Jumbled Sales: Why Pre-Owned Is In Gamers’ Interests

By John Walker on April 16th, 2012 at 2:50 pm.

BAN THIS SICK FILTH!

On Friday, GI.biz posted an article by THQ boxwallah and industry veteran, Richard Browne, in which he argued that pre-owned game sales were the cause of pretty much every major failing present in the current games industry. From homogenisation to high budgets to weak multiplayer, it’s all your fault because you traded in your copy of Homefront. I perhaps didn’t quite agree with everything he said, and after calmly battering down the doors of GI’s HQ, wrote a response piece.

My thesis to Brown’s antithesis is that it’s the extremely high pricetag on games that means a second hand market is a necessity, and industry attempts to demonise it are motivated by the desire to maintain this. I say things like,

“The attempt to control – or even entirely obliterate – the pre-owned market is an attempt to prevent people from selling their own goods, to interfere with the free market, and to artificially induce massive depreciation of your own products. And when a game costs quite so much money in the first place – £45/$60 – it is no wonder that most people cannot afford to buy all they want at full price. And that is the point. This is a matter of how publishers behave, not what retailers and consumers do with the results.”

You can read the rest of the article here.

And I would highly recommend reading another rebuttal by Chris Kohler over at Wired, where he goes far deeper into critiquing the claims presented in the original article, with some rather impressive evidence-based pwnage.

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205 Comments »

  1. Consumatopia says:

    Ending pre-owned games could be quite a set back for gaming historians as well. (Though I suppose this is already the case when multiplayer servers shut down).

    • Andy_Panthro says:

      We’ve already lost a fair amount of gaming history, much in the same way as we’ve lost a lot of early TV recordings. A lot of things have only been recovered thanks to people making personal recordings or copies (a good example being early Doctor Who episodes).

      A similar situation may at some point occur with gaming (might already be occurring in fact), and with some games companies not caring about their past achievements, we might have to rely on people storing, copying and cracking old games. Why history needs software piracy: http://www.pcworld.com/article/248571/why_history_needs_software_piracy.html

    • InternetBatman says:

      It could, but the real history killer is DRM, which already exists. Unless someone establishes a library of cracks (and there are some sites that do this) every physical game would have to be decoded by a skilled computer technician.

      Thank god for piracy and abandonia.

      • sinister agent says:

        Indeed. Home of the Underdogs did more for videogames than every form of DRM and copy protection ever devised.

      • malkav11 says:

        This is a major reason why I am adamantly against many forms of DRM, including in particular anything tied to company-owned servers. It’s not about what it does to -me- (often, very little to nothing) but rather what it does to our history.

  2. TsunamiWombat says:

    …Yeah pretty much.

    I has nothing else intelligent to say.

    The $60 price point is too high and is artificial, crept up by companies like EA and Activision in small increments over time. In an era when most games are only 6-8 hours long, that’s a money to time value of 10 dollars an hour – whereas a full length movie can be taken in at 8-10 for 1 1/2 – 2 1/2 hrs. Multiplayer is used as a justification for this by, in theory, extending time value but Multiplayer is funded by DLC/Micro, any cost for that is defrayed making the 20 quid tacked onto AAA titles effectively just BS

    • TotalBiscuit says:

      Can we stop with the price-tag fallacy please? Pretending that the prices have creeped up over time is absolute tripe. This baseless whine cropped up with Starcraft 2. “$60? YET MORE ACTIVISION PRICE-GOUGING”. These people ignored the fact that Warcraft 3 cost exactly the same.

      Quote from this article. http://www.newsarama.com/games/081106-GameCost.html

      “For some historical perspective, the average cost of games in 1982 was $35, and SNES and Sega Genesis games sold anywhere from $40-$60 in 1991. Adjusting for inflation, those costs are $74 and $60-$90, respectively. Cartridges did cost more than DVDs to produce, but overall, game prices have essentially been frozen, not even adjusting at inflation rate for nearly two decades, even with the rise in production cost and quality.”

      • Obeith says:

        As a follow up to TB i’d also like to bring note to those who say that games cost more now because of DLC etc.

        The market has changed now, before you would get expansion packs with all the new content, now it’s just spread over DLC. Think back to many of your favorite franchises of the past, how many have had expansions costing £19.99, £24.99 etc? What if you didn’t want all that content? it was all or nothing, at least now with DLC you have the choice of exactly what you want.

        • TsunamiWombat says:

          I’m not anti DLC, i’m Anti 10 – 15 Dollars for a MW Map Pack DLC. Any justifiably priced DLC is gravy, IMO.

        • SanguineAngel says:

          As a counterpoint, and based entirely on my fuzzy memory of only the packs I bought but Expansion Packs generally cost between £10 – £25 and generally offered FAR more content than you would find in virtually all DLC available today.

          Regarding the price creep, I don’t think games are more expensive than they were but I do think that I can no longer afford to spend as much on games as I once did. The cost of living, in general, has spiralled for me out of all proportion and the cost of a game, whilst remaining static, is comparatively a bigger ask.

          • grundus says:

            I remember buying PS2, possibly PS1 games for £40 each when they were new, now games’ MSRPs are £50 but you rarely see them in shops for that much. Problem is, £40 in 1998 (I’m sure MGS was £40) and £40 now are completely different amounts of money, and we aren’t necessarily making more money (net, i.e. minus living costs and such) than we were back then. So yes, I have totally just repeated your point, but it was a good point that felt lovely to make, thank you.

          • Dante says:

            The problem with fuzzy memory is that you only remember the highlights, and tend to ignore the lowlights. Sure there were expansion packs with lots of content, but there were also Sims stuff packs, which were denounced even at the time as overpriced and underwhelming.

            For around £25, you can get all the DLC for one of the Fallout games. That’s a pretty substantial return, and only the really exceptional expansion packs (Throne of Bhaal, Lords of Destruction) ever achieved that much.

        • DK says:

          If you think buying 20 bucks worth of DLC now gets you the same or more content than a 20 buck expansion used to you’re insane. DLC is a ripoff, period.

          • HothMonster says:

            Gross generalizations are always wrong.

          • Dante says:

            Challenge accepted:

            In the DLC corner we have four pieces of Fallout 3 DLC, priced at $5 each, Broken Steel, The Pitt and Point Lookout are all substantial, although Mothership Zeta is a little underwhelming.

            In the expansion corner we have The Sims 2 Ikea Stuff. It contains some Ikea branded items for The Sims 2.

            Now of course I picked some rather lopsided examples, but you’re the one who things all DLC is a rip off and all expansions were awesome.

          • Bostec says:

            Edit. Dodgy reply

      • TsunamiWombat says:

        Digital distribution devalues production costs. Digital Costs are maintained on parity with brick and mortar because Brick and Mortars would hemmoraege business and strike back at publishers if digital prices were lower than physical.

        I agree with the rest

        • YourMessageHere says:

          I always find this situation fascinating. What precisely CAN physical shops do to Steam or Origin or PSN or Live? If any of them decided ‘sod it, let’s just undercut all the shops’, how would the shops have any recourse? Not stocking their products? That worked out really well for Game vs. EA recently – it may not have been the same scenario, but the Game shareholders weren’t happy, shares plummeted, the company imploded very publicly and only exists now because someone stepped in at the very last minute. A cannily-worded press release or two on the part of the online service/retailer accompanying any mass undercutting drive could very well undermine the credibility of any store bar a major supermarket who dared complain.

