Gamestop helps increase the visibility of our industry – which can only be a good thing – I disagree with their philosophy and make every effort to shop elsewhere and encourage others to do so as well.
Jon
“If they were to, say, completely prevent used copies from working, that would be a bigger issue.”
This is exactly what EA (and some other publishers) is doing with games now. See Spore and Red Alert 3’s SecureROM/DRM policies. It will only get worse.
I think DRM is a completely different issue, and strongly believe it’s a bad idea.
Jon
Jon, that’s what EA’s new DRM policy is doing. Rendering second hand copies unplayable.
I don’t have any problem with second hand sales. I avoid buying used games unless I can’t find them new, and I don’t sell my own games just because I’m a collector, but I think it’s completely reasonable for people to sell games they no longer want to play.
However, I think Gamestop is horrible. They buy too low and sell too high. (And they pull a lot more bullcrap than that, but that’s the main problem with the issue at hand.) Having a dedicated retailer is fine, but I wish the biggest one wasn’t so disrespectful to their customers.
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Dale:
That’s not what I’m talking about though.
Jon
Gamestop is hardly comparable to Tower Records. I never walked into a Tower Records store to buy a new game only to find Tower only shipped three copies to each store and no more will come until until used copies show up. Tower Records went of its way to stock obscure music from around the world. Gamestop won’t even sell me a Korg DS-10 through the web site. I could go on all day about why Gamestop is horrible and needs to die, but Gamestop is too vile to justify the effort.
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Simply put, if I can’t sell the games that I’ve bought after finishing them, I’ll be buying less games overall.
Bravo Soren!! I appreciate that a Primo dev can attest that the second hand game market is not a terrible thing, but a beautiful thing!!! Thank you Soren!
Buying a game second hand is still viable to DLC and for long time franchise games like Call of Duty and Civ!
Can anyone spell greed?
What I want from a copy of a game; and from any product I buy for that matter; is to completely own that instance of the product. In short, I want to be able to sell it, lend it, give it away, scrape it etc.
Try and pull the same stunt game publishers are attempting with any physical product. Have a car refuse to start because it is leaving the state, or have it explode if it doesn’t recognize the ass sitting at the driver’s seat.
HeirToPendragon:
“And I make a similar arguement against Magic cards. Of course a collectible card game will work that way. That?s why the word collectible has meaning. The problem is that games aren?t collectible in that fashion. Magic cards vary in rarity (games don?t) and all cost exactly the same for a pack (so Wizards isn?t losing any money they would have normally gained in the resale). Wizards sells all those cards for 3 dollars a pack, they each cost like, what, 20 cents a peice to make? No matter what price is put on that Birds of Paradise, it?s still only cost them 20 cents. Games only work this way when a game is out of print (like Earthbound (which yes I understand is rare, but it?s price didn?t increase until after it went ?out of print?)), and by then no one would give the game companies the right to complain.”
So there is no such thing as a video game collector according to you. Wait, oh yeah, you of course have met everybody on the planet and know that no such things exists.
digitalpress.com, atariage.com, neo-geo.com, shall I go on? Video game collecting is pretty big actually. Pretty much any system, new or used, is collected for. I have seen people with well over 100 Nintendo DS games, I have seen people with every single Dreamcast game. Me, personally, I own every Virtual Boy game. There are collectors for every system, but according to you, they do not exist.
Sure, not everybody collects video games, but on the same token, not everybody collects magic cards. Some people may go and just buy bunch of booster packs and that is how they get their deck setup.
As for rare, out of print cards, yeah, do I even need to start listing off every single game system that has out of print games?
Don’t worry, I will help you out, here is the argument that you should have made:
When comparing Magic cards to video games, we have to remember that the majority of used magic cards are not sold in big retail chains. They are normally sold in the hole in the wall comic book shops (well it is like that in my city). These hole in the wall comic shops will cover everything from booster packs, to starter packs (new retails) down to the out of print first run cards.
What separates magic cards from game sales, is that there are not near as many small hole in the wall video game shops where you can get out of print games. I have an EB Games about 3 blocks away from a Gamestop in my city. These major retail chains do not sell out of print titles. Try finding Chrono Trigger for SNES at a GameStop or Gamecrazy.
I think comparing used game sales to magic cards would not work, as they are completely different markets. Sure there are collectors in both, but the stores in which you are able to buy either one are completely different.
