Just remember, Valve isn't publicly traded. This distinction will have applications on their way of DD(Just look at Origins or UPlay).
-
Hey Guest. Check out your NeoGAF Wrapped 2025 results here!
Total Biscuit arguing for no used game sales
- Thread starter Grief.exe
- Start date
Just remember, Valve isn't publicly traded. This distinction will have applications on their way of DD(Just look at Origins or UPlay).
Shai-Tan
Banned
One of the flaws in his argument is it's pining for an all digital future when that probably isn't going to happen for at least half the generation. Microsoft needs retail while broadband speeds are so pitiful - maybe they don't need specialist retail but it seems like they are trying to extract the benefits of digital only by imposing terms on the physical market. He alludes to that later in the video but doesn't revisit the argument against used games in light of that criticism.
ThoseDeafMutes
Member
Digital Distribution (which you can't trade in, obviously) already exists on Microsoft, Sony and Nintendo platforms. Despite this, the digital copies do not usually go on sale for significantly reduced prices, and in fact it's very common for them to remain artificially high while physical copies have already hit bargain bin prices at stores everywhere. The reason for this seems straightforwards enough - the platforms have a monopoly on distribution through their online store. If you eliminate used game sales you won't see a magical drop in price, because that extra money the publishers will be raking in is money they already feel entitled to, and they know they can get consumers to keep paying it.
The switch to account-based game ownership like on PC will only bring some of the benefits, like downloading wherever you're logged in and so on. It won't bring the deep discounting we're all used to on PC, though.
CosmicQueso
Member
Not sure i fully understand your point. Are you saying that, because they're public, ms will have to follow the pricing models for origin and uplay?
Perhaps. But those dd services are so small to the financials of ea and ubi that its probably not material.
If MS can't provide a service that generates more return in a new model, they'll adjust. Ea and ubi seem to be continuing those services to see what happens. They aren't at the same scale of Xbox.
Just hearing a ton of assumptions on pricing models and we just don't know what that will look like yet. Hell we don't even know what the boxes will cost yet. Just early to pass definitive judgment.
But then again, I was pissed to hell when steam launched and was convinced PC gaming was dead forever.
Publicly traded companies are a lot more short sighted. Companies like Steam can play the long game w/o trying to prove to share holders the long game is worth it and still hold onto shares. Based on what we have to go off of, in terms of consumer friendliness, these companies dont give me much to go off of, to assume they wont be bad for consumers(or the industry), as a whole.
You mean besides console developers thinking console gamer should pay more for games? The reason they tolerate the sales on steam is fear of piracy. If there is no piracy or used games they will keep prices inflated. Look no further than XBLA and PSN games they are higher than every other platform that has those games. Retail is not an excuse for these games. My favorite is the put tablet game on console then charege 5 to 10 times more than IOS or Android. There never will be steam like sales on a console period no matter what.
This anti-used/trade/selling/lending/renting is happening to try and get people to spend 59.99 on a digital rental plain and simple. It is not benifit the consumer in any.
CosmicQueso
Member
Fair point for sure... Hadn't thought of it that way.
I guess I'm just an optimist. Doing some of this stuff could be absolutely disastrous and I can't believe that MS or anyone would allow their business to completely crater. Maybe I'm just getting confused in my old age.
But you can see how that sends a mixed message to the buying public, right?
Here's an exclusive for putting our game in your windows, letting people know it's a thing. But fuck you for having all these secondhand products around that you paid for, and people are using to purchase said advertised game from the widows.
The entire system and thought process is fucked.
Did not stop Sony from launching the PS3 at 599.99. MS and the big publishers are going all in on this. They think console games who are used to the console tax will pay a premium for long term rentals.
Ace Harding
Member
I see this argument everywhere, and I don't understand why people think this. It doesn't make any sense.
Are you saying that the quantity of games purchased will remain unchanged, even when the price per game is increased? That would be incredible, especially considering there are three major consoles and a number of PC online retailers competing with each other. Not to mention the fact that publishers compete with one another (and occasionally themselves) even within one console ecosystem.
If one console manufacturer went all DD, didn't let retailers sell codes, and demanded that all publishers accept a permanent $60 price, that console manufacturer would be DOA. It will never happen.
