Preowned Games = DOOOOOM!!!

Visual Novel Community Anime/Otaku Discussions
#1

Now let me get this off on the first sentence: not all game dev’s think this way about preowned games. However there’s sales data which prove preowned games hurt the original maker of a game, because they don’t see the profits from a resold game (just the first time it’s bought). Investors don’t like this (unless they’re investors in the used store retail chain), and are getting more loud about finding “solutions” to the issue - exclusive online content seems to be the most popular idea… although of course, DRM is another.

http://www.gamesindustry.biz/articles/p … e-industry

http://www.gamesindustry.biz/articles/p … mes-braben

DOOOOOM!!! :stuck_out_tongue:

#2

DRM is, but i think if it were to happen (unlikey given that the used video game and movie chains, as well as rental places), they would have to seriously lower prices to attact a lot of people. $50-60 is a lot to put down on something you can’t resell ever.

It also breaks a fundamental aspect of how the economy works in that non-consumables have always been resellable. This goes back centuries. It’s so ingrained into stuff that it’s a core part of economic theory. It would be hard to figure what would be the consequences if intellectual property was non-resellable, but I don’t think it would lead to more economic stability or long-term profits for most, if any, industries involved.

EDIT: A better business model would be for places like Gamestop which directly buy and sell used games to be required to give a smaller portion back to the company (not as much as they do retail %-wise, because that same game can go through 5 different hands at with no actual additional work on the game-industry’s hands involved). For sites like ebay or amazon where they collect fees, it could come from the sales of such items or a basic global fee that isn’t too high.

Another idea is to add a tax to the sale of any used game, DVD or book (hey why should they be left out) of say 10 cents (or 10%, whichever is less…) for each sale. For places like Ebay and Amazon, some other type of structure could be worked out since it would be too difficult to track down Bob when he sold a game for 99 cents to collect the 1 cent tax.

This would likely increase costs on consumer end, yes, but not majorly. It weaken any noise the industry has on after-market sales. While I don’t like paying more for stuff, if the gaming industry also is given some restraints on what they can do, i’d be for this, else, like anyone else, they’ll take it and demand more.

#3

Can we point out that when a used SHIRT is resold, no profit goes to the original makers?

When a used TABLE is resold, no profit goes to the original makers?

On the other hand, generally stores that sell new clothing do not also sell used clothing. There’s a strong distinction between the markets. New bookstores and used bookstores are usually separate. (Except at Amazon, and that’s gotten book publishers pissed off too.)

The problem isn’t really that buying used is always bad for the industry… the ability to resell your games can also be good for the industry if it increases buyer confidence and gets them to buy more new games. However, when used games replace the primary market instead of forming a second discount market, that does cut into primary sales.

#4

This brings up something I mentioned in the Princess Waltz thread on DRM.

Companies need to stop cranking out piles of shit one after the other if they’re so concerned about the sales of used games. Used game sales have been around ever since people have been making games, and companies are only recently starting to complain. Why? Because they don’t bother to put effort into making games people would actually want to KEEP. A lot of people don’t resell the games they like, enjoy, or find re-playable in years to come. Today’s society just likes to point the finger at someone else for all the wrong in the world.

#5

While you have lots of valid points, I think the blame lies more on the game publishers than the game developers. In my experience, there are plenty of developers out there with fantastic ideas for games that people would want to keep, but only a few make it through convincing the unimaginative minds of the suits in publishing. There is one other group of people that the blame rest on however: consumers. The more consumers continue to purchase the mindless drivel that publishers push out, the more mindless drivel consumers will get. (I’ll admit though, that on occasion I am one of these consumers guilty of this.)
As far as what “today’s society” likes to do, I would like to point out that much of that depends on where in the world you are. In general I think this is true in the western world (especially here in the US).

#6

Part of the problem with that is that unless your downloading a game for testing purposes and if you like it buy it (which most people won’t for most items if they can get it free), most companies do not offer demos for products. With a lack of demos it means you’re left with screenshots and movies, neither of which give the end-user the playing experience.

Thus they buy crap, find out it is crap, but can’t return it because most stores today have a “no open box” return policy (except exact exchanges for defects). The industry looks and sees a sale and thinks sale=person liked the game=lets make more, even if you hated the game and tried selling it on ebay the next day. For used console games it’s a bit easier to gage because places like gamestop can be checked to see how quickly used copies of new games are coming in.

PC market though, or anything with extremely asinine DRM though…

Which means the industry is designed to be optimized for promoting drivel.

#7

Exactly.

Though I will agree the consumer is at fault in one area, and that’s the new plagued mindset that everything has to be reinvented or ‘revolutionary’, otherwise ‘it sucks’.

#8

Used games weren’t always prominently on display right next to the new ones, for only a tiny tiny tiny fraction of cost cheaper, and considered practically interchangeable with the original.

