What about a digital download rental service?

[Tap In]

I was thinking, looking at the netflix and GF models, how about Sony, Nintendo or Ms implementing a pay per system of DL games with expiring digital rights (say for 3 days, a week or month or perhaps unlimited monthly fee options).

I loathe disc media and as I look forward to the next gen of huge HDD space on consoles (although I already have room to install ~12 current gen games on my elite) and DL games for purchase, why not implement a system backed by publishers with them getting royalties on each rental?

I am spoiled now with the ability to get partial retail value for a game when I complete it or decide it's not for me (trade in) and we will lose that option if we chose digital DL purchases. this way I'm only still paying for the percentage of game that I actually enjoyed. I think i would also take more risks. It's like a demo system but demos are so limiting and these would allow you saves and progression and online play etc. We would also be putting money into devs hands for their work for some games we would otherwise not even bother to buy.

Is it a feasible idea? profitable? win-win for consumer/developer? I wonder if the rental fees would exceed or impede a typical income from new game sales? perhaps it could help offset the rentals in Hollywood and Block Buster and Gamefly that pubs are missing revenue from and at the same time make it more convenient for the gamer? It would also help to limit the loss of revenue form the used game market as well as be convenient to have all of your games quickly available to acquire and to play without disc switching.

 

[Tap In]

so ... stupid idea then?

 

[DuckThor Evil]

It could be a good idea, perhaps they could make it so that you have an option to purchase the game after the rental and get a refund from the rental purchase. I'm sure I would get to play more games that way.

The problem is that if you are willing to introduce a new service, it should increase your total income and I'm just not convinced that would happen. This might eat too much from full purchases, especially nowadays when games are often very short and offer relatively low replay value, but with proper pricing it might be feasible...

I personally would like to see that very much.

 

[Rangers]

They would probably be too frightened over the possibility of losing money. Rightly or wrongly.

 

[Tap In]

It could be a good idea, perhaps they could make it so that you have an option to purchase the game after the rental and get a refund from the rental purchase. I'm sure I would get to play more games that way.

The problem is that if you are willing to introduce a new service, it should increase your total income and I'm just not convinced that would happen. This might eat too much from full purchases, especially nowadays when games are often very short and offer relatively low replay value, but with proper pricing it might be feasible...

I personally would like to see that very much.

thanks Dr evil.

I'm thinking the added income comes from taking a large chunk of the used and B&M rental market which for now profits independent retailers. A system like this puts the money directly into Devs/pubs pockets. The total income will be the same (more because of the convenience?) but the income shifts from distributors. It's the same idea of what is coming anyway (Dig distribution of sales) I just think rental of licensing is going to get a hell of a lot more people in front of uyour game paying you something for it.. and yes a rental toward purchase would be sweet as well... good idea.

Of course this is all based on getting people off of their dependency of disc media, which I'm convinced will happen in the next gen.

 

[Shifty Geezer]

The added income may come from people who wouldn't play a title being willing to play it as a rental. eg. Uncharted sold 2 million say. If 4x as many people would rent a $15 copy as buy the full-price game, the profits would be no different, but you'd reach a wider audience. If 5x as many people rent, you'd make more money. But if the number who'd rent was much less, you'd lose money assuming those who'd buy instead rented. You'd have to figure out how many people who buy games would instead rent, and, as you say, how much of the 2nd hand market would instead go rental.

Would need a big investigation to get any usable data on which to base an opinion.

 

[Tap In]

The added income may come from people who wouldn't play a title being willing to play it as a rental. eg. Uncharted sold 2 million say. If 4x as many people would rent a $15 copy as buy the full-price game, the profits would be no different, but you'd reach a wider audience. If 5x as many people rent, you'd make more money. But if the number who'd rent was much less, you'd lose money assuming those who'd buy instead rented. You'd have to figure out how many people who buy games would instead rent, and, as you say, how much of the 2nd hand market would instead go rental.

