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Kilgore Trout · Nov 3, 2010

I just read this really interesting (and long) article that went through and explained why exactly the game developers today are so obsessed with used games, and why preorder bonuses or excluding content does nothing. He basically says the money they're "losing" is tangible when you keep on seeing Gamestop's profits soaring, but with piracy there is no exchange of money so they see it as less worthwhile to pursue.

Id presume even the most jaded fan of file-sharing would draw the line at selling counterfeited goods. But in the world where BitTorrent dominates the file-sharing process? There isnt a lot of people making money off of the downloads. Now look at used game sales. Damn. Theres money being exchanged every single time. Whats worse? No exchange of money? Or Money was exchanged?

There was some really interesting stuff in there. I had no idea that the developers in Japan tried to make used games illegal in the 80s. He also proposes that Microsoft entered the console war because it was a closed system as opposed to the computer which anyone could make games for.

http://www.the-ghetto.org/content/used-video-games-the-new-software-piracy

2006. Dismissed by industry critics as a company behind the times, Nintendo was in deep shit. The strong-first party support and kid-friendly gaming that powered Nintendo hardware for the last twenty years? The Nintendo GameCube fought the X-Box for table scraps as Sonys Playstation 2 achieved the most dominant market share in the modern history of the business. Mario was old news. Shooting hookers is what all the cool kids were doing. So what did Nintendo choose to do? They didnt change a damn thing. Strong first-party support. Kid-friendly gaming. Only this time? The gaming peripherals were also designed to appeal to parents. And damn, did Nintendo roar right back.

The Nintendo Wii stole both headlines and the money of soccer moms who would typically spend their disposable income on their kids infatuation with Grand Theft Auto. And the North American publishers that made in-roads? 2006 kicked the ever-loving shit out of them. French-Canadian publisher Ubisoft watched their year-to-year earnings stagnate.* Activisions year-to-year operating profits declined 170 million dollars.* Electronic Arts? At the time, the number one third-party publisher in the world? 2005′s net income of 500 million dollars was slashed in half. * In the win-now world of the American stock market, that is cause for panic. (The video game industry would know this. The Crash of 1983 was preceded by Ataris 1982 fourth quarter earnings. Atari higher-ups expected a fifty-percent sales increase over the fourth quarter of 1981. On December 7th of 1982, they revised. Ten-to-fifteen percent increase. The stock price of parent company Warner Communications dropped thirty-three percent in twenty-four hours.*)

If the pay-to-own video game industry collapses in the next five years, do you know why it will be? It will be a combination of terrible business practices, out-of-control game development budgets, year-to-year sequels that are designed to be consumed like dish detergent, a total misunderstanding of the casual gaming demographic, and the use of motion controls and three-dimensional displays as a step sideways and not forward. It will not be because of used games.

They know it. And thats why theyre after used video games. When your business model is collapsing, you control distribution. Whether it offers a better product or not, you control distribution.

I would really recommend reading the entire article. It's long but worth it.

Amneisac · Nov 3, 2010

That didnt last long. In September of 2008, the world economic system nearly collapsed. With more people concerned about losing their house than corpsehumping their friends, sales leveled off in 2008 and 2009.

This is my kind of editorial. I'm not being sarcastic, either. I actually really wish CNN read more like this.

Good read, thanks for sharing.

Also in May, THQ announced a similar system would be required to access the multiplayer mode in UFC Undisputed 2010.* Unfortunately, the company hasnt made a game worth buying in the last four years, so nobody has been able to check on whether this is actually true.

I lol'd.

jax (old) · Nov 3, 2010

Not buying it.

yes. irony.

doesn't go in depth into how prevalent used game sales is cannibalising current game sales. $5 off a used title? (2xcopies of the same titles sitting on some shelve in the store) 100% profit? Hmmm

its a bad write up anyhow.

Controlling used game sales is a means of controlling distribution. And like all of the actions above, none necessarily provide for a better product. Hell, it hasnt been established that they provide for a more profitable product. If those decisions had transformed video games into the Silicon Valley Casino, we would not be talking about controlling the distribution of used video games. And controlling the distribution of video games will not make for a better or more profitable product.

