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[Open Source]

Now you are saying nobody will change client because they want their games all in the same place, and that is as big a deterrent as a financial hit that would be several hundred dollars at a minimum? You need to find your argument and develop it, not throw shit at a wall and see what sticks.

Good luck with your future endeavours.

Show me the math on that several hundred dollar claim. The games can easily be exchanged for ones on platforms you prefer on places like gametz.com.

 

[Dead Man]

Show me the math on that several hundred dollar claim. The games can easily be exchanged for ones on platforms you prefer on places like gametz.com.

Not any more. :/

Edit: You have just defended this move by saying the recourse is that which the move seeks to prevent. You do realise this, yes?

 

[Open Source]

This I kind of doubt. Not that's not a reason, just not the sole one. Way more likely that they try tacking on game modes cause Bob from accounting is telling them that adding multiplayer to your game increases sales by 23%! Or that adding multiplayer means adding easy DLC, which further increases profits.



It's kind of a leap to say that multiplayer keeps people from trading in games, when if you made a game that people actually want to play more than once before throwing it away would better serve that purpose.


I keep a lot of games. I also trade some games in. The ones that go are not ones I can see ever playing again. Other massive problem is people thinking it's a great idea to have a mass game release schedule at like 2 points in the year, where prices really REALLY hurt.

And why do you think it increases sales? Why do you think DLC is so important now? Dun dun dun!

And you're saying that it's OK that games like Shadows of the Colossus die off because they're really just designed for 1 playthrough?

 

[kinggroin]

I just think this is so wrong. Used games are a critical source of consumer liquidity, and they liquidity is often used to purchase NEW games.

I'm about ready for every publisher to reap what they've sown with this broken AAA model. They'll learn.

Market crash? Market crash.


...who'll hold my hand?

 

[hardcastlemccormick]

- You can easily sell a console on ebay for within 80% of its value on ebay and the like. This was true even of less popular ones like the Vita and the Wii U for quite some time after launch.

From what I see on eBay, everything's selling at about 50% of what it's worth new unless the system is a limited edition, or it's a newer console like the WiiU. Plus, let me note that when you're trying to get out of the Xbox One ecosystem, you can't even sell the games you've bought. So that's an even greater loss.

- And I never said they are equivalent. But they are analogous, and the same downward price pressures would occur.

But they won't, because Microsoft has you locked into their ecosystem. There's no evidence to them lowering prices. They haven't done it on the 360.

- Used games were far less ubiquitous last generation, and customers were less demanding

Source on both? Sounds like nonsense facts created to fit your point.

- Some companies screw it up, yes. I won't argue with that. But that's not a general rule. The big AAA games are the ones with the highest returns on the dollar.

And also the biggest risk, to the point we're at where your developer probably won't survive unless the latest AAA game you're working on does COD numbers.

And I'm not saying AAA doesn't sell. You're not reading my words. I'm saying that publishers are aiming too high even in the AAA space. Why does Tomb Raider have to cost $100m to make? Is there anyone asking for that? Tomb Raider could happily sit in the AAA space with a tenth of that budget.

Everybody wants COD sales and it doesn't happen, but they expect it anyway. It's stupid.

 

[Delusibeta]

Source on both? Sounds like nonsense facts created to fit your point.

He's talking bollocks, used games were just as ubiquitous last gen, and nobody complained about them. It wasn't until publishers were spunking large quantities of money down the toilet chasing CoD that they started this PR war against used games.

 

[Meia]

And you're saying that it's OK that games like Shadows of the Colossus die off because they're really just designed for 1 playthrough?

Um, I enjoyed the game so much I certainly played it more than once. That's kind of my whole point. If the core game experience is good enough, people won't want to trade in your game. Developers have forgotten this very simple fact.

 

[Open Source]

From what I see on eBay, everything's selling at about 50% of what it's worth new unless the system is a limited edition, or it's a newer console like the WiiU. Plus, let me note that when you're trying to get out of the Xbox One ecosystem, you can't even sell the games you've bought. So that's an even greater loss.



But they won't, because Microsoft has you locked into their ecosystem. There's no evidence to them doing that. They haven't done it on the 360.



Source on both?



And also the biggest risk, to the point we're at where your developer probably won't survive unless the latest AAA game you're working on does COD numbers.

And I'm not saying AAA doesn't sell. You're not reading my words. I'm saying that publishers are aiming too high even in the AAA space. Why does Tomb Raider have to cost $100m to make? Is there anyone asking for that? Tomb Raider could happily sit in the AAA space with a tenth of that budget.

Everybody wants COD sales and it doesn't happen, but they expect it anyway. It's stupid.

- Sure, 7 years after launch, when the market's already saturated. But I don't think you'd hold onto your XB1 for 7 years before you decide that it's really just not economically viable for you to be buying games on it.

- They haven't done it largely because of various factors that this new system will mitigate, such as having to kowtow to retail demands for price protection, not having a system built for digital distribution, and charging more for new to alleviate the losses on used (essentially, people buying new subsidize games for people buying used, inefficiently, since GameStop keeps most of the subsidy).

- Gamestop revenue numbers and Metacritic scores relative to game budgets.

- More developers have gone out of business from underperforming and cancelled mid-tier than AAA busts

- I agree on Tomb Raider. But it's an outlier, not a typical case.

 

[faceless007]

The Steam comparison is disingenuous. When Steam sales began they were a deliberate and targeted effort by Valve to draw interest to their own service because the PC gaming landscape was almost dying anyway, and Valve had to convince the publishers that it would be worth it. Valve went first by massively discounting their own titles and were able to provide data as to how much of an effect it created. And they still had to get publishers to agree to such massive discounts, which most of them did because they didn't think the PC versions were worth that much anyway and they might as well wring a little more life out of them. Activision doesn't even play ball as they virtually never discount their titles more than 50%, and even then only older games. And now, a few years later, we're seeing that the major publishers have actually pulled back on Steam sales to some extent, i.e. titles they had previously put on sale for 66 or 75% are now only getting 50-60%. Amazon seems to be stepping up because of Tony, but that just proves the importance of competition on the platform. There wouldn't be any on the XB1 because MS would be the sole platform-holder.

So what could possibly incentivize Microsoft, a publicly traded company, to go to anywhere near such lengths and cut into its own profit margin so drastically, just to increase the attractiveness of XB1 when they already have a viable brand identity? They could have done exactly the same thing this gen with discounts on Games on Demand and GFWL. Did they? What do the prices look like on Xbox GoD? Go ahead, I'll wait.

Or maybe just name another time in human history when a publicly traded company voluntarily decreased its profit margins for anything more than a a very short term.

 

[Meia]

- I agree on Tomb Raider. But it's an outlier, not a typical case.

It's a good one though. Nothing really says more about this gen than Tomb Raider being a disappointment at 3.4mil, and Dark Souls being met with joy at 2mil.

 

[Open Source]

Um, I enjoyed the game so much I certainly played it more than once. That's kind of my whole point. If the core game experience is good enough, people won't want to trade in your game. Developers have forgotten this very simple fact.

That's absolutely untrue. It might work like that for you, but that's not how it works in aggregate.

