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Why used games sales don't matter
- Thread starter Kilgore Trout
- Start date
Used games are much better in Japan. You won't go to a store and find a copy of of games with missing parts, scratched up CD's and your typical Gamestop crap. (Things might be missing if its something from the SNES era, but it won't be in horrible condition.) They also offer great sell back prices. I typically only buy used games here for my next gen systems only because I don't want to spent the extra 2000yen to buy a new game. It isn't the Gamestop approach of discounting it 5bucks.
Then again you never see drops in the prices of new games at electronics stores unless it is a giant bomb. But the only place that I know that even does that is Softmap. Yodobashi Camera and Yamada Denki never drop prices for anything. The same 3-4 year old game will still be 7000yen in most cases.
Then again you never see drops in the prices of new games at electronics stores unless it is a giant bomb. But the only place that I know that even does that is Softmap. Yodobashi Camera and Yamada Denki never drop prices for anything. The same 3-4 year old game will still be 7000yen in most cases.
charlequin
Banned
truly101 said:
Yeah, it isn't. You can even crunch the revenue numbers provided by Gamestop and work out that it isn't really possible -- the actual used game revenue is like a little below 2/3rds that of new games (even though the profit off that revenue is far higher) and when you roll in how much of Gamestop's used business is in old, cheap games, it's clear that those $55 used copies of brand-new games make up a fairly minor part of their used business. (People also don't trade things in nearly as quickly here as in Japan since trade-in values don't decline every week the same way, so the supply of used copies tends to be sparse on the ground until a couple months after a game is out anyway.)
TheBrain76
Member
HungryHorace said:
GS already does this. When UFC 2010 came out, the used price was $15 less than buying new instead of $5. But you don't hear about that, because GS is the devil.
The Faceless Master
Member
if used games are so popular and profitable, why don't publishers buy and sell used games?
boiled goose
good with gravy
if free market assumptions hold, then used game sales dont matter.
ability to sell your game increases the salvage amount. The higher salvage amount decreases the cost of entry.
The less expensive something is, the more likely you are to buy it.
In conclusions, if there is a used game market, used sales dont matter.
No used market vs used market might matter a little bit, but the effect is definitely dampened a lot by the increased salvage cost.
if i couldnt sell games after i buy them, i would buy MUCH MUCH less games, or wait even longer for them to drop in price.
freaking nailed it...
ability to sell your game increases the salvage amount. The higher salvage amount decreases the cost of entry.
The less expensive something is, the more likely you are to buy it.
In conclusions, if there is a used game market, used sales dont matter.
No used market vs used market might matter a little bit, but the effect is definitely dampened a lot by the increased salvage cost.
if i couldnt sell games after i buy them, i would buy MUCH MUCH less games, or wait even longer for them to drop in price.
The Faceless Master said:
freaking nailed it...
amtentori said:
This is because a lot of companies are piss poor in accounting for the element of human behavior and how changing prices and access to said goods can do far more harm than good. Game company X sees that its titles used make X amount of dollars for Game Store A, it wants a piece of the action and at least figures that dollars spent on used games should equal dollars spent on new games. Game company X is too stupid to consider that people buy new games from money they made from selling old games. Or that just because someone is willing to pay $20 for something used, does not mean they are going to pay double for new (in all likelihood they are not). Game Company X has no concept that a used game market increase traffic in places where their new products are sold, it gets their brand and product into other peoples hands, so when the inevitable sequel comes out, you have more people who might be willing to buy it since they tried the original at a lower entry price. Game company X may not even realize that the used market influences hardware sales as well. I think ditching the used market would do a lot of harm to the new market, perhaps sink the whole thing. They are going to need to rethink their approach
Kilgore Trout
Member
Doesn't look like the online pass helped anyway.TheBrain76 said:
THQ posts losses of $47 million this quarter
Amibguous Cad
Member
The Faceless Master said:
They'd probably get hammered with anti-trust suits. Vertical integration, don'tchaknow.
Then again, I guess Valve gets away with Steam...