But well see. If publishers are successful in banning the resale of used video games (or getting a cut of the profits), then I guess the Controlling used game sales is a means of controlling distribution. And like all of the actions above, none necessarily provide for a better product. Hell, it hasnt been established that they provide for a more profitable product. If those decisions had transformed video games into the Silicon Valley Casino, we would not be talking about controlling the distribution of used video games. And controlling the distribution of video games will not make for a better or more profitable product.

But well see. If publishers are successful in banning the resale of used video games (or getting a cut of the profits), then I guess the Internet Nerd Rage Bible demands I have to get back at them. Those games beholden to a sixty-dollar price point? I guess Ill have to start downloading them off of the internet.

You know, software piracy. The old used video games. demands I have to get back at them. Those games beholden to a sixty-dollar price point? I guess Ill have to start downloading them off of the internet.

You know, software piracy. The old used video games.

really? The whole thing is a bit rubbish to be honest.

L O L

robjoh · Nov 3, 2010

Jax said:
Not buying it.

yes. irony.

doesn't go in depth into how prevalent used game sales is cannibalising current game sales. $5 off a used title? (2xcopies of the same titles sitting on some shelve in the store) 100% profit? Hmmm

its a bad write up anyhow.

really? The whole thing is a bit rubbish to be honest.

L O L

It is very sarcastic, but I actually think it describes the industry pretty well. The industry is bleeding money and instead of trying to solve the mess they are in, they are blaming the consumer.

You are correct that he doesnt go into deep how used sales is cannibalizing sale of new products, the reason might be that there is no proof that it does. Half my GameCube library I bought used, because the simple reason: I couldn´t afford new games. I was a student at that time, so I bought what I could afford. On the other hand me buying someone else games might mean that the person selling could afford a new game.

The truth is that if the companies are missing sales to the used market then the problem is that they are doing something wrong not that the market is selling used products.

Malio · Nov 3, 2010

Long live Ebay and Gamestop.

Steve Youngblood · Nov 3, 2010

Jax said:
doesn't go in depth into how prevalent used game sales is cannibalising current game sales. $5 off a used title? (2xcopies of the same titles sitting on some shelve in the store) 100% profit? Hmmm

Why are those used copies sitting on those shelves? And why are customers eager to save less than 10 percent off of the purchase price as opposed to purchasing new and supporting the developers and publishers. What you've described doesn't set the stage at all for establishing that used game sales cannibalize current game sales.

Affeinvasion · Nov 3, 2010

Steve Youngblood said:
Why are those used copies sitting on those shelves? And why are customers eager to save less than 10 percent off of the purchase price as opposed to purchasing new and supporting the developers and publishers. What you've described doesn't set the stage at all for establishing that used game sales cannibalize current game sales.

5 bucks is 5 bucks. Either 1) people don't realize that the developer doesn't get a cut or 2) they don't care.

John Rabbit · Nov 3, 2010

being an opinion piece, the author fails to represent both sides fairly. that said, this is at least an important summation on the history of this issue from a gamer/consumer perspective. i think its pretty fair to say that overall publishers have gotten a more greedy and more brazen with their tactics to bilk consumers out of their money.

just like retailers. gamestop is as much to blame here as activision, and i think the author makes it a point to illustrate this. good read.

Dennis · Nov 3, 2010

The publishers need to get in on the game then.

EA should let me relinguish my DD copý of Mass Effect 2 in return for credits toward one of their new games.

I would rather give my old copies to the publishers than Gamestop if the same could be done with physical copies.

Rhindle · Nov 3, 2010

Kilgore Trout said:
I would really recommend reading the entire article. It's long but worth it.

I feel significantly more stupid for having read the portions you excerpted, so no thanks. A large collection of delusional rubbish is still delusional rubbish.

Steve Youngblood · Nov 3, 2010

Affeinvasion said:
5 bucks is 5 bucks. Either 1) people don't realize that the developer doesn't get a cut or 2) they don't care.

That question was meant to be rhetorical.

badcrumble · Nov 3, 2010

I think the way a lot of them see things is that "solutions" that work well against used game sales (preorder exclusives, online vouchers, special editions) also function as a solution against piracy, and that fighting the two things isn't a completely separate pair of issues.

Krauser Kat · Nov 3, 2010

Even if they managed to become better ran companies. They will still see the money gamestop is making as money that could be used to go towards more games.

captmcblack · Nov 3, 2010

DennisK4 said:
The publishers need to get in on the game then.

