The Weekly Recap: Dressing Down
EyePet review
No More Heroes 2 review
Wings of Prey Review
There is a small amount of consistent debate around used game sales, and the idea that it’s one of the reasons developers are losing money. You don’t have to be an economist or some kind of market analyst to realise this is a completely ridiculous statement. Almost every industry, from cars, to furniture, to books, all have second-hand markets.
People have been re-selling their old goods since open markets were established in BC. So why should the games industry be any different, and how come games developers, who tend to be reasonably more opinionated then most content producers, are getting so enraged about it when no-one else does?
Dave Perry has been carrying on this particular sentiment for quite a while now, basically claiming that it’s abhorrent that developers do not receive a cut from used game sales. This particular argument has been around for a few years now, with a multitude of various “consequences”, such as the push towards DRM, digital distribution and advertising in games to make up lost revenue.
But why should this even be the case? No other industry has bothered to complain, or made any blanket statement in regards to lost revenue. Even Hollywood, next to the music industry, being the biggest complainant when it comes to protecting content has no problem with people re-selling DVDs. The same goes with book publishers, car manufacturers, and almost every original producer of anything you see on E-Bay.
Video Games are one of the biggest growth industries in the world, and the most profitable in the entertainment industry, with billion dollar revenues in almost all western nations. To hammer it home, Australia has 21 million people and gaming makes up a $1.5 Billion market value. That’s larger then the local movie, and book industries put together.
The price of games over the past 10 years hasn’t lowered, like it has with almost every other tech based market, with the average price of a retail launch title coming in at around AU$99, UK£39 or US$49. In comparison, a brand new album might launch at AU$16, UK£10, or $10US. In fact, for the price of two retail games, you could actually purchase an Xbox Arcade, DS, or PSP.
My point is, games aren’t cheap. In fact, in most cases, a game would easily trump anyone’s entertainment budget for a given fortnight. So if you were to finish the average title in seven hours, you would be left with something that you would be unlikely to finish again. Sure, some titles may provide some replay, but it’s likely the initial novelty and experience are gone.
You paid a large chunk of change for the experience. You own a tangible asset. Why should you be lambasted for re-selling it? Ford wouldn’t be annoyed if you re-sold a car you purchased, just like Penguin wouldn’t be upset if you re-sold a book. Why? Because you rightfully purchased it from them. That asset is yours. Not theirs. Games should be no different.
Why should the publisher get a cut from a re-sale? They sold a license to someone, and that someone then sold it on to another person. It’s the same license. Just instead of buying it from the publisher, they bought it from someone else. It’s not being split, or doubled up. Just like a DVD, Book or CD, its just moved from one person to another. The developer isn’t losing a sale, since they already made it to the original purchaser.
Gamestop isn’t any different. They purchase the license back from the consumer, and resell it. This is no different from buying a license from the publisher originally. Nothing is stopping a developer from offering the same service, but they don’t. Probably because they don’t want to front up the costs involved in sustaining their own second hand market. Also, most likely, because they would rather crush the whole operation with DD/DRM instead.
It seems the publishers want every single copy of the game to be bought from them, at full price, by everyone. Instead of being price competitive, they simply remove the different avenues for purchase so everyone is stuck with something they might not want anymore. While the music, and gradually, movie industries start to move away from DRM, games publishers just run straight back in claiming that lovely word as defence – piracy.
Don’t get me wrong, piracy is a big problem. It honestly does hurt developers. But the console piracy market is relatively insignificant in terms of piracy take-up. Modding a console is irritating, costly, and reduces its life. Even with the options available, people keep buying games. Even the people most likely to pirate, young males, keep buying games.
I’m of the great, old fashioned, tradition that when you buy anything, whether it be a software license, a car, a book, or a CD, you own it. And because you own it, its your right to resell that good to someone else without someone else double dipping into your pocket. Developers complaining about lost profits might do well to lobby their publishers to reduce the cost of games in the first place to increase first party sales.
“Sure, let me go make you exclusive content, let me advertise to send buyers into your store, let me pay to put standees and posters everywhere, so you can sell them used games and stab our industry in the back.”
