That is assumption that you are making and may not be true. Both Gamestop and the publishers want to drive full price sales near the time of game release. If Gamestop has data showing that credit from trade-ins tends to drive high profit full price new game sales from them instead of other retailiers, they could be willing to take 0 or even a negative profit margin on used games sales to generate those high profit sales and keep the customer buying from them. No different than loss leaders from other retailers. They also see a signficant financial benefit from the money they are holding as credit which isn't taken into account in your gross oversimplification.
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DICE: Anti Used System 'can be a win and a loss'.
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That is assumption that you are making and may not be true. Both Gamestop and the publishers want to drive full price sales near the time of game release. If Gamestop has data showing that credit from trade-ins tends to drive high profit full price new game sales from them instead of other retailiers, they could be willing to take 0 or even a negative profit margin on used games sales to generate those high profit sales and keep the customer buying from them. No different than loss leaders from other retailers. They also see a signficant financial benefit from the money they are holding as credit which isn't taken into account in your gross oversimplification.
RoninChaos
Member
If gamestop was such a blight on the industry, and was so horrible, then why do business with them unless you're getting something out of it?
See, this is the problem; publishers aren't being honest. First it's piracy, then it's gamestop, then it's gamestop selling games to people that are used etc. The publishers aren't putting their money where their mouth is. They're already fucking the customer with things like online passes and the like, so why keep doing business with Gamestop, the people who are apparently the MAIN facilitator of the thing you think is fucking you out of money? Why keep doing business with a company that is fucking you?
There's only two options; either they aren't fucking you, or you NEED the service they provide. That's all their is to it.
HamPster PamPster
Member
Gamers With Jobs posted an article on used games. I found it interesting, might be worth its own thread if we all weren't sick of arguing about used games 
Michael Pachter on lost sales vs. trade in revenue used for new games:
http://www.gamerswithjobs.com/node/111869
Michael Pachter on lost sales vs. trade in revenue used for new games:
http://www.gamerswithjobs.com/node/111869
NullPointer
Member
Always fun to see publishers / developers ignoring a pretty important question: Why, if your game is worth $60 and delivers such value to consumers based upon that price, are customers trading it back in such numbers that there's a used game market available to undercut the sale of new copies so early into its release?
No. Let's ignore that question. Let's focus, instead, on how this is everyone else's fault.
No. Let's ignore that question. Let's focus, instead, on how this is everyone else's fault.
Plinko
Wildcard berths that can't beat teams without a winning record should have homefield advantage
Gamers With Jobs posted an article on used games. I found it interesting, might be worth its own thread if we all weren't sick of arguing about used games
Michael Pachter on lost sales vs. trade in revenue used for new games:
http://www.gamerswithjobs.com/node/111869
Wow.
I never want to hear a developer complain about this again.
Version 3.0
Member
I don't know what you mean by that. You're pleased that your ignorance urges me to educate you? Or you find some enjoyment in my wasted effort? I find it harder with each post to believe that you don't already know you're wrong.
Nevertheless, my tag is accurate, I'm fairly tireless on this topic. So...
I'm sorry, but you are factually incorrect. And your math, which I'm sure you're very proud of, fails to even attempt to account for the human variable. Using that type of math, you could easily "prove" that a hamburger restaurant with an average meal price of $100 would be more successful than McDonalds, and I'm sure you'd be confused when reality didn't concur.
People don't shop at Gamestop for used games because they want a used game. They shop there because games aren't worth MSRP. Any business model that eliminates the resale opportunity will decrease new sales, because it will devalue the product.
Version 3.0
Member
Elegantly put. Bravo.
Followup question: will a customer who pays $60 for a product with a resale value of $30 also pay $60 for the same product with a resale value of $0. Publishers are betting the answer to this is "yes".
Seems to me that these companies are doing a good enough job of devaluing their products as it is, though I'm not sure I agree with the assessment that it would 'devalue the product.' It would simply amplify the value of the money relative to the value of the product - which has the same effect, it's true, but then the value gap is two-sided:
The value of the product is devalued by decisions made by the publisher / developer while making it. This is what is already occurring, and is the reason why trade-ins are so common so quickly after a game's release.
The value of the $60 would go up, due to the heightened risk associated with no trade-in option, thereby creating a very high bar that the majority of games won't meet.
The former should tell publishers / developers that they need to consider a change in their development practices or types of products created; in essence, this should be the thing that leads to variety within product attributes. The latter? All it does is more narrowly define the attributes publishers / developers should hit in order to be successful, as well as turn it further into a zero-sum game in which he who produces the most expensive, loudest product is most likely to be successful.
The more they treat this industry as a zero-sum game, the less variety we will see. Everything will simply be amplified.
I'm just curious, what game is worth $60 and keeping it forever to you?
NullPointer
Member
That's also a threadworthy question right there.
