Is the Used Game Market Damaging the Industry?

Are you asking why publishers would want to pursue a deal from used games revenue eventhough that is not common in other industries or what?

The reason WHY they want to make a deal is because, they can sell the copy once to the retailer and the retailer can sell, buyback and sell it again for five times or more making much more money than the publisher. Publishers don't like this. (I personally think that this ability to buyback and sell the same item multiple times in very short time period is what makes this situation unique and separates it from most other business situations)

Still It's not illegal to do what the retailers are doing, but that is the reason why publishers want a new deal.

Publisher also have some leverage when making such a deal, they can talk about e.g. digital distribution and the possible revenue split in the future. Retailer might want to look beyond short term and make a deal. So if you are asking why retailers should care, then there was that reason. They can benefit from this deal too.

Is it so hard to understand the publisher side even if you don't agree with it?

 

You didn't get what he asked for at all.

He asked what makes games so special to that they should be looked upon differently than all normal products when they are traded.

We all understand why publishers want more money and all that, but the argument being used here are asking to either change laws, or look upon these products differently than all others, giving the industry special rights.

Im all for publishers making deals with retail outlets, thats a natural part of business, but no way in hell there should be any law, or any regulations(that the retailers haven't agreed to) against selling used goods like the retail stores are doing, just because people like video games.

If publishers can make a deal, good for them, if not, to bad, they certainly arent entitled to it.

 

LOL - I was thinking the exact same thing.

The video game market, IMO, is not at all much different than the movie industry. Video games and movies certainly have more in common than houses, chocolate bars, cars and clothes do. I think if people are going to be building all sorts of analogies, they first need to look right there...the movie industry. I also think that the video game market needs to try to emulate this industry more and more, in order to succeed.

 

Nobody has to see games as being anything different than what other businesses are, but since the publishers do see it differently, we are having this discussion And I tried to explain why publishers see this business as being slightly different.

Nobody is asking or demanding any law chances... you made that up. The industry has no special rights, but there is enough leg room to make adjustments to the current situation without changing any laws etc. If I say that I think developers and publishers should see a bigger cut from the total revenue stream that their IP generates in a let's say window of 3-6 months after the release of that IP, I don't mean that It should be written in blood to the law book. It's just my personal opinion.

And it's not just me being fanboy to the industry, which to a degree I am, since I like to play games... Instead I believe that if bigger cut goes to the publisher, we have slighty better chance to see more varied titles that are not entirely calculated from start to finish like many EA titles for example. Competition can create better products, but it can also kill risk taking, so it's possible that if developers can create titles in a less hostile environment, we get better games in many ways than what we will in the future if the costs keep getting up. I like better games so that is the reason why I wouln't mind publishers getting something out of used games market. Do I want to change laws... NO!

 

I'm asking what I asked. It's obvious why publishers want a new deal,more money.
I'm asking why we should give them that privilege. Why the consumer and retailer should see them any differently.

 

Well I already wrote something about the retailer and as far as consumers go, you either agree with the publisher side or you don't. The possible reasons and motivations for both sides are laid out there.

How is this you giving anybody any sort of priviledge anyway?, this whole matter is between the industry. Publishers and retailers will sort it out themselves. It's not our place to hand out priviledges to them.

 

To be treated special is a privilege.I'm not asking why publishers would want a better deal,that's obvious.I and others want to know why the games industry should be treated special. And it's not just between the industry,we as the consumer have the final say.We have rights,and we have money.
Edit: I have read your posts supporting publishers.My point is that any of the arguments you made could be made for any used industry.

 

I agree with everything you said. I'm just trying to say that if used game sales is hurting the industry, then the industry is going to have to change....not the secondary market nor the laws. There are so many opportunities to make money from your video game other than just the standard formula of releasing a game and hoping it does well.

DLC is one of them. Done correctly, the publisher should be able to capture considerably more profit than they ever lose to used sales. Right now DLC is viewed by the consumer as a nickle and dime approach of getting more money from us. The paradigm needs to change. Games are released lacking content and then a few months later "the rest" of the game is available for download. The industry needs to change this. If you make a shell of a game...then charge for a shell of a game. Consumers are WAY more likely to buy your DLC if they spent $10-15 less for the game to begin with. Cosmetic DLC (skins, music, game modes etc.) should be ready for download at the same time as a game is released, capitalize on this period of time. Content DLC (maps, add-ons, weapons, quests) should compliment a game...not complete it. They need to be a value added and they also should be available as close to release as possible. DLC is a direct line of money for game companies...there are really no middlemen and the buck stops there...there is no DLC used market. Gamers that pay for DLC are much less likely to sell their physical media. If you are losing money from used sales...then either make up for it somewhere else or trivialize the used video game industry.