EA should let me relinguish my DD copý of Mass Effect 2 in return for credits toward one of their new games.

I would rather give my old copies to the publishers than Gamestop if the same could be done with physical copies.

This.

But the publishers would never do that, because it would lower the value of their newer games on which they spent a jillion dollars to produce and promote.

Activision couldn't sell you DJ Hero 2 for $90 after you bought the first one for $90 if you're just going to hand them back their old product and be able to get it for $70. They'd profit less, and the shareholders would flip out.

Ranger X · Nov 3, 2010

The guy is mixing things. Yes this industry is extremely badly managed and publishers are all over the place crazy. All the while, used games don't bring them a dime and this is a simple truth. That's all they are after, they want to profit again when you resell your game.
The industry can fall for a multitude or reasons, not one alone. Nobody ever debated that. Used games and piracy can be a part of those reasons.

Lost Fragment · Nov 3, 2010

Steve Youngblood · Nov 3, 2010

Ranger X said:
The industry can fall for a multitude or reasons, not one alone. Nobody ever debated that. Used games and piracy can be a part of those reasons.

But the more important question is why wasn't this brought up before? If I create a start-up company right now that is targeting consoles, I know going into it that a lot of people are going to pirate the game, and a lot of people are going to buy used. These aren't new developments. They've been known commodities for some time now. That's why targeting used games now, or piracy before seems disingenuous.

So, yeah, used games and piracy can be a part of the reason if you insist on listing every single factor, but when your industry is falling apart at the seams, it reeks of desperation to point out a "problem" that has pretty much always existed.

DonMigs85 · Nov 3, 2010

Amneisac said:
This is my kind of editorial. I'm not being sarcastic, either. I actually really wish CNN read more like this.

Good read, thanks for sharing.

I lol'd.

I don't agree with that part, Darksiders and De Blob are actually very good games.

Warm Machine · Nov 3, 2010

DennisK4 said:
The publishers need to get in on the game then.

EA should let me relinguish my DD copý of Mass Effect 2 in return for credits toward one of their new games.

I would rather give my old copies to the publishers than Gamestop if the same could be done with physical copies.

This only makes any kind of sense if there are a finite amount of digital copies to go around. Why would they give you any money for the return of a virtual item when they have an infinite stock of them?

If publishers and retailers worked together by distributing games to retailers at a cheaper rate so the retailer made more on a new sale, and then proceeded to split the purchase price of used games in some fashion I can see it working a little better for the industry. That is such an epic shift in business practices that I doubt it will ever happen.

The game industry only does poorly when publishers let their projects cost too much vs. what they expect to get a return on. NBA is a good example of a project with spend that will never see a dime of return. It has been proven time and time again that a smaller budget, lower priced game can be incredibly lucrative and maintain an exceptional quality level on any platform.

Castor Krieg · Nov 3, 2010

Affeinvasion said:
5 bucks is 5 bucks. Either 1) people don't realize that the developer doesn't get a cut or 2) they don't care.

We trade-in lots of things - old TVs, old fridge, microwave, etc. Games are mostly a digital product. Why buy new, when you can get the same game cheaper? Maybe you want a good condition box, with a map? THen look inside if your used game has all of them in satisfactory condition. No? Buy new. Got it? Buy used.

As for supporting developers - I'm not in charity business. I expect them to convince me by the value of their game, not by "please buy it or we lose our jobs!". Do you see any other industry doing so? Car manufacturers going everyday: "Buy our cars or we have to fire our employees"!. Not gonna happen. It's funny how game devs like to exclude themselves from economic cycle.

The reason I buy used games is simple - I do not believe a 5-6 hours game justifies 60USD investment. Someone else might think the opposite - they are welcome to buy at full price.

I said it before, I will say it again - console gaming is in dire need of multi-tier pricing, esp. now with great games coming from PSN and XBL.

HungryHorace · Nov 3, 2010

Castor Krieg said:
As for supporting developers - I'm not in charity business. I expect them to convince me by the value of their game, not by "please buy it or we lose our jobs!". Do you see any other industry doing so? Car manufacturers going everyday: "Buy our cars or we have to fire our employees"!. Not gonna happen. It's funny how game devs like to exclude themselves from economic cycle.