          • TsunamiWombat says:

            They can get sick and die like all unevolved, lesser animals when faced with superior, evolved competition. Their Companies will cease to exist and all their workers will be fired.

            Pure Capitalism is not a friendly system. I think it’s about time Corporations were reminded of that instead of just the individual and the consumer, as it happens time and time again

      • Milky1985 says:

        Can’t we just agree that yes they have crept up in price just not in line with inflation, wherein the real/actual cost is in fact lower.

        Just because its less of our disposable income now doesn’t mean that the price, the ammount of money we hand over hasn’t been increasing. Just that said money is worth less than it was!

        Also i’m guessing the quote doesn’t take into account the MASSIVE increase in sales of the items now, so whereas selling 1million was a massive deal 10-15 years back that about 2 games managed, its now seen as a failure for the big players to sell only a million.

        [EDIT] Edited for a bit of clarification, to make sure i’m not misinterpreted (as much as normal :P)

        • Shuck says:

          There’s been an increase in game sales, but not a massive one (and certainly not a MASSIVE one). The original Super Mario Bros. sold over 40 million copies on the NES alone, for example. Super Mario Bros. 3 sold more than all the 360 Halo games – combined. Pac Man made over a billion dollars (not adjusted for inflation) in the US alone, etc. The total amount of money in the industry has increased, but it’s spread over a larger number of products of a greater number of types of games (console, PC, phones, social games, MMOs…).
          Though yes, selling a million or two copies was a big deal when the budget for a game was a million dollars or less – the profits could actually sustain a company. Now a million sales for a typical console game won’t pay back the development costs, much less marketing, etc., leaving a company in the red. And this, this is the real problem – exploding development costs. Anyone trying to compete in the console space has to spend a lot of money, but sales just don’t support that level of development anymore. The whole business model is broken and publishers are extremely limited in what they can do about it. As a result, the survival rate for console developers is dismal right now, and any failures will quickly destroy a company.

        • Milky1985 says:

          http://images.wikia.com/vgsales/images/d/d6/Us_revenues_1995-2007.png

          Really , not a massive increase in sales (this is a general overal sales graph not specific numbers i know but shows the main pattern :P)

          If you look at it in terms of outliers then sure theres not been a big increase, but the average mainstream “hit” now does sell a MASSIVE ammount more than the average mainstream “hit” then, when again 1 million was a big big number (and probably made the companies a lot more then as well cause costs were so much lower, not going to deny that)

          Unfortantly with the new consoles doing yet another massive graphical push the cost of development is only going to get higher until they start competition on gameplay rather than graphics again :/

          Expect another push for higher prices, below inflation sure but another push :/

          [EDIT] Again for clarification, i don’t think your wrong here, in fact i think we are both right (thats right internet, it can happen) cause yes there were massive hits back then, but the ammonut of “hits” now has the average hit sale

          • Shuck says:

            Yeah, outliers are pretty meaningless (except for the few companies that publish such games, where the profits [used to be] enough to sustain a publisher through years of flops). At the same time, however, the economic significance of the outlier has changed dramatically.
            The thing about those ‘average mainstream “hit[s]”’ is that all console games are now designed around getting massively higher sales. With consoles there’s no middle ground (in development budgets) anymore – so those games are now developed on the “blockbuster” model, unlike previous generations of games. Since their development costs are also at “blockbuster” levels, the cost/revenue imbalance is even worse than you might think. It used to be that 100,000 sales made a game a success. Now a (modest) console game budget is such that it requires selling a million units just to recover costs. The problem is that the average game sells 500,000 copies. Sales numbers that once would have made a game a hit are now enough to destroy the company that made it.

            Which means that essentially the console game business is now based on the necessity of making sales outliers in order to stay in business! This is insane, obviously.

      • TurquoiseTail says:

        In regards to the 60 dollar price tag, that’s pretty much not the case in a brick and mortar retailer store in Australia, you are looking at a game in the Aus for about 100 dollars where as you can buy the exact same game overseas for 60 dollars and what not.

        Steam of course offers better deals but most people would buy it at the local store rather than steam, for most people, its actually much better to have a hard copy on hand.

        It’s also impossible for some younger kids to buy games using steam because it requires paypal whereas cash is the norm

        I’m not saying the prices have gone up but fact is, prices over here is ridiculously bad

        • sassy says:

          Steam has better deals in Australia? Really? Most AAA titles on the platform would argue otherwise. Not only do prices get put up but they often stay up, a prime example of this is Modern Warfare 2 which is USD$90 on steam at the moment, only USD$60 more than what you would pay for it in the us and $10 less than MW3.

          This is nothing new, we’ve always been ripped off. Do you remember some N64 game prices? I seem to remember seeing some of them get all the way up to $140, though that is memory for a console I never owned but they were certainly often in the $120 range. We haven’t any price creep here, according to my mother (whom was the one buying me games for the following system) Sega Master System games used to retail for $80. So really our current retail prices are in line what we’ve always had.

          It’s all a ripoff though, especially on Steam. Previously one could argue we were a small market so converting games for PAL and shipping here increased the price but now no excuses like that exist. The additional costs for bringing out the game here on steam are minor, just things like getting it rated here. Yet we are paying often $30 more then the US but we are paying in the same currency, no excuse can be made for that, just like no excuse can be made for Modern Warfare 2 costing USD$30 in the US and USD$90 in Australia.

          Really I wish I could organize a mass movement to boycott all products that pull this deplorable move but it’s beyond my abilities, getting people to actually follow it is incredibly hard despite it being for their own good. So I write these long rants to raise at least some awareness how bad the problem is for us Aussies and a few other nations who share the same problem. Unfortunately we mostly hear Europeans complaining (and rightly so) which drown out our more severe price increase(over a smaller range though).

          • TurquoiseTail says:

            Which a lot of people will simply wait for a sale of a game they wished to purchase on Steam which offsets the original price tag but no one is going to purchase mw2 anymore i personally think, stores rarely will put on a sale and most games are better on steam then it is in stores.

            And yes, your example is quite correct, why would Modern Warfare be so expensive? but there are many examples of stores cost being much higher than an online purchase, Mass effect 3 is a great example but its not on steam but in comparison to origin compared to stores, ME3 N7 edition is 100 dollars in origin, you are looking at 128 dollars in stores. of course, whilst i was being fairly specific to saying steam was cheaper, i really meant overall online purchases.

            One of the strange things i realised that no prices for games has been changed despite our currency is now stronger than the US compared to a few years ago where we were a good 90 cents to 1 dollar now its reversed

            and i totally agree with you on being totally screwed over for prices here in the Aus, but i doubt any sort of actions will ever make the prices drop to being in the same as the ones in the US

      • SoggySilicon says:

        That’s nice TotalBiscuit, but it was 60 bucks for Starcraft on PC. Cartridges and consoles recoup part of the system sale through the price of a game unit (see PS3 or Xbox 360 game) which is… wait… 59.98 dollars? That’s right, the cost of a PC game scaled upwards to that of a console game I assume to recoup the cost of building my watercoo… wait… no they didn’t, they don’t have one farthing in my machine.