 

[Open Source]

The Steam comparison is disingenuous. When Steam sales began they were a deliberate and targeted effort by Valve to draw interest to their own service because the PC gaming landscape was almost dying anyway, and Valve had to convince the publishers that it would be worth it. Valve went first by massively discounting their own titles and were able to provide data as to how much of an effect it created. And they still had to get publishers to agree to such massive discounts, which most of them did because they didn't think the PC versions were worth that much anyway and they might as well wring a little more life out of them. Activision doesn't even play ball as they virtually never discount their titles more than 50%, and even then only older games. And now, a few years later, we're seeing that the major publishers have actually pulled back on Steam sales to some extent, i.e. titles they had previously put on sale for 66 or 75% are now only getting 50-60%. Amazon seems to be stepping up because of Tony, but that just proves the importance of competition on the platform. There wouldn't be any on the XB1 because MS would be the sole platform-holder.

So what could possibly incentivize Microsoft, a publicly traded company, to go to anywhere near such lengths and cut into its own profit margin so drastically, just to increase the attractiveness of XB1 when they already have a viable brand identity? They could have done exactly the same thing this gen with discounts on Games on Demand and GFWL. Did they? What do the prices look like on Xbox GoD? Go ahead, I'll wait.

Or maybe just name another time in human history when a publicly traded company voluntarily decreased its profit margins for anything more than a a very short term.

Microsoft would not be controlling the prices. Publishers would. And it would not be decreasing profit margins. It would be increasing them by expanding the customer base. Supply/demand curve intersection.

 

[CharminUltra]

Is this a new thing? I mean, Penny Arcade siding with corporations? I haven't read PA in years.

 

[jetjevons]

He's talking bollocks, used games were just as ubiquitous last gen, and nobody complained about them. It wasn't until publishers were spunking large quantities of money down the toilet chasing CoD that they started this PR war against used games.

Actually I remember seeing old Japanese games (was it SNES or PsOne/Saturn?) that had do not resell used warnings on the back of the box. Pretty sure everyone just ignored them but used games being a perceived thorn in the publisher's side is as old as the industry.

 

[Kurdel]

That's absolutely untrue. It might work like that for you, but that's not how it works in aggregate.

When I was a poor student, I traded in amazing games just to be able to afford the latest hotness.

One thing I never did was buy a used game. I know I was playing into the system by feeding it my used copies, but I never found the 5$ rebate on a used copy worth depriving the publisher and developper revenue in favor of Gamestop.

 

[Kingbrave]

He's talking bollocks, used games were just as ubiquitous last gen, and nobody complained about them. It wasn't until publishers were spunking large quantities of money down the toilet chasing CoD that they started this PR war against used games.

I actually traded in more stuff last gen than I have this gen. I prefer to give them to my friends to get them to try things other than COD.

 

[unbias]

As long as publishers have full control over the pricing, they can and will drop prices as needed to stimulate demand just like GameStop can. The digital markets like Steam are proof that they are willing to do so. There is no need for "trade-in credit" to fuel new game purchases. In other words, used games do not increase net consumer $ spend on games, when publishers can discount prices at will to accomplish the same thing.

The only difference in the "long run" with used games is that billions of dollars go to gamestop instead of game creators.

It's the people here talking about how used games are essential who are short-sighted.

As someone who rarely if ever buys a used game, the second hand market in a lot of ways increases the demand for new games, and only in cases where there is an abundance of that particular used game, does the second-hand market negatively impact a new game. Even when the second hand sale does negatively impact new game copies, it isnt on a dollar-for-dollar basis, the extent of its effects is largely based on the value of the original product, before reaching second hand. This reminds me a lot of when people were freaking out over used book sales through amazon. You know what happened as a result? The market adjusted and start selling e-books at a cheaper rate then physical books because the transaction costs were reduced.

What the game industry is currently trying to do is have its cake and eat the whole thing, too. It wants to push out the second hand market, focus on the perks of not needing the physical package, and rely on the internet to help alleviate the costs, while not adjusting their prices accordingly. They essentially want to be e-books, but without any adjustment to cost. This has a chance of completely biting them in the ass in the long run, and because of this we actually may see a very real decline in new game purchases because of this aggressive idea.

As someone who is not a huge fan of the second hand market, because I like knowing who I am essentially giving my "demand" to, I'm not blind enough not to see the intrinsic value in allowing for a second hand market to exist. This is the equivalent of Latin America putting ridicules tariffs on used cars to force people to buy new. It will backfire, and the economic health of the game industry will be the response. The second-hand market grows if transaction costs decrease or if product lifetime increases. The growth of the secondhand market reduces demand for new goods if there are used goods that can be brought into the market(essentially the product has low value of owning or high sell value). But if there is not a ready supply of used goods, growth of the second-hand market can increase demand for new goods, thereby increasing material consumption. Moreover, even when second-hand sales reduce demand for new goods, it is typically not on a one-for-one basis. The extent to which the purchase of used goods replaces the purchase of new goods is shown to be an explicit function of the relative value provided by used versus new goods.


There is a very good reason that we dont have a lot of detailed numbers, that compare the value of a second hand market for new goods; the obfuscation this brings is a desire from companies so they can adjust a consumers expectation and their personal wealth, while also attempting to keep them in the dark.

To add, shadowwebb made a post awhile back talking about this as well, when we were debating this months ago:

Quote:
Originally Posted by shaowebb:
I did my college thesis on the used game market and did a lot of digging on some numbers.
used games only account for 1/3rd of the game sales out there. New games sales still equate for the other 2/3rds and sell more than used titles still.
for roughly every 2% used game sales increased in 2012 digital game revenue increased by nearly a full 1%. Used game sales were letting publishers sell DLC so they were penetrating that market and likely making multiple DLC sales per single unit made as it got resold.
75% of games traded in were traded in toward the purchase or pre-order of NEW games or hardware. The used market was making it affordable for the weary pockets of consumers to afford their games.
Around 100 million units of used games were sold in 2012 on estimate equating to around $2 billion sold. However, for the summer quarter alone digital game revenue equaled $1.47 billion in the US and $983 million in Europe...this means that quarter alone saw the videogame industry make more from digital revenue than it lost the whole year in used sales. Digital revenue goes up as market penetration of titles increases.

The actual number on that 1% digital revenue increase for every 2% comes from the rate at which digital revenue increased last year compared to used game sales. It increased at roughly 46% what used games increased which is almost a ratio of 1% for every 2% increase, but you get the idea.

Eliminate the used game market and you not only eliminate a ton of digital revenue potential, but its incalculable how many new game purchases you'll limit yourself to without a used market for consumers to trade titles back into for money to aid them in the purchase of new titles in this economy. Not to mention its also incalculable how much popularity some series will be costing themselves without a used market to help them penetrate into more units of their title in households. 100 million used units a year is a big number and you can bank that without that number a lot of titles wouldn't have as big of a fanbase as they do.