SapientWolf
Trucker Sexologist
This is an important point that often gets overlooked. The used games market subsidizes the $60 price point and helps to drive pre-orders and day one purchases, which is how most publishers make the vast majority of their money. It also incentivizes retailers like Gamestop to basically shill new releases months before they come out.Kilgore Trout said:
That is why I don't think all publishers want to get rid of the used market. It's clear that they're looking for ways to monetize it. Used cars often need parts and service, and we're already seeing artificial degradation added to used games in the form of online passes.
The Faceless Master
Member
yeah, but the online pass makes the used game less valuable, which also makes the new game less valuable, which goes into the consumer's decision to buy the game new or used and also affects their thoughts on the game, franchise and brand.SapientWolf said:
SapientWolf said:
Bolded bit is bullshit.
I think your POV is exactly what publishers are wary of. They need to monetize the transactions because otherwise, they don't make money.
The problem here is the growing used game market. My local shops have a HUGE selection of used titles. The Used shit is more prevalent than new. Sometimes, a game comes out and not even a week into release, you have used copies sitting on the shelve (at $5 less).
Say you bought Halo Reach used, Bungie/MS don't get a cent. You play online. For months. Its a loss making venture. Especially with titles that have an online component to these.
Games have changed. The used games market is burgeoning and game shops love it because its 100% profit. Its a problem. Digitial Downloads will change this and already has. I mean, it really wasn't possible before because the delivery method wasn't there.
Buying online/DD is no different from using netflix etc. Some people seem to think that the fact they can't resell a DD title, is a problem. Well, there's a solution. You don't have to buy it.
This is also SO fucking stupid. No one really complains about steam or GOGs. In fact, I'm pretty sure gamers love it. so there.
The Faceless Master
Member
they made money when they sold it, just like anyone else who creates something does.Jax said:
so, someone bought their game new and kept ir for under a week? that should be a message to the developer to make a game that's worth keeping.
someone bought it new and they got paid when someone bought it new. they should ask themselves why the first buyer wasn't playing it online, and instead sold it, not how they can make money from the second buyer...
from a mass market standpoint, the delivery method still isn't there. and with all the quotas already in place in some markets and slowly being introduced into others, it's not looking good in the near term.
Netflix is a rental/streaming service and people understand that, buying games is buying games and people don't equate that to a non-transferable restriction filled limited license to use. basically, in most cases, it's not really buying and people expect to be able to do all of the things they are used to doing with what they paid for. especially when they pay the same price or more for less stuff.
i'm pretty sure there have been several threads on GAF complaining about Steam and GOG... and that's not even the point really, with PC DD platforms there is DIRECT competition for many games sold, with Console DD, there just isn't, and old games and dlc from 2006 is still being sold at the launch price, and awesome deals, bundles and sales like on PC DD plaftorms are almost nonexistant. it's pretty ridiculous to bring up PC DD in the discussion when the circumstances surrounding Console DD are completely different.
Najaf said:
If they can divert the attention that they're failing because they're bad at their works but that it's used market fault, the higher ups don't get replaced nearly as quickly.
I mean how many execs have you seen stay in place after they publicly stated that they sucked balls?
I'm still waiting for the day they manage to kill the used market, many publishers will finally understand why that never was a good idea.
I think a lot of these companies bleeding money need to sit down and have a good self-reflection session. Look at the horrible business models they're running and then go from there. I'm sorry, but if you greenlight a $25 million dollar game and only make $15 back, don't greenlight another $25 million dollar game. Even a kid can figure out that's not a good way to make money. I'm not going to feel sorry for a company when they can't figure out basic economics.
Gamestop and the used game market didn't just pop up overnight, its been here for a while.
Where were these companies bitching at the used market when they were making a profit on their games, oh that's right, there wasn't any.
Since this gen started and the money well ran dry for these companies, all they've been doing is grasping at straws to try to figure out what's going on. This is what they've done this gen to try to fix the problem
Jack the price of games up $10
Start charging for DLC
Start charging for on-line in used games
Guess what, it hasn't worked. They're still losing money. Wonder why that is.