That’s the distinction I’m trying to make. The stores have realised that they can sell a game for $50, buy it back from the purchaser for cheap, and sell it again for $45, rinse and repeat. That’s a TON of profit for the store, while being very little profit for the producer AND very little benefit for the consumer. The consumer who can’t afford the new game still can’t afford the used game, and feels priced out of the market (and may resort to stealing). The consumer who can afford the new game sees no reason not to save a few bucks by buying used, since they’re presented as practically the same product (and stores sometimes use extra tools to push the used sales even harder, since it’s extra profitable).

This is an intentional effort on the part of retail outlets to maximise their profits at the expense of both game-players and game-makers. At least, in the shops I’ve been in, and according to the statements of some high-up business people in the retail outlets. Both the industry and the shoppers would be happier if the price for used games were capped lower. If the retail store made the SAME profit from selling a new copy and selling a used copy, they wouldn’t have the incentive to push used sales over new. And the poor would get cheaper games. shrug

But yeah, often the mindless drivel sells a lot faster than the ‘keeper’ games. It doesn’t do you much good to make a special keepworthy game if the drooling hordes don’t buy it to begin with. :slight_smile:

#9

True, but that only matters for current games. Out-of-print games are a different beast, especially if they are rare ones. Those have been more subject to the market forces than others. Finding a copy of Suikoden 2 PS1 for cheap is like finding a piece of gold. Those types of games couldn’t be easily regulated in price without completely driving out the market.

If it were limited to stuff that was still in-print it might get more support, but then it might not because they might just use places like ebay.

Part of that is advertising. Most “keep worthy” games don’t do much advertising. Most of the games I have now I never saw ads for. Those I did, only 1 or 2 ads.

#10

True, true, I meant to insert a caveat for “only things that are actually in print” at the time but it got lost in editing. :slight_smile:

I don’t think ebay is as big a deal in the industry’s mind, it takes more knowhow (and patience) to get a title off ebay. (For that matter, you already get a better deal selling your OWN used games on ebay than selling them back to the store.) From the arguments I’ve heard, especially with regard to Amazon and books, I think a lot of industry forces would be happy to let ebay slide.

And yeah, lack of advertising for titles considered ‘risky’ is a problem. If you’re really really lucky it might manage a stealth hit on its own through word of mouth, but often - pfft! Killed at the start by your own company because the publisher thought it wouldn’t recoup the cost.

#11

Echoing papillon, whenever one sells back anything, the original maker doesn’t make money out of it. Does that mean selling used items and buying them should be condemned?

Besides, when it comes to erogames (at least as far as the Japanese market is concerned), I think that when one buys a game used, part of the money goes to some of the gamemakers’ pockets because chances are high that the seller will spend said money to buy a new game. The point is that the market is so saturated that most games being sold wouldn’t be so if the guys buying them couldn’t afford to play a game they buy as fast as possible before selling back in order to buy another game. So, in effect, the second-hand market is supporting the main erogame market.

Of course, it’s a consequence of the very niche nature of said market, but it’s the market that concerns us all.

#12

Narg returns to give you the game market point of view! :stuck_out_tongue:

This is where companies see used games as a problem: without getting too complex and boring, titles are generally sold in three phases - Preorder and Release, Shelf Life, and Bargain Bin. Preorder and Release is self explanatory. Shelf Life is the 30 to 90 day period after a game is first released. Bargain Bin is the post 90 day period when a game is considered old (so to speak), and retail chains replace them with newer stuff.

The fear about the preowned issue, is that most sales today - especially for big name titles - are made during the Preorder and Release phase. In the past, a healthy number would also have been sold during the Shelf Life period (especially when word of mouth got around) - however sales data is revealing a HUGE drop in this period, because a growing number of customers are choosing to buy used, instead of getting a new copy. Thus even for a great game, profit loss (due to the percentage drop) has been noticed during the Shelf Life. Statistics reveal games are generally returned around 30 to 90 days after the initial release, thus impacting the profits of the Shelf Life.

There are negatives to this for gamers as well. For example it makes it harder to convince investors to budget on games that are faster to “beat” than others. An action platform returns to the used market before an RPG does, so investors want to make more RPG’s than they do action platforms. Thus action platform titles don’t get those big budgets (or worst suffer a budget cut and early deadline). Or it causes titles to be printed in fewer numbers (especially for small companies), as they don’t expect sales to grow after the preorder and release. Hence why you can’t find certain titles two or three years later, except as an overpriced item on Ebay. There are others of course…

#13

My short POV: it’s legal to sell back items and buy them used, wherefore people have a right to do so. End of discussion.

#14

True. I’m with you there. I myself use the preowned market for my own gain. :slight_smile:

It doesn’t mean the companies and investors aren’t going to fight against it though. Not with legal battles of course - since the largest preowned dealers are also the largest retail dealers; biting the hand that feeds you and all that - but through DRM, untransferable online accounts, one time use codes, etc…

I’m not saying I disagree with you. Just you know… I know a lot of people who do and their reasons why.

