Is the Used Game Market Damaging the Industry?

[....]

Irrelevant whether you have the right or not but there is an obvious difference between reselling a house and reselling games.

When you resell a house most likely you will replace that "product" with another house or another apartment. If you sell a particular game or not, you dont buy it again. You just reduce a unit of sales for the developer because its you who sold a unit and not him.

Indeed, and such sales especially when it comes to the way its handled in gs or eb is harmful to the industry.

A solution for this might be to further weaken the disc's protective layer, such that careful or normal use will lead to indefinite functionality, but abnormal use will lead to irreparable failure.

Given most individuals are basically 'retarded' when it comes to handling optical media, it need only have a decent threshold of dmg tolerance for such abuse(say a few months of negligence.) to appease customers, with no way to repair it (no polish or the like, maybe requiring proprietary or patented methods to repair cost effectively) should it be damaged.

This way the customer gets what they want, and shops are unable to sell used games.(at least in the united states, where most dvd games are scratched to hell.)

Another method might be to have a degradable section of the disc with information that gets tied to the first 2-3 consoles(with the different consoles using their laser to heat and erase portions of the data each time. After 2-3 plays in different consoles, the game can no longer be played in any other console. The validation key could be tied to say up to 2-3 users' online id's so that they can transition from console to console without problems or erasing data.).

Such would make it possible for a person to sell it once after buying it, and to use it indefinitely in as many consoles as they wish. But would cap stores from hoarding and reselling the same game again and again.

DDs with copyright management is another way. As are crippled online features(ala, mmorpgs). It could also be made such that a significant part of the game is not playable until it receives a validation key online, and that such keys are limited per copy of the game.

The move from cartridge to discs helped, but the ability of used games shops to easily polish away scratches hinders the full potential of optical media at dealing with this problem.

 

[valioso]

It should be as simple as eb/gs just making a deal like renting companies do to give a small % of the sale of used games back to the developer.
You buy a game at 60, you sale it back 4 days later like a lot of people do for 25, and then the store sales it again not at 30, which i guess it wouldn't be a big deal then, but at 55, thats an incredible deal for the store.

 

[ban25]

When I worked at a videostore, a smaller operation, none of the revenue went back to the film studios. That's the Blockbuster deal, but from what I understand Blockbuster pays almost nothing for the product they put on their shelves, where the smaller operations have to put up the full cost.

The rental market has certain stock requirements. They need lots of copies when a particular movie is first released. In the old days, video rental stores were never able to stock that much, so they had waiting lists. Once a movie has been available for awhile, they actually need fewer copies for the library, so it becomes cost prohibitive for a store to try and buy all the copies needed to meet the upfront demand. The arrangement the large rental chains have is to get essentially unlimited copies of the disc upon release and then to return what's not needed later. In exchange, the studios get a cut of the rental revenue.

 

[ban25]

I'm not a collector myself and usually I only own 2-3 games at a time, but I wouldn't have problem paying less for new games in digital form and never have to bother selling them and I would get to keep the old games in the process. I for one can't understand how that is so hard to understand, but whatever.

Common sense, obviously, but publishers have to tread very lightly or risk alienating the retail channel. If EA offers the same game for $10 less via EADM, that's not going to go over well with retail. In fact, this is one of the reasons why EA was so slow to begin digital distribution, because their clout in the channel is renowned.

In any case, you can point to the success of Steam and Xbox Live and clearly see that digital distribution is growing.

 

[ban25]

Games stores chains don't do that as much. One obvious reason? They have used games sales to protect so if they have sales on new games, that pushes used games prices lower.

Used game sales dominates EBGS revenue. If a gamer trades in a game for $15, and EB sells that game for $50, their profit is $35. That's huge -- for them, anyway, the developer and publisher see nothing from that sale. That's why they try so hard to push used games sales, even when a game has just been released and there are plenty copies new in stock (with a paltry $5 difference in price).

It's also why they essentially don't sell PC games. PC games at EBGS are largely relegated to a single shelf smaller than my desk with the games stocked spine-out. They can't sell used PC games, so they almost don't bother to sell them at all.