Whilst the emphasis on Dave Perry’s arguments have focused on how the consumer has done nothing wrong, and it is the retailer’s insistence on promoting used games sales, the distinction is merely semantics. I’m also sure it’s probably got absolutely nothing to do with his new, completely online, digital and pirate-free Gaikai service either. Thoughts?
16/7 Update: It’s like the gods of gaming descended to provide me with fantastic proof - this kind of thing proves my point so deliciously well I could eat it for breakfast.
Jickle
Nice one. I made similar comments in an article I wrote for Hyper a while back (albeit in much shorter form, it was the opening paragraph to a guide to doing trade-ins). Remind me to discuss this with you next time we’re MSN-ing.
July 16th, 2009 at 8:02 am
Jamie Obeso
The average price for a PS3 or XBox360 game in the states is actually $59; $49 is usually for Wii games. Still, the point is incontestably well-made. Good stuff!
July 16th, 2009 at 12:05 pm
James Pinnell
I actually wrote $59 but changed it after looking at a few websites. Must have seen discounted prices.
July 16th, 2009 at 12:16 pm
Chris Carter
This kind of issue has been flying around lately, and I’m not sure what to think of it. I’ll be really depressed if game publishers decide to try and eliminate the used games industry.
July 16th, 2009 at 4:41 pm
TheGameLlama
I try to buy new whenever I can, just to support my favorite industry. Still, $60 is a lot to spend on anything, so I usually only buy full-price games that I MUST have on day one. Most of the time, the price drops in a few months anyway (Prince of Persia and Bionic Commando both came out just a few months ago and are both now $20 BRAND NEW).
New games only cost like $5 less when sold used at GameStop anyway… That’s not really worth crushing the games industry to me. But I’ll be first in line on price drop day! Like when Guitar Hero: World Tour just dropped to $90 for the full band kit? That was the price of the drum kit by itself. Good things come to those who wait.
July 16th, 2009 at 8:47 pm
GameMaster
It will never fly by the Supreme Court within a million years. Totally agree with you.
July 16th, 2009 at 9:36 pm
Redlogic
well written and clearly thought out. In an internet filled with kaka…this article was refreshing. Thanks!
July 16th, 2009 at 9:52 pm
Mark
Publishers can bite my ass.
July 16th, 2009 at 9:58 pm
Tony
Comparing to the car industry is not really accurate. yeah Ford doesn’t mind the 2nd hand market, because it knows that a 2nd hand car won’t give you the same experience of a new car (Wear and tear, noises..), while a used game will give you the FULL experience of the same new game.
July 16th, 2009 at 10:02 pm
Saf
I don’t think it’s the same as the car industry. Car manufacturers themselves sell second hand cars and then they derive and sell car parts throughout it’s life cycle.
With music- the artists and publishers make money from tours, appearences, iTunes, licensing to movies etc not just from record sales.
With films- they make money in the cinema, pay per view, cable, sky, terrestrial channels, DVDs, Blu Rays and Rentals!
The same logic pretty much applies to every other product being sold, however, the games publishers only make money from game sales.
It’s bad enough people buying pirate games, but now u have the second hand Market which is cutting into more and more profits.
Your arguement is a fail on these grounds!
July 16th, 2009 at 10:17 pm
Mike
Tony— using ford is a bad example he always used books, cd’s, movies as an example and aside from a bit of wear on the books the experience in all those categories are as if the product was new and those industries do not put up as large of a fuss about it.
July 16th, 2009 at 10:19 pm
John Davis
NO they should not! They got their money from the initial sale! Enough is enough!
RT
http://www.anonymize.us.tc
July 16th, 2009 at 10:33 pm
Game Developer
It’s all a matter of whether you want quality games or not. Compare the quality of games produced in countries with poor intellectual property protection versus those that have good intellectual property protection: ie. US and Japan. China has a huge market for games, music, and movies. But what do they produce? Almost nothing because the potential profits for a domestic Chinese game industry is zero because piracy is so rampant.
Furthermore, the finished good of a used video game is virtually identical to a new game, something which cannot be said of your used Ford.