Gamestop and the used game market didn't just pop up overnight, its been here for a while.
Where were these companies bitching at the used market when they were making a profit on their games, oh that's right, there wasn't any.
Since this gen started and the money well ran dry for these companies, all they've been doing is grasping at straws to try to figure out what's going on. This is what they've done this gen to try to fix the problem
Jack the price of games up $10
Start charging for DLC
Start charging for on-line in used games
Guess what, it hasn't worked. They're still losing money. Wonder why that is.
linkboy said:
The funny thing is that they've got a competitor who basically went the other way....
they actually decreased the price of the goods by 10bucks (at least here).
As a result personnally I ended up being one more active consumer.
seriously 70 bucks for a game? No wonder nobody buy new.
Steve Youngblood
Member
Remember when EA responded to that by buying exclusive rights to the NFL license? I agree with you that prices need to come down, but someone (charlequin, I believe) already touched on how a concerted effort is needed to really make it work. One company trying it with some success followed by another company pulling the rug out from under them isn't going to cut it. But yes, I agree that prices should go down. However, budgets need to come down as well.Amneisac said:
Hcoregamer00
The 'H' stands for hentai.
Attacking used games is definitely not the way to do.
Slim down budgets and move products to different positions in the market. It bothers me that almost all brand new games are at the $60 level when released, and then lower the price because of lower than projected demand. The gaming industry needs to have smaller budgets to allow for games to be released in multiple price tiers ($30, $40, and $50).
This muti-tiered system would work because they can scale price according to budget.
Slim down budgets and move products to different positions in the market. It bothers me that almost all brand new games are at the $60 level when released, and then lower the price because of lower than projected demand. The gaming industry needs to have smaller budgets to allow for games to be released in multiple price tiers ($30, $40, and $50).
This muti-tiered system would work because they can scale price according to budget.
MaximusNeo701
Member
very interesting
HungryHorace said:
To be fair, I used other examples - a painting, a book, a CD or DVD, garage sales, flea market type setups... If I buy a painting from an art gallery for $1000, then 2 months/ years later decide to sell it off at a flea market, I don't have to REPAY THE ARTIST for reselling the painting/book/lcd monitor/transistor raidio or whatever item it was I originally bought and paid for in full.
If I form a company called PaNaMa's Used Junk (heh) and I want to specialize in selling off people's old crap, to other people, I'm pretty sure that falls under your standard capitalism business enterprise, and I'm pretty sure I don't have to give more money to all the original manufacturers of the traded in crap, before I can sell it to my bargain hunting customers. Those guys made their money on their original sales. If cars are a bad example, then choose almost any other commodity.
What game companies seem to be pushing for, is a concept I think that's kind of anticapitalist in a way. They want $70 for your NHL 2011 game disc. Then when you trade it in (to EB, Johnn's Used Games, Pawn Shop, PaNaMa's Used Junk Store, your cousin Freddy - whatever) they want you to pay them an additional $10/20 or whatever.
Then if the game is resold to someone else (your neighbour, a classmate, or back to a store) they want another $10 or $20.
In effect, they are now asking for say $70 + 20 + 20 + 20 (for example) for that ONE COPY of ONE GAME, every time it changes hands, throughout it's very existance on earth.
So instead of making $70 on that copy at retail, they want to make $70 at retail + another cut every time it changes hands - so say, $130 in this case, for example.
This is totally at odds with almost everything in the history of market exchange.
If I sell off my old Dreamcast collection at a flea market this sunday, and that guy decides to sell it off via his game store 2 weeks later, does he RAELLY have to go back and give Capcom another $10 for my copy of SFA3 from 2000?
There is no way they can do a "cradle to grave" price gouge, for the life and existance of every single disc, every time it changes hands, and get more moneys every time. That is retarded. And I'm pretty sure someone could prove unconsititutional, or something.
The industry experienced rapid growth when EB adopted the pre-owned program at all its stores and then Babbages/Software Etc. followed suit. Once those programs were in full swing and then all those companies and Funcoland combined to form one conglomerate, again games sales kept going up (NEW sales) at historic rates.