 

[AzBat]

I am more worried that the consumer money goes to the source rather than to these game stores and I'm willing to remove some of my rights to quarantee that, for example I'm keeping my Mass Effect copy, because I don't want some random dude playing it without Bioware benefitting from it, that way I'm trying to protect my right to get great games in the future too.

That's totally messed up thinking. I'm not giving up any of my rights, not for you or anybody. If I want to resell, trade or whatever any of my games, then I'm going to do it and if the developer don't like it, then they can suck it. I'm looking out for numero uno, not some corporation that could care less about me. If they want my money, then they have the means to change things on their end. Till they do I'm going to trade my games and GameStop and GameXchange are going to be getting my money.

Fearsome, thanks for the info regarding software licenses, it totally opened my thinking on the matter. Sounds totally wrong to me.

BTW, just to put it out there, I haven't seen much comments about game trading. I'm seriously thinking about quit using GameXchange and GameStop and go straight to online game trading. I got interested in the idea after my wife got hooked on PaperbackSwap.com. I started looking for something similar and came across Goozex.com and GameTZ.com. There's also trading via CheapAssGamer.com forums too. Anyway, I wanted to see if there was anybody else here bypassing rentals and retail and doing online game trading? If so, I'd like to hear your experiences.

Tommy McClain

 

[LunchBox]

IMHO just my 2 cents

IMHO,

It seems the debate is getting a little veered elsewhere...

the original question was if the used game market damaging the industry.

I just want to say that I would rather make the publisher's wallet fat than have a used retailer's wallet fat.

I would rather give the publishers the money so that they can invest it in a better funded game than have used market retailers get rich and not really give back to the development of games.

I would rather give the developers and publishers what's rightfully theirs, profit-wise.

If price is a concern for you, then just wait till they mark that game's price down... since the difference between a used game and a new game in price doesn't vary that much... (i.e. 17.99 used vs. 19.99 new, 44.99 used vs. 49.99 new, 54.99 used vs. 59.99 new)

crap games that don't deserve the full price will quickly plummet down in price anyways...

and great games will have the greatest hits price eventually...

 

[PARANOiA]

IMHO,

It seems the debate is getting a little veered elsewhere...

the original question was if the used game market damaging the industry.

I just want to say that I would rather make the publisher's wallet fat than have a used retailer's wallet fat.

I would rather give the publishers the money so that they can invest it in a better funded game than have used market retailers get rich and not really give back to the development of games.

I would rather give the developers and publishers what's rightfully theirs, profit-wise.

If price is a concern for you, then just wait till they mark that game's price down... since the difference between a used game and a new game in price doesn't vary that much... (i.e. 17.99 used vs. 19.99 new, 44.99 used vs. 49.99 new, 54.99 used vs. 59.99 new)

crap games that don't deserve the full price will quickly plummet down in price anyways...

and great games will have the greatest hits price eventually...

I don't think anyone here would rather give a retailer their money over a developer/publisher. I think you need to consider though that the "used game market" doesn't just include buying used games - it includes selling used games, and putting that cash towards more new games. More new games sold are good for everyone involved IMO.

 

[AlphaWolf]

I would rather give the publishers the money so that they can invest it in a better funded game than have used market retailers get rich and not really give back to the development of games.

I would rather give the developers and publishers what's rightfully theirs, profit-wise.

Then they need to step up and offer the service themselves. It's that simple. Used goods aren't going away.

 

[DuckThor Evil]

That's totally messed up thinking. I'm not giving up any of my rights, not for you or anybody. If I want to resell, trade or whatever any of my games, then I'm going to do it and if the developer don't like it, then they can suck it. I'm looking out for numero uno, not some corporation that could care less about me. If they want my money, then they have the means to change things on their end. Till they do I'm going to trade my games and GameStop and GameXchange are going to be getting my money.

You are of course free to do whatever you desire... However when I buy some game that I have wanted for awhile, I don't consider myself doing an amazing favour to the publisher of that particular game as you "customer is the god" people feel you are doing... I consider it an equal trade where we are doing favour to each other.