There is a finite demand for video games out there. People wouldn't magically start spending more money on games when individual game prices are increased. And without any differentiation in price, all but the most popular games would suffer from a strict $60 required price on games.
In the real world, prices would adjust as people started buying less games, and less popular games would sell for less money. This is how it works now, and this is how it would work in the future unless companies would be so stubborn they'd allow themselves to fail before adjusting prices.
This guy is such a shill.. I unsubbed after his Planetside bullshit. Everything he says comes off as arrogant and looking down on his subscriber base. He clearly made this video to get a reaction (hence more video views) and more money coming in from his channel.. He must have rubbed his hands together with glee when he seen the outcry the Xbox One caused.
Getting rid of the 2nd hand market will reduce liquidity(this part is very important) and disposable income, them getting rid of this(by either getting rid of it or taking a cut) will not be off set by their "attempt" at imitating the PC market. These publicly traded companies will push consumers farther, try and oligopoly the system, and cattle consumer into a controlled environment(The only publicly traded company that really doesn't do this is Google, and they are not in the console business). Even if the market contracts, if they can create an oligopoly between the other publicly traded companies, they would gladly let the industry contract and crowd out the market.
Even if they don't crowd out the market, they will be beholden to share holders, and share holders want quick returns, specially with this current world economy(speculators as an all time high). The belief that this move will/would expand the market is just lollipop talk, we have no evidence these companies are responsible enough with the markets they are in.
ThoseDeafMutes
Member
The part of my post you highlighed is not saying that games will never drop in price, it's saying that they will not start charging less for games simply because the used option doesn't exist. 60 will not become 50 or 40 even if the amount of revenue skyrockets (hypothetically). Games will still be 60 at launch, possibly more if they think they can get away with it. I was also not talking about a hypothetical DD only console.
How much of a discount does buying used give you at an American gamestop? In Australia at EB it's like 5 dollars, 10 sometimes. On a game that they're charging 100 dollars for. The cost of games at launch jumped to 60 this generation and yes, the volume of sales did not have some sort of apocalyptic drop. We know that digital games on the store currently remain high for far longer than they have any right to, and why is this going to change with the new consoles? The retail market still exits and the retail market will still discount games over time like it does now. They might start trying to bring digital prices into line, but do they have any kind of strong motivation to do so when their competitors aren't? The PC space is the only one where we see rapid drops in price and huge, deep discounting sales. And even then, not on every platform - Origin, uPlay store etc don't get the same quantity or quality of sales that Steam, GMG and Amazon do.
As an aside to how Microsoft could handle used game sales; look at some of their past history of MSP:
a) Setting game sales at 1,200 MSP; but only selling points in non-compatible blocks. (Cash flow is king)
b) MSP Exchange Rates, e.g.:
- 1,200 MSP = USD$15
- 1,200 MSP = AUD$19.80
1.00 AUD = 0.956048 USD
MSP Source; FX Source
a) Setting game sales at 1,200 MSP; but only selling points in non-compatible blocks. (Cash flow is king)
b) MSP Exchange Rates, e.g.:
- 1,200 MSP = USD$15
- 1,200 MSP = AUD$19.80
1.00 AUD = 0.956048 USD
MSP Source; FX Source
I always assumed that this had more to do with them not wanting to piss off their retail partners (who account for an overwhelming majority of their business in the current gen) as opposed to some sort of monopoly.
I don't really see how a monopoly is that big of a deal when the games are still competing amongst themselves. Assuming the publishers control the pricing and not Microsoft.
So the company that was hurting them was the same company giving them so much revenue that the damage was outpaced by the revenue they generated for the industry? You realize the implications with this statement, alone?
ThoseDeafMutes
Member
That would be an argument for price parity at best. We see this sometimes where retailer pressure forces Steam games in Australia to be raised to 70-80 dollars instead of the US standard 50. But even then it's cheaper almost every time on Steam and it doesn't stop the huge sales.
Shai-Tan
Banned
I don't think you can necessarily conclude this when one of the reasons they fix the digital prices at a high price point is avoiding losses from unsold retail stock. The Xbox Live store actually has some reasonable prices on older games when retail wouldn't be relevant anymore. You could argue that MS would collude to set a price floor which would harm consumers but there would be a lot of unrealized sales if they set high prices whether desired or not. It benefits the publishers to have different price points at different times. Some speculate that the Steam prices are so low to displace piracy and that pressure wouldn't exist on a closed console but those systems aren't in a vacuum either.