Like clockwork somebody compares cars to games, even when the article it's in response to is criticising publishers for trying to control distribution channels, which is exactly what car manufacturers do. They also lock out generic products & use proprietary tools & warranties to control servicing. In other words, they guarantee a revenue stream through the life of a product, just like dlc or online passes.

Personally, I don't have a problem with second hand sales per se, but I wish gamer's would drive a harder bargain. Squeeze the middle man, demand more for your games & to pay less for second hand titles. If an online pass costs $10 then knock it off the price you pay Gamestop & some more for the inconvenience. Then you'll have more to spend on games and the developer will have more to spend making games.

Do agree with you about multi-tiered pricing though.

woodypop · Nov 3, 2010

Castor Krieg said:
As for supporting developers - I'm not in charity business. I expect them to convince me by the value of their game, not by "please buy it or we lose our jobs!".

Agreed.

linkboy · Nov 3, 2010

I understand why companies are bitching about used games, but its not the biggest issue with the industry.

These companies need to scale back their budgets. Get those in line and then focus on used games.

Hell, look at what EA just did with their basketball game. Who know how much money they spent on Elite, only to delay and cancel the game after sending some copies out.

Its insane.

blame space · Nov 3, 2010

PaNaMa · Nov 3, 2010

linkboy said:
I understand why companies are bitching about used games, but its not the biggest issue with the industry.

These companies need to scale back their budgets. Get those in line and then focus on used games.

Hell, look at what EA just did with their basketball game. Who know how much money they spent on Elite, only to delay and cancel the game after sending some copies out.

Its insane.

The thing is, I actually don't understand it.
EA sells a game, via EB, to Johnny Gamer_001. He pays his $70, EA gets their money, EB takes a retail cut. Same as any other merchandise transaction in the world.

The difference? Games are not Fridges, cars, or furniture. People are done with them after a few weeks, maybe months.. EA still got their big cash grab and have likely begun developing next years version of the same cash cow.

What are game companies so pissed off about? If someone came into the store 2 months or 3 months after NHL_Game_492 was launched, and bought it used from EB, it's not like EB STOLE THEIR SALE OMFG. Their game sold, they made their money on it. Their customer then sold that game back to EB, who then sold it again to a new customer who wasn't willing to pay the price EA was charging to begin with, 3 months earlier.

This is capitalism, and one of its better aspects imo. If I buy a Honda Civic 5 years ago, and decide to trade it in to a used car dealership, for money or perhaps towards a new car that is my right. I paid Honda for the Civic, it's mine, and now I'm done with it.
If used_care_dealership_001 decides to sell the USED civic to another customer, who doesnt' want to buy a NEW one, they can. They are not BONING Honda by doing so.
They are not "screwing" honda out of a new sale, cause hey they particular customer wasn't looking for the newest iteration of Civic, at the lofty new car price.

It's no different with games, used book stores, whatever. I just don't understand the beef.
here. If I buy a painting, or a book, or a CD, or whatever ... and I'm done with it 2 months or 2 years later, and choose to sell it at a garage sale or flea market, or on ebay .. do I have to give compensation AGAIN to the original artist? No.
End of story. Stop crying evil game companies. Wtffff

Dennis · Nov 3, 2010

Warm Machine said:
This only makes any kind of sense if there are a finite amount of digital copies to go around. Why would they give you any money for the return of a virtual item when they have an infinite stock of them?

To encourage me to buy a new game by giving me credits toward the new game. Its a promotion to elicit a new sale from the customer. Sort of like a rebate coupon.

Considered it a form of compensation for the fact that you have bought a DD copy instead of a physical copy you could have traded in.

Mudkips · Nov 3, 2010

Buy a game for X
Sell a game for Y

You have Y more moneys to buy other games with.

People who buy used games do so because they're cheaper.

If you don't like losing potential sales to the used market, make the used market less appealing. The best way to do this is to lower prices on the new market. The current practice is to lower value on the used end (account-based shit, one-time-use codes, etc.).

The fact that middlemen (Gamestop) buy low and sell high is simply an indicator that people are idiots and value convenience (laziness) over the $10 - $20 per title that the middlemen will skim off of the top.