Quite frankly, I consider that it is easier for me to save up 50-60 units of money than what it is for publishers to summon a team of 100+ person and make them work with each other succesfully 18+ months to bring a piece of AAA entertainment for me to enjoy. That's why I have some respect towards my business partner aswell and don't view myself as some sort of holy benefactor when I'm spending my money towards products and services that I personally want to use and enjoy. Of course if the game sucks and doesn't provide me what I want, then it stays on the shelf.

You can view that as messed up, but I don't really care

 

[archangelmorph]

It seems there's a clear split between those who feel no solution to the
*problem* is necessary/possible without damaging consumer's rights (which I think we can all agree is a bad thing) & those who feel that retailers resell rights should be altered in order to provide greater revenue towards content creators & further growth of the industry..

Now,

Maybe its because, being a developer, i'm a little bit biased on the subject, however I'd have to agree that I believe a solid solution can & should be found which forces retailers (registered companies as opposed to individuals) to provide a percentage income from used software back to the publishers but yet doesn't affect the rights of the consumers from being able to sell back there products without issue.. I say this because when I look around at the state of the industry as it is currently, it's worrying to see that, in a world full of multi-million dollar budgets, extremely high consumer expectations & a technologically fragmented & highly competative market it's the content creators that are suffering to bear the brunt of the risk involved in creating the content which is the lifeblood of the industry. Maybe development studios are increasingly struggling to make ends meet when development costs are so high & to make matters worse there's no guarantee that big budget spending will in fact produce high sales on software.. It's increasingly difficult to even get creative & novel ideas green lit since publishers are shit scared of taking risks which could potentially loose them millions of dollars & even then, a derrivative product will always come under intense scrutiny since it's competing against similar products on the market, sometimes developed by larger more talented teams on bigger budgets..

It's a sad state of affairs to realise that the average title nowadays is *required* to do unit sales to break even, what a title 10 years ago would have done & been considered a complete success..

So it's worrying to find that whilst even publishers move to try & create a state of balance & security with highly selective green lighting, corperate mergers and acquisitions & public, private & state funding in order to just *remain competitve & financially stable*, retailers are cheerleading there fiscal profits as they continue to rise year-on-year, getting fat off the back of those who are even struggling to stay afloat.. Retail sales continue to rise & even with high attach ratios (360 especially) who knows exactly how much revenue these retail outlets are turning over due to their considerably high margins on used games & hardware sales..

In my view a resolution is necessary if only to bring financial stability to the content creation side of the industry & this in effect would only benefit the consumer..

Producers would generate vastly greater income per title & over a longer period of time, releaving much of the risk of green lighting IP that doesn't have strong enough "first day sales" potential..
More & more diverse IP will be able to find it's way into the market & producers & developers would have more money to put back into what they do; making games better, with stronger development schedules, better technology, greater production values & greater scope for critical success & hence sales..
Software prices wouldn't *have* to be so high & producers would be free to set lower RRPs at retail for titles & still see good sales which wouldn't get eaten up by discounted used game sales over the counter (since they'd be making money of those too & besides, lower RRPs mean even lower discounted prices of used games too..)

& all of this wouldn't affect the consumer's abilty to go into a store with a used game, hand it to the store clerk & get some cash for it.. Even if the stores themselves decided to raise the prices of used games those prices would ultimately remain limited by the initial price of the product & consumers still have the freedom to choose not to sell it in the store in favour of keeping it, selling it online for a better price etc..

I don't see why we as developers should be struggling to stay afloat in order to create the content which caters towards the consumers' entertainment needs & yet everyone else will still be making far far more money from the IP than we ever will. The whole "why help the greedy corperation" attitude is cute, but the way I see it..:

More £££ to the Publisher - > more £££ to the developer -> more scope for development -> more & better games for the consumer

So why is that such a bad thing..?

 

[LunchBox]

imho (and some ranting close to lunacy)

I don't think anyone here would rather give a retailer their money over a developer/publisher. I think you need to consider though that the "used game market" doesn't just include buying used games - it includes selling used games, and putting that cash towards more new games. More new games sold are good for everyone involved IMO.