Games wont get cheaper to make, but used markets aren't killing them. Its the development and monetization models of the studios that are to blame.
Originally Posted by SOURCES CITED so you can check my facts:
Krugman, P. (2009). Economics. (Second ed.). New York: Worth Publishers.
Sherpa, I. (June, 18 2012). [Web log message]. Retrieved from http://www.iesherpa.com/?cat=151
Campbell, C. (2012). What happens to your used games?. IGN, Retrieved from http://www.ign.com/articles/2012/08/...our-used-games
Reisinger, D. (2010). Dev: Used game sales are 'destructive' to industry. News. Cnet, Retrieved from http://news.cnet.com/8301-13506_3-20022957-17.html
Cousens, R. (Nov, 16 2010). Interview by P Elliott [Personal Interview]. Codemasters' rod cousens part 2. Codemaster's Rod Cousens Interview, Gameindustry.biz., Retrieved from http://www.gamesindustry.biz/article...terview?page=2
Reisinger, D. (2012). Dev: How much do industry ceos hate used games a whole, whole lot. News. Cnet, Retrieved from http://news.cnet.com/8301-13506_3-57...ole-whole-lot/
Brightman, J. (2012, March 27). Pre-owned increases cost of games, cannibalizes industry, says dyack. game industry.biz, Retrieved from http://www.gamesindustry.biz/article...try-says-dyack
A, B. (2012, August 27). Interview by J Webb [Personal Interview]. GameStop employee describes used and resale trends at local branch.
Pricecharting.com. (2012). Video game prices & values. Retrieved from http://videogames.pricecharting.com/
Hussain, T. (2012). Capcom: 'there's no difference between dlc and locked disc content'. Computer and Videogames.com, Retrieved from http://www.computerandvideogames.com...-disc-content/
Humphries, M. (2012, March 19). Online pass buyers lose out as ea announces server shutdowns Geek.Com, Retrieved from http://www.geek.com/articles/games/o...owns-20120319/
Kolan, P. (2007, April 17). Too human: Through the ages. IGN, Retrieved from http://www.ign.com/articles/2007/04/...rough-the-ages
Martin, M. (2012, Feb 2). Thq losses widen to $56m for q3. game industry.biz, Retrieved from http://www.gamesindustry.biz/article...-USD56m-for-q3
Usher, W. (2012, June 21). Ea's stock plummets. Cinema Blend, Retrieved from http://www.cinemablend.com/games/EA-...ets-43822.html
***** Staff. (2012). Rod cousens. Retrieved from http://*****.com/people/1469/Rod-Cousens
Burke, S. (2012, Jan). Graphics wars: Amd vs nvidia for gaming . Gamersnexus. Retrieved from http://www.gamersnexus.net/guides/71...-amd-vs-nvidia
Pigna, K. (2009, May 19). Assassin's creed 2 dev team totals a colossal 450 people. 1up.com. Retrieved from http://www.1up.com/news/assassin-creed-2-dev-team
Bush, E. (2012). Game development budget somewhere around $25 million. Planet Xbox360. Retrieved from http://www.planetxbox360.com/article...und_25_Million
Chiang, O. (2011, Feb 15). Valve and steam worth billions. Forbes. Retrieved from http://www.forbes.com/sites/oliverch...orth-billions/
Originally Posted by AstroNut325:
Your very first bullet point is the reason devs and pubs want to block used game sales. 33% of game sales are going to pre-owned games. For a game like GTA which sells upwards of 20 million copies that's 6 million copies associated to pre-owned sales. Let's say that each of those pre-owned sales is for $20. That's $120 million in revenue. You're telling me that this revenue is meaningless?
Im saying that while they are losing that revenue that the numbers I posted for digital revenue increase at a very impressive rate with the used market. In a year its about $2 billion in used game sales in the US alone. In a quarter last year the digital revenue for the world equaled OVER that same $2billion dollar amount. In other words, YES its irrelevant because they get a lot more market penetration and a lot more digital revenue this way. Actually more digital revenue than they ever could otherwise since the more people end up owning a single unit as it churns through the system the more DLC gets sold off a single title. This breathes market longevity back into some titles in the form of digital sales life over shelf sales life.

Plus you have to admit with anywhere from 70%-75% of trade ins going to the purchase of new games that the used market is helping to allow consumers to buy those titles new. Factor in that 1/3rd of of the market is used games and realize that the people in that category may not have gotten into the series otherwise and you have an incalculable amount of product saturation that could have been lost.

TLDR and if you don't get the math.

People still buy more new than used games
The used market is driving up Digital Revenue sales for games so high that the industry makes back in a single fiscal quarter what it loses in a year in unit sales revenue
Without a used market many wouldn't have become familiar with certain titles and supported them later on with sequels
Without a trade in market many can't afford games new. 70%-75% are trading in games towards the purchase of new games or hardware.

In other words what they lose do to used games is NOTHING compared to all the ways they profit and improve their brand value from such a market existing. Simple math and economics.

I'm not sure why you think there is a need to show an indirect benefit of a second hand market to this particular industry. Seriously, do you think a second hand market, specifically, is detrimental to the overall economy/demand?

The game industry is trying to eliminate a market, without properly adjusting their business model or adjusting the costs on the consumer. This will not work the way they think it will if this is truly what they are doing. Steam has the right idea of how to handle this, but they are more of a distributor. Developers and publishers(most anyways) dont have the ability to do what steam does to increase the viability of a lack of a second hand market. If developers and publishers don't adjust accordingly, THQ will be a footnote in what is to come.

The simple realization is, if they get rid of the second hand market, then they better do something major to help adjust the demand for a specific title(2nd hand market is a billion+ dollar industry). You cant be ignorant to a average persons disposable income, in relation to the second hand market; and then try and eliminate that market without realizing you might be alienating a lot of people who essentially lived in that market, without some serious adjustment to they way you do business. Your opinion or POV is a non sequitur. This POV is the assumption that by getting rid of the second hand market, that they are helping their bottom line... I'm not sure what example they are using where trying to bypass the second hand market helped an industry make more money.

There is a finite amount of used games, and the ability to purchase those used games comes from people purchasing new games. The only way for the used game sales to grow, is by the new game itself growing. The onluy real way it is a negative(proof positive) is if the majority of the product has been put in the "used" category, that would mean there is a viewed lack of value with a particular game, which has no basis in believing that the used games is actual forgone growth.

Essentially, you cant ignore the intricacies of supply and demand, and at the same time complain you are not seeing the profits that you want. The idea that getting rid of that market share will result in more disposable income for new games is nonsense.

The only way the second hand markets can depress a good is if the value of the item goes into the negative in terms of the availability of a new good vs used and only then does it become a depression of demand when the value of the product is considered lower then the original value. In every other case that I have ever seen there is an increase in demand from second hand markets, for new product.

When the second-hand price is zero, equations show that increasing the product lifetime always increases the second-hand demand and decreases the demand for new goods. When the second-hand price is positive, however, increasing product lifetime results in increased sales in the primary market. In other words, as long as the market value for a used good is in the positive, and product is still in circulation, demand is increased due to second hand sales.

With digital goods there is no excuse why MS/Sony don't routinely, already, have deep discounts similar to Steam, even with the 2nd hand market. We have been shown nothing that indicates that the big 3 are anything close to being able to handle a market where there is no 2nd hand market.

 

[Open Source]

What the game industry is currently trying to do is have its cake and eat the whole thing, too. It wants to push out the second hand market, focus on the perks of not needing the physical package, and rely on the internet to help alleviate the costs, while not adjusting their prices accordingly.

No. Prices drop further, faster this gen than before. Remember going to Toys R Us and finding the 2 or 3 year old Zelda game for $70 and accepting that as kinda normal? Now even fairly recent mega-hits like Black Ops 2 are $40 new. And games that would have been $40 retail titles are instead $15 XBLA titles.

This tendency will only be magnified when digital is the primary method of distribution, retailers aren't holding them back, and publishers can follow the changing supply/demand intersection with a few clicks of a mouse.

As far as the thesis goes, where is the data on:
- how much DLC was sold to used game buyers (there's no direct correlation made between DLC purchases and used game sales)
- how many of those new games would have been sold if trade-ins were not possible (post hoc ergo propter hoc fallacy - the fact that the purchase occurred after trade in does not mean it happened because the trade-in was possible. If I take a shitload of coins to the coin machine and then buy groceries with that cash, it does not mean that coin machines increase grocery buying. I would have done it anyway.)

And yes, I think used games are detrimental, not to overall demand, but to game creators, who see smaller returns, and game buyers, who have fewer games and fewer TYPES of games available to them.

