Quote:
I Feel Used
Most Game Developers will agree that the Used Games market is significantly impacting the revenue we receive. I think what most consumers don’t realize is that every time they buy a used game, there is ZERO money making it back to the Game Developers. All of those profits are going directly to the re-seller and making it more and more difficult for us to continue making higher quality products.
The Question is, what can we do about it?
Game Developers have recently been trying to figure out ways to address this on our own over the last few years and have come up with some ideas that I’m actually beginning to like! Supporting the game with DLC is always a good idea since it not only encourages the buyer to keep the game longer, but that content is also tied to their account when purchased. Great Idea as long as your DLC is compelling and a good enough value to bring in plenty of consumers. It seems to be working since this article says DLC generated over one billion dollars as of May last year.
One of the newer ideas cropping up is including a unique code in the box that gives you access to certain parts of the game…like Co-op or multi-player. Buyers who do not purchase new, will have the opportunity to pay around $10 to get access to that part of the game just like everyone else. Some consumers complain about this method because the precedent has always been that it’s included in the price and should come with it. It did for the person who actually bought it first…so was saving that $5 at Gamestop worth it for you?
These methods are doing a little bit to help offset the loss in income for Game Developers, but it’s really just a band-aid on a large wound. So that’s where we are currently, where do we need to go?
I saw a rumor today that the PS Vita is going to have a lower price point for digital editions of their games compared to the retail versions. I like this idea a lot and the price reduction COULD be significant if you consider the simple cost of production as well as the cut that retailers take. Sony says just a 10% price reduction(meaning higher profit margins for them), but at least this could reduce the amount of used games out there.
There’s another big rumor about the next Xbox console that could really start to shake things up…it won’t play used games at all! Personally I think this would be a fantastic change for our business and even though the consumers would be up in arms about it at first…they will grow to understand why and that it won’t kill them.
The system is already there for Microsoft, all they’d have to do is use the DLC and codes model they have to tie a game to your Xbox live account. Each retail disc would likely need that unique key somewhere in the code so the account would be able to link it properly. Ideally it would tie a full version to the console it is registered on so family members can play even if the main account isn’t signed in, but this is exactly how their model works now anyway.
It does have it’s faults that would have to ironed out…like game rental. I’m a fan of rental companies because they have to buy copies of the game to be able to rent them out and if someone likes the game, there is a chance they would purchase it for themselves. I could see Microsoft implementing their own rental service which would maybe give them a code that activates the game for X days and they are charged a small amount. This could work when you borrow the disc from someone or even with digital download of the full version. It would also send a percentage of the rental to the Developer with each rental…likely improving the overall revenue we would receive from it.
Another issue would be with simply lending the game to a friend, but maybe they could implement something similar to what Amazon is doing with their Kindle Books lending policy. The license of the game could be transferred for a set time to another Gamer Tag and the original owner won’t be able to play during that time. Seems like it could work.
In the end, I fully believe that we have to do something about these issues or our industry is going to fall apart. People often don’t understand the cost that goes into creating these huge experiences that we put on the shelves for only $60. They also don’t seem to realize how much they are hurting us when they buy a used game and how pirating a copy is just plain stealing. Maybe something as simple as educating them could help solve the problem…
I know that some will say I’m not considering the retail games stores and the impact something like this would have on them…but remember they were doing fine well before the Used Games market became such a staple of their business. The truth is, they aren’t concerned with how this business is affecting us so why should I care how these changes will affect them? Every game I buy is NEW from Amazon.com and it arrives at my door on or close to release day, shipped free with no tax. The proper revenue also gets to the Developer that created it…how could a retail store ever get more convenient than that?
DISCLAIMER: Opinion does not represent that of my employer :)
Seriously, how wide of the mark can this guy be. Predictably, the comments thread of his blog post has blown up.
While it has been discussed a bit already, do you see a console blocking used games as being a good idea? For me, quite simply, I wouldn't even consider buying a console, Microsoft or otherwise, if this was implemented.
I wonder why you never hear writers up in arms about libraries or second hand book stores or book lending. If they decide on having new game only consoles then I won't be bothering with them unless the price of the games is cut dramatically.
You've summed up my feelings exactly there. I will not learn to live with such a system. You'd just be setting yourself up for dissapointment as (for most people) there is no possible way you could afford all the games you'd want to play. I'll stick with PC gaming only if this is the future for consoles.
I have an immense distaste of the one use code system EA loves to bits. Although it certainly does its intended job with preowned Fifa and BF 3 at their current prices, makes buying them practically more expensive than getting new.
I'm not sure if i'm alone in this, but lately i've been feeling guilty about buying preowned. At work i've had a copy of the Ico/SotC HD collection put aside for me for a while now to wait for the £29.99 price to come down. All the while resisting the urge to just buy the £12.99 pre-owned one.