The fact is most games suck and aren't worth buying.
If we didn't have a used market, sales of those titles would not improve, they would get worse. People would be less willing to hand over $60 for a game if it's worth exactly $0 once the shrink wrap comes off.

John Rabbit · Nov 3, 2010

Mudkips said:
The fact is most games suck and aren't worth buying.
If we didn't have a used market, sales of those titles would not improve, they would get worse. People would be less willing to hand over $60 for a game if it's worth exactly $0 once the shrink wrap comes off.

what?

lets take a game like bulletwitch. by all sensible accounts a mediocre-at-best title that launched at a full retail price of $60. i don't have figures, but given the amount of coverage/attention this game has received even to this day and the fact i regularly see at least 1-2 used copies in the bargin bin every time i visit a place that has one, its sales were poor if not almost nonexistent. the game is not good, and accordingly, has not sold well.

you're telling me that because of the used game market which allows someone to buy a copy of bulletwitch for a fraction of its initial cost, the entirety of that purchase going to the retailer, this is cause for celebration since it "improves the sales" of that title? what?

ClosingADoor · Nov 3, 2010

PaNaMa said:
What are game companies so pissed off about? If someone came into the store 2 months or 3 months after NHL_Game_492 was launched, and bought it used from EB, it's not like EB STOLE THEIR SALE OMFG. Their game sold, they made their money on it. Their customer then sold that game back to EB, who then sold it again to a new customer who wasn't willing to pay the price EA was charging to begin with, 3 months earlier.

The problem is, companies like GameStop make it their business to sell used games instead of new ones, since the profit margin on used games is higher for them. Publishers aren't happy with this of course. More people are playing their games, but the publisher (who invested in the game and took the risk) doesn't see any of that money since the same copy is used over and over again. I think in movie rentals, a cut of every rental is given to the filmstudio (please correct if I'm wrong). It isn't that way with games.

I don't want to pick a side here, since both have a point. Publishers take a risk in investing in a game, so they should get their share. But consumers should have the right to resell.

kame-sennin · Nov 3, 2010

If you make a disposable product, it will be resold in large numbers. It's that simple. If developers want better sales they should make less disposable games.

jump_button · Nov 3, 2010

:lol they are used game they dont matter to movies as well and every dev should make game you want to keep <_< they should if they do or not....

Mudkips · Nov 3, 2010

Rabbitwork said:
what?

lets take a game like bulletwitch. by all sensible accounts a mediocre-at-best title that launched at a full retail price of $60. i don't have figures, but given the amount of coverage/attention this game has received even to this day and the fact i regularly see at least 1-2 used copies in the bargin bin every time i visit a place that has one, its sales were poor if not almost nonexistent. the game is not good, and accordingly, has not sold well.

you're telling me that because of the used game market which allows someone to buy a copy of bulletwitch for a fraction of its initial cost, the entirety of that purchase going to the retailer, this is cause for celebration since it "improves the sales" of that title? what?

That's not what I said at all.
I said that if the used market did not exist, the new sales of such games would plummet.
The direction of this effect matters. The used market doesn't make a game sell more, but the lack of a used market can easily make a game sell worse. "More" and "less" being relative to a situation where the used market and new market were much closer to equity in terms of the value proposition (e.g., the used market of the early 90s - before DLC codes, account registration, and the Gamestop monopoly in the arena).

$60 for a potential turd vs. $60 for a potential turd you can turn in for $40 next weekend.

Little Green Yoda · Nov 3, 2010

kame-sennin said:
If you make a disposable product, it will be resold in large numbers. It's that simple. If developers want better sales they should make less disposable games.

But if they make a super awesome game that people will play for a very long time, how are they going to sell you a sequel every 18 months? :lol

Brak · Nov 3, 2010

Rabbitwork said:
what?

lets take a game like bulletwitch. by all sensible accounts a mediocre-at-best title that launched at a full retail price of $60. i don't have figures, but given the amount of coverage/attention this game has received even to this day and the fact i regularly see at least 1-2 used copies in the bargin bin every time i visit a place that has one, its sales were poor if not almost nonexistent. the game is not good, and accordingly, has not sold well.

you're telling me that because of the used game market which allows someone to buy a copy of bulletwitch for a fraction of its initial cost, the entirety of that purchase going to the retailer, this is cause for celebration since it "improves the sales" of that title? what?