        Now you review games, and I respect that, I like your channel… thing is… I am an engineer and spend half my time running cost optimization… I am CLEARLY able to demonstrate time and time again that development cost should be scaling down per unit sold, not up.

        I remember when cell phones where 300 dollars US to get a lease, not to own. Now they are extremely cheap with amazing features… IT SCALED DOWN. The fact that a technology sector has not scaled down in price with EVERYTHING ELSE, is a price hike, NOT a fallacy.

        • Chandos says:

          IMO the reason is that AAA publishers have not quite figured out how make the costs scale down, because:
          - Every sequel in a franchise is essentially targeting the same target audience as the game that came before (good for predictability, not great for growth), with pretty much the same core gameplay experience
          - Growth, in turn, is fueled by ballooning marketing expenditure, which gives diminishing returns
          - Add to that, AAA mindset has a knack for totally missing the point of value added features and needlessly inflating the development cost with such things as the graphics arms-race, celebrity cameos, etc.

          • Shuck says:

            Unfortunately graphics sell console games. It’s often the central focus, traditionally it’s one of the main pillars of review scoring, and in innovation-poor genres like FPSes where very little distinguishes games from each other, the graphics become exceedingly important.
            But other things increase costs – better AI and physics, larger more complex environments, more voice acting in general, etc. All these things are expected as well.

        • TsunamiWombat says:

          I hadn’t even considered optimization.

          Frankly, I think it’s just the sloppy, assnine way the industry is run. When a multimillion dollar super project like Mass Effect 3 can have it’s goddamned ending up in the air until the last minute (verified by dev statements) resulting in a (WHAT IS IN MY OWN OPINION WHICH IS NOT FACT BUT MY OPINION MY OPINION MY OPINION) sloppy, rushed, bullshit copout, you know there is something fundamentally wrong with how games are planned and executed.

        • TotalBiscuit says:

          I liked the part where you completely ignored the example of Warcraft 3.

          And I don’t do reviews

          • SoggySilicon says:

            @TB (Apologies) Cynical Brit, is a great show for what it is worth, so what is it that you would call that… a self narrative conversation? (scratches head).

            “Personally” I didn’t complain with Starcraft 2, I didn’t buy it. For a couple reasons.

            1) Always on DRM or server connectivity with the way the EULA read’s is “akin” to a lease. Not ownership. PS3 License agreement is very similar to how a lease is written as well, I am only able to assume the Xbox is the same way. Starcraft 2, and to that extent Diablo III appear to “this” guy, as “leases”. Not really interested in “leasing” software, so… yeah…

            Other than Havok the PS3 has had no engine especially with Kojima, hence the development cost of MGS4 being high… had to create it from the ground up. This was also true for many of the older games mentioned in that article.

            Changes today:

            Engines: Unreal, Quake, Cry, Havok, Unity, on and on and on.

            Middle Ware: trees, scenery, stock image maps, stock texture maps

            Re-used art assets: sequels get to enjoy the gratuitous use of re-used materials.

            The greatest cost increase?

            Advertising: “Activision was spending as much as $4 million dollars on marketing a single game as far back as 2001.”

            now lets examine: http://www.iab.net/media/file/games-reportv4.pdf

            At a brief, looking at a 2008 600 million advertising budget, explode to a 1.5~2 billion dollar advertisement budget in 2012… being generous, that is a 200 % increase in budget in less than 4 years, hardly a 6~7 percent inflation.

            I THINK I just found your “development cost” problem. It has NOTHING to do with development.

            @TsunamiWombat

            ME3 is “easily” the cheapest game of the trilogy to create. The whoring if that product (oh and it’s a stinker) easily 2-3x the cost of it’s creation… if not 4x-5x.

            Further, lets look to indie.

            PS3 “Limbo” 15 Dollars US
            PC “Limbo” 10 Dollars US

            50 % price difference, on the same title. Where is the scaling development cost? Why the disparity? This is a repeating pattern. I “conjecture” anytime one deals with a publisher/producer that is “locking out” titles to their system/drm/lease scheme, you will get pricing becoming skewed.

            As Mr. Walker is saying, and I will add my own spin to it. Used is an alternative to new, it is product recycling. Does it hurt publishers and developers? Probably. The industry will simply have to adjust to the change in the market, and that means cutting prices.

            Probably, less advertisement. OHHHH NOOOOOOOEEESS! :/

            Rather than do that, we are getting “lease ware” ENJOY!!!!

          • Shuck says:

            @SoggySilicon: You’re dismissing the explosion of dev costs as if they don’t exist. They are very real, and not due to the additional marketing costs, but rather the opposite. Development costs have increased across the board far more than advertising costs have. (Engine licensing and middleware can cost millions of dollars; they aren’t always the cheaper solution.) Dev costs hit (and went beyond) $20 million for a console game while the average sales figure for a console game is 500,000 units. Which means the only hope a game has of not being an utter flop is to be a blockbuster (and to therefore be heavily marketed). So a $20 million game might have $5 million in marketing in a desperate, unsustainable attempt to get at least double the average number of sales (which is necessary just to break even), because a game with no marketing isn’t going to even come close.

        • HothMonster says:

          Top tier cell phones still cost hundreds of dollars. The 2 year contract eats most of that price for you but still a new Droid 4 with contract is 200 or 300$.

          • SoggySilicon says:

            Seems like quite a bit…

            Unless one looks at 1990 and a cellular phone costing $325.00 plus contract. Anyway you slice it, the price went down. Considering that many cell phones (today) offer unlimited plans of various degrees the elimination of a land line per residence is an opportunity cost savings to the consumer. Resulting in another price reduction by carriers coupled with bundled packages including high speed internet.

      • Chandos says:

        The price by itself means little without taking into consideration what you are getting back for it in return. If a dozen eggs used to cost $10 back in the 90′s and now it’s still $10 but you only get 2 eggs out of the box, the price has definitely not stayed the same.

      • Chaku01 says:

        Totally agreed (no pun intended…). Ad to this the fact that the length of a game is a TERRIBLE way to judge it’s quality and ignoring the rise of production costs etc… etc… There are hard facts that dictate the price of a product, mostly projected sales and production costs. The problem today is that big name publishers have become investors more than producers, in turn, they put much more emphasis on return on investment than the game in itself. Eventually you end up with games with a huge budget invested in graphics and the rest ends up just being cost cutting entries in their bookmaking. I think frustration for most of us older that 25 yo is that graphics just don’t cut it anymore, we ask for something more that mostly can’t be found in mainstream games. From this comes frustration that’s ill directed towards the price of the game when the real problem is the game in itself and the way it has been produced.

      • KDR_11k says:

        I’m continental European, I complain about price gouging all I want.

      • Ichi_1 says:

        How many hours of content per dollar were they back then though? The average length of a AAA game is now 6 hours. Ten years ago it was double that. So yes the prices are basically the same with regard to inflation but the amount of content we are getting for our money has decreased dramatically. So basically the prices have gone up, just in a very underhand way

        • Ragnar says:

          “The average length of a AAA game is now 6 hours.”
          Are you only doing speedruns, or greatly exaggerating the truth?