If you truly was a viable solution, this is a good thing to do: let the game companies take the games back and sell them used. What incentive do you have to buying a new game from the company’s website when they sell it used as well (ex: rock band getting sold used by Harmonix)? You would get the same incentive as buying new, but this time, since there are not a bunch of middle men like GameStop, you could easily make more money from trading a game back to the company itself. This will also help the company know which ideas work and which do not. I highly doubt video game companies check tallies on all of the major chains to see how long it takes before somebody brings a used copy into Gamestop. If somebody returns rock band within 1 week, then that is on the company. Maybe trade Madden 08 in and get half off of madden 09 (I don’t know, I am guessing). They could easily do that, because by the time people are trying to get the new Madden, they are dumping off all of their old Madden games.
This would also eliminate non selling games in Gamestop. This would clear up more room, which also bring in the possibility of a place like that not making near as much money.
This would be something that would really not be all that hard to implement. They just need a system setup so that they can handle things like non working games. They might as well take those in as well, but give like $1 or something.
Look at the gamestop deals. They have stuff like bring in 50 non sports games that have been released within the past week and get $5 off a new copy of Trading Spaces: the game. Now imagine the game deals the company itself could do for you.
Do you see where I am going with this. Basically, if people are dumbed enough to get ripped off by a major retail chain, getting rid of gamestop won’t help, but if the company itself is ripping people off, well, since there is no middleman, at least they won’t rip you off as bad (hopefully).
Oh yeah, the value of the game is the entertainment?
Are you sure about that one?
Not all super rare games are very fun. You don’t even want to know how much I spent getting all of my virtual boy games in prestine condition with box, manual, everything. Have you played virtual boy? It is not all that fun. Out of every game that has come out for the system, 3, maybe 4 are even remotely fun.
And congrats Soren, you’ve been linked to on Slashdot: http://games.slashdot.org/article.pl?sid=08/11/18/0412225
The games industry isn’t really welcome enough to newly entering customers, those who are making their first or second purchase. The pricetag on games is quite hefty for new customers, as they’re not even sure what they want, they have to consciously risk essentially throwing that money down the drain. Then there’s availability, as specialized game shops are scarcely, if at all, available in numerous European countries, not to mention Asia or South America. And then you have locked-in registration accounts, CD keys and whatnot to often make second-hand copies crippled, if not useless.
In the long run, everyone would benefit from easier second-hand sales, as that would mean more customers. It works in other areas, after all. And publishers who use digital distribution should be practicing bonuses for long-time customers. I got 2 free copies of Valve games to give away and that’s good thinking on their behalf, because that kind of stuff creates new customers.
And hey, think about what could be the biggest customer scaring-away tool: EULAs. On modern games, particularly those with online registration and content (like Spore), EULAs often read like a deal to sell your soul, the industry is lucky that very few people ever read that.
GAMESTOP IS A SCAM PPL.
$18 = NHL 09 Trade in value (as of 11/18/08)
$55 = Cost to buy used copy of NHL 09 .
THEY ARE MAKING $37 A COPY USED. OMG.
IS THE PUBLISHER EVEN MAKING THAT MUCH?!!
They sell used copies of games for $55 and new for $60 and yes, they do push the used ones first because they are making a killing.
I can go to my local owned gamestore and buy new for $55 and used for $50.
This encourages me to buy the new copy for the same price the I would buy a used one for at Gamestop.
If you live in area where it is possible, shop around and look for a local game store.
I
Hmm… I’m not really a fan of the reselling of games on an epic scale like Gamestop. It seems to take money away from the developer and it’s employees…
Listen, if Gamestop buys a game for $20 and then resells it for $30-$55, they get all the profit. The developer is losing out in that loop of money and it can be rinsed and repeated (reselling the game multiple times). The developer needs a piece of that, even if it’s like $10.
I don’t feel that Gamestop is really part of the industry either, they’re just like BestBuy, Target, Walmart, etc. They sell stuff, exclusively games.
I kinda get what you mean by secondary market keeping the game’s name around, but I feel that this reselling is getting out of hand.
Maybe some Gamestop numbers could clear this up, like how many used copies of games are they selling and then reselling again (especially for games that have been out 1-6 months).
Anyways, interesting topic=)
contraband, Pat G., and others earlier, etc.:
Can we please take the GameStop blinders off and realize that a sizable chunk of the used market doesn’t touch GameStop?!?! I buy 90% of my games used and I haven’t bought one from GameStop since before the EB/GS merger. It’s all about P2P (Craigslist, eBay, Amazon marketplace, etc.).