July 16th, 2009 at 10:48 pm
someone
My problem is with EB and gamestop who sell for like $5 less only, and when you buy new they put the dvd back in to a case and put that stupid really sticky sticker on the box, once it open shouldn’t it be considered used. After all you on;y have their word for it, that what your even buying is new.
July 16th, 2009 at 10:53 pm
Game Developer
The author and other commenters are lambasting the high cost of games as reason against killing the second hand market. Economically speaking, this is backwards because game producers have to increase the cost of their games in order to compete with their own product in the marketplace. Without a used game market, the price of the new product can be decreased to the amount of the used games. So in fact, without a used game market, EVERYONE would pay the used game price.
You can already see this pricing difference in games which have built in methods of piracy protection. Online games or games with a different distribution channel that does not offer their games on a physical media do not have a second hand market and thus are much cheaper. Sure, they are cheaper due to other reasons, but the lack of a second hand market contributes to their cheaper price.
So if people are upset of the high cost of games, they should be against the second hand market, not for it.
July 16th, 2009 at 10:55 pm
Duke
So what if the product lasts forever and the experience doesn’t change.
If Ford made a car that lasted forever, Should it be illegal to sell it used unless Ford gets a cut of the sale? I think not. If book publishers printed books on indestructible, wear-proof paper, should they get a cut of second-hand sales? Again, no. In a second-hand sale, the original producer produced nothing more of value, and therefore, they deserve nothing of value in consideration, no matter how durable the product.
The original purchaser is transferring their right to play the game, in whole, to the used game buyer. Why should the original purchaser have to give a kickback to the publisher in order to sell that right? It’s not as though the transfer creates an additional license. Nothing of value created, nothing of value given in return. It’s a very simple and rational concept.
At any rate, this is all already settled legal precedent. It’s called the First Sale Doctrine.
July 16th, 2009 at 10:56 pm
anon
IS a whole article required just to refute that dumb point?
July 16th, 2009 at 11:00 pm
popurls.com // popular today
popurls.com // popular today…
story has entered the popular today section on popurls.com…
July 16th, 2009 at 11:01 pm
Matt
I normally don’t respond to these things but Game Developer, the is a lot more going on in places like China that prevents it from making quality games, and none of it has anything to do with IP laws.
Read this article. It’s about China’s reaction to Kung Fu Panda, and it’s got some relevant parts on the second page:
http://www.washingtonpost.com/wp-dyn/content/article/2008/07/11/AR2008071103281.html
July 16th, 2009 at 11:04 pm
Matt
Oh and I didn’t see your first post, GD.
I’m curious – do you think all secondhand game sales hurt the industry? What about the secondhand sale of games that are no longer published or widely available anymore? Nobody seems to be noticing that if secondhand sales were banned or otherwise eliminated, then games from as little as 10 years ago would completely disappear and only pirates would have copies.
July 16th, 2009 at 11:08 pm
Badguy
Overall pretty lame, lame topic lame points made.
you didn’t really say anything at all, so I will say it.
this is simply about greed, and greed is the cause of 90% of the problems society has. your greed for games, the publishers greed for money.
for example spore. I was going to buy it but then the DRM topic kicked in. so if I get the game? it will be by pirating it, because I don’t always have internet.
As for piracy affecting sales? pretty much very unlikely that the impact is anywhere near what people assume.
Just because it is available to be pirated does not mean the person would buy it, most people wouldn’t.
I buy games, when they have passed the approval phase.
I do not run out and buy games when they are released for the reason that most games are shit.
Like the China thing, china does not make any world class software.
and you think it is because of piracy? ….
Lame.
July 16th, 2009 at 11:25 pm
Badguy
Game Developer,
you are clearly clueless.
you are stating that the used market has influenced and declared the video game pricing model?
that is absolute CRAP.
its the ownership that has caused the price, the need for a publisher to provide a hard copy, this is not related to used sales at all.
The pricing difference of downloadable games is caused because of ownership.
no one would buy it, think people are gonna buy some crappy indy game for the same price as a AAA title that comes in a box?
… get real.