If you are interested in buying Bullet Witch, but realize that there is a 90% chance that you're not going to like the game, then having the option to re-sell the game is going to be an important factor in your decision to make the purchase.

If re-selling the game is not an option, you're stuck with the lemon. Or if you can sell the game, you get $40 back and buy a different game. You're still out $20, but it's better than the full $60 and you can go buy a different game. Much more appealing to buy risky/mediocre games when you know you can get some money back.

nice edit by the way.........

Steve Youngblood · Nov 3, 2010

ClosingADoor said:
The problem is, companies like GameStop make it their business to sell used games instead of new ones, since the profit margin on used games is higher for them. Publishers aren't happy with this of course. More people are playing their games, but the publisher (who invested in the game and took the risk) doesn't see any of that money since the same copy is used over and over again. I think in movie rentals, a cut of every rental is given to the filmstudio (please correct if I'm wrong). It isn't that way with games.

I don't want to pick a side here, since both have a point. Publishers take a risk in investing in a game, so they should get their share. But consumers should have the right to resell.

I understand the rationale for the argument, but the argument is completely undermined by the timing. GameStop didn't spring up yesterday. Furthermore, I think consumers should raise a suspicious eyebrow at second-hand sales being the devil when the biggest seller of second-hand titles also happens to be the biggest promoter of new titles. Not that I religiously watch TV and document the commercials I see, but I can tell you that I see a lot of video game commercials that are GameStop advertising the latest lame pre-order bonus that publishers dubiously provided exclusively to GameStop, the evil retailer of used games.

When viewed in that light, it's not that I think there is no legitimacy whatsoever in the argument against used games, but it seems far more likely that management is looking for a scapegoat in lieu of taking the blame themselves and making hard decisions about where next to go with their company.

Brak · Nov 3, 2010

The fact that many people non-ironically lump 'used game sales' together with 'piracy' shows that the publishers' propaganda is working.

charlequin · Nov 4, 2010

Rabbitwork said:
you're telling me that because of the used game market which allows someone to buy a copy of bulletwitch for a fraction of its initial cost, the entirety of that purchase going to the retailer, this is cause for celebration since it "improves the sales" of that title? what?

In a world where all the games are precisely the same as they are now, but used resale does not exist, new game sales fall for two reasons: people know they can't get any money back if they don't like the title (increasing the monetary risk of buying it) and they can't get any money back from previous titles they've already beaten (thereby reducing their total level of cash on hand to buy new games.) Overall, sales of the biggest AAA+ titles like Call of Duty would stay the same while the sales of niche or marginal titles across the board would fall, because the latter are already riskier and "less" worth $60.

ClosingADoor said:
The problem is, companies like GameStop make it their business to sell used games instead of new ones, since the profit margin on used games is higher for them.

In order for it to even be possible for a third party to step in and extract this much profit reselling your product, your own business model has to be so messed up to start with that it only makes sense to start looking inward for a solution. Pushing downwards the cost of games would have a huge negative effect on the viability of the used market.

ClosingADoor · Nov 4, 2010

charlequin said:
In order for it to even be possible for a third party to step in and extract this much profit reselling your product, your own business model has to be so messed up to start with that it only makes sense to start looking inward for a solution. Pushing downwards the cost of games would have a huge negative effect on the viability of the used market.

I hope publishers have some smart people who can do their math and have calculated if lowering their prices would increase profit in the end. And since prices don't come down, I guess the answer to that (at least according to those publishers) is no.

If they really want to eliminate used games, they need to put unlock codes on the total game for $20 or so. With the way it is going now (no multiplayer if you don't have a code), I can see that happening in the future. I don't want to, but it is possible.

And then there are digital downloads. You can't trade in your Steam, Xbox Live Arcade, PSN games. But for the foreseeable future, I don't think releasing your blockbuster title via download only on the consoles is a very profitable idea.

Steve Youngblood · Nov 4, 2010

ClosingADoor said:
If they really want to eliminate used games...