RiccochetJ
Gold Member
I think this statement is premature. We don't know what will happen.
I think that right now the costs are high because they are a convenience charge. The current market is disc based, but when the shift comes where all the titles are available to download day 1, then there will be the change.
If anything, there will be competition between the brick and mortar to the DD system for consoles.
I also believe in the GameStop argument that people who trade in games tend to buy new ones. That market will be going away and the market will shrink. Initially. I actually think that MS and Sony already know this if they've been paying attention whatsoever. Steam already had to deal with this and essentially created sales that mimic used games over the course of their lives.
Now we don't have all the details, but it seems like MS is going to try and one up Steam by providing a method to effectively sell your digital copy to them which gives you money to spend on a new game. Win, win from their standpoint.
Man, I feel like I am so disconnected with most of this forum lately, it bums me out.
The way I see it:
- An all-digital future is coming much faster than anyone here I think is anticipating, and MS/Sony are simply trying to get ahead of the curve here.
- They both will have some system to still sell/buy "used", either via some (albiet convoluted) trade-in system at a physical location, or via some auction house on live/PSN
- I almost ALWAYS opt to buy something digitally if possible ... the convenience outweighs any negatives 100x for me. Case in point, recently I purchased ni no kuni physically, then returned it after realizing I could buy the digital copy instead.
- Honestly, discs are becoming more and more of a method of getting a game onto your HD, and the concept of them having some special differentiator from digital versions of the same content (i.e. I should be able to sell this one since I have a physical disc) seems more and more obtuse to me.
Now, I'm almost certainly an outlier, but I feel like my feelings are that I largely never trade in/buy used, and I'm the type to always lean digital. I understand the negativity to a degree about not being able to resell a physical game to a private party, but if MS/Sony offer solutions to resell it in some separate way which allows for a near all-digital future... meh. Its hard for me to get really upset about it.
One question to everyone: why is there not more uproar about not being able to resell digital downloads via XBLA/PSN? Does it really completely boil down to the disc vs. download?
The way I see it:
- An all-digital future is coming much faster than anyone here I think is anticipating, and MS/Sony are simply trying to get ahead of the curve here.
- They both will have some system to still sell/buy "used", either via some (albiet convoluted) trade-in system at a physical location, or via some auction house on live/PSN
- I almost ALWAYS opt to buy something digitally if possible ... the convenience outweighs any negatives 100x for me. Case in point, recently I purchased ni no kuni physically, then returned it after realizing I could buy the digital copy instead.
- Honestly, discs are becoming more and more of a method of getting a game onto your HD, and the concept of them having some special differentiator from digital versions of the same content (i.e. I should be able to sell this one since I have a physical disc) seems more and more obtuse to me.
Now, I'm almost certainly an outlier, but I feel like my feelings are that I largely never trade in/buy used, and I'm the type to always lean digital. I understand the negativity to a degree about not being able to resell a physical game to a private party, but if MS/Sony offer solutions to resell it in some separate way which allows for a near all-digital future... meh. Its hard for me to get really upset about it.
One question to everyone: why is there not more uproar about not being able to resell digital downloads via XBLA/PSN? Does it really completely boil down to the disc vs. download?
I actually wouldn't be surprised if they know it already, although I think it would be for a different reason. Even if you contract the market by what would happen from getting rid of used games, you have a chance of crowding out the market and in turn gaining more market share of that market. All the big guys could potentially profit off this if they don't screw this up. This honestly could be a big business move to create a form of an oligopoly so only the big boys can play, outside of indy.
Now I don't think any of this would work, because they are sort of competing with the PC market. I still wouldn't put it past them to try this. And from anything I've read, most developers can be pressured into thinking anything big business wants.
Ace Harding
Member
Yeah the bolded is my point. Getting rid of the used game market without changing the prices of new games would, as you suggest, "reduce liquidity." The way I say it is that it would increase the net cost of buying games. If these companies tried to "oligopoly the system" and hold prices artificially high, they would sell less games. Since they are publicly traded companies (as you note) their shareholders would flip a shit as sales declined. If, for some reason, they refused to reduce the average cost of new games, they would be in serious trouble.