I know this question wasn't asked of me, but I'll give an answer anyway. In short: Any games with replayability, co-op, continuously maintained online modes, or just truly polished and fun mechanics with good potential for single player or co-op DLC down the line. So, GTAs, Red Dead, Halos, Borderlands, Tom Clancy games, Forzas, Dirt 3, Gears, Skyrim, and many more.
Throw-away games are ones that put too much focus on versus multiplayer modes that split the community either day one or with the first map pack release, or are wastelands a few months after release, ultra linear campaigns with no reason for replay, and/or games built with obsolescence in mind (your yearly installment games for the most part).
RoninChaos
Member
Gamers With Jobs posted an article on used games. I found it interesting, might be worth its own thread if we all weren't sick of arguing about used games
Michael Pachter on lost sales vs. trade in revenue used for new games:
http://www.gamerswithjobs.com/node/111869
To further push my point home, here's a quote from that article
So, this goes back to what I said originally
So, in the end, publishers are running their business in a shitty way and are blaming their customers and the retailer that pushes NEW product for them, instead of themselves.
As usual.
OldJadedGamer
Banned
Many. To this day I never traded in COD4.
Palette Swap
Member
This is precisely the fallacy at the heart of the anti-used sales argument: if used sales were eliminated, all other things would remain equal.
That ceteris paribus approach embodies the short sighted greed underlying the whole notion.
The other fundamentally flawed idea of the argument is that sooner or later, its apologists will point out the consumer is the issue, not the business model. Any business that views its customers as a problem doesn't deserve to have any.
Version 3.0
Member
Again, very nicely stated.
Version 3.0
Member
Somewhat ironically, my answer to this question is: just about anything. I have a huge collection - just hit 1,100 games last month - and I almost always buy new, and pretty much never sell anything. I'm totally fine with paying $60 for a game, playing it once, and then shelving it forever.
But I know that my outlook isn't even close to the norm. And though nothing would change in practice, for me, if my right to re-sell my games were taken away, I'd instantly stop buying them.
Demon's Souls. I will never trade it in. Why? Because such games are few and far between, not easily replaceable by a new product coming out within a two-week period after its release. It's so rarefied, in fact, that even the release of Dark Souls doesn't devalue it enough that I'd willingly turn it in for a $10 or 15 credit.
That's value.
When differences between products are so minute as to be compared by metrics of 'gunplay' and detailed analyses of shrubbery, something is wrong with the value proposition of the products being produced.
NullPointer
Member
Nope. Publishers will just implement a "Bomba" pass. This pass will be free for buyers who purchase new copies within the first 30 days. For everybody else it will cost $10 + whatever adjustment is necessary to bring the average sale price up to MSRP. Players will need this Bomba pass to access any of the game's content (after the splash intros of course).
You read it here first GAF.
JimmyRustler
Gold Member
Analyst on Wii U: "Competitive position has deteriorated":
GAF: lol, Analysts...
Analysts on used sales: "They have no real effect on the overall turnover"
GAF:
Funny forum here.
RockTurtle
Member
So guys real talk:
If they implement a no-used game sales mechanic, that means that game prices are bound to drop due to no revenue lost form piracy, right? RIGHT?
If they implement a no-used game sales mechanic, that means that game prices are bound to drop due to no revenue lost form piracy, right? RIGHT?
Man, who is this singular GAF guy?
In a sense, they would. But not for that reason.
iamshadowlark
Banned
Gamers With Jobs posted an article on used games. I found it interesting, might be worth its own thread if we all weren't sick of arguing about used games
Michael Pachter on lost sales vs. trade in revenue used for new games:
http://www.gamerswithjobs.com/node/111869
Thats a poor article.
For one, comparing revenue is pretty silly when you consider the gulf between the price floor of a new game and an used game.
Secondly, what does it matter about what the Gamestop ceo said in 2009 as far as trade-ins go? We had a thread this year about gamestop's financial call and the ceo failed to provide hard numbers on the tie-in for used-game credit to new-game purchases. That lead me to believe that the actual numbers are not impactful as he was saying considering how they provided numbers on nearly everything else.
I also think Pachters numbers are simply estimates and unless Gamestop is providing his firm with numbers that they are withholding from their share-holders, its not much more accurate than what we could come up with.
Its not really a fallacy. With the elimination of used-game sales, new game sales could definitely rise thus increasing publisher/developer revenues and profits. That would of course be the goal an anti-used game measure in the console.
Version 3.0
Member
With the elimination of used game sales, new game sales would be guaranteed to fall.
Unless, of course, prices were to come down dramatically. But of course, if that were a solution that publishers would consider, there would be no need to kill used games; they'd die on their own.
iamshadowlark
Banned
No they aren't and there is no data that you have to support this claim.
Who else is going to sell anything other than the top 15 or so titles?