The industry could not sustain its current level of sales if publishers found a way to stop used games sales. New games sales would plummet because trade-ins are driving this wash/rinse/recycle system that's allowing even middling quality games to sell well.
The industry could not sustain its current level of sales if publishers found a way to stop used games sales. New games sales would plummet because trade-ins are driving this wash/rinse/recycle system that's allowing even middling quality games to sell well.
Kelegacy
XBOX - RECORD ME LOVING DOWN MY WOMAN GOOD
Used games are and always will be a scapegoat for larger problems within the industry. One problem? $60 games. I switched to Gamefly in September because I'm sick of short games going for such a high MSRP. Few games IMO are worth that pricepoint these days.
And I've saved hundred of dollars in the last couple months alone. I'm now part of the problem, but I don't care. $60 is a lot for a single unit in a hobby, IMO. Especially when hundreds of units come out a year and all are priced similarly. I don't care about inflation, I don't want to get into that argument. I just think it's a lot of cash.
CliffyB said the same thing years ago, that games needed to come down in price, right before the first Gears came out. Guess what? Microsoft priced his game at $60 in the fall of 2006.
And I've saved hundred of dollars in the last couple months alone. I'm now part of the problem, but I don't care. $60 is a lot for a single unit in a hobby, IMO. Especially when hundreds of units come out a year and all are priced similarly. I don't care about inflation, I don't want to get into that argument. I just think it's a lot of cash.
CliffyB said the same thing years ago, that games needed to come down in price, right before the first Gears came out. Guess what? Microsoft priced his game at $60 in the fall of 2006.
charlequin
Banned
Jax said:
No, it's straightforwardly accurate. The value you can get by reselling something once you've extracted its utility for yourself is its "salvage value." The higher the salvage value of the things you purchase, the more liquidity and capital you have available to purchase other things. In the specific case of video game trade-ins, since getting your full trade-in value is dependent on accepting credit (rather than cash), you can even be guaranteed that all this salvage value is being rolled back into further game purchases (and that the games being purchased are new, day-one titles, both since all the best trade-in deals give you bonuses for such day-one purchases and because the salvage value on older games already bought used is near zero.)
When you remove this element from the system, people's liquidity for games decreases. Someone who buys 12 new games a year at full price and gets $20 back for each of them is out $480 over the course of the year. Change the system so he gets back $0 for each game, and that $480 will only buy him 8 games -- those extra four were all paid for by his ability to trade games in, and those are the new sales that would be lost without a used game system in place.
I mean, there's really no debating this part of it unless you just don't believe the underlying economics. This is how markets like the one we're looking at work: high-priced new products are subsidized by money flowing into the system for pre-owned products.
And as I've already addressed in the thread, the "omg they sell it for $5 less" thing is basically a distraction from the issue. Games less than two months old are a minuscule part of Gamestop's used business and very few of their used titles are sold at $5 off the cover price; most of their money comes from jumping ahead of the pricecut (buying back a game from earlier in the year at $20 and selling it used at $40) and from buying giant stacks of games back at $1-2 apiece and reselling them for $10-15.
PaNaMa said:
Well, in a pretty straightforward sense, copyright itself is an anti-capitalist concept: it's an artificial, government-granted monopoly, created in order to achieve specific social ends.
Now, I'm okay with that for a wide variety of reasons, but fundamentally, the reason copyright exists is to reduce competition and allow a seller of creative works to achieve an artificially inflated profit margin as a result, because otherwise no one will have an incentive to go into the content business (and therefore the citizenry will not enjoy the fruits of others' creative labors.) That's why it's so baldly, unabashedly cronyish when companies want new laws that strengthen their copyright protections in situations like this -- they're quite literally saying that the special privileges they enjoy now are insufficient and they need some more privileges to really keep doing their job. (All the while the internet has been rapidly disproving the idea that ultra-restrictive copyright protections are necessary to encourage people to make creative works...)