          Action games (Assassin’s Creed, Batman AA) come in at 16-20 hours.
          RPGs range from 36 hours (Mass Effect) to 80+ (Dragon Age)
          FPS games tend to be shorter, at 8-20 hours (Bioshock, Crysis 2) which is comparable to older gold-standard FPS games (Half-Life). I finished MW2′s SP in 5 hours and felt it was worth the $30 I paid for it, but it also offers co-op and multiplayer.
          The shortest singleplayer game I’ve played was Ico, which came in at 7-8 hours at my leisurely pace.

          That said, do you really judge entertainment by its duration? Do you judge movies and books by how long they are? Do you judge a meal by how long it takes you to eat it? I would rather play a great 6 hour game than a mediocre 20 hour game.

        • Jimbo says:

          I don’t think it’s true at all about the ‘average’ length of a AAA game being 6 hours. Maybe if you only count the SP campaign of FPS and TPS. How about Skyrim, Mass Effect, Fallout, Assassin’s Creed, Batman etc? How about the hundreds and hundreds of hours some people get out of one $60 purchase of CoD or Starcraft?

          Gaming still stacks up pretty well compared to other hobbies in terms of cost. I don’t think games are overpriced. In fact I’d be prepared to pay more if it meant an end to all of the disgusting nickel & diming going on, and if it made certain niche games viable again.

          I agree with JW that trying to restrict reselling just undermines the value of the product in the first place and is probably a bad idea, but I disagree that lowering the price would do a great deal to disuade used sales. That would only happen if the games became so cheap that it’s never worth trading them in, but they’d never make the difference back in extra new sales because the market just isn’t big enough. Until you got down to dirt cheap levels, the price the shop pays for a used copy and the price they sell it for would just mirror the drop in the new copy price. These guys aren’t *entirely* stupid – if they thought they’d make more profit at $40 they’d sell their games at $40.

      • Vorphalack says:

        ”This baseless whine cropped up with Starcraft 2. “$60? YET MORE ACTIVISION PRICE-GOUGING”. These people ignored the fact that Warcraft 3 cost exactly the same.”

        I’m pretty sure the SC2 whine only appeared after Blizzard announced they were planning to divide the main campaign into 3 parts. Suddenly people were presented with a possible scenario of a $60 main game + $20 expac turning into three $60 games without guaranteeing any more content.

        Reguardless of weather or not this comes to pass (and it probably wont), you can see why people reacted as they did at the time. It’s only natural following such an announcement to assume worst case scenario and get the comaplints in early. If Blizzard had simply released three 6-10 mission campaigns for each faction at $60, same format to SC1, no one would have even blinked. Sudden change scares people.

      • Andy_Panthro says:

        Sounds like everyone needs to read the wikipedia article on “Money Illusion”

        http://en.wikipedia.org/wiki/Money_illusion

        “In economics, money illusion refers to the tendency of people to think of currency in nominal, rather than real, terms.”

      • InternetBatman says:

        The pricing model then was for a niche hobby Hobbies cost more, just look at d&d. It is wholly insufficient for a major form of mass media though. Also, Valve seems pretty convinced from their internal research that as you lower prices to a certain tier, profits increase. Maybe this is because there are no used games on Steam, but I doubt it.

      • alundra says:

        but overall, game prices have essentially been frozen, not even adjusting at inflation rate for nearly two decades, even with the rise in production cost and quality.

        Quality?? What quality?? You are well on track, just wrong on one department, production costs have sky rocketed, end user costs maybe remained steady, the problem is production quality has hit rock bottom.

        Result?? End user costs have gone up after all, what’s more expensive for the consumer?? A $60 game that lasts a month or a $60 game that lasts 10 hours??

        That’s what TsunamiWombat is talking about.

      • Caiman says:

        $35 for an SNES game in 1982 is precisely why I did not own an SNES. I had a ZX Spectrum instead, where the games were generally 4.99 sterling. And I bought lots of them, so did my mum. I distinctly remember when Ultimate: Play the Game introduced Knight Lore at 9.99 sterling. Oh my, so expensive! But it soon became the norm, although I started buying less games.

        I still contend that high prices are good for individual companies but bad for the industry as a whole. I may buy one or two games at 60 bucks, but I’ll buy several times that amount of games that are a quarter to half of that price, and that means I’m putting more money overall into the industry. Games are too expensive right now, that doesn’t mean they get devalued by bringing the price down slightly, it just means we don’t feel ripped off. I recently spent $12 on Legend of Grimrock which I’m enjoying and valuing a lot more than Kingdoms of Amalur: Reckoning which was 5 times the price.

      • aepervius says:

        This ignore a few point TB. The price of a software might not have changed, but the distribution of that price changed. Development cost (coding) is much less nowadays when franchise are reusing the same engine. Assets cost skyrocketted (music, sound, textures, models level etc…). Distribution changed and will change even more with digital download. Breakage (broken disk , unreadable software) has dropped significantly, and the market is much much wider in size. Support has been streamlined.

        So yes, if it was a simple gizmo you could probably compare and expect inflation to rise the price. But it is not. The combination of all those factors changed over time from 20 years ago, to 10 years ago, to today. I will contend that you cannot that easily compare raw price due to that.

      • bill says:

        PC games used to be 40 to 50 quid, a long time ago. I paid 50 for Tie Fighter, and I got Doom2 in a sale for a bargainous 30 quid.

        Prices are a lot lower these days, but the main point isn’t really prices, it’s budget. the budgets are insane.

    • Ragnar says:

      Speaking for things in the US:
      1) Game prices have not kept up with inflation, so games are relatively cheaper now than they were years ago (and a great deal compared to movies at $9-12 for 1.5-2 hours).
      2) Pre-owned retail means buying a new $60 game used for $55, and selling that game back to the store for $20. How is this in gamers’ best interests? Gamers are better off avoiding pre-owned retail and trading with other gamers through a 3rd party.
      3) New games (almost always) come down in price over time. $60 too expensive? Just wait 3-6 months and pick it up new for $30. A year later you can get it for $5-20.

      Patience, not pre-owned, is in gamers best financial interests.

  3. Baresark says:

    I love when gamers bash pre-owned sales. They are in the best interest of the consumer, yet so many people look at them as a problem, as tantamount to piracy. I love when people buy the publishers lines, it shows how intelligent they are as a consumer, which is not very intelligent at all.

    • Bhazor says:

      What publisher line? You mean the line that funding developers by buying their game is a good thing?

      • Baresark says:

        Actually , the line I’m thinking of is the one where new games could be cheaper if not for used game sales. That one is my favorite because it’s foolish to think that publishers are looking for a way to drop prices. If used games did not exist, games would not be any cheaper. And then the consumer would have no choice but to risk paying more for a product that they may not feel is worth more than the value of the money they are giving away. the funny bit is that no matter who little a publisher may spend on a game, they still want $60 for it. As an example to the arbitrary state of game pricing. Gears of War cost $10 Million in development cost and retailed for $59.99. Final Fantasy 12 cost $40 million in development and retailed for $49.99 on release.

      • InternetBatman says:

        Except you’re not paying developers. You’re paying publishers. Kickstarter pays developers. Steam pays self-published developers. The difference is enormous, because there isn’t really a profit sharing system in place for independent developers.

    • Shivoa says:

      When looked at as a zero sum game then successful second hand games are neutral to bad (they either subsidise the retail locations for selling games and so are neutral or are actively removing money from the system without paying it to the creation of content and so negative) but the issue is we should doubt this is a zero sum industry so the real effect is too complex to really say anything objectively smart about. It could be good or bad.