Stop right there: that thinking is the problem. They don't need to eliminate used games. They need to make more profits. That's it. Getting a cut of that sweet, used game action just happens to be the lowest hanging fruit available to them. They either need to figure out a way to sell more copies (this would involve erroneously trying to be the next Call of Duty/Rock Star sandbox game/Halo/(insert other blockbuster franchise here), or by getting budgets under control (ding! ding! ding!) and releasing games that can profit even with reasonable sales forecasts.

arstal · Nov 4, 2010

ClosingADoor said:
I hope publishers have some smart people who can do their math and have calculated if lowering their prices would increase profit in the end. And since prices don't come down, I guess the answer to that (at least according to those publishers) is no.

If they really want to eliminate used games, they need to put unlock codes on the total game for $20 or so. With the way it is going now (no multiplayer if you don't have a code), I can see that happening in the future. I don't want to, but it is possible.

And then there are digital downloads. You can't trade in your Steam, Xbox Live Arcade, PSN games. But for the foreseeable future, I don't think releasing your blockbuster title via download only on the consoles is a very profitable idea.

The problem there is people who are on the fence won't buy your game if you do that. You need impulse buys to grow.

charlequin · Nov 4, 2010

ClosingADoor said:
I hope publishers have some smart people who can do their math and have calculated if lowering their prices would increase profit in the end.

People bring this up every time there's a discussion of large companies doing stupid, self-destructive things, but the fact is that companies are run by people and they do stupid, self-destructive things all the time. The idea that you can look at a company's behavior and determine a priori that their choices are right because if they were wrong they would've made different choices is entirely unsupportable.

That said, in this particular case, there are big issues with moving to a lower-priced model even if it'd basically eliminate Gamestop's used game business (it would) and even if the current $60 game model is going to destroy the industry (it is.) The pricing model for games isn't set by any one economic actor in a vacuum -- it's a result of choices by platform-holders as well as all participating publishers. If everybody works together to change a price (as they did with the $10 "HD tax") then a change sticks. If someone tries to go it alone, it's quite likely to fail as long as the other players don't get on board.

In that environment, you have a coordinated action problem. One individual publisher might recognize that $30 games are better for everyone, but they can't just start selling their games for $30 -- they'll be lambasted in the press, create the suspicion of being "bad" or "bargain" games in consumers, and potentially sell the same number of units with half the revenue on each. Fixing this problem involves coordinating with everyone to bring about a new, more sustainable, less used-game-vulnerable business model, and that's a difficult proposition even if it'd be quite valuable if it succeeded.

Kilgore Trout · Nov 4, 2010

I think the problem with the car analogy is that when you buy a used car it had a limited lifespan, and that's been partially used up. The price at which the car is sold at generally reflects that usage.

With games, beyond physical damage (which you can check for when buying,) a disc doesn't have a real drop in value for the buyer. The product will perform the same as if it was new

ClosingADoor said:
If they really want to eliminate used games, they need to put unlock codes on the total game for $20 or so. With the way it is going now (no multiplayer if you don't have a code), I can see that happening in the future. I don't want to, but it is possible.

But that hasn't worked in the past. It discourages sales as people know when they buy a game the resale value is lowered so they end up choosing not to buy it. Rescinding content you would already get doesn't convince people to pay more to get it.

Steve Youngblood · Nov 4, 2010

Kilgore Trout said:
I think the problem with the car analogy is that when you buy a used car it had a limited lifespan, and that's been partially used up. The price at which the car is sold at generally reflects that usage.

Yes, but the counter as to how it is pragmatically relevant rarely gets brought up. People often just cite it because it's a prominent example of a used merchandise industry with little to no thought as to how the situations might be analogous. For the most part, I'd argue that the automobile industry needs the used car industry. After all, nobody (outside of the fabulously wealthy) needs extra cars just sitting around, or wants to pay two loans simultaneously. So, take someone like me. New car manufacturers want to sell their new cars. Well, I'm certainly not in that market. I already have a functioning car. As stated earlier, I don't need two. It's only the promise of a good trade-in deal that you might entice me to jump into the new model. And the enticement of a good trade-in deal is only possible if you're confident that there is a market for this vehicle I'm trading in.

Are games in a similar predicament? Do new games purchasers often find that they need to subsidize current purchases via similar, used, and no longer needed items?

truly101 · Nov 4, 2010

Steve Youngblood said:
Why are those used copies sitting on those shelves? And why are customers eager to save less than 10 percent off of the purchase price as opposed to purchasing new and supporting the developers and publishers. What you've described doesn't set the stage at all for establishing that used game sales cannibalize current game sales.