July 16th, 2009 at 11:29 pm
Gimble
There is a problem in games that is not present in movies, book, or cars; and that is they the publisher does not print there product. They have to make large runs of games to bring to market and sometimes even when there is demand for 10k more units in a 2nd run they will not print due to the licensing fees they have to make. This has lead them to make there business model around sell in not sell thru. So they try for a block buster first printing. This includes huge pushes to all the local retailers and to renters at there full price point. The problem this creates is there is no continued demand on the publisher side for them to create more product or support it. So then they have this huge initial sell of games that keeps coming back to EB and rolling in and out. No they have made some improvement with DLC and online models but the point remains if you make a game on a console the only way to keep making money on it is by coming out with a new one every year.
July 16th, 2009 at 11:30 pm
Natezero
If this is really hurting game developers that much, no one is stopping them from changing their distribution methods. Make every game have a CD Key that becomes linked to your account or something.
Why is everyone so worried about the “Poor Game Developer”? The Game industry is too big, too profitable for the consumer to give a crap about the well being of the developers. Even smaller studios have no excuse for not developing a business strategy that allows them to make money.
Also, I don’t see the courts changing property right law anytime soon, so this is pointless.
July 16th, 2009 at 11:32 pm
Bliminy
Time for the developers to form a collective and cut out the publishers.
http://onlinegamerkid.com
July 16th, 2009 at 11:33 pm
AJ
I think developers should get a 10% cut from used games. The reason Hollywood, Car makers and other industries don’t try to recoup losses is because they already did. Movies appear on the big screen first, then on DVD, then on demand, then at blockbuster then on cable t.v.
And games?
Just from sales. There is no other way to recoup their losses besides sales. I will say this however, I would be more active in buying games should their price be more reasonable, maybe $39.99 instead of $60. Then afterward lower it to $29.99 and finally $19.99. This would more likely fuel sales.
July 16th, 2009 at 11:35 pm
Matt
How are people going to deal with a 10% cut? Are individuals going to have to do this? Will I still be able to sell my own used games? Is eBay going to report me if I don’t register with the proper authorities before selling? What if a game is out of print or has been sold to another company? Am I going to have to trace its path of ownership? What if I accidentally pay the wrong company? What if I sell without the cut at a garage sale and get caught? Am I going to go to jail? What if a company doesn’t want a game to be resold, can they refuse my 10% payment?
Similarly, how are small individually-owned game retailers going to do this? Without a team of accountants to make sure the money goes to the right place, are they going to go under the table? Are they going to have to hire people to make sure fees are divided up correctly? Are game companies going to compile lists of their games and sell them only to retailers they like (Gamestop)?
July 16th, 2009 at 11:41 pm
BMWM5er
If you go to a baseball game, can you go home then sell that experience to someone else?
Of course not because you paid for the experience and entertainment.
Games and Movies work the same way.
They aren’t like cars because no two cars will ever be the same. Even if they’re both fresh from the same factory, you’re not paying for the drive, you’re paying for the ride.
But if we both have the same game Tales of Monkey Island, they are both exactly the same because we’re paying for the experience of playing it. 50 years from now my copy of Monkey Island will not be any different from yours. And luckily unlike baseball games or musicals, we can still experience it 50 years from now even though we paid for it once.
Bottom line, it should be illegal to sell used games and movies, but it should be MUCH MUCH MUCH cheaper to buy them new.
July 16th, 2009 at 11:43 pm
Gimble
Poor Developer lol. I cannot speak for a developer run by a publisher, but for independent developers it is hard. A game that the publisher pays 20M only 1-2M will go to the developer to make it. The publisher is going to try to get the most for the least amount of money they can put into too. Not to say the publisher are a bunch of greedy bastards. You need to have marketing or you are not going to sell enough to make it worth your time to make the game. And it is also good to have 20 other games being made along with it so you don’t go under half way thru. Money and people are hard to line up and distribution where you actually can make a consent living is hard too. Changes need to be made and one of them is not getting ride of the 2nd hand market but it is not an easy gig.
July 16th, 2009 at 11:45 pm
Matt
BMWM5er,
A baseball experience is just an experience, you’re right. But a game is an experience on a physical object, like a CD. The game may be an experience and be the IP of someone else, but the CD is my property. Can I not sell my own property to someone else?