      Personally, I think it generates a disproportional revenue source for the shops and this is the evil that means I can see it go without shedding a tear (the difference between trade in and second hand sale price is too high). As a PC gamer for 20+ years, I said goodbye to the right to actually buy a game in the end of the 90s when CD keys and online activation and multiplayer auth came in and removed our ability to sell, rent, or gift used PC games. I’ve learnt to live without those and current prices (in sales) are viable for me to ‘buy’ far more games than I will ever have time to play.

      The problem with removing the value (the return for selling if you’re not a collector) from console games is I don’t see publishers saying they’re going to move to a $40 or lower price model in the future. They like the Hollywood based system of hits and they think that means high initial prices to feed on as many day1 customers as possible. Then use sales to get the long tail.

      • Bhazor says:

        I agree about games getting cheap enough (Amazon, Steam Sales) that I really don’t care about being able to sell them.

        When games cost at most £40 it’s hard to get excited by people on the internet yelling “THIS IS AGAINST OUR HUMAN RIGHTS!!!!” because they can’t get their money back.

        • Kandon Arc says:

          Personally I quite like having consumer rights, of which the right of resale is a core one. I never trade in games, but I respect that people should have the right to if they want. Every other business on the planet survives with second hand sales; so if there’s a problem it’s firmly in the hands of the industry, not the consumers, who are just behaving predictably.

      • mendel says:

        “are actively removing money from the system” — well, people who trade in their games or sell them second hand are likely to use that money to buy their next full-price game somewhat earlier than they would otherwise be able to, and buy more such games in a year, so I don’t really see how that money is removed from the system. The second-hand trader needs to throw away a lot of games that nobody will buy, so of course trade-in value is a lot lower than used game price (i.e. think one used game sale pays for two trade-ins). NOw account for teh fact that the trade-in sales help the merchant make a living selling new games and keeping the store afloat, and I don’t see how it costs the games economy all that much.

        On the other hand, I balk at paying full price for a DRM-encumbered version at the price a DRM-free game used to cost. If you’re looking for the reason games are devalued, THAT is what I’m pointing at.

        • Shivoa says:

          The zero sum maths works this way: the second hand shop is using the profits from the sale (over cost of purchase) to pay for healthy profits (so money to investors/stock dividends and not to publishers, as a resale requires no money to be handed to any publisher) and that money could better be used in the industry if it was a new sale (at the same price as used), where the profits would be split between the retailer and the publisher. The loss of the seller of games is offset by the lowering of the sticker price so they are not out of pocket. When you look at a fixed total cash going into the system and so coming out then you look at maximising the number of games any player can buy and minimise the number of ‘leeks’ of any money to people not making games. But that only works if you assume zero sum, which is unlikely to be a sane thing to assume.

          If you look for the finances of a GameStop (or recent articles by many sites using that data and giving the low down) then you can see used sales are a major profit driver (far exceeding their revenue percentage). They don’t have to buy two games for every sale they make, they make a lot of money from the difference in trade in ‘value’ and the second hand sales price they use and they shift a lot of stock this way. As I said, this may be neutral but it could also be a negative as that churning can’t add money to the industry (industry in the sense of the people who create content being sold, not the expanded industry who also deal with replication and distribution of said items) because no publisher sees a penny of those sales returned to them. But it could be neutral as the resale possibility adds value to the new goods they are offering and do see recompense for.

          • HothMonster says:

            Wouldn’t the smart answer be to lower the cost of new games faster to compete with the used game market? Gamestop does take a risk by buying games for resale, anything they do not sell is a loss for the company which is partially why there is such a gap between their buy-in price and their sell price. If you drop the price of new games quicker they can not sell used games so high and eventually the risk/reward is not worth it. If they had to sell used games for 15 dollars instead of 39-47 it would be a lot less lucrative for them and it would be a much riskier venture. Even Best Buy is moving into the used games market and its funny to see the used game sitting there for 40$ right next to the new copy for 60$. Is the “we don’t make any money” line from pubs/devs really going to get anyone to spend the extra 20$? Should the consumer have to suffer because they are afraid if people know they price will come down in 4 months they will wait?

            If publishers competed with 2nd hand they would still get a cut of the majority of sales and consumers would still be happy. You say the 2nd hand market is neutral or negative for the devs/pubs but do not forget it is a boon for the consumer. We should not swing the game so it is more beneficial to the companies at great hindrance to the consumer.

          • mendel says:

            Given that Game in the UK almost had to close, it’s hard to image used game trading being all that profitable, but I believe you when you say you’ve seen the figures.

            However, if car makers complained that used car dealers making a living or even, god forbid, a profit off trading used cars, and accused them of taking consumer money that by rights should be theirs, everyone (I hope) would think that was ridiculous. We’re just too polite to laugh out loud at the game devs we love. ;-)

          • Shivoa says:

            http://penny-arcade.com/report/editorial-article/a-war-on-used-games-is-a-war-on-gamestop-here-comes-the-science

            In 2011 (well, Jan 28 to Jan 28th, 52 week) GameStop made $1.22 billion in gross profits on a sales total of $2.62 billion in used games. They counted 46.6% of the money they received from consumers buying used games in the ‘profits’ column (this compares to 7% profit on hardware and 20% profit on new games, all gross). The numbers indicate they are reliant on used games as the core of their business (in terms of business viability, not in terms of total income/sales, where they get most income from selling new things – this is why I say this is a disproportionately good area for them, which may imply exploiting customers who do not realise they are being taken for a ride and they’re not helping pay for the creation of new games while doing it). As you say, you can’t believe used game sales are that profitable, which is how they can get away with it and why GameSpot pushes used so hard, follow the money.

            Used cars depreciate by getting worse and more expensive to maintain. They also had a fixed cost of production to give a ballpark figure for the ‘sanity value’ of the new sale. Games are virtually a zero duplication cost item and so everything is about R&D/invention cost and so it’s a completely different ball game. Someone has to pay to make the game, the $100 million dev costs (note you can only scale that price back so far, indie usually means people underpaying themselves for a chance at success, any indie that made it should have been paying themselves over $100k a year in salary for their time) are split by everyone who buys the game, but we average that with risk for investors so the market decides, but that’s a high wire act and if people want to only think about replication costs (ie games are free to pirate) then we’ve got to start mobilising today to try and save what bits of the industry we can from the revenue shortfall that would create.

            The question of the value of used games is in enticing people to buy, knowing they can sell later, but GameStop seem to be using that to make themselves very rich and maybe we want to see that money ‘leak’ removed and make games $40-50 new to compensate buyers for the loss. It’s tricky, and publishers are definitely out there to maximise how much they can get out of consumers and will try and make a mess of things by trading long term viability for short term profits. We live in interesting times; I love renting console games to sample titles that aren’t on my radar as worth buying (often, I will buy if I find a gem), but then Steam sales mean I can do basically that but with buying during sales rather than renting so a model with deep discounts and no worries of out-of-print (from everything also being in a digital store) might replace how I use the non-new games ability of consoles.