And you have no idea if the game industry is going to adjust costs. None. You're just guessing. It makes sense that they would. But you're asserting that they will not, with no basis other than how they behaved in a system where used games are 33% of sales. Why would they behave the same way? You give no justification or rationale why.

Also: http://www.xbox.com/en-US/marketplace/sales-and-specials

 

[hardcastlemccormick]

- Sure, 7 years after launch, when the market's already saturated. But I don't think you'd hold onto your XB1 for 7 years before you decide that it's really just not economically viable for you to be buying games on it.

The 3DS has been on the market for two years and is already at 50-60% new retail cost. The Vita even less time, same figure.

But this is all details. You're going to lose money on the console when you sell it. That's prohibitive. That's the point that's being made here - it's not comparable to PC at all because you're going to lose all your games and you're going to lose money on the hardware itself. Neither of those are true on PC.

- They haven't done it largely because of various factors that this new system will mitigate, such as having to kowtow to retail demands for price protection, not having a system built for digital distribution, and charging more for new to alleviate the losses on used (essentially, people buying new subsidize games for people buying used, inefficiently, since GameStop keeps most of the subsidy).

And what makes you think that just because they don't have any of those excuses in place means that they will drop the price? Do you think they'll say, "oh, hey, we don't have to protect ourselves against used games," which is complete and utter bullshit to begin with, considering no publisher has ever received revenue from used games in the past, "now we'll drop the price because we're nice." No. That's dumb. They'll blame something else and hike up the prices again.

Plus, these games will still be at retail new, so retail demands aren't going away. And what does a "system designed for DD" even mean? The 360 has been DD-ready for years now. It's not like this takes a lot of prep work.

It all seems like hand waving and hopeful dreams.

- Gamestop revenue numbers and Metacritic scores relative to game budgets.

1) Gamestop != whole market

2) I see no correlation, so you're gong to have to bring me up to speed. I can see other patterns that people buy games on, such as pedigree and series.

3) Who is to say that it's not the sales driving Metacritic rather than Metacritic driving the sales? I'm not actually suggesting this, just pointing out that even if there is a sync-up, we can't assume anything based on it. Correlation != causation

- More developers have gone out of business from underperforming and cancelled mid-tier than AAA busts

Examples please. We haven't had very many mid-tier games in the past four or five years, so it's kind of hard for me to believe you.

- I agree on Tomb Raider. But it's an outlier, not a typical case.

La Noire? Hitman: Absolution? Syndicate? Gears of War Judgment? I'm just throwing out games as they come to me. I wish we had better budget reports on games. But look at the superfluous stuff they bragged about in the Xbox One announcement. Mo-capped dogs? Fish AI? Celebrity voice acting? Who cares?!

There's plenty of examples of companies doing it right, sure. Deus Ex: Human Revolution, Dishonoured, Batman: Arkham, Dark Souls. Those should be the norm. Games that live within their budget.

Used games is profit you never had, so used games cannot be killing you. It has to take something much bigger than that.

 

[Dead Man]

As someone who rarely if ever buys a used game, the second hand market in a lot of ways increases the demand for new games, and only in cases where there is an abundance of that particular used game, does the second-hand market negatively impact a new game. Even when the second hand sale does negatively impact new game copies, it isnt on a dollar-for-dollar basis, the extent of its effects is largely based on the value of the original product, before reaching second hand. This reminds me a lot of when people were freaking out over used book sales through amazon. You know what happened as a result? The market adjusted and start selling e-books at a cheaper rate then physical books because the transaction costs were reduced.

What the game industry is currently trying to do is have its cake and eat the whole thing, too. It wants to push out the second hand market, focus on the perks of not needing the physical package, and rely on the internet to help alleviate the costs, while not adjusting their prices accordingly. They essentially want to be e-books, but without any adjustment to cost. This has a chance of completely biting them in the ass in the long run, and because of this we actually may see a very real decline in new game purchases because of this aggressive idea.

As someone who is not a huge fan of the second hand market, because I like knowing who I am essentially giving my "demand" to, I'm not blind enough not to see the intrinsic value in allowing for a second hand market to exist. This is the equivalent of Latin America putting ridicules tariffs on used cars to force people to buy new. It will backfire, and the economic health of the game industry will be the response. The second-hand market grows if transaction costs decrease or if product lifetime increases. The growth of the secondhand market reduces demand for new goods if there are used goods that can be brought into the market(essentially the product has low value of owning or high sell value). But if there is not a ready supply of used goods, growth of the second-hand market can increase demand for new goods, thereby increasing material consumption. Moreover, even when second-hand sales reduce demand for new goods, it is typically not on a one-for-one basis. The extent to which the purchase of used goods replaces the purchase of new goods is shown to be an explicit function of the relative value provided by used versus new goods.


There is a very good reason that we dont have a lot of detailed numbers, that compare the value of a second hand market for new goods; the obfuscation this brings is a desire from companies so they can adjust a consumers expectation and their personal wealth, while also attempting to keep them in the dark.

To add, shadowwebb made a post awhile back talking about this as well, when we were debating this months ago:


I'm not sure why you think there is a need to show an indirect benefit of a second hand market to this particular industry. Seriously, do you think a second hand market, specifically, is detrimental to the overall economy/demand?

The game industry is trying to eliminate a market, without properly adjusting their business model or adjusting the costs on the consumer. This will not work the way they think it will if this is truly what they are doing. Steam has the right idea of how to handle this, but they are more of a distributor. Developers and publishers(most anyways) dont have the ability to do what steam does to increase the viability of a lack of a second hand market. If developers and publishers don't adjust accordingly, THQ will be a footnote in what is to come.

The simple realization is, if they get rid of the second hand market, then they better do something major to help adjust the demand for a specific title(2nd hand market is a billion+ dollar industry). You cant be ignorant to a average persons disposable income, in relation to the second hand market; and then try and eliminate that market without realizing you might be alienating a lot of people who essentially lived in that market, without some serious adjustment to they way you do business. Your opinion or POV is a non sequitur. This POV is the assumption that by getting rid of the second hand market, that they are helping their bottom line... I'm not sure what example they are using where trying to bypass the second hand market helped an industry make more money.

There is a finite amount of used games, and the ability to purchase those used games comes from people purchasing new games. The only way for the used game sales to grow, is by the new game itself growing. The onluy real way it is a negative(proof positive) is if the majority of the product has been put in the "used" category, that would mean there is a viewed lack of value with a particular game, which has no basis in believing that the used games is actual forgone growth.

Essentially, you cant ignore the intricacies of supply and demand, and at the same time complain you are not seeing the profits that you want. The idea that getting rid of that market share will result in more disposable income for new games is nonsense.

The only way the second hand markets can depress a good is if the value of the item goes into the negative in terms of the availability of a new good vs used and only then does it become a depression of demand when the value of the product is considered lower then the original value. In every other case that I have ever seen there is an increase in demand from second hand markets, for new product.

When the second-hand price is zero, equations show that increasing the product lifetime always increases the second-hand demand and decreases the demand for new goods. When the second-hand price is positive, however, increasing product lifetime results in increased sales in the primary market. In other words, as long as the market value for a used good is in the positive, and product is still in circulation, demand is increased due to second hand sales.

With digital goods there is no excuse why MS/Sony don't routinely, already, have deep discounts similar to Steam, even with the 2nd hand market. We have been shown nothing that indicates that the big 3 are anything close to being able to handle a market where there is no 2nd hand market.

A most excellent post.