But that is under the assumption that the traded games will automatically become a new game sale.

the traded games are also used in getting a different used game(s). Specially if the person in the counter is instructed to push for the used version of the game instead.



on a side note...

It just feels like everytime I go to one of their stores, I see some guy or kid being coerced into getting the used version instead even though they initially wanted to get the new version instead. I can't really get mad at the counter person since they are just doing their job... sometimes I even feel sorry for them coz they looked really butt-hurt if they couldnt make that used sale. It's one of the reasons why I mostly buy my games online or do a store pick-up if available

I guess for me, it's more because I keep and collect all the games that I bought... yes, even the crappy ones. So trade-ins seem pretty dubious to me. But I do realize that some people don't want the clutter of old games they don't play so they just trade it in for something they would want to use/play, instead of shelling out some cash for a game.

It's also quite disappointing to hear a potentially good game put to sleep by developers simply because they simply ran out of money to continue.

Most of all, I cringe everytime some schmuck would say that developers are making all this money coz it only costs a few cents to make the disc... yet fail to realize that it took a lot of time and money to make a game, from making or liscencing a game engine, story, game art, sound, debug...blah, blah, blah... to shipping it to the stores.

I guess what I want to say is that the publishers and developers should also get a piece of that used game market pie.

 

[LunchBox]

Then they need to step up and offer the service themselves. It's that simple. Used goods aren't going away.

They might if they have enough profit... It's that simple.

If you remember the ps1 days, the developers were getting the healthier piece of the profit and the games went from $50 to $40 standard.


I don't want the used gaming market to vanish, I just want developers to get some of that used game profit...

 

[Johnny Awesome]

There is nothing wrong with the status quo. Any attempts to enforce some sort of income redistribution on the industry are only going to hurt consumers. That's why I call it socialism, or corporate welfare. Publishers are doing just fine right now. They don't need any "help" IMO.

 

[Scott_Arm]

Regardless of whatever tangents we all want to go on the original question asked was is the used game market damaging the industry? The question was not do you like it, or do you need it? To the original question I simply answer, yes; this is the same answer I give to, is the DVD market damaging to the Movie Industry, I answer in the affirmative to this question as well, why, because I would rather pay $20 for a movie I may only watch 1 or 2 in the comfort of my home with my TV and sound system than the $50-$100 it costs me to go to the movie theatre. Or is the High Definition Movie market damaging to the DVD Industry? again an affirmative from me, why because I am not buying any movies unless they are in HD.

I just don't buy the argument that the used games are damaging the industry. Buying and selling used products has been a well established market for a very long time. If you made a game that won't sell enough to recoup its budget because of used games, you probably should be making smaller budget titles.

 

[Scott_Arm]

I guess what I want to say is that the publishers and developers should also get a piece of that used game market pie.

I just don't like the idea of that. Once that happens book publishers will want the same thing from used book markets. The music industry will want a cut of used CD sales. Ford will demand a percentage off of every used Ford sold. It just doesn't make sense. They already sold it and made their money off of it. They don't own it anymore, so why are they entitled to any of its value?

 

[AzBat]

Again, I have no problems with the developers and/or publishers making a small commission on used games sold at retailers and provided it doesn't increase the cost of the trade by a buck or so. However, I'm not going to pass up cheaper used games that I want to play just because of some ideology to help out the developers make more money. They have the total means at their disposal to change the used game market, yet they haven't. Until they do, I'm sorry, but I'm buying used games. Call me a cheap ass gamer or tightwad or whatever, but I'm going to save money on my gaming hobby and whoever provides it to me will get my money. Now don't get me wrong, I do buy new games(like 40%). But only those that I deem worthy and ones that I'll keep forever. So again, developers and publishers, you want a piece of that used game market? Then do something about it. I know it won't be easy, but until you do the retailers will make all the money.