ThoseDeafMutes said:
OK. I guess I just disagree. The market wouldn't tolerate it. Again, people aren't going to just start paying more money for games because they don't have a choice. They'll either abandon the platform or just buy less games. If all games cost $60, and if steep discounts aren't given pretty quickly after launch (like we see at retail now), non-AAA games (and some AAA games) are going to sell like shit.
To be clear - you are right to say they wouldn't start charging less simply because the used market doesn't exist. They would start charging less because they would have to in order to maintain and grow revenue.
You're not seeing as much willingness to reduce DD prices on the PSN and XB stores because they don't yet have a huge incentive to reduce prices. They also don't want to totally piss off retailers by undercutting them. You're also not giving enough credit to the XB and PSN stores - they have both gotten a lot better with pricing and continue to improve.
ThoseDeafMutes said:
For digital downloads you mean? Because there are absolutely steep and rapid discounts on console games currently.
The price tag on some brand new console games might read $60, but that's not the real price people pay now if you want to compare to Steam or other PC DD stores.
More people are willing to pay $60 because they know they can sell their games later if they want to, sometimes for $20-$35 if they sell them fast enough. If you eliminate the ability to sell used games, less people will be willing and able to buy $60 games. If less people are willing and able to buy $60 games, less games will be sold. You can see where this goes...
Yes. I think most see digital as a consumer choice of convenience over control. If the consumer has the choice to make this decision it becomes acceptable, however if you force it and try and force supply on demand that isn't there, you will just piss off your base. Essentially it should be the consumers choice to choose to have the option of liquidity for the option of convenience.
Once physical completely goes away, you definitely will see new competitive ways of recouping your purchases once the physical 2nd hand market goes away, but for consoles that is a long way off. Those of us who live in the PC community are more acclimatized to this. Still though, you cant get around the fact that the console market, because of how strong the 2nd hand market is, has a lot more liquidity and disposable income, something the PC market does not have, and is a smaller market. Basing your business model on a smaller market, even if it is healthier is just not going to work, specially when the people controlling the console market hasn't been the most responsible in having a strong and healthy business model.
not psycho
Member
I agree, even though I don't like it. Purely because of the technology it will be more complicated to sell used digital downloads.
My problems are more along the lines of:
1. Bad DRM including "always on"
2. Lack of preservation of games (treating them as disposable)
3. Expectation that prices will not drop enough to reflect the new situation
Purely on the used issue, I'll give them a little more time to figure out their system on it (which is yet to be explained at all) before going all out attacking it.
Share holders are not as invested in the why of why it is doing bad(fundamentally) as much as they care that it isn't doing something they wanted it to do. The industry is selling share holders a bill of goods that the used game market is part in parcel of why the console industry is less healthy. There is 0 numbers that says the 2nd hand market hurts instead of help. You have to remember, the problems with games isn't simply just pricing, budgets are out of control and we have no signs that publishers even care about fixing this(why would they, it makes the market value of the company "appear" higher). They cant effectively lower prices and still maintain these budgets, something has to give, and there is no indications that it is going to be the budgets. This entire equation isnt simply used vs new vs digital.
I guess that's fair, though it seems to me that the arguments would feel more coherent (to me) if it was a more "all-or-nothing" approach, where the anger is essentially at not being able to resell purchases at large, rather than only limiting the uproar to physical distribution.
It seems a little disjointed to be like "I am fine with not being able to resell this game if I acquire it via X channel, but not okay via Y channel". I do agree, though, that the process should work itself out more naturally, rather than being forced onto the consumers, even though I sincerely believe the end result will be the same in 5-10 years or so.
Yep.
Point 1) I am sort of "meh" about. It would obviously suck to not be able to play a game if your internet goes out, but I could count on one hand the amount of times its been out for more than 24 hours so it doesn't affect me too much, personally. I'm definitely their ideal market, though, and I can understand the fact that a daily online check sucks for the majority of the population.
2) I agree with, though it remains to be seen how this plays out. I imagine if they are attempting an all digital future, both Sony and MS realize they will need to have massive contingency plans so that games are playable well into the future, though to be honest I *never* think about this when purchasing a digital game so its more philosophical at this point.
3) Remains to be seen. I don't have a ton of faith that MS/Sony will have deals ala steam, but I would imagine that in the not-so-distant future when digital is all but ubiquitous there will be more experimentation with price.