 

[Sanctuary]

He's talking bollocks, used games were just as ubiquitous last gen, and nobody complained about them. It wasn't until publishers were spunking large quantities of money down the toilet chasing CoD that they started this PR war against used games.

Exactly. Rentals have also been around since the mid 80s and didn't seem to be a problem for gaming until this gen. Piss poor management is the reason games cost as much as they do with most Western developers and Square.

 

[nib95]

Damn, fantastic posts. Anyone have a proper quote to the original post and discussion of this one?

I did my college thesis on the used game market and did a lot of digging on some numbers.
used games only account for 1/3rd of the game sales out there. New games sales still equate for the other 2/3rds and sell more than used titles still.
for roughly every 2% used game sales increased in 2012 digital game revenue increased by nearly a full 1%. Used game sales were letting publishers sell DLC so they were penetrating that market and likely making multiple DLC sales per single unit made as it got resold.
75% of games traded in were traded in toward the purchase or pre-order of NEW games or hardware. The used market was making it affordable for the weary pockets of consumers to afford their games.
Around 100 million units of used games were sold in 2012 on estimate equating to around $2 billion sold. However, for the summer quarter alone digital game revenue equaled $1.47 billion in the US and $983 million in Europe...this means that quarter alone saw the videogame industry make more from digital revenue than it lost the whole year in used sales. Digital revenue goes up as market penetration of titles increases.

The actual number on that 1% digital revenue increase for every 2% comes from the rate at which digital revenue increased last year compared to used game sales. It increased at roughly 46% what used games increased which is almost a ratio of 1% for every 2% increase, but you get the idea.

Eliminate the used game market and you not only eliminate a ton of digital revenue potential, but its incalculable how many new game purchases you'll limit yourself to without a used market for consumers to trade titles back into for money to aid them in the purchase of new titles in this economy. Not to mention its also incalculable how much popularity some series will be costing themselves without a used market to help them penetrate into more units of their title in households. 100 million used units a year is a big number and you can bank that without that number a lot of titles wouldn't have as big of a fanbase as they do.

Games wont get cheaper to make, but used markets aren't killing them. Its the development and monetization models of the studios that are to blame.
Originally Posted by SOURCES CITED so you can check my facts:
Krugman, P. (2009). Economics. (Second ed.). New York: Worth Publishers.
Sherpa, I. (June, 18 2012). [Web log message]. Retrieved from http://www.iesherpa.com/?cat=151
Campbell, C. (2012). What happens to your used games?. IGN, Retrieved from http://www.ign.com/articles/2012/08/...our-used-games
Reisinger, D. (2010). Dev: Used game sales are 'destructive' to industry. News. Cnet, Retrieved from http://news.cnet.com/8301-13506_3-20022957-17.html
Cousens, R. (Nov, 16 2010). Interview by P Elliott [Personal Interview]. Codemasters' rod cousens part 2. Codemaster's Rod Cousens Interview, Gameindustry.biz., Retrieved from http://www.gamesindustry.biz/article...terview?page=2
Reisinger, D. (2012). Dev: How much do industry ceos hate used games a whole, whole lot. News. Cnet, Retrieved from http://news.cnet.com/8301-13506_3-57...ole-whole-lot/
Brightman, J. (2012, March 27). Pre-owned increases cost of games, cannibalizes industry, says dyack. game industry.biz, Retrieved from http://www.gamesindustry.biz/article...try-says-dyack
A, B. (2012, August 27). Interview by J Webb [Personal Interview]. GameStop employee describes used and resale trends at local branch.
Pricecharting.com. (2012). Video game prices & values. Retrieved from http://videogames.pricecharting.com/
Hussain, T. (2012). Capcom: 'there's no difference between dlc and locked disc content'. Computer and Videogames.com, Retrieved from http://www.computerandvideogames.com...-disc-content/
Humphries, M. (2012, March 19). Online pass buyers lose out as ea announces server shutdowns Geek.Com, Retrieved from http://www.geek.com/articles/games/o...owns-20120319/
Kolan, P. (2007, April 17). Too human: Through the ages. IGN, Retrieved from http://www.ign.com/articles/2007/04/...rough-the-ages
Martin, M. (2012, Feb 2). Thq losses widen to $56m for q3. game industry.biz, Retrieved from http://www.gamesindustry.biz/article...-USD56m-for-q3
Usher, W. (2012, June 21). Ea's stock plummets. Cinema Blend, Retrieved from http://www.cinemablend.com/games/EA-...ets-43822.html
***** Staff. (2012). Rod cousens. Retrieved from http://*****.com/people/1469/Rod-Cousens
Burke, S. (2012, Jan). Graphics wars: Amd vs nvidia for gaming . Gamersnexus. Retrieved from http://www.gamersnexus.net/guides/71...-amd-vs-nvidia
Pigna, K. (2009, May 19). Assassin's creed 2 dev team totals a colossal 450 people. 1up.com. Retrieved from http://www.1up.com/news/assassin-creed-2-dev-team
Bush, E. (2012). Game development budget somewhere around $25 million. Planet Xbox360. Retrieved from http://www.planetxbox360.com/article...und_25_Million
Chiang, O. (2011, Feb 15). Valve and steam worth billions. Forbes. Retrieved from http://www.forbes.com/sites/oliverch...orth-billions/
Originally Posted by AstroNut325:
Your very first bullet point is the reason devs and pubs want to block used game sales. 33% of game sales are going to pre-owned games. For a game like GTA which sells upwards of 20 million copies that's 6 million copies associated to pre-owned sales. Let's say that each of those pre-owned sales is for $20. That's $120 million in revenue. You're telling me that this revenue is meaningless?
Im saying that while they are losing that revenue that the numbers I posted for digital revenue increase at a very impressive rate with the used market. In a year its about $2 billion in used game sales in the US alone. In a quarter last year the digital revenue for the world equaled OVER that same $2billion dollar amount. In other words, YES its irrelevant because they get a lot more market penetration and a lot more digital revenue this way. Actually more digital revenue than they ever could otherwise since the more people end up owning a single unit as it churns through the system the more DLC gets sold off a single title. This breathes market longevity back into some titles in the form of digital sales life over shelf sales life.

Plus you have to admit with anywhere from 70%-75% of trade ins going to the purchase of new games that the used market is helping to allow consumers to buy those titles new. Factor in that 1/3rd of of the market is used games and realize that the people in that category may not have gotten into the series otherwise and you have an incalculable amount of product saturation that could have been lost.

TLDR and if you don't get the math.

People still buy more new than used games
The used market is driving up Digital Revenue sales for games so high that the industry makes back in a single fiscal quarter what it loses in a year in unit sales revenue
Without a used market many wouldn't have become familiar with certain titles and supported them later on with sequels
Without a trade in market many can't afford games new. 70%-75% are trading in games towards the purchase of new games or hardware.

In other words what they lose do to used games is NOTHING compared to all the ways they profit and improve their brand value from such a market existing. Simple math and economics.

As someone who rarely if ever buys a used game, the second hand market in a lot of ways increases the demand for new games, and only in cases where there is an abundance of that particular used game, does the second-hand market negatively impact a new game. Even when the second hand sale does negatively impact new game copies, it isnt on a dollar-for-dollar basis, the extent of its effects is largely based on the value of the original product, before reaching second hand. This reminds me a lot of when people were freaking out over used book sales through amazon. You know what happened as a result? The market adjusted and start selling e-books at a cheaper rate then physical books because the transaction costs were reduced.