Would need a big investigation to get any usable data on which to base an opinion.

yes I guess that does open up the possibility of cannibalizing sales so research would need to be done (probably already is being done somewhere ) and then a scaling price structure where ownership is still the sweet spot for most games.

so my thought would be game sales targets remain as they are today but an added revenue of what is now the rental market (GameFly, Blockbuster etc) and the used games where someone will not play full price (there is huge revenue made by Gamestop).

Perhaps GF or Netlix or blockbuster/Hollywood video cold get a piece of the action by maintaing a system like this if not run by a Microsoft or sony.

I'm just thinking it could be a win, win... except for Gamestop/Hoolywood video/Game Crazy). i'm referring to the North American market obviousl as i'm not sure how it works abroad.

 

[DuckThor Evil]

Hmm it could be good if they would offer the rental version say 4-8 weeks later than the purchasing option, kind of like movie theater vs rental stores. With that kind of delay, it probably wouldn't eat that many full game purchases and maybe the rental business would then be extra sales and growth.

 

[Tap In]

Hmm it could be good if they would offer the rental version say 4-8 weeks later than the purchasing option, kind of like movie theater vs rental stores. With that kind of delay, it probably wouldn't eat that many full game purchases and maybe the rental business would then be extra sales and growth.

good idea as well.. I don't know... I'm being selfish as I would love it (I would definitely get a chance to play or try out a LOT more games than now) and was thinking that it could increase revenue as well (which in theory should make more and better games)

I don't bother to rent games (too inconvenient) but I will buy used and I prefer to be giving my money to devs than Gamestop. thanks or the feed back guys.. i guess we'll see in a couple of years if someone else considers it a viable idea.

 

[wco81]

It's been discussed many times.

First, you undermine the retail and other distribution channels which you've built up over the years. Maybe not that big a deal for publishers. But a big deal for systems companies. Why would retail carry your console hardware, which has minimal margins, if you deprive them of the chance to make better margins on software? (then again, with the CC bankruptcy, maybe retail channel is dying for media and entertainment products. But Wal Mart alone could cause trouble for Sony, Nintendo and MS by dropping video games as retaliation for DD of games).

Second, the infrastructure in NA doesn't support heavy downloads. Certainly not a Blu-Ray disc-full of gaming content. Comcast instituted caps. Other ISPs have caps which aren't publicized.

Third, given the first reason above, why would systems companies assume incremental costs to include more storage off the bat? They get their cut of gaming software licenses whether games are on disc or downloaded. So there would have to be the prospect of incremental revenues to justify incremental costs. Maybe if they sold video content, which they do. But nobody is making big money from video downloads yet.

Fourth, if the rental model becomes the dominant paradigm, it's not good for consumers. As you noted, you can't recover part of your costs in the used games market. But as people get used to shorter times with games, game design could evolve to shorter game play, to accommodate shorter rental periods. Downloaded games may not be as spare as current downloaded games, but developers may figure, we're not going to shoot 20 GB or more of data for download, lets pare it to under 5 GB.

 

[Tap In]

It's been discussed many times.

First, you undermine the retail and other distribution channels which you've built up over the years. Maybe not that big a deal for publishers. But a big deal for systems companies. Why would retail carry your console hardware, which has minimal margins, if you deprive them of the chance to make better margins on software?

Gamestop could go out of business as far as I'm concerned and there will NEVER be a shortage of a retailer to make a few bucks moving a hardware product in and out.

DD is the future, no question, the question is would a rental system work? You make some good points above as well as to why that would be dicey situation.

I still think it's possible, if not immediately plausible with the information we have currently. that may change when DD become standard 5-10 years from now.

 

[steampoweredgod]

They would probably be too frightened over the possibility of losing money. Rightly or wrongly.

They can always do a small test on a small area and see the results.

Renting games is easy as pie, and buying used is also easy as pie at present..

By integrating it into the online system they get money they otherwise would've lost.

If your online component is good and addictive, it will force the player to buy or take an indefinite rental(which might be even more profitable).

In fact if the system is designed to cause indefinite rentals, it could be extremely good ala mmorpg's fees but lower, many might bite.(for example a rent any one item at a time for a monthly fee, some might keep paying it even while renting low or nothing new.)

Theoretically you could also implement a trade-in system for credits and some might not realize they're actually just renting, the feeling of temporary ownership might cause some to bite.