          • mendel says:

            Thanks for the link, that’s very instructive.
            What it comes down to, then: could a brick&mortar game store be profitably run with lower profit margins, and if so, why is nobody doing that?
            If it turns out it can’t, then attacking used sales will deprive the industry of that type of retail outlet, and the buyer’s money may not transfer to supermarkets and online – in that case, fighting used game sales would actually hurt the industry. But then that’s all speculation, so who knows?

      • InternetBatman says:

        Retail shops are hugely important to publishers and to an uninformed audience. They track preorders, drum up interest, and frequently employ people who spend their means or more on games. Retailers are in a symbiotic relationship with publishers, not a parasitic one, and both sides would do well to remember that.

        Since used games prop up retail shops and subsidize the consumption of more games, I think efforts to limit them will do more harm than good for publishers.

        • Jimbo says:

          I agree. I think the idea that retailers don’t do anything to deserve any money is wrong and shortsighted. If they can’t make their profit from used games they’re either going to have to get it from a larger cut on new sales (resulting in smaller cut for publisher or higher shelf price and less sales) or they’re going to stop being viable.

          Shutting down used sales is not worth putting game retail out of business for (not yet at least). The industry would lose more from losing the exposure and market the retailers bring to the table than they would gain from shutting down the used market.

    • Tom Servo says:

      I completely agree, anyone buying the publishers’ line on this is an idiot. For my evidence I present the current state of PC games. Thanks to one time use codes and activation nonsense, there is no used game market on the PC. Yet prices have gone up since many new games now retail at $59.99 whereas they used to all be $50. According to morons like the THQ guy, prices would come down if there was no used game market but that is obviously not true. The real future these guys want would be digital distribution only on a closed network like XBL/PSN where full game downloads still cost more than their retail disc counterparts. Only they want the discs gone too.

      • jezcentral says:

        And I counter your anecdotal evidence with my own. I bought Frontier: Elite 2 for £44.99, and Master of Orion 2 for £39.99 (back in ye olde nineties). On top of this, nowadays, download-only, PC-only games are often available at launch prices that are far less than even today’s far more reasonable standard £29.99 prices (and we all know we can get games for even less than that from Amazon or Play.

  4. Bhazor says:

    Except that publishers/retailers will always be undercut by the second hand market regardless what they charge.
    The end.

    • Dances to Podcasts says:

      Just like almost any other product.

      • JFS says:

        But miraculously, every other product seems to be able to cope with it.

        • Niautanor says:

          But there is a slight difference between the creation of a (digital) game and any other product.

          Let’s say you buy a piece of clay and make a 3 Teapots out of it. You have spent 6 dollars to buy the clay and it took 1 hour to manufacture them. Then you go to the market and sell your Teapots for 2.50 dollars each. At this point you don’t care if your customers resell your teapots later on because you don’t have any more teapots to sell.
          In this example you would have made a Profit of (2.50 * Teapot sold) – 6 dollars in 1 hour = 1.50 dollars per hour at 3 sold Teapots

          On the other Hand let’s think about the Production of a Game. You don’t require any resources to produce it because you already own a PC with your development environment. The only thing that really matters is the time you are willing to invest in it. So you make a game in 1000 hours and sell it on CDs for 10 dollars per game. What now happens is the following: you sell 50 copies of your game at the release date, which are traded in by the consumers.
          This results in your profit being 10 dollars * the number of people who bought the game directly from you (in this case 50) / 1000 hours -> 0.5 dollars per hour you developed the game.
          The actual number of people who play the game (and thus use your work) is more like 1000, which would result in a profit of 10 dollars per hour.

          In the case, that the number of used game sales exceed the number of used sales like shown above the game developer would make much less profit (or even lose money due to the cost of eating for these 1000 hours) than he would have made if he just made Teapots for the time.

          Please note, that there are of course other Factors to be considered and that the actual ratio of New / Used sales will be more on the ‘New Sales’ side.
          This is just an example of how the principle of used sales could damage the Industry.

          • mendel says:

            Yeah, but you see, there might be more than one person drinking from the teapot – in fact, there might be an entire family using the same pot. Imagine if every household member had to get their own tea pot! We could buy more clay and make many more pots!

            There’s a certain percentage of churn associated with sales: books are read by more than person, cars are sold used, etc. This is factored in the market already: the bookseller knows the average readership of his book is greater than one, but he can still run a profitabel business. This has long been the case with computer games as well: you would sell X copies, and k*X people would play them, with k being larger for worse games. There is no change now that has suddenly made game sales less profitable than they were before.

            The argument: “well, if there were no used games sales, we could sell you our games cheaper” is snake oil, because then we couldn’t buy cheap used games any more, and the profits would just move from the retailer to the game publisher (if the game publisher doesn’t expect more profits, what’s the point of this?)

            So it’s the old 1%-argument: “we deserve more money, and if consumers get worse products in return, then so be it”.

      • Shuck says:

        I can’t think of any other product where people buy it planning to use it once and then resell it, where it then goes on sale used for 80-90% of the new price.

        • Kandon Arc says:

          Book publishers have managed to survive against used book sales since the dawn of the printing press. DVD resales aren’t killing the movie industry, nor did used CD sales kill the music industry in the 90′s. The market for these is all fairly small, and this is due to the fact that customers have little problem with the price of new products.

          • Bhazor says:

            10 years ago I was making a profit of $100,000
            I am now making a profit of $10,000

            Just because I’m still making a profit doesn’t mean I haven’t lost money.

            Also you might want to look into the current financial situation of WMG and EMI before you dismiss claims that they’ve been harmed.

          • Hoaxfish says:

            Most of the current “problems” with the movie industry’s profits, are pinned on “piracy”… and a lot of the profit comes from cinema showings (where there is no possible way to have a “second hand” version)… everyone else says the “problem” with dropping profits are because they keep churning out crap.

            Which honestly sounds rather familiar, except the games industry has this extra target of “used sales” (as in, they’re making specific noises about it, while the film industry is much quieter on that front).

            In the end, film and music are accused of not adapting their business plans to newer business opportunities (like e-books, itunes, etc) rather than something which has existed as long as they have (after all, how do you mass produce something without being able to copy it).

          • Brun says:

            Used sales are to consoles what piracy is to the PC. It’s the same kind of scapegoat used in the exact same way. When a big-budget console game tanks, the publisher can’t very well blame piracy since consoles are a “closed environment” and supposedly pirate-proof. So they blame used sales instead.

          • Kandon Arc says:

            Firstly I never said the music industry wasn’t ‘harmed’ I just said CD resales didn’t kill them – which is true, piracy and a la carte music purchasing did far more damage.

            The point is though, as a business you have to maximise profits within the circumstances of the market. If you fail you can’t get rid of consumer rights to succeed (although many companies would love to do so and are trying very hard to do so).

            The way I see it, industry costs are going up, but people don’t want to pay more. There is no happy ending to that problem. Once the publishers can’t expand their customer base anymore, they’re going to have to do some big cost cutting.

            Oh and EMI has a truly shit business model, which is entirely their fault: http://www.techdirt.com/articles/20120214/02015317752/katy-perry-shows-how-problem-with-major-labels-is-economics-not-piracy.shtml

          • Bhazor says:

            @ Kandon

            And my point is that you can’t just say “This company still exists, therefore there are no problems and they are entirely unaffected and everyone will be happy forever”. Publishers are losing money or at least sales from the second hand market and piracy, even CD Projeckt have admitted that.