What the game industry is currently trying to do is have its cake and eat the whole thing, too. It wants to push out the second hand market, focus on the perks of not needing the physical package, and rely on the internet to help alleviate the costs, while not adjusting their prices accordingly. They essentially want to be e-books, but without any adjustment to cost. This has a chance of completely biting them in the ass in the long run, and because of this we actually may see a very real decline in new game purchases because of this aggressive idea.

As someone who is not a huge fan of the second hand market, because I like knowing who I am essentially giving my "demand" to, I'm not blind enough not to see the intrinsic value in allowing for a second hand market to exist. This is the equivalent of Latin America putting ridicules tariffs on used cars to force people to buy new. It will backfire, and the economic health of the game industry will be the response. The second-hand market grows if transaction costs decrease or if product lifetime increases. The growth of the secondhand market reduces demand for new goods if there are used goods that can be brought into the market(essentially the product has low value of owning or high sell value). But if there is not a ready supply of used goods, growth of the second-hand market can increase demand for new goods, thereby increasing material consumption. Moreover, even when second-hand sales reduce demand for new goods, it is typically not on a one-for-one basis. The extent to which the purchase of used goods replaces the purchase of new goods is shown to be an explicit function of the relative value provided by used versus new goods.


There is a very good reason that we dont have a lot of detailed numbers, that compare the value of a second hand market for new goods; the obfuscation this brings is a desire from companies so they can adjust a consumers expectation and their personal wealth, while also attempting to keep them in the dark.

To add, shadowwebb made a post awhile back talking about this as well, when we were debating this months ago:


I'm not sure why you think there is a need to show an indirect benefit of a second hand market to this particular industry. Seriously, do you think a second hand market, specifically, is detrimental to the overall economy/demand?

The game industry is trying to eliminate a market, without properly adjusting their business model or adjusting the costs on the consumer. This will not work the way they think it will if this is truly what they are doing. Steam has the right idea of how to handle this, but they are more of a distributor. Developers and publishers(most anyways) dont have the ability to do what steam does to increase the viability of a lack of a second hand market. If developers and publishers don't adjust accordingly, THQ will be a footnote in what is to come.

The simple realization is, if they get rid of the second hand market, then they better do something major to help adjust the demand for a specific title(2nd hand market is a billion+ dollar industry). You cant be ignorant to a average persons disposable income, in relation to the second hand market; and then try and eliminate that market without realizing you might be alienating a lot of people who essentially lived in that market, without some serious adjustment to they way you do business. Your opinion or POV is a non sequitur. This POV is the assumption that by getting rid of the second hand market, that they are helping their bottom line... I'm not sure what example they are using where trying to bypass the second hand market helped an industry make more money.

There is a finite amount of used games, and the ability to purchase those used games comes from people purchasing new games. The only way for the used game sales to grow, is by the new game itself growing. The onluy real way it is a negative(proof positive) is if the majority of the product has been put in the "used" category, that would mean there is a viewed lack of value with a particular game, which has no basis in believing that the used games is actual forgone growth.

Essentially, you cant ignore the intricacies of supply and demand, and at the same time complain you are not seeing the profits that you want. The idea that getting rid of that market share will result in more disposable income for new games is nonsense.

The only way the second hand markets can depress a good is if the value of the item goes into the negative in terms of the availability of a new good vs used and only then does it become a depression of demand when the value of the product is considered lower then the original value. In every other case that I have ever seen there is an increase in demand from second hand markets, for new product.

When the second-hand price is zero, equations show that increasing the product lifetime always increases the second-hand demand and decreases the demand for new goods. When the second-hand price is positive, however, increasing product lifetime results in increased sales in the primary market. In other words, as long as the market value for a used good is in the positive, and product is still in circulation, demand is increased due to second hand sales.

With digital goods there is no excuse why MS/Sony don't routinely, already, have deep discounts similar to Steam, even with the 2nd hand market. We have been shown nothing that indicates that the big 3 are anything close to being able to handle a market where there is no 2nd hand market.

 

[unbias]

No. Prices drop further, faster this gen than before. Remember going to Toys R Us and finding the 2 or 3 year old Zelda game for $70 and accepting that as kinda normal? Now even fairly recent mega-hits like Black Ops 2 are $40 new. And games that would have been $40 retail titles are instead $15 XBLA titles.

This tendency will only be magnified when digital is the primary method of distribution, retailers aren't holding them back, and publishers can follow the changing supply/demand intersection with a few clicks of a mouse.

What are you basing this off of? There is nothing there that even hints that prices will adjust even quicker on the console market without 2nd hand slaes. You literally are not making sense. You cant just say "I believe" while at the same time saying that taking out a billion dollar industry will help games make more money. The used game market existed back when zelda was 70, so your point is even more lost. Pricing doenst exist in a vacuum, the only reason prices drop is becuase the relative value of the product drops, the 2nd hand market actively shows where that relative value is through the abundance of that used game.

Without the 2nd hand market the only thing that would push pricing down would be the relative value through the lack of sales, because the console market is a closed system. There is no market indicator that the big 3 would adjust pricing the same way the 2nd hand market does, and you are talking nonsense if you think the relative cost for a game will adjust to the same pricing as used games. The disposable income for games will go down, not up, and there is NOTHING that gives evidence to the contrary with specifically consoles.

 

[Septimius]

gaf is always a tear fest with candlelight vigils everytime a studio is closed yet a system that helps the industry stay alive and profitable is being demonized.

This is a very good point.

I don't care for the used games business. However, I'm principally against systems wherein I don't own what I buy, and the new Xbone system seems to build under that. Every time someone restricts the use of something I buy, I get sad and upset. One day some great games just won't work. They'll be single player, but the services are down, so 'whops'.

I like to revisit A Link To The Past once in a while, and I figure I'll do it until the day I die. Imagining a title of the same caliber being lost in time because of such a system is hugely upsetting.

I have probably bought 5 used games during my entire life. That's nothing compared to the 500 I'm roughly estimated I've bought otherwise. I don't care to trade in stuff. I want to keep things I've bought. I remember my neighbour - he always had to sell his previous generation to get into the new one. He used to have a SNES with great games. Then he had a Sega of some kind. Then N64. He actually didn't sell that to get a PS too. I did contemplate it, myself, but my dad saw the value in keeping it, so he figured there was no need to 'teach me the value of money' by selling my childhood.

 

[unbias]

No. Prices drop further, faster this gen than before. Remember going to Toys R Us and finding the 2 or 3 year old Zelda game for $70 and accepting that as kinda normal? Now even fairly recent mega-hits like Black Ops 2 are $40 new. And games that would have been $40 retail titles are instead $15 XBLA titles.

This tendency will only be magnified when digital is the primary method of distribution, retailers aren't holding them back, and publishers can follow the changing supply/demand intersection with a few clicks of a mouse.

As far as the thesis goes, where is the data on:
- how much DLC was sold to used game buyers (there's no direct correlation made between DLC purchases and used game sales)
- how many of those new games would have been sold if trade-ins were not possible (post hoc ergo propter hoc fallacy - the fact that the purchase occurred after trade in does not mean it happened because the trade-in was possible. If I take a shitload of coins to the coin machine and then buy groceries with that cash, it does not mean that coin machines increase grocery buying. I would have done it anyway.)

And yes, I think used games are detrimental, not to overall demand, but to game creators, who see smaller returns, and game buyers, who have fewer games and fewer TYPES of games available to them.

And you have no idea if the game industry is going to adjust costs. None. You're just guessing. It makes sense that they would. But you're asserting that they will not, with no basis other than how they behaved in a system where used games are 33% of sales. Why would they behave the same way? You give no justification or rationale why.