Hmm it could be good if they would offer the rental version say 4-8 weeks later than the purchasing option, kind of like movie theater vs rental stores. With that kind of delay, it probably wouldn't eat that many full game purchases and maybe the rental business would then be extra sales and growth.

I agree.

Second, the infrastructure in NA doesn't support heavy downloads. Certainly not a Blu-Ray disc-full of gaming content. Comcast instituted caps. Other ISPs have caps which aren't publicized.

I prefer any option that forces the consumer to run against caps, the more they get pissed, the likelier they'll move politically and force the hands of the companies who've been given tax benefits, incentives, monopolies, etc, etc. and have only left their networks to rot while complaining and placing caps, etc.

 

[-tkf-]

I was thinking, looking at the netflix and GF models, how about Sony, Nintendo or Ms implementing a pay per system of DL games with expiring digital rights (say for 3 days, a week or month or perhaps unlimited monthly fee options).

I loathe disc media and as I look forward to the next gen of huge HDD space on consoles (although I already have room to install ~12 current gen games on my elite) and DL games for purchase, why not implement a system backed by publishers with them getting royalties on each rental?

I am spoiled now with the ability to get partial retail value for a game when I complete it or decide it's not for me (trade in) and we will lose that option if we chose digital DL purchases. this way I'm only still paying for the percentage of game that I actually enjoyed. I think i would also take more risks. It's like a demo system but demos are so limiting and these would allow you saves and progression and online play etc. We would also be putting money into devs hands for their work for some games we would otherwise not even bother to buy.

Is it a feasible idea? profitable? win-win for consumer/developer? I wonder if the rental fees would exceed or impede a typical income from new game sales? perhaps it could help offset the rentals in Hollywood and Block Buster and Gamefly that pubs are missing revenue from and at the same time make it more convenient for the gamer? It would also help to limit the loss of revenue form the used game market as well as be convenient to have all of your games quickly available to acquire and to play without disc switching.

I could see this as a great idea that would help kill the used games market by presenting a way for people to play games they want for less money, but keep them from going the used route. My local gamestop has crazy amount of used games, and usually there is fairly new releases on the shelved as well.

But not sure it would work, i think it would be easier to just make the Digital Download versions cheaper, since they can´t be sold as used games they don´t represent a "loss" in the same way as a physical copy. But it would have to be on a case to case basis. Games that rely heavily on multiplayer could just keep going with the "license to play online".

 

[AntShaw]

I think this would be a brilliant idea, but no shot legacy media companies will do this. They are more concerned about gatekeeping and restricting windows and abilities to purchase games. Legacy media companies don't want to serve their consumers, they only want to serve their pockets. You can easily see that with what they are threatening to do with used games, and the simple fact that 98% of full retail games cost $60. Price fixing at it's finest.

 

[Silent_Buddha]

I think this would be a brilliant idea, but no shot legacy media companies will do this. They are more concerned about gatekeeping and restricting windows and abilities to purchase games. Legacy media companies don't want to serve their consumers, they only want to serve their pockets. You can easily see that with what they are threatening to do with used games, and the simple fact that 98% of full retail games cost $60. Price fixing at it's finest.

Yes, price fixing to keep prices artificially low. Despite inflation causing everything you buy to go up in price, games have been artifically kept low and hence hasn't go up in price relative to other purchasable goods. Food prices have risen nearly 100% since 2000. Yet game prices have gone from 50 USD to 60 USD for Sony and MS. Labor costs for game retailers in my state have gone up over 50% in that same time span, yet their profit margin on new games hasn't changed. I'd say the price fixing to keep game prices low has definitely hurt game companies more than it has helped them.

You also realize that most game companies and publishers are in constant danger of going out of business at the 60 USD price point right? THQ is just barely avoiding bankruptcy at the moment despite having some profitable and well known franchises. Yup sure sounds greedy. There's been multiple buyouts and mergers in the past few years as publishers are either bought out or merged to avoid bankruptcy and going out of business. Square Co. merging with Enix Co. which then later absorbed Taitos and Eidos, as a recent example. All to avoid all 4 of those companies going bankrupt and potentially going out of business.