Haven't PC games already gone down this road?
I can understand developers frustration at retailers taking so much profit from second hand. They have an odd idea that it's somehow immoral though and they also seem to ignore the fact that specialist retail isn't doing that well even with second hand profits. Stop it and a huge chunk of games would be getting sold at supermarkets, that's a risky situation for a developer so reliant on a title that supermarkets would drop like a hot brick at the first outraged Daily Mail headline.
Live / PSN : bigiain_______ Team Awesome
I really don't understand why game developers think that should be exempted from the second hand market any more than film makers or writers etc should be. Buy a second hand blu ray and the studio/director etc get nothing out of it. Why should games be any different? Particularly if we're talking about single player content with the company providing no servers or anything like that.
I can imagine a new-games-only xbox would lead to a huge rise in console chipping and piracy.
I don't mind online passes provided they're more carrot rather than stick. Take day-one DLC - consumers don't get it. They don't get it was developed in the window between the core game being finalised and its release. So why not offer it as a free bonus to people who buy your game used? You aren't meddling with the content from your core game and consumers will think you're a dick if you try and sell it.
Codes with every console game sounds shit. It was a pain in the arse with PC games and it'll be a pain in the arse here. It's just horribly anti-consumer.
Surely, as soon as the general public heard about this, it would kill the Xbox brand dead? Can you imagine Joe Public's reaction?
"So, if I buy this game with the new Xbox, and don't like it, can I bring it back?"
No, it won't work in any other console.
"But can I trade it in?"
No, it won't work in any other console.
"Can I sell it on Amazon on eBay?"
No, it won't work in any other console.
"Can I not just give it to my mate then?"
No, it won't work in any other console.
"Ah well, I don't want the game or the Xbox then. How much is a PS4?"
They shouldn't but if someone goes into HMV to get a newly released Blu-ray, they can only buy it new. The games market is pretty unique in having the 2nd hand market so closely intwined with the method of getting new shit to customers as well.
You could argue that years of overpriced games, cynical yearly updates and sequels, and a hyperbolic relationship with customers ('You MUST get this game') have helped create this situation.
I can't see myself ever trading Skyrim. But FIFA 12 will be gone by next September.
A lot of film rental places also sell second hand films. Blockbuster certainly used to. I'm sure the rental industry is also taking some profit from film makers. Maybe that should go too.
In every single Blockbuster the second hand section is actually much larger than the new sales section. It's the same with Game and second hand stuff. Once you take all the shelf stock into consideration, it's obvious they know where their profit margins lie.
The price difference between a new DVD and a 2nd hand one isn't going to be as big anyway. So there's less incentive for the retailer to implement a 2nd hand scheme and less incentive for the consumer to buy 2nd hand.
Whatever the reason is for a new copy of an old game costing £40 while a 2nd hand copy sits around for sub £20 - that's the reason for the 2nd hand market cutting into sales so much. It's either greed, the high cost of developing games, incompetence on the part of the publisher or any combination of them.
As a general rule of thumb film makers get a lot of bites at the money making cherry though.
Cinema release, DVD rental, DVD sale in shop, Sky, Terrastrial TV.
You're thinking that retailers get the same/similar profit margins off selling a new item as opposed to a preowned one. I can use films in Blockbuster as an example to point out just how much money they make off them.
Joe public comes in with a sack of DVD's to trade in, most of which are about a year old, some older. For every dvd he gets (and this is exact) 20p and that's only as store credit. If he wants cash it's 10p.
Blockbuster then sells those films for £3 a pop in a preowned dump bin. And they sell fairly well.
Retailers get notoriously small margins off selling new titles. The thing going through their heads at big releases like CoD is that they can't wait to sell all these new copies so they can get loads back eventually as trade in.
It will only happen if all three hardware manufacturers agree to do it or if EA and Activision refused to release games on hardware that didn't implement it.
We'll know what's happening as soon as the Wii U is released.
Live / PSN : bigiain_______ Team Awesome
No I'm not. Blockbuster might get away with selling stuff at £3 a pop but a lot of places can't. The percentage margin doesn't matter as much as the amount of margin. A retailer making £2.80 (like a blockbuster 2nd hand DVD) isn't as good as a retailer making around £10-15 for a 2nd hand game. If you've got an expensive lease on a high street, then devoting shelf space to product that makes you £10 per sale is more worthwhile than something that makes you £2.80.
So it makes sense for game retailers in a way that doesn't (to the same extent) for film retailers.
£2.80 actually sounds less profitable than the margin a retailer would make on a new Blu-ray. Not sure though.
No second hand market would mean the end of the line for a lot of developers. How many people wouldn't take the risk on a game with a six hour single player campaign or a game they weren't 100% sure to like, knowing there would be no way to offload it? Christ the only game made would be CoD.