The question shouldn’t be revolving around how much GameStop is making per sale and gee, that’s a crime against humanity. The question is, “When a person has a legally-procured plastic disc with code on it in his hands, what’s he allowed to do with it, and with whom?” Court decisions have already indicated that secondhand sales of music, movies, books, and yes, games, all fall under the umbrella of Fair Use, so face it: me selling my old copy of Police Quest to my next-door neighbor for $5 is not going anywhere.
The free market is a beautiful thing, man! If somebody’s time preferences are high enough that he’s willing to take just $18 for NHL 09 because it’s convenient to do so at GameStop, he’s perfectly within his rights to do so. Someone with lower time preferences is likely to go the P2P route and get over double that. If the next somebody’s time preferences are high enough that he’s willing to shell out $55 to GameStop for that same used copy of NHL 09, GameStop is perfectly within their rights to sell it to him. Someone with lower time preferences is likely to laugh hysterically and then go find the guy on Craigslist who’s selling it for $40.
A buy-sell transaction by definition has no loser, since both parties agree on the price and product. If there’s no agreement (even grudgingly so) there’s no transaction. Period. The guy who stalks out of a GameStop grumbling about thievery, but with $55 less in his hand but with one more copy of NHL 09 than he started with, still at the end of the day agreed to make the transaction. It’s not GameStop’s fault that there are people out there who agree to their prices, and under Fair Use (unless some new court decision rules that it doesn’t apply to corporations – unlikely) there’s nothing EA or Ubisoft or 2K can do about it.
You want GameStop to stop fleecing their customers for a $37 profit on every used sale? Stop selling to them or buying from them and sell/buy used games through P2P. When they see their used game throughput dry up like a raisin they’ll be quick to find out why and adjust accordingly – or they’ll wither and die.
Soren’s ideas are encouraging to me – if given the choice between Soren’s embracing of the Jerry Maguire “we want more from them, so let’s give them more” school and EA’s embracing of the “if we can’t get a piece of that action we’ll take measures to eliminate the action entirely” school, I’ll take “more for more” every day of the week and twice on Sunday.
JT,
You’re missing my point and probably some other people’s points. Selling or buying a game here and there on Craigslist or Ebay is fine, but taking it to the corporate scale of Gamestop and other stores that resell games as a business is taking money away from the Dev companies and their overseers.
To clarify how I feel about this: I do not like the sale of used (new) games during the first four months the game has been released; this is where the game makers lose their money (when a used game is sold multiple times). It’s great for the customer and the store, but bad for devs. Here’s an example: You buy Gears of War2, you sell it back to Gamestop within a month and you get extra store credit than you would otherwise, and then you can buy newer used games with that money and extra store credit (it keeps the money within Gamestop).
I don’t know too much about this Fair Use situation, but if these companies are greatly profiting off of the reselling of used games, something should be done about it. It just doesn’t feel right.
I’m all about free markets, but in a free market, companies and people need to protect their properties and interests.
I agree with JT. Gamestop can’t make any money if you don’t sell or buy with them. Unlike Wal-Mart and other big chains, Gamestop makes most of its money in sales to “hardcore gamers.” They are far more vulnerable to a boycott than any big box retailer.
Pat G.
Do the car manufacturers get a piece of every second hand sale of their cars? No.
It’s the same concept with second hand games.
Plus, the second hand market gives people access to products they would not normally have access to. History has shown that people won’t stop wanting those products and will get them illegally if they can’t get it legally (robbery, looting, extortion, piracy).
Dale,
Maybe the car manufacturers should get a piece of cars that are resold (that would be between the used car dealer and the manufacturer), but that’s a whole different situation. Cars cost thousands of dollars and people take out loans for them, and the car companies make thousands of dollars in profit from each new car sold, it’s not the same thing as the game industry. Also, cars depreciate at a different rate, not the same situation.
And Dale, games are not crack^^, people are not out there looting & pillaging for copies of Madden and Halo (atleast a high percentage of people aren’t).
I dunno, I see it as hurting the smaller Dev who doesn’t sell 2+ million copies of their game, but sells enough to give some bonus’, keep the company afloat, let the overseers buy their yacths, expand the company to make something bigger & better…
Like I said earlier, I don’t know the extent of the problem; some numbers from Gamestop would be nice.
I’m really not that worried about Gamestop, I think they’ll just over-expand and go out of business, but if they stick around it will hurt devs, it might end up hitting the pockets worse than piracy, but that’s mainly a PC problem atm.