As soon as we start making distinctions between different kinds of property and saying that I can sell this CD because it has music on it but can’t sell this CD because it has a game on it, we’re fundamentally changing the entire concept of ownership and property rights. Your and my right to sell our property is infinitely more important than the obsession with control of the industry that produced the CD.
July 16th, 2009 at 11:48 pm
Matt
Gimble,
Just because an industry is hard to get into and make money in doesn’t mean we need to make laws to make the industry easier. Sometimes things are the way they are. Developers complaining that there’s no way to make money outside the initial sale of the game are developers who aren’t inventing new ways to make money and compete. They’re no better than the RIAA who is trying to legislate the market to suit them instead of adapting themselves to suit the market.
July 16th, 2009 at 11:50 pm
Gimble
To be devils advocate a you do not own the game you have a license for a game experience has nothing to do with it.
July 16th, 2009 at 11:52 pm
Matt
Right, but you do own the media that the game is on.
July 16th, 2009 at 11:53 pm
BMWM5er
So can I buy music from the internet, then put it on a cd then sell it to someone else?
So long as there something to sell, people will sell it.
With the way games are beginning to get distributed through the internet, it will be pretty much impossible to sell the games you buy through it.
Imagine trying to sell that copy of half life 2 that you have on steam.
Part of that 50 dollars we currently pay stays in the disc which we can turn around and sell.
So technically they are already getting paid for the used market.
But no one will pay 50 dollars to legally downloaded a game that they have no physical copy they can sell.
So games will become impossible to resell, but it will have to be cheaper.
Otherwise everyones just gonna illegal download it.
July 16th, 2009 at 11:54 pm
Matt
There’s actually a site somewhere that lets you sell your bought MP3s to other people. You should be able to do this, as long as you actually transfer the music and don’t make copies.
People complaining about games being too expensive are missing the point. Game developers will charge whatever they think they can get for games regardless of market conditions, and they’ll put out excuses like piracy and used games. I don’t doubt that it contributes, but ultimately people paid $50 for Doom 3 because that’s what Id asked for and they were willing to pony up the cash.
Games being sold online with DRM are part of that innovation I was talking about before. People are willing to trade resaleability for convenience, instant updates, and all the other benefits of Steam. If that’s the direction the market moves, the used game problem will rapidly solve itself. I’m just saying that legislating used games away is the totally incorrect and unconstitutional way of doing it.
July 17th, 2009 at 12:00 am
James Pinnell
Some really interesting points raised from both sides of the argument, thanks for reading and contributing your views on the subject guys.
July 17th, 2009 at 12:00 am
Johnny Mofo
Has anyone been into a Gamestop lately? Only 20% (random percentage out of a hat) of the used games have instructional manuals and covers. Half of them are scratched up beyond all belief. When you buy used you get used and its obvious. I actually quit trading and selling to Gamestop because most of the time Ebayers will pay what it is really worth used. Great article and excellent point.
July 17th, 2009 at 12:05 am
Gimble
It is the right to play it on a Xbox360 ,PS3, or Wii with a disc that adds the $10 being able to resell it is only a nice side effect. And part of that price is on the publishers heads for the ease of use on that product. For a number of people nothing is easier or faster than getting a disk from the store and putting it into a little box hooked up to the tv. Everyone involved should be ready to deal with what that means. If the publishers want to change it come out with 1 constant easy online only box and sell it to us.
July 17th, 2009 at 12:06 am
Dave Thomas
Honestly, I don’t entirely understand this brand of insanity; this specific form of it is exclusive to the gaming world, as far as I know, but it shows up in other forms with other types of entertainment industries. It boils down to a desire to control the market to the point of enabling monopoly pricing.
The gaming industry should ask the music industry how that worked. They think they have a piracy problem now? Such policies in the music industry led to the piracy revolt among consumers, and even pushed a number of major artists and hoards of emerging artists off the recording industries’ bandwagon entirely.
I get that most of the lunatics in this country, both in industry, government, and education, loathe the free market…but entertainment is probably the one industry that will always be subject to consumer’s demands, no matter how much of the world abandons the free market approach. I can always make my own entertainment if I don’t like the price of theirs.
Boo-hoo.