Also: http://www.xbox.com/en-US/marketplace/sales-and-specials

For fuck sake, show me the numerical evidence in any market, where tariffs or the removal of the second hand market has ever helped an industry. Show me where 2nd hand sales market reduces disposable income for that particular industry as a whole and decreases net growth for a company.

 

[Opiate]

At least in the short run, it is good for people who don't buy used games. It means that less enthusiastic consumers will be forced to consume just like they do, and subsequently provide more revenue to the publishers.

I'm much less confident this is a good choice for any consumer long term, though.

 

[hardcastlemccormick]

This is a very good point.

It's a terrible point. Consumers are not beholden to the publishers and developers. I'm not buying their games because I'm a charity. If they want to make the package worse, fine. It's their choice. And it's my choice not to buy it.

At least in the short run, it is good for people who don't buy used games. It means that less enthusiastic consumers will be forced to consume just like they do, and subsequently provide more revenue to the publishers.

Only if it happens across the entire industry in a unified fashion, which I don't see happening. If that's the case, then people will either stick with the locked in platform (and not be happy about it, buy less games) or people will just buy the other system.

 

[nib95]

At least in the short run, it is good for people who don't buy used games. It means that less enthusiastic consumers will be forced to consume just like they do, and subsequently provide more revenue to the publishers.

I'm much less confident this is a good choice for any consumer long term, though.

Will it even in the short term though? Or will thousands of gamers who previously used to buy new games with trade in, simply wait for these games to go to bargain bin prices before they jump the gun? That is the reality I see with millions of gamers, especially the younger one's.

 

[Open Source]

And what makes you think that just because they don't have any of those excuses in place means that they will drop the price? Do you think they'll say, "oh, hey, we don't have to protect ourselves against used games," which is complete and utter bullshit to begin with, considering no publisher has ever received revenue from used games in the past, "now we'll drop the price because we're nice." No. That's dumb. They'll blame something else and hike up the prices again.

Plus, these games will still be at retail new, so retail demands aren't going away. And what does a "system designed for DD" even mean? The 360 has been DD-ready for years now. It's not like this takes a lot of prep work.

It all seems like hand waving and hopeful dreams.



1) Gamestop != whole market

2) I see no correlation, so you're gong to have to bring me up to speed. I can see other patterns that people buy games on, such as pedigree and series.

3) Who is to say that it's not the sales driving Metacritic rather than Metacritic driving the sales? I'm not actually suggesting this, just pointing out that even if there is a sync-up, we can't assume anything based on it. Correlation != causation



Examples please. We haven't had very many mid-tier games in the past four or five years, so it's kind of hard for me to believe you.



La Noire? Hitman: Absolution? Syndicate? Gears of War Judgment? I'm just throwing out games as they come to me. I wish we had better budget reports on games. But look at the superfluous stuff they bragged about in the Xbox One announcement. Mo-capped dogs? Fish AI? Celebrity voice acting? Who cares?!

There's plenty of examples of companies doing it right, sure. Deus Ex: Human Revolution, Dishonoured, Batman: Arkham, Dark Souls. Those should be the norm. Games that live within their budget.

Used games is profit you never had, so used games cannot be killing you. It has to take something much bigger than that.

- It's not about excuses or being nice. It's about maximizing revenue, which is done by dropping the price to match the sweet spot on the demand curve.

- Designed for DD means everyone having a large hard drive to store games, having a flexible game update process, giving publishers adequate tools to manage their store presence, including pricing and promotions...there's a crapload of stuff that X360 was not designed to do and in many cases cannot be patched to do. If you don't think it takes a lot of prep work, you do not understand the logistics of digital delivery.

- GameStop is like the Dow Jones, which is also not the whole stock market, of used game sales. It's always the primary used game retailer for years and has had a huge used game market share for years. It can be safely used as an indicator of the growth of used game revenues over time.

- THQ is an example of a mid-tier publisher that went bust. Its AAA stuff made money, even when it sucked (Homefront); everything else didn't. They went after AAA in the first place because all their mid-tier stuff was pulling them under. And then you look at Majesco, SEGA, Konami, Namco, Capcom...it's the same story. Look at the lists of developers closed by EA and Activision - it's not failed AAA projects there.

- you're assuming that people who buy used games would have bought nothing new. That has no basis in reality.

 

[Open Source]

For fuck sake, show me the numerical evidence in any market, where tariffs or the removal of the second hand market has ever helped an industry. Show me where 2nd hand sales market reduces disposable income for that particular industry as a whole and decreases net growth for a company.

Steam and XBLA. iTunes. Come on.

 

[Mango Positive]

I'm not really going to defend the decision to reduce the impact of the used market on publisher profits, but I do have to say that I really like having all 160 games I've bought on Steam at my disposal whenever I want to play them. Since I'm primarily a PC gamer, the lack of used games would not really be a detriment to my purchasing the console. The camera pointing at me, deciding how many people can watch my movies, or basing marketing on the images that appear on my t-shirts... that's where I get freaked out.

 

[Opiate]

gaf is always a tear fest with candlelight vigils everytime a studio is closed yet a system that helps the industry stay alive and profitable is being demonized.

And the masses want a strong military and social security and medicare but they don't want to be taxed to pay for it.

Nobody wants to pay for the stuff they get. The problem we're experiencing in the gaming industry is that costs continue to go up relentlessly, and the only way for companies to stay afloat is to make the consumer pony up more and more money.

Many on GAF want their games to keep getting more technically impressive but nobody wants to pay for it. Many people even think that companies like EA, Take 2 and Ubisoft are massively profitable and that these initiatives are only further increasing their profit margins.

 

[unbias]

Steam and XBLA. iTunes. Come on.

Wow...you have no clue what I am even asking do you?

 

[unbias]

And the masses want a strong military and social security and medicare but they don't want to be taxed to pay for it.

Nobody wants to pay for the stuff they get. The problem we're experiencing in the gaming industry is that costs continue to go up relentlessly, and the only way for companies to stay afloat is to make the consumer pony up more and more money.

Many on GAF want their games to keep getting more technically impressive but nobody wants to pay for it. Many people even think that companies like EA, Take 2 and Ubisoft are massively profitable and that these initiatives are only further increasing their profit margins.

So if the consumer doesn't want to pay for it, yet companies keep adhering to the demand of consumers they cant afford, whose fault is that?

 

[FLAguy954]

Damn good post.

Fucking bravo. This is what I call an argument.

 

[Open Source]

Wow...you have no clue what I am even asking do you?

Removal of second hand market. There is none on Steam. There is none on XBLA. Both wildly successful, one reviving a platform and another creating a viable digital platform on consoles for the first time.

What am I missing?

 

[Opiate]

Only if it happens across the entire industry in a unified fashion, which I don't see happening. If that's the case, then people will either stick with the locked in platform (and not be happy about it, buy less games) or people will just buy the other system.

I simply do not agree. The PC has been significantly more open as a platform for decades, and yet many consumers continued to stick to consoles. If the Xbox One is advertised well and is giving people the games they want in a convenient, easy to understand fashion, people will continue to buy the system.

Thus far in the history of gaming, I haven't a lot of evidence that consumers will reject platforms that take control away from the consumer and give an increasingly large portion of control to the manufacturer.

So if the consumer doesn't want to pay for it, yet companies keep adhering to the demand of consumers they cant afford, whose fault is that?

The fault of consumers and publishers. Just like the existence of pap like E! News and US Weekly is partially a fault of the consumers who buy it and the producers who stoke demand.