Gamestop the only major speciality retailer in the US, and stores like Best Buy and Target don't devote a lot of shelf space to games. If Gamestop goes away where are you going to buy games the project to sell 200k or less copies?
Publisher revenue has been rising all generation. That's why this whole thing is so stupid.
EA in 2006 - $2.95 billion
EA in 2011 - $3.5 billion
Revenue is not the problem. Cost is the problem, and it has been for the last five years.
iamshadowlark
Banned
Notice I said revenue and profit. Also its kinda disingenuous to discuss EA, when they surely don't compare to the average developer/publisher.
But profit is simply revenue - cost.
So on one side of the equation, we can see that revenue is going up. People have spent more money on video games during this generation than ever before. Yet overall, people aren't making much money from console development.
Used games only effects revenue. It has no bearing whatsoever on cost. I mean, I guess you could draw a long bow and say that used games have forced developers to include mutliplayer modes, thereby forcing up cost, but I'd say that has more to do with crappy management than used games.
So people are spending more money than ever before on games, but profits have fallen. So the only other explanation for that is to look at the other side of the profit equation, and that is cost.
As for the 'average developer/publisher', the entire point is that they do not exist any more. There are more EA like publishers in the market than there are non-EA like publishers.
We could look at THQ: http://www.wikinvest.com/stock/THQ_(THQI)/Data/Revenue/2006
Revenues this generation were MUCH higher than last generation. They are hanging on by a thread and will probably die if they have one more bomb.
Revenue is not the problem. People are spending money on video games. Banning used games won't solve anything.
The major problem this generation has been publishers vastly increasing development costs, but not increasing their audience in kind.
Question: Paint me what you believe to be an accurate picture of what would occur should used game sales go the way of the Dodo.
From my perspective, the risk associated with spending $60 on a new game is diminished by the ability for consumers to resale games that do not meet their standards. This allows them room for experimentation, in buying games they aren't 100% sure about.
In what way would this increase in risk not occur given the loss of resale?
I H8 Memes
Member
Prices wont drop at all. DD delivery is so much cheaper and profitable for companies, but they will just jack up the price another $10. They will come up with some BS excuse why they need to do that and the consumers that are suckers will repeat it on here verbatim.
iamshadowlark
Banned
Ok, if you want to focus on EA like publishers we can. Revenue has increased sure but so has the average cost of developing a game. In fact it has tripled in some cases. Looking at revenue is only one part of the equation.
Used game sales represent a significant amount of money in this industry and the parties who make the content are not getting a cut. Cutting used games is not the only answer but the opportunity cost is too large to not pursue those funds.
iamshadowlark
Banned
I don't know what would occur, which is why I don't usually say one way or the other. The thing I take issue with is when people say such things as "new game sales are guaranteed to fall without used games". Its simply not a fact, and there is really no data available to make such claims.
If Game X doesn't sell well at a jacked-up price, even though Game W did, then the publishers will have no choice but to lower the price. In fact, I believe that the removal of the used game market will necessitate the adoption of a tiered pricing model. My concern is that the adoption of such a model will require a lot of companies going under before the obvious answer is realized. A standard price for all games will not survive the loss of resale.
Well, let's discuss the notion anyway: Just a logical exercise. Can you name me a product type in which riskier options are sold at the same price as less risky options?
EDIT: And please keep in mind that I'm discussing riskiness from the perspective of the consumer in this case, not riskiness from the dev or publisher's viewpoint.
iamshadowlark
Banned
None come to mind but on the notion of the risk involved with purchasing a game, its there used games or not. Whats the most Gamestop will give you for a Day-1 game? Like half?
And to be frank, the "risk" games are not usually the ones that are selling gangbusters, used or not. The point is a new-only market could force people to buy more new games, which would be the goal of this whole move. Whether or not the sales come later when the price is down is largely irrelevant.
Jake Tower
Banned
Trading it to Gamestop isn't the only option.
Example: I traded my copy of ME3 for Saints Row the Third on cheapassgamer.com.
So bomba prices on retail products are a good thing?
iamshadowlark
Banned
Jake Tower said:
Fair enough. Gamestop is probably the most popular option though, no?
In the face of used game sales? Yeah.
Version 3.0
Member
Yes, there is data to support it, but it's constantly ignored. As I've said many, many times - the world's #1 new game retailer is entirely dependent on its trade-in business to support its huge new game business. And it's only one of many ways we have to extend the value of the high purchase price of games. Ebay, Amazon, etc also let people re-sell games, and currently, you can also share a game, where any anti-used system would be a threat to that, also.
There is hard data available to back that up, but it doesn't "count" to the nay-sayers, because it comes from Gamestop.
Where there is no data available is for the opposite scenario. There is only the assumption that the removal of game resales will directly move that revenue over to new game sales, which is, quite frankly, utterly simplistic pre-school math.