July 17th, 2009 at 12:22 am
LordCancer
No.
July 17th, 2009 at 12:28 am
boybunny
If games publishers deserve a cut of second hand resales, then the customer should be allowed up to a 100% refund on disappointment. Too many games are complete rubbish, including the big budget games.
Games developers want it their way in every situation. Well, I have not pirated a game in two decades, but if they got a slice of the second hand pie without offering refunds for disappointed customers, then I would have no problems going back to pirating games. I only find 1 in 10 games worth the price, so it is tie that games publishers were responsible for their trash.
July 17th, 2009 at 12:57 am
blahDev
As a game developer I might be a little biased, as games (and software) is one of the few items that are purchased by the public that can support some sort of DRM. That being said I don’t think that second hand purchases should have any funds back to the developer (even though it would be nice) as for the most part it is considered your property once you have bought it.
However there is a move in the industry towards more of a service based industry rather then a product business model, conceptually something like World of Warcraft or other online game could be entirely service based with no product involved other then the runtime files on your computer. There is a definite push towards downloading or streaming of games onto different platforms (which also helps for updates, bug patches, etc.) and I suspect the industry business plans will adapt that model more and more. Video, music and game stores will likely begin to feel this shift as more and more content is streamed to the individual in their homes and once that happens it is unlikely that there will be much of a second hand market to consider anyway
July 17th, 2009 at 1:59 am
Gimble
I am not saying developers or publishers need any special treatment. Just that they have very low tech profit models for a very high tech industry. There are a lot of things that need to change in video games as a business. They have a very strange set of problems cause they are trying to be the recording, movie, or some industry they are not. Every industry is strugeling with new tech and I am sorry to say mine is not leading.
July 17th, 2009 at 2:01 am
ecco6t9
Exactly if a game flat out sucks/was 4 hours long I should get my cash back.
Fact is if developers did a better job with developing and programming(not patching a game a month later) we might be more sympathetic towards their plight.
Also Dave Perry really doesn’t matter as much as he thinks he does.
July 17th, 2009 at 2:06 am
Laser
I’m a developer too, I work in formware. Where is my cut from used device sales. After all, they are selling my software with that little piece of tech. How far do you think I would get with Ebay if I tried making this case?
And firmware is everywhere from your music player, to computer, to phone, to car.
the other comment that really got me was how Game Developer invoked the work competition and implied that less would result in a better value for consumers. I thought economics was still an education requirement in most schools. But don’t the publishers compete against each other? I think that would be a good topic for another article.
I have found this sense of entitlement in the games industry ver off putting, and I am being much more selective, and playing my older games, and couldn’t we argue that my replaying my old games is unfair competition the same way used games are?
July 17th, 2009 at 4:02 am
name
of corse they should.
they put not only millions of dollars but their blood and sweat into them to, people dont realise how much effort goes into making a video game.
so every single one sold, devs should get most of that purchase.
they did most of the work so are they not entitled into most of the sales?
also i wish my video game store was as organized as the one in that picture.
normaly the game stores arround my area like EB or game just have 2 tables for each system and the games are chucked onto there,
you have a pile of 10 games on top of each other.
finding the game you want is like finding a needle in a hay stack.
July 17th, 2009 at 4:58 am
Alex
Enough Already! Pretty soon almost everything you buy will have a disclaimer on it, that you don’t actually own (insert item here); you are just paying for the privilege to use it!
This type of thinking has got to stop! The *greed* of corporations is just *sickening* beyond belief! Once the product for sale is sold, the seller extinguishes any and all rights to further collect any profits, from second or third party sales.
Note to game publishers and developers…
Want to see the video game market implode, like it did in the eighties? (The caveat however, will be of a much longer magnitude, since most gamers today, have several consoles in working order, plus extensive libraries of games to play = No new game or console sales for you!)
July 17th, 2009 at 5:22 am
Josh
I’ve been reading through the comments and I have to say that most of the comments that are for charging royalties on every resale just don’t hold any water. There is no way to regulate something as vast as the video game market.
Think about it, every time you go to a swap meet, every purchase on ebay, every time you go to a buddy house and he decides to give you his game for $5, every garage sale, every transaction ever?!?!? Are you kidding me. Its ridiculous to think.