#15

Isn’t that the same thing though? They rob from Peter to feed Paul? Except, Peter might just not want to feed Paul? :stuck_out_tongue:

DRM when it’s made to strict is going to eventually lead to less up-front sales. People won’t be willing to take risks on pre-orders for $50-60 (or sometimes more) games, especially when the last game disappointed them. That means companies might rely on shelf life, except, those games by having DRN mean that people tend to shy away from those titles. I suppose if every game had the same kind of DRM protection theoretically it might not be so big of a deal for chosing specific games, but it’s certainly going to make a lot of people think twice about a title they might consider picking up.

And when a person has to consider whether to pick up a new title or not because they don’t want to be screwed out of $$$, that can’t be good for businesses long term. Because then a lot of titles just won’t sell. Pre-orders and release sales will dry up. Shelf-life sales are a gamble, but likely not to good. Bargin-bin is likely to be the only thing unaffected, which is not what businesses rely upon. When you spend $50 on a new game, most people are getting because they’ve been atincipating it (this is usually pre-orders or first 48hr sales), or because it looks good and they know they can resell it to recover a decent amount of what they paid. That latter part is likely to dry up the quickest and the former is likely to be a slow-bleed death as people get disenfranchised with games and are willing to less-and-less buy games upfront (DQ4 is a good recent example).

Though to note, a lot of places do not move titles after 90 days. Zelda: Phantom Hourglass is still $35 after 18 months, hardly bargin-bin pricing.

#16

Nintendo cheats. :twisted:

Nintendo pays a special premium to companies like Wal-Mart, for Extended Shelf Privilege. Then the various Wal-Mart stores are instructed to put Nintendo products on the “center floor” and easily seen locations. It’s not just Nintendo though… Sony, Levis, Kraft, and so forth do the same too. That’s why you’ll find certain brand names easier or in the front of the store, than others. Normally Wal-Mart will keep something “out in the open” and in their weekly sales fliers in the newspaper for about 30 to 60 days (give or take). For example you won’t see Castlevania: Order of Ecclesia in Wal-Mart or Best Buy after about January, because they’ve gone beyond their selling freshness. If you do, its more likely to be old stock that hasn’t been sold, rather than ordered from the warehouse. Of course if something is a best seller, they’ll keep them in stock for as long as it’s a bestseller - but we’re talking about a first class super title like Halo or the newest Pokemon. You’re not going to see Harvest Moon or Mega Man sell in their range and hold Wal-mart’s attention like that.

Game specialty stores like Gamestop keep titles on the shelf for as long as they have them in stock… but they’re the huge offenders of preowned. :wink:

#17

So then what’s better for said businesses (those not paying premiums or having best-sellers)? To have a store that’ll buy new stock every now and then for games, but is a big offender for preowned games or stores that’ll move inventory quickly and forget about said products unless they’re paid a premium or are “best sellers”?

#18

Well the trick is that major game companies don’t make their money off the gamers: they make their money off the retail stores that stock their games. It’s the retail store that makes money off the gamers. If a game is expected to sell great, then retail stores will purchase thousands upon thousands of units. Simplistically speaking: game companies will cease producing a title when the retail stores cease ordering them… not because customers stop buying them (its the retail stores that cease ordering because the gamers stop buying). The whole preowned issue comes into this, because specialty stores like Gamestop are securing more and more of the video game sales market. Since specialty stores like Gamestop order 50% the number of units they used to in the past - because they make more money off the preowned thing - that becomes a more scary proposition for the game companies.

Gamestop is their life blood… but Gamestop is also their cancer. Gamestop is only doing what’s good for Gamestop: they make more profit off preowned, than they do off new game company orders. Game companies aren’t mad at gamers for buying preowned per se… they’re mad at groups like Gamestop capitalizing on the preowned market at their expense. Essentially the “middle man” is making one hell of a profit. Of course this is what the middle man does: but usually the source gets their cut somehow. How the preowned market works, the source is getting screwed. Thus the anger… and the search for a solution. Gamers are sadly getting caught in the crossfire.

In a world where everyone is nice to each other, Gamestop would share their preowned profits with the respective company that originally produced the game. Of course we all know if that was a real world, Narg would be sleeping with twins every night. I’m not doing that… so neither is Gamestop. :stuck_out_tongue:

#19

Valve has largely bypassed this issue, at least when it comes to PC games, because a majority of their sales are digital distribution now. Digital distribution is something which Gamestop has been very vocal about because it cuts in to their huge profits, as well as “open mouth, insert foot” stupidity moments like this statement.

#20

Well, for most games digitial distribution doesn’t hurt gamestop. There core games are console games distributed via CD or cartridge, ie non-virtual media. That isn’t going to go away anytime soon for a variety of reasons: existing investment in the media, the tactile response that many people have vs. virtual, the ability to sell “special editions” which isn’t so easy with virtual media, etc.

I’m sure though if company’s like Nintendo, Square-Enix, Bandai, Sony, etc. really wanted to they could pressure Gamestop and others to give some kind of compensation…or pressure Congress to pass a bill.