Not a fan=)
It seems to me like Gamestop’s cannibalistic used game model and rampant PC (and X360) piracy will push the next-gen consoles towards becoming (even more) heavy handed DRM-downloading machines.
Right now on the Wii Nintendo at least has the concept of ‘gifting’ games from the Virtual Console. Maybe a virtual equivalent of Gamestop will appear. If or when it does you can bet the margins will be smaller but the prices will reflect the real value of a game, since the concept of a ‘used’ game will no longer exist…it will all just be licenses.
What if you could sell back your license for Geometry Wars 2 to the publisher, and get 50% of the fair market value, calculated by what consumers are willing to pay? Or what if it were set up like an auction house where you ask for whatever price you like and if you sell the broker (hardware seller and/or publisher) gets an automatic 33%? I would wager that the amount of trading would skyrocket and it would be big money all around.
Pat G.
Cars, games, books, etc. It’s all relative. 🙂
There’s a massive second hand book market (look at any high school or uni). And like games, the value of a book is the content, not the media its written on.
And no, people aren’t going out robbing 7-11 to get money for games (well I hope not!). But how many students on limited money buy second hand games at half the price? When I was at uni that market was HUGE! What if the second hand market didn’t exist? Simple, those who really want it would look to other “means” of obtaining the software. A certain percent would look to piracy.
And that’s my point, the second hand market is providing an affordable LEGAL method of a HUGE market to obtain these games (whether it’s GameStop, Ebay, or car-boot sales). Without it, piracy would be higher. And everyone knows piracy only exists because of demand, and with higher demand the harder it will be later to combat.
I think you can only agree that the second hand market is helping to curb piracy by providing an alternative legal means.
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Nice article. It’s nice to see that not all game devs are complete morons.
To those of you whining about Gamestop and the general practice of selling 2ndhand merchandise:
What is it about capitalism that you don’t get? Game devs are SUPPOSED to be some of the brightest people in the industry, but yet they don’t seem to grasp the concept of a free market. All I’m hearing is “poor me, poor me”. Fuck you. You want to make more money? Find new ways to market and/or distribute your product along with the current system.
As for Gamestop, yeah, they’re reprehensible – but only because they’re greedy like the game companies. But they’re not the only game (pardon the pun) in town. Where I live, there isn’t a gamestop. But I can still buy used games. Imagine that. If you don’t like them, go to their competition. Speak with your dollar and stop whining like a bitch.
Pat G.:
I don’t think I’m missing your point, I just don’t think you’ve thought your point out to any realistic conclusion:
“Selling or buying a game here and there on Craigslist or Ebay is fine, but taking it to the corporate scale of Gamestop and other stores that resell games as a business is taking money away from the Dev companies and their overseers.”
But what would you propose be done about it? Legally (at least right now), you can’t specify that an individual is allowed to resell a piece of content-holding media (book, game, movie) but a corporation can’t. So if you allow one you must allow the other. And as I’ve mentioned, Fair Use has been ruled to include ownership of a piece of content once it’s purchased, with the only restrictions on post-purchase actions being that you can’t make illegal copies, can’t pass it off as your own work, can’t alter it & re-distribute it, etc.
“To clarify how I feel about this: I do not like the sale of used (new) games during the first four months the game has been released; this is where the game makers lose their money (when a used game is sold multiple times). It’s great for the customer and the store, but bad for devs.”
I can kind of see what you mean by talking about the short-term post-release period, but again, what would you propose? Legislation that says you can’t resell content-holding media for four months after the release date? Seems arbitrary & borderline capricious to me, and therefore unlikely to be approved – it would also be very difficult to enforce. Also, that makes an unsupportable assumption that the vast majority of buyers of used games in the first four months would, in the presence of this kind of restriction, pay full price to get a retail copy. I’d submit that the kind of folks who wait any amount of time at all after release to get a used copy for less than retail would have very little problem waiting four months to get their hands on one. As I alluded to earlier, it boils down to preferences, whether you have high or low time preferences is what will determine how much you’re willing to spend on the game and when.
“I don’t know too much about this Fair Use situation, but if these companies are greatly profiting off of the reselling of used games, something should be done about it. It just doesn’t feel right.
I’m all about free markets,”
No offense meant, but I’m not so sure you are, if you feel that an entity (person or company, the principle is the same, no matter the scale) should be prevented from making a profit by filling a need that so obviously exists in the market. A “market” is not some monolithic “thing”, but it’s made up of millions of individual entities (people and companies) contracting for products & services at mutually-agreed-upon prices. Each individual decision on the part of a consumer or a producer, when aggregated to the macro scale, is what makes a market a market.