And what about if you let your friend borrow a sweet game for the weekend, are you supposed to pay royalties on that, I mean.. the developer isn’t making money. Or what about when you have some buddies over and you all play on the Wii, are they all now supposed to pay royalties, because, well, up to 4 people can play on the Wii, but you have 8 people so the developers are losing potential customers who would otherwise buy the Wii.
Where will the greed stop? Can people really expect to pay money to some company everytime a game is “experienced.”
Think about what would happen if you have to pay a fork company everytime you used their fork, sure you get the same “experience” from a fork hundreds of times, but would you expect to pay for that “experience” everytime.
The argument I see from the “other side” of the argument is that people should pay everytime they uniquely experience a particular piece of media, CD,DVD,Blu-Ray, whatever. Sorry this just doesn’t work.
July 17th, 2009 at 6:27 am
Fractal514
I think part of the problem here, both with arguments for and against, is that you are using other industries as examples for or against this topic. You can’t do that, because the gaming industry is unique. A video game is a product that many people will purchase, use once (maybe twice) and then be done with, but it is also a product that others will purchase and use repeatedly and collect and keep.
The closest comparison I can think of is DVD’s or Books. There are definitely stores that resell used versions of these products, and those industries don’t seem to have a problem, this is true. What is easy to overlook however is the scale. For the most part, used book stores are very very rarely chains, they are usually privately owned. Used DVD’s are more widespread, but still a very small portion of the DVD market and is usually a very very small section of the store that sells them (except movie stop.)
Gamestop has a model that might well be described as a license to print money. They purchase games for less than half of the final retail cost, and give credit in return (20% less for cash.) On a $60 game, a typical trade in cost might be $25, they sell it for $55, that’s $30 profit. No wonder the gaming industry wants a portion of that, they see Gamestop raping the customers and just want a turn at the sloppy seconds.
July 17th, 2009 at 7:01 am
Gunther
If developers want a cut of the used games market, they simply need to provide a way to bring in used games. I can’t stand that Gamestop will give me $25 for the game I paid $60 for a week or two ago. If I could sell my game back to the developer for that same $25, I would gladly do so.
Most developers and publishers have a project that they know is of dubious quality. They should do us all a favor and cancel their cheezy Wii kids game, that terrible game based off a summer movie, or Generic Space Marine FPS and use the savings to make an online store where I can sell back my used games, then buy other used games at a discount.
I’ll still gladly buy new games when the right title is available. When I can’t wait to play the next Halo or Mechwarrior or Metal Gear, I’ll pay the premium for new and buy on launch day.
Developers get my money when they provide me with a product. If they want to get money for used game sales, they should provide a way for me to buy used games and not just demand a cut of someone else’s business.
July 17th, 2009 at 10:04 am
Dehio
So what about games that came out long ago or a release that I missed that no one is selling new? What do I do then? It’s not like I can pick up Final Fantasy 9 anywhere new! Ya that’s BS
July 17th, 2009 at 11:14 am
DaveExile
Devil’s Advocate here:
As we move from physical media for entertainment and closer to licenses purchased directly from producers on-demand, we lose the transferability which you defend. How do you sell a used iTune or Amazon Video? How does one transfer a game purchased from the XBLA or PSN?
If we are willing to move towards a content distribution system without physical media, it seems game publishers are left out of the “first time buyer” stream only because their products occupy more physical memory and are not — for now — best suited for digital delivery. Is that fair for the largest, most complex content providers to be subjected to a secondary market rapidly becoming extinct? Book publishers and newspapers are dying because they can’t make a profitable adjustment to digital distribution: should game make be next?
Good article, Devil Out!
July 17th, 2009 at 11:53 am
Mike
I’m sick of this crap…
If you can’t make money as a developer
Close the doors and do something else.
If the career path I chose took a nose dive in the future nobody
would care about me….
July 17th, 2009 at 1:59 pm
Fractal514
Yes Mike, no one would care, but that’s because you seem like an uncaring jerk.