Ace Harding
Member
I don't think I understand this. Shareholders care about one thing - stock price. Stock price is dictated (at least in part, over the longer term) by earnings and perceived earnings potential. So shareholders of video game companies HATE it when companies that sell video games sell less video games. That was my point. Publicly traded video game companies try to sell MORE video games than they did before. Increasing the net price of games without increasing the value of games is going to cause them to sell less games. One way to rectify that is to lower the price of games relative to what was being charged before, or at least ensure the average price is equivalent to the average net price people were paying before (new game price, less residual/resale value).
I'm not sure why you think it is so disjointed. There are plenty of products in general where a consumer is willing to give up X to obtain Y. Also, you are wording the question wrong. I am willing to give up X to gain A, B, and C, so long as it is my choice. Value isn't among consumers isnt simple. For some, I get to sell it, has a lot of value but at the same time for others there is more value in "I get all these conveniences if I cant sell it(like being cheaper)". It depends on the consumer, and it should stay on the choice of the consumer, because that is the only way to maintain a healthy industry. Otherwise you end up with a bunch of malinvestment and you have all the houses built that nobody wants to pay for or live in.
Look, like I said, I agree with most of what you're saying. I just think its a bit strange to hear so much vitriol over not being able to potentially resell something based (as you said earlier) on the method of delivery (disc vs. digital). To be honest I'm surprised there is not as much anger about *not* being able to resell/trade-in digital games, as those are just as 'purchased' as something physical, no? To push this further, if MS/Sony offer ways to trade in digital purchases, it sounds like they are actually rectifying that issue (if it even was one to begin with?).
I don't have a dog in this fight, as I said earlier it doesn't really affect me either way, I'm just trying to distill the arguments a bit here.
It doesn't work that simple. They don't care about how many they sell, they care about how much they get from selling. If you sell more copies, but at cheaper rates and your budget doesn't return your expected returns from investment, your stock value still drops. If you sell less copies, but you spend less, and have a net increase in profit your stock value would still rise. You are ignoring the component of cost. You cant drop pricing on games, and at the same time have budgets that are out of control. They wont be able to make more money, even if they sell more. The 2nd hand market gets to step out of the realm of the out of control budgets and still properly value games the way they should(through the market). As it stands, unless you are saying that the industry is going to get budgets under control, what you are saying isn't applicable in the present or the foreseeable future.
SapientWolf
Trucker Sexologist
I think the move away from physical media is inevitable, and used games will go away too, because it's something that emerged from the current disc based DRM than the intentional conferring of consumer rights. But going all in next gen would cause a huge market contraction (in addition to angry mobs with pitchforks), which is why MS is scrambling to put together a workable half-way solution. If game prices are high and rigid next gen then the market is going to contract even farther. If MS and Sony fumble the ball then Valve is in the perfect position to eat their lunch.
What's morally right or whether consumers or developers are being robbed of something they're entitled to isn't going to change the direction the industry is moving in. That conversation will be drowned out when the digital tide comes in and sweeps away old practices and business models.
What's morally right or whether consumers or developers are being robbed of something they're entitled to isn't going to change the direction the industry is moving in. That conversation will be drowned out when the digital tide comes in and sweeps away old practices and business models.
Retailers make about $2 on new games.
njean777
Member
Got to fix internet infrastructure first before this ever happens, and I do not see that happening in the next 10 years.
Ace Harding
Member
I think I'm done then - you clearly are not understanding what I am saying. You are introducing things like game budgets which have nothing to do with any of my points. If you are saying game budgets are excessive and that's a problem in this industry - I agree. That just has nothing to do with my posts here. I'm talking about price elasticity of demand.
Edit: OK I reread and think I at least get the first part. You are saying that even if they lower prices and sell more copies, they won't necessarily make more money. This is true when talking about one company in isolation. However, when certain games just aren't being bought at all because people can only afford 6 games instead of 10 per year, that's where you have a problem. There's not an even distribution of games being purchased. The CODs and Halos might be fine in that environment, but the middle-tier, non-niche games get hit hard unless they can lower their price.