            As for Katy Perry, thats not ineffiecency thats just a good contract. But looked at as an investment they have built her into a brand and could get another $30million out of her before the contract expires.

            Sadly that does mean putting up with her another 6 years before we get to the interesting bits like the public meltdown and sex tapes.

          • Kandon Arc says:

            “And my point is that you can’t just say “This company still exists, therefore there are no problems and they are entirely unaffected and everyone will be happy forever”. Publishers are losing money or at least sales from the second hand market and piracy, even CD Projeckt have admitted that.”

            I never said anything of the sort. In fact I said the exact opposite – the current games industry model is probably going to involve some heavy costs down the road.

            What I am saying is that used sales have been a consumer right for as long as we’ve had them. If company can’t adapt to the market then it dies, and that’s it. I’m not prepared to give up my right to resale so an industry can make money off me.

          • Shuck says:

            @Kandon Arc: And, like I said, in exactly none of those industries does anyone buy the product with the intent of using it once then reselling it for (ultimately, at retail) only slightly less than it cost new, making the comparisons fairly meaningless.
            Books are the closest, yet obviously the production models are completely different. In addition to the many orders of magnitude difference in production costs, the cost of a book is essentially subsidized by the author herself. Most authors have never been able to make a living writing books. This clearly doesn’t work for products that require studio production. Though this is exactly what’s happened with the console game business – the average game has sales that are only half of what it would require just to break even. It’s a dying industry right now.

          • InternetBatman says:

            @Shuck Well isn’t that an issue in and of itself? If I want to watch a two hour movie ten times, listen to a forty minute album twenty times, read a four hour book eight times, and only want to play a twelve hour game once the error lies in the game.

            Entertainment products that are meant to be used only once are normally much cheaper than long lasting products. Compare a hardcover book to a harlequin romance novel, a tv show to a dvd of the series, or a newspaper to a quarterly academic journal.

            Games are using an archaic pricing model that doesn’t scale with the size of the market.

          • Jimbo says:

            “Though this is exactly what’s happened with the console game business – the average game has sales that are only half of what it would require just to break even. It’s a dying industry right now.”

            No, dying implies a trajectory which will result in death. What you’re describing isn’t a dying industry, just a high risk one. Not all games need to make a profit, not even most games – as long as some of them are making stacks and stacks of money then people will keep trying to get a piece of it.

          • Shuck says:

            @InternetBatman: It certainly is an issue, but not an easily resolved one, in part because a game designed to be repeated is a game that costs more to make. And the fundamental problem with the pricing for games is that they don’t reflect costs as it is; they’re, well…
            @Jimbo: “Dying” probably isn’t the right word. “Unsustainable” is more like it. Film and books are also one-success-supports-many-failures sorts of endeavors, but console games are unique in that they’re stuck between ever-rising development costs and static (or even falling) sales. The profits are going down for hit games while the costs also increase for flops, which means the hit-to-failure ratio has to get ever greater in order to generate any sort of profit. So the risks are constantly increasing while the rewards are constantly shrinking. At some point the risk is too high for too low a reward, and I think the loss of console developers we’re seeing right now indicate we’ve about hit that point. Certainly some companies have decided that’s the case – Disney, for example, axed all its console teams in the last few years.
            Soon only a very small number of publishers who have a stable of successful franchises from which they can make sequels will likely be the only companies who will be investing in console games. (And even then, a string of not-successful-enough hits could bring them down.)

        • SanguineAngel says:

          yeah mostly they devalue a lot more.

          • Shuck says:

            Which is an important point. Publishers can look at used sales, where the games are sold at almost new prices as proof that there is a substantial amount of money that people are willing to pay for their product that they don’t get to see a penny of. In other words, unlike with “piracy,” or with used products sold for a small fraction of the original cost, these are demonstrably lost sales.

          • Jimbo says:

            It’s still hard to say. They’re only really demonstrably lost if everything else could remain equal, but you can’t remove used sales without also taking away the resale value currently inherent in the new copy.

            Maybe the guy currently buying the used copy would buy a new copy with zero resale value, or maybe he wouldn’t. Maybe the guy currently buying the new copy would still buy a new copy with zero resale value, or maybe he wouldnt. It’s all speculation at this point how it would pan out, but I suspect there is a large slice of ‘grass is always greener on the other side’ at work here from the publishers.

        • mendel says:

          Well, car factory employees do exactly that (in Germany): buy a car at their company discount, drive it for a year, then sell it at 80%-90% of its original list price, then go on to buy their next “Jahreswagen”.

    • HothMonster says:

      That is not necessarily true. Buying used good to resell is a risky market. Gamestop and the like mitigate that risk by buying a game and then reselling it for 3-6 times what they pay for it. If you do not let them sell it for so much profit the risk greatly increases and the market becomes less lucrative for them. You do not see used cd and movie stores like you do game stores for this reason. The profit margin on resale just isn’t there and it does not off set the risk of investing in 2nd hand goods.

      • malkav11 says:

        You don’t? Weird, I could swear there were multiple chains in my city that did exactly that, but I guess I must be imagining things.

        • HothMonster says:

          Really? I know of three gamestops within walking distance of my house. I know one nice record store in the same distance but they don’t sell much used-recent music. Just records and and a new shelf . Quite a bit farther away I know another cd store that has a small used section, a very small fraction of their business, few others like it in the my general area. I can’t think of anywhere to buy used dvds other than a rental shop selling off their old stock. What chains are by you?

  5. killias2 says:

    I haven’t read his original argument against used games. However, I don’t really buy the counter you’ve posted here. High price-tags, if anything, are likely a partial result of used games, and used games don’t do anything to discourage them. This is because of something I call the “5 dollar effect.” Maybe it’s different in Britain, but, in the U.S., the Gamestops usually sell used games for about 5 dollars less than the new ones. There are certainly exceptions, but this is broadly true.

    If you accept this basic setup, it’s easy to see where the problem lies. A 55 dollar used sale price is not much cheaper than 60, and it actually disincentivizes lowering prices (at least permanent price reductions). Imagine if the decision-maker in this process decided to respond to a 55 dollar used game sale price by dropping the price of a game to 55. Then the used game price becomes 50.. and the relative price is maintained. Hell, if you think in terms of percentages, the price reduction actually becomes better. 5 dollars is a smaller proportion of 60 than 55. For example, if the used game price was 25 and the new price was 30, then 5 dollars would represent -twice- a big a % as in the 55:60 dollar situation.

    In addition, the used game market greatly incentivizes front-loading your sales and getting a lot why you can. Game companies basically make all their money from the first month (often the first week) of sales. After that, they’re competing with a perfect, yet cheaper competitor. Hardly a fair fight in a “free” market.

    The ultimate test, however, would be to find a market where used games do not exist and see how prices have responded. So.. let’s look at the PC. Yeah. I’d say prices are cheaper on Steam/GoG/GG/etc. than on console.

    • Milky1985 says:

      Its about the same in the UK, normally £5 cheaper.

      Oddly this is seen as a bad thing by a lot of people (and it is in many ways) but there is a silver lining to it in my opinion which is basically what you seemed to getting at.