And of course, they are trying to do something about the used games market. The people that actually make the games you want to play get 0 dollars when someone plays a used copy. It's hard to fund developement of games if people are paying you 0 dollars to play your game.

Digital rentals makes sense. Similar to how you can rent or buy digital movies. And perhaps it'll even encourage game companies to make longer single player campaigns to try to get multiple days rentals out of people. Rentals are easily tracked if rented digitally and hence it'll be easier for the developers and publishers to get some money each time someone rents and plays a game.

But I also think a way to digitally sell your game would be good. As long as a percentage of the sale price goes back to the developer/publisher they would still be able to get a return on investment from used game sales. And if they continue to do the free DLC only to the original purchaser of a game, that would still encourage people to buy new. Of course, allow used digital games purchasers to buy that DLC for a low price.

Regards,
SB

 

[AntShaw]

The strawman argument in regards to used game sales is just that. Does used books/CD/movies/etc hurt the market? No. In turn used sales usually spur market.

In regards to price, publishers struggle because of poor quality products, not because of not charging enough. With that said if individual developers would price their products according to value/quality instead of a pre-defined price, they could improve their sales.

 

[Silent_Buddha]

The strawman argument in regards to used game sales is just that. Does used books/CD/movies/etc hurt the market? No. In turn used sales usually spur market.

Actually yes they do. Especially for books as the authors more often than not cannot get revenue from concerts and artist related products sales (posters, t-shirts, etc.) or for movies product sales related to movies (toys, games, posters, etc.). Physical book copies also degrade over time, especially paper backs which are passed from person to person. That doesn't generally happen as easily with optical media.

Until the advent of digital book sales, the book industry could weather much of this although they were already hurting even prior to that happening.

With the advent of digital book sales and the ease of pirating digital books (just look at some torrent sites I won't mention where entire author catalogs are available) book publishers and the book industry as a whole is in a relatively dire situation at the moment.

Unfortunately digital copies of books don't degrade through use or over time, thus removing used books from circulation eventually.

As far back as I can remember (1970's) used book sales have been an issue for the book industry. It just wasn't as problematic as they didn't also have to deal with pirating non-degradeable digital copies.

You'll also note that unlike console games, prices of books have followed inflation trends as most products do. Unfortunately between people reading less, used sales, and the added impact of digital pirating the book industry finds itself struggling to survive.

Regards,
SB

 

[AntShaw]

Used markets give new items greater value, thus making it better for the consumer and creator. This whole used markets are bad is just not an accurate statement. I'm with you on publishers being able to adjust their prices, for inflation or any reason for that matter. Again, we're back at the main crux of the issue and that is a quality product.

 

[AlphaWolf]

Used markets give new items greater value, thus making it better for the consumer and creator. This whole used markets are bad is just not an accurate statement. I'm with you on publishers being able to adjust their prices, for inflation or any reason for that matter. Again, we're back at the main crux of the issue and that is a quality product.

It's one thing to have a used market for consumer devices that gain wear and tear such that new versions are generally perceived as superior, but when you are talking about a product that is entirely digital a used version is just as good, such that every used copy in existence becomes a serious threat to new sales. Why wouldn't you buy a used digital copy (assuming it's somewhat cheaper) over new if there was no disincentive?

 

[AntShaw]

I was speaking solely to physical goods, and their used markets. Being as digital goods are infinite, the same economics don't correlate. With that said, the only other option for 'used' digital goods is piracy. So, having a way to monetize that would be valuable to any industry.

But, back to the main topic of digital rentals, PSN already does this somewhat with their time limited demos of full games. If this was available for all games, I would fully take advantage of that. I'm a Gamefly subscriber as I find it hard to justify $60 for many of the games I play. I purchase on average about 4 games a year at boxed retail. I purchase many more games off PSN and XBL as I find I get more value out of those purchases. If I had the ability to 'rent' a digital game for 48 hours, or a week digitally and my $$ would go back to the developer directly, I'd fully support that and cancel Gamefly.

In the end, I think this is a missed opportunity for additional revenue.