Are you actually trying to make the claim that getting rid of the 2nd hand market will make the industry more inelastic? The cost of development is what determines pricing, if the budgets stay on current trends, the price of games will either have to go up or budgets will have to be brought down. If budgets dont go down, they wont be able to have the same value adjustments on games as teh 2nd hand market, since the 2nd hand market pricing is solely paced on market demand, instead of set pricing. You cant just pretend that getting rid of the 2nd hand market will increase revenue for the industry. I'm not sure why you think this is a legitimate argument to what you were initially talking about. If you think what I am talking about doesn't have anything to do with price elasticity, then you probably should be done.
RiccochetJ
Gold Member
You quoted me and my point was clearly about the profit differential. So what point were you trying to make that didn't align with mine?
This is actually an argument for the 2nd hand market... I'm not sure what you think you are inferring here.
Edit: I just realized I've hit apathy talking about this. It doesn't really matter, I've talked it to death, we will see if they do go after 2nd hand sales this gen, who is going to be right. So, meh.
Because there is no other reason. That is the reason why Gamestop wants us to sell used games to customers. There is no money in new games because the publisher wants all of that. If the Publisher gets control of the used price don't expect any different.
Unless I am just not understanding your point, its late and if thats the case then sorry.
Ace Harding
Member
I'm inferring that prices would have to be lower or many companies would suffer. Publishers would lower prices (closer to where net prices are now, with used games) to increase sales before they'd go out of business. Obviously not all games would cost less, but on average the price of games would have to be reduced or the industry would suffer.
We are agreeing on one thing: if used game markets were eliminated, sales would be hurt.
I'm just saying publishers would adjust prices accordingly, and I guess you are disagreeing.
1st Course
Member
No way this is true. Even digital distributors take like 30% per each game sold. retailers like Gamestop probably take even a bigger cut than that.
While I agree GameStop shouldn't be making billions of dollars off of an industry it contributes next to nothing to, I think it is going to be interesting to see how well games sell once this is implemented.
And even more interesting will be to see who the publishers/devs point fingers at once they get their way if things don't go how they predict they are going to go.
Other things of interest will be if DLC reverts to free and a thank you for buying their product similar to how ios apps continually update their games with additional content at no extra charge, or do they continue to use it as a way of milking additional funds out of customers?
Will retail prices actually lower, even if not initially, but maybe drop faster and to lower price points?
Will devs actually take chances on new IPs, or will games become even more cookie cutter? Or will they use the extra revenue to actually take more chances?
Will pre order bonus bullshit go away, especially different items at different stores?
I'm sure there are things I missed, but I'm going to grab some popcorn and watch how this goes, because it's going to be an interesting ride indeed.
And even more interesting will be to see who the publishers/devs point fingers at once they get their way if things don't go how they predict they are going to go.
Other things of interest will be if DLC reverts to free and a thank you for buying their product similar to how ios apps continually update their games with additional content at no extra charge, or do they continue to use it as a way of milking additional funds out of customers?
Will retail prices actually lower, even if not initially, but maybe drop faster and to lower price points?
Will devs actually take chances on new IPs, or will games become even more cookie cutter? Or will they use the extra revenue to actually take more chances?
Will pre order bonus bullshit go away, especially different items at different stores?
I'm sure there are things I missed, but I'm going to grab some popcorn and watch how this goes, because it's going to be an interesting ride indeed.
They take more but they also have other costs, so in the end they don't make much profit from new game sales.
How does GS contribute nothing? it's where most games are sold.
If GS contributes nothing, why haven't we seen publishers set up retail chains to sell games. Shouldn't it be easy?
He didn't say that it was inexpensive to create a chain of retail game stores, only that Gamestop itself doesn't contribute much, which is debatable. I'm not sure its where 'most' games are sold, but they certainly have helped create a robust secondary market for games.
I am not convinced, however, that if Gamestop magically disappeared overnight, online and other retailers wouldn't make up the difference in sales pretty quickly.
Look in the Jimquisition topic. Not only is there info to back it up but there are also a number of retail workers in that topic that confirm that profit on new games are that bad. Publishes just want more of the pie and they have always look for a scapegoat. It was game rentals now its used games.
Me too. I refuse to listen to corporate apologists.
It'll happen much sooner than later if they don't learn to get their gaming & marketing budgets under control.
Disagreeing with you makes him a corporate shill? LOL okay. He's better off without viewers like you.