One of the major differences movies have over games is that they make millions of dollars before anyone can actually buy the physical media. Games need to do this. They need to make money before they are released. Here are some ideas. To my knowledge these things have never been tried. They may sound ludicrous or radical but like they say, you never know until you try.

Charge money for demos. That simple. $1 dollar...maybe $2. Have a demo done, polished and up for purchase months before the game is released.

$5 beta tester for online mode of games (I would gladly pay to beta test games). As much as I hate to say it, companies should realize that they COULD charge people to get in on this.

$10 demo/pre-order that ships to you directly from the publisher with perks such as special editions, cloth maps, stickers, posters blah blah blah. The Xbox live/PSN/Wii market places should be selling pre-orders to games. The publishers should distribute direct to customers an early sale of the game. You are charged $10 on your CC as soon as you download the preorder demo. You are given the option to cancel your preorder by deleting the demo. If not then your CC is charged the remaining amount as soon as it ships. You get the game in your mailbox a few days before it is released to the game stores and the game company turns a considerably higher profit initially by cutting out the middleman.

Free physical media/game - $40-50 online activation

Change. That's the solution.

 

What about rentals?

Sales aren't going to increase automatically if you eliminate rentals in that fashion.

A lot of people also buy games knowing they're going to sell it afterwards for $40-50, in effect renting for $10-20.

Plus why would stores give their shelf space to media from which they make no money?

Would be interesting to see the sales breakdown between a game like Warhawk, which sold for $40 as a DL and $60 retail.

 

I don't think lowering prices quicker would be a solution to the used games problem (although it could increase sales all around). Right now, a new game is sold $60, which GS (or other) buys back for $30, and sells back for $55. If games dropped in price a couple weeks after launch (say to $45), we would see GS buy the games back at $20 or 25, and sell back at $40, maintaining their insane margins, and that same little price differential that makes their used games business so dangerous to new games. Meanwhile, the margin of the publisher would be far, far more impacted (since they still have distribution, packaging/marketing and royalties to pay).

I think we will see publishers (with EA leading the way) try to push HW manufacturers to put safeguards against this in the next generation of consoles, and push DLC in a big way.

 

Would it be viable for game developers to offer some downloadable content for free with a one use code? People that buy it 2nd hand can still access the content but have to pay $$$. Would that be a good strategy if they find it to be a problem?

 

Actually the smaller the price differential the less dangerous their used game business is to new games. Imagine the demand for used versions at $35.99 of newly released games priced at $59.99.

 

But if the price difference between used and new was that much, then the very fat margins of the resellers would be cut by a lot. After all, they wouldn't get that many used games in the first place if they bought them back for $15 a couple days after release. So they buy back at $30 (or something like that), and make an extremely large margin by selling back at $50 or $55. They are so enamored with their margins that I've often seen the used copies stay at that level of price while the new game drops in price...

I don't know GS first hand, but I know their French counterpart, Micromania, very well, and that's basically the same practices : sell new game at €70 (for a 360 game), buy back a short list of heavy hitters at €30 (less for the other games), and sell back at €55 or even more while the game is still hot. They even advertise their used games business on their newsletter. Their competitor, Score Games, pushes even more by making lots of trade-in offers (sell 2 recent games, get a large discount on your purchase of a big release). They even make trade-in offers for preorders... So they get the used games back while they are still hot.

 

If the big publishers (Activision, EA, Ubi and so on...) joined forces could they not just stop distribution of games to outlets that deal with second hand games? Sure those stores could still buy and sell used games but they must hurt when they can no longer sell new hot games on release day, but i don't know maybe that would hurt the publishers even more.

Anyway, does the used game market damage he industry? Yes it does, although it would be nice to have some studies done to actually see how many new games are not being sold because of it and the other thing is that everyone has the full right to sell their game and no new laws should prohibit that...

 

I'm sure that it would make a lot of lawyers rich. There are laws against a bunch of companies joining forces to impose their will.

studies like the ones the RIAA runs that they use to try to tell us that they lose 100s of billions of dollars every year to piracy?

 

Well you would also find from such a study that removing used sales would decrease new sales, because you would be increasing the relative cost of every title.

I'm sure they can do plenty of studies but mostly my point was that a lot of purchased studies tell you exactly what the purchaser of the study wanted you to hear. Not necessarily the truth.

 

If some game sells 1 million new copies at 50$ and 500k used copies at 40$, are you saying that it's possible that if you can't buy the used game for 40$, it would not only kill all of those 500k sales, but have some sort of ripple effect lowering new game sales aswell? I don't think so.

You could make a case that the number of sales would be lower than 1.5M or any number between million and 1.5 million.

 

It doesn't matter if used games are hurting the industry or not. If I buy a game I have a right to sell it to someone else.

 

He is saying that the 500K people that sold the game to the ones that brought it used may have not brought it new if they knew that they won't be able to sell it after. I am not saying that it would be likely but it could happen.