 

[faceless007]

Microsoft would not be controlling the prices. Publishers would.

And what incentive would they have to implement such drastic sales on a closed platform with a locked-in userbase? How have they done on Xbox Games on Demand so far?

And it would not be decreasing profit margins. It would be increasing them by expanding the customer base. Supply/demand curve intersection.

You're assuming sales on DD games are a significant factor driving adoption of a $500 console, and that enough customers would move to purchasing games over the DD service rather than buying in-store as they are used to to make up for the profit loss. If that were the case, surely they would have tried that this gen?

 

[unbias]

Removal of second hand market. There is none on Steam. There is none on XBLA. Both wildly successful, one reviving a platform and another creating a viable digital platform on consoles for the first time.

What am I missing?

What do you think these entities are?

 

[Hellsing321]

Valve started doing sales before there was any real competition on the digital front

The only reason publishers allow sales on PC is because it makes them more money, it's entirely possible similar sales could happen on consoles if publishers think they can replicate the success

You aren't going to be seeing Steam like sales on consoles because Retail is still too powerful for consoles. Retail would pitch a fit if the same game was 75% on Xbox's store when there is no way they could match that price and make any kind of profit.

 

[JimmyRustler]

I'm curious to see how Microsoft want to teach Avarage Joe that they can't borrow or resales their games. Will be one big shitstorm this Christmas for Microsoft and retail.

 

[Open Source]

What are you basing this off of? There is nothing there that even hints that prices will adjust even quicker on the console market without 2nd hand slaes. You literally are not making sense. You cant just say "I believe" while at the same time saying that taking out a billion dollar industry will help games make more money. The used game market existed back when zelda was 70, so your point is even more lost. Pricing doenst exist in a vacuum, the only reason prices drop is becuase the relative value of the product drops, the 2nd hand market actively shows where that relative value is through the abundance of that used game.

Without the 2nd hand market the only thing that would push pricing down would be the relative value through the lack of sales, because the console market is a closed system. There is no market indicator that the big 3 would adjust pricing the same way the 2nd hand market does, and you are talking nonsense if you think the relative cost for a game will adjust to the same pricing as used games. The disposable income for games will go down, not up, and there is NOTHING that gives evidence to the contrary with specifically consoles.

Because corporations like to get as much money as possible. In a system where used games will simply undercut them further and retailers will be pissed, they have little incentive to drop prices, because people buying used games will still buy used games and they'll just make less money off the new ones they sell. In a system where they can prevent that undercutting, they have a greater incentive to drop prices because when they do, those price-sensitive customers will now buy from them instead of GameStop.

 

[Biker19]

Because corporations like to get as much money as possible. In a system where used games will simply undercut them further and retailers will be pissed, they have little incentive to drop prices, because people buying used games will still buy used games and they'll just make less money off the new ones they sell. In a system where they can prevent that undercutting, they have a greater incentive to drop prices because when they do, those price-sensitive customers will now buy from them instead of GameStop.

LOL. If you think that publishers are going to lower their prices because of no used games, you got another thing coming. If anything, they may boost the prices higher than $60 without the used gaming market or keep it around $60 for years to come (just like with most of Nintendo's 1st/2nd party games).

 

[ASIS]

I need clarification on Burai's point.

I thought Tomb Raider, on its own, was a success. If it sold 3.4m copies at $60, it made more than $200m - more than enough to make up for its budget. I thought it was considered a "failure" because Square/Enix needed Tomb Raider to offset losses incurred by other games that sold poorly?

Not all of that $60 goes to the devs.

 

[FLAguy954]

Removal of second hand market. There is none on Steam. There is none on XBLA. Both wildly successful, one reviving a platform and another creating a viable digital platform on consoles for the first time.

What am I missing?

Ponder to yourself what the differences are between these two distribution systems (hint: there are a shit load of differences, aka it's apples and oranges honestly :/).

 

[nib95]

Steam is a different kettle of fish, very little competition on the digital front, and far better value pricing than the console alternatives.

Is XBLA even that successful? I thought it was actually doing quite poorly besides the odd big successful title (Minecraft). Lots of developers seem to be complaining about it as of late. Again, it's a much cheaper and more bite size affair so not really comparable.

I'd argue that one of the reasons PC gaming has been overshadowed by console gaming with respect to revenue and sales on the whole, despite the cheaper pricing, is because of the lack of used game advantages (serial numbers with limited uses etc) and obviously the overall inconvenience and tech requirements compared to the console realm.

Digital works, if the pricing is more appealing compared to the retail alternative. Otherwise the convenience (or inconvenience depending on the size of the game or files in question, and the trade in or resale options) do not counter weight it.

 

[Kingbrave]

I simply do not agree. The PC has been significantly more open as a platform for decades, and yet many consumers continued to stick to consoles. If the Xbox One is advertised well and is giving people the games they want in a convenient, easy to understand fashion, people will continue to buy the system.

Thus far in the history of gaming, I haven't a lot of evidence that consumers will reject platforms that take control away from the consumer and give an increasingly large portion of control to the manufacturer.



The fault of consumers and publishers. Just like the existence of pap like E! News and US Weekly is partially a fault of the consumers who buy it and the producers who stoke demand.

I think many went with consoles is because they didn't want to mess around with upgrading their hardware so it would remain relevant. With Steam it simplified the process.

I just think that the publishers are chasing after the COD and WOW numbers when every game isn't gonna do those type of numbers.

 

[unbias]

The fault of consumers and publishers. Just like the existence of pap like E! News and US Weekly is partially a fault of the consumers who buy it and the producers who stoke demand.

Sounds like you are adding in moral obligations to a business model that doesn't regard or even care about such a thing. IF companies are producing goods that consumers want, but dont make enough money off it, yet are unwilling to ask ofr more that isn't the consumers fault, that is the companies. If they didnt think the demand was there then they shouldn't create product they barely/cant make money on. Your idea that it is the consumers fault the producer cant properly create a sustaining business model doesn't make a ton of sense. This isn't like government, where the people vote themselves into a mess, the only "vote" consumers have is with their paycheck. The anticipation of demand is not demand and it isn't the consumers fault that producers confuse the anticipation of demand and actual demand.

 

[Open Source]

And what incentive would they have to implement such drastic sales on a closed platform with a locked-in userbase? How have they done on Xbox Games on Demand so far?


You're assuming sales on DD games are a significant factor driving adoption of a $500 console, and that enough customers would move to purchasing games over the DD service rather than buying in-store as they are used to to make up for the profit loss. If that were the case, surely they would have tried that this gen?

Xbox 360 is poorly designed from a digital distribution perspective. It is extremely difficult for publishers to change prices, to deliver updates, to communicate with customers, to customize their presence, to run promotions, etc. And this cannot be patched by Microsoft for both technical and financial reasons. And of course many customers do not have adequate disk space.

Games on Demand is an abortion of a service, hamstrung by retailer demands and the technical limitations of the system. And yet it still sees some decent sales.

With a system that seems to be designed around digital distribution (game discs are entirely optional, everything can be purchased on the online store, everyone has a giant hard drive, etc.), DD games WILL be a significant factor for XB1.

 

[unbias]

Because corporations like to get as much money as possible. In a system where used games will simply undercut them further and retailers will be pissed, they have little incentive to drop prices, because people buying used games will still buy used games and they'll just make less money off the new ones they sell. In a system where they can prevent that undercutting, they have a greater incentive to drop prices because when they do, those price-sensitive customers will now buy from them instead of GameStop.

Do you think there is an infinite supply of used games?