But you're right - I shouldn't have said "guaranteed". I should've said "virtually guaranteed".
The only datum you need is the fact that people trade in their old games and put the resulting credit toward new releases, in effect reducing their cost. Take that as a given and it's not difficult to extrapolate the consequences. The effective price of a new game will increase for those consumers, making them a poorer value proposition. If forced to work within the same entertainment budget, they simply won't have the funds to purchase the same number of new titles they would otherwise within the same timeframe, all else being equal. And that's not even taking into account the risk-averse purchasing habits this would engender in those consumers - without some easy means of recouping at least part of the purchase price of a game they're unhappy with, or beat and shelf after 1-2 days, they're going to be a lot less likely to gamble $60 on an unknown title.
You can debate the degree new game sales would fall in the face of such a move, but I think Leondexter was on point with his original statement. Qualifying it with virtually is a nice concession on his part, but not really needed, IMO.
As opposed to having the option of receiving 0? Yes, I would imagine paying an expected price, using your numbers, of $30 ($60 - $30 = $30) takes some of the risk away from trying out new, unproven titles. Here's the question I asked earlier in the thread, though paraphrased for the sake of this specific line of discussion:
Why, if the game you produced is worth $60, are people selling it to GameStop for $30 within its first week to such a level that the used market for it is cutting dramatically into new purchases?
For used sales to take place, people have to have resold the game; that is, they felt the game was not worth keeping beyond a relatively short period of time and will willingly take a loss in order to put a portion of their original investment into something else.
This is the question that, if I were a game dev or publisher, would warrant some real concern and thought. Yet it's not the topic they ever seem to discuss.
Are you saying this as to remove them from relevance in the argument? If so, that has a pretty profound meaning, you realize.
It would force people to 'buy more new games' or it would force people to 'buy more copies of new games'? Because I agree with the latter but not the former.
Jake Tower
Banned
I can't speak to that. I personally look to trade a newish used game for another game or games. I don't even consider Gamestop.
So that would mean the bomba price would be the price where the market settles at, revealing the 'true' value of the game.
How does $30 sound to everyone for new AAA games?
Version 3.0
Member
Trying to force a customer to spend more is a great way to crash an industry. Look at the comic book industry late last century, for example. And a person who now has no option to buy used is only one piece of the scenario. You also must consider the person who can't re-sell a game, and will therefore consider a new purchase that much more over-priced.
Funny you would knock "half" as a poor incentive. 50% off is a very compelling value to many shoppers, and anything down to single-digit discounts often are as well. Gamestop does very well with those incentives, so clearly your view is not shared by their customers.
iamshadowlark
Banned
Where is it?
As I said before, Gamestop said something to that effect earlier this year but failed to provide the data to back that up. Data they would surely have. Its not in any of their fiscal reports either.
http://phx.corporate-ir.net/phoenix.zhtml?c=130125&p=irol-irhome
The only thing that proves to me is that used games are not as big an impact as gamestop makes it out to be. Its obvious why they would make a case for used games.
Please provide me this "hard data" because in the many times we have had this argument on this forum it has failed to reveal itself.
iamshadowlark
Banned
That fact was never in question. The question is to what degree does this happen? or How many people trade in used games to buy more used games?
How do you know people won't simply wait til prices fall/sales to buy new games? You don't.
Again you are talking about guarantees but you have no data.
Its not forcing them to spend more, new games drop in price many times during their shelf life. That comicbook example is a bad analogy.
Version 3.0
Member
Let's examine this for a moment.
Let's assume, for this exercise, that the net dollars of new game sales remains equal, and used game sales go away. What you'll have is an increase of dollar sales in new games, but a decrease in unit sales - more money being spent on each game. And a very large net decrease in total unit sales, including the old used game sales.
So now you're a publisher who has made the same profit, but sold to fewer people. No problem - until you release a sequel. Now there are fewer people who have played your game, and therefore may have a heightened interest in the sequel.
How good do you think that is for sustaining your revenue? This is another largely ignored side effect of re-sales.
Again, unless prices come down at least to the point where the average price of a game is at least the same as it currently is (new/used combined), the removal of used games is almost certain to hurt, not help. Customers aren't trapped into this market. They have plenty of options where and how to play games.
I repeat again my assertion that publishers, facing falling sales after implementing anti-used tactics, will likely blame Apple rather than face the truth - that they drove their customers away.
Version 3.0
Member
Not true. Data to that effect has been posted several times, even in this very thread if I'm not mistaken. There are a lot of threads on this topic, true.
http://www.gamerswithjobs.com/node/111869
Edit: now, sorry, gotta go actually play games. My friends just arrived for "Game Night" (every Friday - and we often play the newest stuff, which will cease to be the case if we're stripped of our ownership rights).