Several UK retailers have said they would be prepared to share revenue from sales of second-hand games with publishers.
Speaking to MCV, a number of stores said they would be prepared to pass on a cut of their lucrative pre-owned business if publishers were to cut them some slack in return, either by reducing trade prices or doing away with online passes.
"We all know the business model in the industry is changing," said HMV in a statement. "So if there is any merit in this idea then it may be worth looking into."
Surrey-based indie Gamepod said: "As a retail store we would happily share part of the sale from a used game if we get something in return. Perhaps new games at better prices and no more online codes."
Cheshire independent Bits And Pieces added: "If you want to stop these one-time codes then yeah, fair enough, we'll share revenues. If publishers gave me a better deal, then maybe. The publishers are not the poor man here."
Chris Muckell from Dover-based Xpress Games was sceptical about whether publishers would even be interested in such a deal. "We'd definitely like to do this, but I don't see it being something publishers would implement," he said.
"With new releases dropping in price after just the second week, I'd have thought their investments would be better made in making money from DLC."
Source: MCV
Comments
12how many times do the publishers want to be paid for the same product? this doesn't happen with cd's or dvd's so what makes game publishers so special?
they're already in the top-grossing entertainment medium...
I walked into HMV yesterday. Looked at their PS3 chart (not their PS3 section, mind, but their chart). New Skyrim - £42.99. Pre-owned Skyrim, missing Manual and Map - £37.99. I don't know how much they gave they person who brought in that used Skyrim, but if it was more than £20 I'd be stunned. So HMV are making, approximately, £20 profit - pure-and-simple profit - on that game, none of which goes to the publisher.
Want to know the kicker? The new and pre-owned were right next to each-other.
In my local indie game store I saw Skyrim for £27.99 today.
But the publisher already made money on selling it once already, what entitles them to any money from a 2nd hand sale?
And not to defend HMV too much because they are rubbish for games, but every HMV store I've ever been in had clearly marked the difference between new and used games. I don't see the problem of them being next to each other if one has a normal price sticker on and the other has a different coloured one with something on it that marks it out as used as HMV do.
Every person who buys a second-hand game is a lost sale of the worst kind. It's not like piracy, where you could argue that the pirate was never going to buy the game anyway, so the publisher never lost money. A second-hand sale is a sale of a game to someone who wants it, has money to spend on it, but isn't putting money back into the industry by buying new.
On a small scale, this doesn't matter. You're talking peanuts.
On ebay, it doesn't matter, because people only pay what they're willing to pay, and no more. Bargain-hunting writ large.
On a large scale, though? When the second-hand is placed next to the new? It doesn't matter that they're marked as such - to the average consumer, it's just a cheaper game, and that's great. Awesome. But they don't realise that every time they buy a second-hand game, the developer gets nothing. The publisher gets nothing. Multiply it by the number of HMVs and Games, and you're talking about a large amount in lost revenue. Revenue that isn't being fed back into the industry.
Now, you can argue that publishers are greedy. Sure. I'll go along with that. EA especially. You can argue that second-hand sales are allowed, so what the hell are they trying to do. And, sure, I'll go along with that too. I love buying cheap games.
But can you argue for a system that doesn't fully compensate developers for their time and effort? Can you argue for a system that allows retailers to maximise sales on second-hand items where the majority of the money goes not to the people who put time and effort into producing and marketing the game, but the company who just happens to have it on their shelf? And who actively promote second-hand because it maximises not the industry's revenue, but their own revenue, to the detriment of new sales?
Which is also why I find little point to this concept, unless HMV and Game are part of it. Smaller chains and independent shops? What impact do they really have on second-hand sales? Like I say above - the industry doesn't much care about smaller shops one way of the other. But multi-national chains? That's a different matter.
@Pixieking your assumption that HMV paid someone more than £20 and so are making £20 profit ignores the fact that HMV have wages, rent and other stuff to pay. Not saying that £37.99 is ok for a 2nd hand game by the way, just that your argument is bunk.
No, my argument makes an assumption - yes, okay, an assumption that may not be warranted - that the person who bought it new, bought it at HMV. If they did, then HMV already cleared a profit - of some amount - on the initial sale. They used that initial profit to clear their overheads, and then some. In this case, the pre-owned sale goes entirely to their profit margin, not their costs.
If the person bought it new elsewhere - let's say Game - then HMV cover costs with the pre-owned sale. But since they also sell new copies of entertainment products, you would expect them to cover operating costs with those. This is why retail prices are consistently higher than online prices - because of rent, distribution, merchandising, and wages on top.
PixieKing, your arguement is still flawed.
Preowned stock doesn't magic itself onto the shelf.
WAGES
Someone had to serve the customer who traded it in, file the disc away in the drawer behind the till, sticker the box, put the box on the shelf, serve the new customer who is buying the preowned stock.
RENT
Preowned stock takes up floor space, if a store didn't do preowned stock they would have excess floor space and therefore could rent a smaller unit thus saving rent. Alternatively they could fill the space with new stock.
OTHER STUFF
Price stickers, electricity/ air con for a larger store (see above), training on how to deal with preowned (checking discs etc). Wastage from games they never sell on or sell on very cheaply (FIFA games are a good example).
Granted the profit margins ar higher than new but sale price minus trade in value doesn't equal profit.
Actually where the initial 'new' purchase was made is completely irrelevant.
Ok so it's 'mostly' all profit after they deduct their costs, what's your point? They are still biting the hand that feeds them.
My point was that Billy Hologram was correct and Pixie king wasn't. Thought that was pretty obvious.
As for my opinion on the subject.
Games retailers are business', as long as they abide by the law then they should be free to do as they wish.
People complain about the price of preowned games, or that it damages developers but the fact is 'preowned' is a working business model.
There is a demand for cheaper games, there is a demand for a place to easily sell/trade old games. Game, HMV etc are simply supplying to this demand and I think it is pretty obvious from recent figures thast they are struggling even with prices set at what they are.
Should retailers give money to developers based on preowned sales?
No I don't think they should. I didn't have to give the VW group any money when I bought my second hand Seat, I didn't have to give the people who built my house any money when I bought it from the previous owner and I didn't have to give Mad Decent any money when I bought a second hand copy of the Major Lazer album off eBay.
If developers can't turn a profit based on the current model then they need to re-think their business strategy because plenty of devs are managing it.
If retailers start paying developers for preowned sales the consumer will end up picking up the bill therefore making preowned more expensive in participating retailers. In turn consumers will stop shopping there simple as.
The stores have the right to push second hand games, publishers have the right to gimp second hand titles with activation codes.
I say, let it play out but my money is on the publishers.
Retail have picked a fight on this issue by actively discouraging consumers from buying new titles and in a roundabout way actively trying to destroy their own industry. I have zero sympathy for them.
By the way, this is the same with GameStop... regarding this topic I fully agree with jb1.