It does when you're selling much larger volumes at a higher %. More people buy the £3 titles in bigger handfuls than those who buy the expensive preowned titles. Many preowned games also stagnate on store shelves and can practically lose the company plenty of money if they fail to be sold before the price drops to below what the company paid for it. Rage is a fine example. That's the danger of titles with large margins.
Although with Blockbuster it isn't as profound since they turn a fair lick of their rentals into ex rental purchases so it's just additional profit.
Why not?
I am with Kow on every point he has made in this thread.
The used market is an issue for many different industries, most other industries try to embrace it with part exchanges etc...
I think it would kill the industry and even more small devs with new IP would either go to the wall quickly or not even get a look in.
I would buy a next gen console that didn't allow used copies but I can say with 100% certainty that I would buy nowhere near as many new/day one games for it as I have this gen. I would basically have it to play the absolute must have 9-10/10 releases and that is what 1-4 titles a year.
It might be an idea for devs to actually make their software something you want to keep. Have a commitment to good cheap or free DLC over a long period (Like Bad Company 2 did) for instance.
If it must be introduced (because of dev pressure) the only workable way I see is by it being a code when you first put the disc in the box. I don't want this but thats what I see working.
You trade the game in (probably for a pittance) and the next person to buy it is prompted to pay for a new code when he sticks it in his machine. I expect trade in values and used prices to drop drastically to take the price of the code into account in this scenario.
Gamertag: sgt pantyfire PSN: pantyfire Wii: What's yours?...Yeh thought so.
The cost of retail space. Using Birmingham as an example, all of the Blockbusters are in outlying areas. The prime retail area is the Bullring which has HMV,Game, Apple store etc. The price of occupying that area is high, so they need to make high margin per item to justify the space. The pile them high, sell them cheap model doesn't work in these areas as effectively.
This doesn't stop HMV selling 3 DVDs for £10 (or whatever it is). In fact that's why they do it. The cost of the DVD per unit when it goes into one of these sales has dropped to such an extent that selling it individually is barely worthwhile. And that's for new stuff! So no viable 2nd hand market for DVDs in the areas where a lot of people go shopping. Games start off at about 4 times the price of DVDs though.
Gotcha. I see your point.
Do you get 99p and £1 shops in the same area at all? CEX?
Actually yeah. Inside the Bullring, is like a standard high street and a few big department stores. Outside the Bullring is turning into more and more of a shit hole - CEX, pound shops, Cash for Gold, pawn shops.
Both areas seem to attract some first-rate twats.
I very rarely buy second hand, and I never sell my games on so if someone brought out a console that didn't cater for a second hand Market then it wouldn't really change anything about the way I buy games. It would hopefully be cheaper to buy new games, but I wouldn't be holding my breath on that happening.
Surely the rental stuff would be left alone? You can already rent a film via download on your consoles, so there's nothing to stop you renting a game using the same method. Which would bring a download only console a step closer to reality, and you can't trade in or sell on a download.
The second hand Market has sucked millions out of the gaming industry for years now, people have been making plenty of hay while the sun was shining, but it couldn't last forever.
The alternate view to that is that it's pumped millions into the industry in terms of trade in credit, helped new IP's by letting people take a risk on something they don't know about, and served as advertising for newer games. The Assassins Creed example given is a good one.
Without pre-owned, the industry would consist of the big boys playing it safe, and indies making interesting stuff hardly anyone ever sees. There is not a chance in hell anyone would green light Enslaved, Okami, Bulletstorm, Mirrors Edge or Heavy Rain because they'd be seen as too big a risk by both players and publishers. Or if they were made, they'd be stripped down, budget priced Live Arcade releases.
You list those games like they went on to become successful franchises that enriched the culture of gaming. They were all commercial failures except Heavy Rain and none of them have spawned sequels or spiritual successors, except for a couple of downscaled follow-ups for portable platforms. Pre-owned didn't help them at all. If pre-owned was non-existent or was able to be monetized by the games industry they might have been able to produce more long-tail profit.
Do you think splitting the profits on preowned games would work? I don't know how it could be regulated though.
I list those games because they're all games that I own, that were seen as risky business. Did they become successful franchises? No. Did they enrich the culture of gaming? Yes. Mirrors Edge also has a sequel underway though. My point was that people will take risks on something new if they can get rid of it if it's shit. Did the games I list have low sales? Sure. They'd have been lower if people couldn't trade in though.
Maybe they'd have been higher if people had to buy it new at a discounted price point instead of waiting for it to be cheaper second hand?
I honestly don't believe that the industry would be bothered about keeping games on the shelf that weren't called either Call of Duty, FIFA or Just Dance. I think that we'd see exactly the same situation we have in terms of the length of time something stays on the shelf. "Oh it's not sold a million in the first weekend, it's obviously shit and no one wants it."