Tommy McClain

 

[AzBat]

I just don't like the idea of that. Once that happens book publishers will want the same thing from used book markets. The music industry will want a cut of used CD sales. Ford will demand a percentage off of every used Ford sold. It just doesn't make sense. They already sold it and made their money off of it. They don't own it anymore, so why are they entitled to any of its value?

I'd also have a problem with that, but I don't think that would happen necessarily. Publishers won't be able make money on every used game sold because there's no way they would be able to keep up with everybody selling used games. However, I could see a system where they could make money on games sold through retailers that also sell their new games. Call it a 1-2% tax per disc, or what have you. Naturally, the retailers will pass that on to the consumer, but at least the publisher would get something in return.

Tommy McClain

 

[Shifty Geezer]

There is nothing wrong with the status quo. Any attempts to enforce some sort of income redistribution on the industry are only going to hurt consumers. That's why I call it socialism, or corporate welfare. Publishers are doing just fine right now.

If no publishers and studios were going under, you'd have a point. Sadly quite a few are, and it's only the mammoth publishers who can ride out the rough seas because they have enough diverse products to balance out the low earners with high earners. It's clear money is being lost to the content creators. The other side (consumer side) to this is that if the used game market is a substantial loss, publishers will end up with higher game prices to compensate. If there were no used game profit losses and the publishers were raking in the dough, the could rake in the dough at a lower price making the new games more accessible in the first place.

Because this is a free market, the publishers are free to try and get some returns on used game sales, or not supply to companies trading in used games. This is different to passing a law banning the sales of used games as owners of game discs would still be able to sell them on eBay etc. Also measures to return profits to the creators of material don't strike me as any sort of socialism. Indeed free market capitalism is full of federal controls managing certain aspects of trade already, so I don't see that another one (if it came to government legislature, although the industry should work something out amicably on its own) is any more socialism than things like preventing companies merging or fixing prices.

The real crux here is what the used game market is worth and what effect that is having on the publishers. Without real facts here, we don't know whether we're talking 3% losses and the publishers are just messing about a consumers right to own and sell their possessions, or 50% and the retail chains are taking food straight from the publishers mouths resulting in hundreds of job losses and the collapse of publishers and developers.

 

[Scott_Arm]

If no publishers and studios were going under, you'd have a point. Sadly quite a few are, and it's only the mammoth publishers who can ride out the rough seas because they have enough diverse products to balance out the low earners with high earners. It's clear money is being lost to the content creators. The other side (consumer side) to this is that if the used game market is a substantial loss, publishers will end up with higher game prices to compensate. If there were no used game profit losses and the publishers were raking in the dough, the could rake in the dough at a lower price making the new games more accessible in the first place.

Because this is a free market, the publishers are free to try and get some returns on used game sales, or not supply to companies trading in used games. This is different to passing a law banning the sales of used games as owners of game discs would still be able to sell them on eBay etc. Also measures to return profits to the creators of material don't strike me as any sort of socialism. Indeed free market capitalism is full of federal controls managing certain aspects of trade already, so I don't see that another one (if it came to government legislature, although the industry should work something out amicably on its own) is any more socialism than things like preventing companies merging or fixing prices.

The real crux here is what the used game market is worth and what effect that is having on the publishers. Without real facts here, we don't know whether we're talking 3% losses and the publishers are just messing about a consumers right to own and sell their possessions, or 50% and the retail chains are taking food straight from the publishers mouths resulting in hundreds of job losses and the collapse of publishers and developers.

I kind of understand that, but if you're a smaller studio dumping boatloads of money into a title to compete with the big boys, you've got to know you're taking a huge financial risk. The used game market is not a mystery. Sales of used games cannot be look at as losses. A person that buys a game used would not necessarily have bought the game new at full price. I know I've bought a lot of used games that I never would have payed full money for. I just wasn't interested enough. If used games is a make or break for your finances, you've probably invested too much. Unfortunately, with gaming technology being such a competitive field, the smaller players are going to get pushed out because of the escalating costs of developing first rate titles. And we all know there's a good deal of gamers that are fickle about technology. The game industry needs to find its "indie" market, like the film industry has.