“but in a free market, companies and people need to protect their properties and interests.”
And they’re perfectly able & allowed to do so, so long as they don’t encumber the expressly recognized rights of their own customers/consumers, one of which is Fair Use, which encompasses the idea that when I buy a piece of content-holding media, I own that copy, it’s not a rental, it’s not a “license to use” (despite what you might infer from a piece of software’s EULA) – it’s mine.
If game companies want to make something a rental, the use of which is subject to time constraints and whatever whim they have, they’re free to do so, but they need to call it what it is, a rental, and price it accordingly.
If they want to come up with new & creative ideas that will create *positive* incentives for us to hang onto our games (MMO, DLC, etc.), then more power to them.
If they want to (like EA has started with Mass Effect, Spore, & Red Alert 3) put more restrictions on what their customers can do with their legally-purchased content, they’re free to do so (at their own sales-number and market-share peril), so long as these restrictions are common knowledge (which, for the majority of purchasers out there at Wal-Mart buying a game for their nephews, they aren’t).
Dale:
“And that’s my point, the second hand market is providing an affordable LEGAL method of a HUGE market to obtain these games (whether it’s GameStop, Ebay, or car-boot sales). Without it, piracy would be higher. And everyone knows piracy only exists because of demand, and with higher demand the harder it will be later to combat.”
That is an excellent point, and one that seems to be lost on the publisher CEOs who seem to be aiming their DRM restrictions not on pirates (’cause hey, they don’t work!) but at the used market.
Maybe Soren can tell me how he feels about me using a noCD crack for my copy of CivIV.
I bought the game at a retailer (and every expansion pack) and have never pirated it. I just hate having to load the CD each time I want to play – especially since I travel with my laptop a lot and that’s one less thing to tote around.
Whether its games, movies or music the industries need to start being a lot more creative and try to relate more to their consumers.
There are a myriad ways that developers could make a profit on the used game market while still providing an outlet to gamers — even with digital distributions.
For example.. what if Steam had a buy back option with some fixed price (only available say 2 months after release).
So, a gamer decides after having played Game X for a couple months that they don’t want it anymore, and decide to sell back their game for the offered price (lets say $20), and after making the necessary clicks and check-box checks are placed in a queue.
Another gamer decides they want to purchase Game X, but don’t want to pay full retail so they check the Game X used queue. They notice that there is a copy available and they select to purchase it for $30. If no one is selling it… then they have to just wait like they do now.
When the second person makes their purchase, they are charged $30, 20 of which goes to the original gamer, and 10 to the developer/publisher of game X.
Now, the first gamer has a $20 credit… and since he doesn’t feel like waiting a week or paying a fee to get it as cash, he decides to purchase Game Y new for $50.
If, on the other hand, no one ever purchases Gamer 1’s used copy of the game, then no money changes hands.
Some work would have to be done to determine the most efficient values for re-buying and re-selling, but at least they keep all the profit from the transaction instead of letting Gamestop reap all the rewards.
So.. the game companies stay in the profit loop, hard-core gamers have more purchasing power (and even have more incentive to purchase games from Steam since they have a credit), more casual gamers can still afford games at reduced prices, and there is no need to worry about the overhead of buying back games that no one will buy.
Headline: EA buys Gamestop outright. Profits millions from reselling their own (and others) games. Yay team.
That is the only way the can secure the “second hand” market. Legally or philosophically.
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I see that the central point of discussion is that gamestop (that do not exist in my country btw…) sells used games while selling new games at the same time, resulting in the possiblity that people buy only used games and not new games.
But there are one thing in this argument that prove that the flaw is coming from the game devs itself, not gamestop.
Why a used copy of a game would be avaible like 1 week after the game got released? Because someone bought and sold it back.
Why someone would do that? It is simple, they do not want the game anymore, or they disliked the game right away, or got bored with the game, Civ 4 from the author of this blog is for example faulty of this, you get the game, play it for some days in the same game (ie: you pressed “new game” only once), and when you have a bizarre number of units the game become so boring that you stop playing it (I am a Civ fan, and this still happens with me, I always get bored end-game), thus the person just sell the game back, if the game was replayable or lasted longer that would not happen, a example would be blizzard games for example, I never saw a used blizzard game for sale here, and blizzard itself sell the game cheaper now (a new warcraft III is 10 USD here), you do not see blizzard complaining of piracy or used games sales, do you?