A lot of used sales aren't strictly on brand new released product. Lots of people who hate used games will say " why would anyone buy Fallout NV for $54.99 used instead of $59.99" and tout this as the most prevalent example of used sales. I dunno if it is but I doubt it. I do know why I'd buy, say, Lost Odyssey off of eBay used for $12 instead of new for $29.99. Pretty much all of my used purchases are like this, if there is no substantial discount (say $19.99 GH price vs $17.99 used) then I'll buy new.

Kilgore Trout · Nov 4, 2010

Steve Youngblood said:
Yes, but the counter as to how it is pragmatically relevant rarely gets brought up. People often just cite it because it's a prominent example of a used merchandise industry with little to no thought as to how the situations might be analogous. For the most part, I'd argue that the automobile industry needs the used car industry. After all, nobody (outside of the fabulously wealthy) needs extra cars just sitting around, or wants to pay two loans simultaneously. So, take someone like me. New car manufacturers want to sell their new cars. Well, I'm certainly not in that market. I already have a functioning car. As stated earlier, I don't need two. It's only the promise of a good trade-in deal that you might entice me to jump into the new model. And the enticement of a good trade-in deal is only possible if you're confident that there is a market for this vehicle I'm trading in.

Are games in a similar predicament? Do new games purchasers often find that they need to subsidize current purchases via similar, used, and no longer needed items?

I understand this. If used games were somehow prevented through the use of codes or online confirmation, sales would go down. Included in the $60 is the knowledge you can resell your game to make some of that back if you like. I wasn't trying to discount the analog entirely. There's just a marked difference between the two. With a used car you're buying a cheaper item knowing it has been partially "used up." Some people trade in their cars to buy a new one, but more often than not they trade in their used car to get another used car. With video games because the value is for most people the same between a new and used game, price is the only discriminating factor. New and used markets are in competition with one another because they offer the same product at different prices. At least this is true earlier on in a game's release. For cars they are mostly separate because the products are not the same.

HK-47 · Nov 4, 2010

Will people fucking get over the "$5 off, omg devs and pubs getting ripped off" thing? I highly doubt most used game sales happen at that price. You are just looking for worse case.

Little Green Yoda · Nov 4, 2010

Steve Youngblood said:
Are games in a similar predicament? Do new games purchasers often find that they need to subsidize current purchases via similar, used, and no longer needed items?

Speaking for myself personally, no. I do tend to dig up older consoles/games and play them when I get the occasional itch to do so. Plus I don't want to deal with hassle of selling them on eBay/craigslist and I don't want to get ripped off by a chain like Gamestop. Unlike an old car, I don't have to maintain my old consoles/games (for the most part) nor do I have to pay for insurance or storage.

Of course, I probably buy fewer games than the average GAFer.

truly101 · Nov 4, 2010

The whole crux of the argument is simply developers and publishers see the profits GS and other used outlets make and they want a piece of the pie, there is nothing really noble or just about it. I'd not be opposed to GS or Amazon or official retailers partnering with game pubs to agree upon some sort of royalty rate, between 5-10% of the used sale (developers still aren't going to get shit BTW)but the pubs are going to have offer some sort of incentives on their end, either better wholesale rates, better rates on returns and credits, some sort of discounts and outlets for either overstocked games or bombs. The key is that neither side can get greedy i.e. jacking up the prices, holding incentives hostage for a higher cut, basically turning it into a racket. Since no company cannot be greedy, this is a pipe dream and would be doomed to failure.

jecclr2003 · Nov 4, 2010

You can always tell when a new month begins..... this same damn tired circular argument comes up.

It's simple... the new market could not exist without the used market subsidzing it. With out the trade in programs, they would sell nowhere near the amount of new games they o now.

To Far Away Times · Nov 4, 2010

Its not the consumer's responsibility to pay more to get a product. I buy games I want to play, whether its used or new. I'm not buying games to support developers, I'm buying games to play them. Its not the consumer's obligation to buy new and its a shame that some people think that way. Its up to developers to make games that are quality titles that are worth keeping (without online passes and anti consumer practices). Make something with a high perceived value and I'll value buying it new and holding on to it.

Think about how bad the book industry has it. You can walk into a library and get their product for free. We don't feel sorry for those authors, do we?

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