Most of us read this because, on some level, we are gamers, and even if we might agree in principal that developers should figure this out for themselves, if they don’t then WE lose. No more new games, more expensive new games, or a host of other issues.
I’m sorry you don’t have sympathy for these developers, but if you are sick of this “crap” stop reading these sites.
July 17th, 2009 at 2:31 pm
Austin Sutton-Jennings
Until this gen, I had never owned a second hand piece of hardware or software.
July 17th, 2009 at 7:46 pm
Alvis
Exactly how does modding a console reduce its life?
July 17th, 2009 at 7:53 pm
Mythar
Should car manufacturers get a cut of used car sales?
July 18th, 2009 at 9:40 am
Fractal514
No Mythar, but you are comparing Apples to Oranges, a car is a major purchase, most people make a car purchase 5-6 times in a life. Car also show significant depreciation in value when sold used. Games are purchased 5-6 times a year, and (according to gamestop) there is a minimal $5 depreciation between new and used.
July 18th, 2009 at 12:09 pm
shaolinjesus
Interesting article I wrote a similar one for wingdamage.com a while back. One point I think should be brought up is that most trade ins go towards the purchase of a new game. Most kids would not be able to afford new games without trade ins. The publishers are paid regardless of how the game is purchased, but without trade ins those kids are buying platinum hits or greatest hits. New releases would be out of the question and publishers would still lose money.
July 19th, 2009 at 6:51 pm
Chris
This is an extremely misinformed article. When you compare used game sales to used car sales, that’s a huge red flag that should alert anyone that the writer is very misinformed. Used games and used cars are completely different. A video game has (essentially) infinite life. The disc won’t go bad if taken care of. If a game is bought new, then sold to gamestop, then someone else buys it, plays it, then sells it back…lets say 10 times. 10 people played that game and the developer only saw money from 1 person. How you can say that the developer didn’t lose a sale is beyond me.
Now, here’s why used cars and used games are completely different and can’t be compared. A car will not last forever. Suppose a car will last 200k miles. I buy it and drive it for 100k miles and then sell it. I have essentially sold my remaining 100k miles to someone else. When the 200k miles are up, the company will make another sale on a new car, it doesn’t matter whether I kept it or not.
Used games have a VERY negative effect on the games industry. You see sequel after sequel because it is so hard to make a profit and so they recycle ideas just because they know they’ll sell (just look at the # of Call of Duty games that are released).
Another thing, look at gamestops profits…it’s ridiculous. That money should go to developers.
July 20th, 2009 at 10:33 am
James Pinnell
Used games aren’t the reason games developers struggle to make a profit. That’s a completely different issue, and its based apon marketability. Risky titles with creative game mechanics or subject matter never sell as well as something more generic because its based around a niche market. It’s a long standing issue that has nothing to do with my article.
You can hardly blame the second hand market for half the things you mention. Games only have a longer shelf life because the medium used to create them is hardy. Cartridges don’t have a long shelf life, they won’t last forever, even well looked after ones. You could technically keep a car for decades, and people do, if it is properly serviced.
I find it interesting that you also avoided my other, and more concrete examples, of movies, music and books. They all last technically forever as well, but you don’t hear those content producers getting pissed off if you sell a CD, or a Book, or a DVD to someone else.
The more we stop coddling the gaming industry the more we can be objective about its flaws. There is nothing that makes it more exempt or special then any other entertainment medium, especially when it comes to the rights of consumers and ownership.
July 21st, 2009 at 3:05 am
Mike
New definition of Jerk:
“An opposing viewpoint from an uncaring person”
LOL
Is there something wrong with changing your line of work if you can’t make a living at the other?
How do we lose?
Someone just comes along with a better business model that will work.
It’s only natural to complain about something first (to see if the government or consumers cave) before spending there own resources to fix it.
To think that there will be no more video games because of this is ridiculous and extremely naive.
Mike
July 21st, 2009 at 8:45 am
Mike
Making sequal after sequal is easier and safer. Thats why they do it.
You already know there is a built in base of customers for this type of game and you already have previous resources at hand to build upon for a sequal. You don’t have to start from scratch. Eg. Existing code etc.
It has nothing to do with resale of used games.
July 21st, 2009 at 8:48 am