Now Civ again, I had the version III pirated (I deleted after I got bored and needed disk space), and I play FreeCiv instead of civ I and II, and I do not bothered to even get a pirated Civ IV, the same applies to some friends of mine, why is that?
Simple, like I said Civ is a game that altough is good it still has the end-game boringness flaw, this make it sell less.
Now I must say that I have Rainbow Six 3 original, and that I lost my DVD and I will buy another one (original), why is that? Because that game is plainly good, not because it is action (I in fact like more strategy oriented games, Rainbow Six Vegas suck…), the same applies to Age of Empires I and II (I had various copies of both, pirated and original… My current copy is a original copy that I bought from a Ubisoft relese for also 10 USD), and several other good games.
Now you see companies complaining that their games do not sold well, like Crysis, seriously, I have a friend that has a pirated copy of Crysis, I asked him why he have a pirated copy of Crysis (it is the only pirated game that he owns, he is fairly rich and buy everything original), he said: “It is not worth my money, not even the pirated copy is worth, I have it because I friend installed, otherwise I would not bother, because I even played the game, and it suck, I only allow it to be still installed to that I can show off my computer that runs the game at maximum quality at 40 FPS”
I got the similar awnser from a friend about Asassins Creed, then people come trying to defend those companies that got their games poorly sold and complain of GameStop selling them used, GameStop would not sell them used if the gamers do not sold them back in first place.
Just one more example: Mirror Edge is perceived as a good game, but since EA is acting like an ass I know SEVERAL people that will get it pirated on purpuse to still play the game and be sure to not give money to EA, altough I say that usually piracy is not stealing (I will not explain now that), now this IS the intention, steal from EA, make EA have less profit, make EA suffer until they learn that their clients are their clients, not idiots, neither robbers.
So the final point: You make good games, people do not resell them. You make games cheaper, people do not buy them pirated.
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The key difference is actually not between the formats physical verses digital download, but actually relates more to the time since release
a) close to day of release where the early adopters/hard core fans want a copy now
b) later when it is more of an impulse buy as the price has dropped.
even publishers make use of option b by rereleasing games as budget titles. The industry complaint seems to be that the price is dropping too soon. If that is the case then the product obviously wasn’t worth the price it was being sold at, and will be finding its way to the bargain bin soon.
the second hand shops actually do the market a service, by
a) encouraging people to make the initial purchase knowing that there will be some form of secondary market
b) enabling the publishers to avoid producing short runs of old titles (thereby reducing costs), while still keeping their games in the shops.
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The idea that used games hurts developpers is both morally questionnable, OUTRIGHT stupid, and partly suicidal
=> It is morally questionnable as the buyer is the owner of a game. Same as a car, if I buy it it’s mine. I am not allowed to replicate it (legislation may vary), but I am certainly entitled to sell it.
=> It is outright stupid as Gamestop actually helps developpers. They increase the gaming market and allow developpers to get more money from market segmentation. Take a new hot game. Let’s assume a market model with fans and budget gamers. Without Gamestop, you could sell it either 60$ or 40$. 40$ will get you more sales (fans and budget gamers), and maybe less cash. 60$ will loose you sales to budget gamers, but you’ll get cash from fans.
Gamestop helps you selling your game :
60$ to fans (most of who won’t resell it)
60$ to 50% of budget gamers (who will sell it at gamestop for 20$, effectively paying it 40$)
0$ to budget gamers who will buy it 40$ from Gamestop, but only if it available from other budget gamers who purchased it full price.
Basically Gamestop allowed you to sell your game 60$ to fans and 60$ to half budget gamers. Gamestop increases the value of your game, buy making it a marketable commodity.
My model only relied on the hypothesis (easily confirmed in practice) that :
* many fans won’t resell the game at gamestop, especially as they won’t bother ot will want to keep the game so long that it will have lost market value
* many fans won’t buy it from gamestop, as other venues exist and people like to pleasure of a “new” thing
* some budget gamers will buy the game 60$ as they rely on its 20$ resell value
Gamestops’s margin (20$), the time needed to complete a game is large enough so that the transaction costs prevent a game from being used by an average of 10 users
=> I think this idea is dangerous to developpers as :
* fighting Gamestop will loose you sales (Gamestop creates sales)
* DRM hurts user. They hurt HARD. I got an hard drive burned by them, I hate the hassle of having my single player games temporarily blocked from me if my internet connection goes funny (f… you Steam).
Though I have the money and respect to buy games, too many DRM’s mean I’ll get them from bittorrent, which happens to offer DRM free versions.
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