      If the price of second hand was lower (lets say half the price of a new game) then due to:

      1. Anyone trading a game in would get less money for the game, since the resale value is lower
      2. The game is a lot cheaper

      There would be MORE of an incentive to buy second hand rather than new. Cheaper stuff sells more but also if your trading games in you now won’t have the money for a full price game!

      Second hand games being higher COULD be pushing people to buy more new (“its only a £5 screw it, now i know only my hands have been touching the disc” – you think to yourself as the store guy puts the little plastic evelope disc and all into the box :P)

      Of course i have no maths to back this up other than conjecture but its a idea that could be valid!

    • Simes says:

      If publishers want to make a decent chunk of money in the first week/month of sales, my recommendation would be to make games that people will want to hang on to for more than a few days. Then the problem pretty much sorts itself out.

    • S Jay says:

      In fact I remember Mafia II, 3 days after being released, being exactly the same price used or new at Game in Norway.

    • Ichi_1 says:

      So Call of Duty, Assassins Creed etc… are cheaper on Steam than in a shop? Rubbish. They should be as they are digital and have no resale value, but they aren’t.

      • HothMonster says:

        But they do go on sale for 50% multiple times a year if they are on steam this does not happen to their retail counter parts.

    • Ichi_1 says:

      Who cares if the used games market is costing them money? It’s our consumer right to be able to sell OUR PROPERTY. If they’re losing money to another market they need to find ways of incentivising us to use their market instead. It’s called CAPITALISM.

      Gamestop undercuts them by $5? Boo hoo. Instead of all this locking multiplayer to one account rubbish they should try a different tactic. Rather than treating us like cr*p they should treat us like people who are looking for the best deal. How about reward schemes for buying their games? If you buy Fifa 12 direct from EA then they will give you a 5% discount off of Fifa 13. You know, try treating us like customers rather than criminals

      • Ichi_1 says:

        *And when I say ‘direct from EA’ I mean buying new.

      • killias2 says:

        If you don’t like what video game companies provide, feel free not to buy. You have no natural right to selling or re-selling media of this nature. If stripping the product of re-selling potential is enough for you to walk away, that’s your decision. I have no problem enjoying games I can’t re-sell. I just buy them at a much cheaper price.

  6. NathanH says:

    Err, how many games are there that actually cost £45 in the UK?

    • Bhazor says:

      Mostly they’re on the consoles but online shops are usually about £15 cheaper anyway.

      I don’t buy second games* but I haven’t paid more than £24.99 for a game since the N64 era.

      * The only exception is a few out of print games for the PS2. A console I only got last year and am still mining my way through for gold nuggets. In that case I support the second market as it’s often the only way to get at ‘em.

      • mjig says:

        What if you want to play games from this generation that are more than a year or two old? It’s pretty much impossible to find new copies of games for the 360 that are older than 2010 or so, and unless it’s an extremely popular game, pretty difficult to find new copies of games that are older than a year.

    • Apples says:

      I paid over £40 for ME3 on a console. It was about the same for RDR and LA Noire and other AAA games. Bear in mind this is on release day and the price depreciates pretty fast sometimes (ME3 was half the price a couple of weeks later), but it is not an unusual price. Some of the most popular games, probably because the market for them is assumed to have a higher amount of easily-ripped-off people, I have seen going for closer to £50.

      This isn’t anything new though as I found a couple of N64 boxes from when I was a kid and was blown away to discover they had cost £50 back in the day too…!

    • Milky1985 says:

      Its becoming a lot more regular now, at the start of the current gen they tried to say the RRP was £50, but stores sold them for 30-35 (knowing that no-one would pay 50).

      Its been creeping up with te big games leading the charge (i remember when i worked at PC world halo 3 was the first game in a long while we charged more than normal for, think it was £40, but it was £5 higher than the average )

    • Seafort says:

      On the consoles I guess pre owned sales could be a problem as gamers buy those instead of a new box but don’t the retailers buy the games from the publishers anyway so the publisher doesn’t lose out unless the retailer can’t shift their stock they bought from the publisher in the first place.

      I sold my old PS3 games so I could buy more new games so if they stop pre owned sales outright I would buy less games as I wouldn’t be able to sell my old ones for a decent amount to contribute to the price of a new game.

      On the PC the big publishers are trying to control their own digital stores with very high prices for the PC.
      As PC gamers can’t resell their old games any more this is only going to end in disaster for the bigger publishers in the long run. For example it’s £50 for the standard digital edition of Guild Wars 2 from NCSoft and £45 for Diablo 3 from Blizzard store. These prices are beyond ridiculous.

      This will amount to more and more people waiting for sales and discounts rather than paying £50 for a new 5-6 hour game. I know GW2 is a bit different as I paid £50 for the pre purchase myself but I see this game as a one off and would never pay £50 for a console port.

      I can see another video game crash in the near future as publishers and developers become more and more greedy.

  7. HoosTrax says:

    Except for a handful of games each year like Skyrim, all of the games I buy are $10 or less *new* (Steam, Amazon, etc), so I kind of fail to see the attraction of supporting GameStop’s business model of ripping people off who bring in their games for trade.

    The whole issue of pre-owned is more relevant to the console people, so I was kind of confused to see this article on RPS.

    • killias2 says:

      Here here! I thought I was on Destructoid for a moment, lol.

    • Milky1985 says:

      The PC is an example of what happens to a market where the pre-owned market doesn’t exist any more.

      Basically price is lower and people wait for sales :p

      • YourMessageHere says:

        I don’t know how it is where you are but there’s several shops in my town that do used PC games. It’s also relevant because of the multiplatform nature of the very games the original publisher apologist hack was talking about.

        • Hoaxfish says:

          I’m in London, UK… and I can barely find a shop selling PC games, let alone used PC games. New from online retail, sure, Digital Download, yep… used, not so much.

          Granted, the last time I bothered looking in an actual shop vs online was a while ago (looking for a cheap version of Mass Effect 1 years after release, in 2009… found it new for about £15).

    • Kandon Arc says:

      To be fair, the article itself isn’t on RPS. John is just linking it as a matter of general interest.

  8. Walter Heisenberg says:

    As completely insane as this sounds I wonder how far off we are from these guys rallying against sales on Steam.

    • JFS says:

      Wasn’t there something on RPS in the last few weeks where a game dev argued that Steam sales are damaging computer gaming as a whole?

      • trjp says:

        GoG made that claim – it made no more sense coming from them that it did from anyone else.

        Their reasoning was like that of a 14-year-old who’s really really upset…

        • Delusibeta says:

          Considering I grabbed four games from them yesterday for the grand total of ten quid, I have no idea where the hell they got that argument from, since they’re as guilty as Steam in pricing games very cheaply.

        • SanguineAngel says:

          Thing about GoG is they just say what they feel. They’re largely honest and make no bones about their opinions. I didn’t agree with a lot of what he said in that interview, although I can see what he was getting at. I like how he said it though.

      • frightlever says:

        It’s an argument GOG are promoting.

        Anyway.

        I’ve bought second hand PC games off Amazon in the past but I wouldn’t do it these days, because there really isn’t such a thing as a second hand PC game anymore with on-line activation, and game keys being tied to accounts.

        JW’s argument is full of holes – the idea that a console game is more of a tangible product than a PC game, because it doesn’t come with the sort of draconian DRM we endure, is hogwash. If you’re going to argue that we have a “right” to sell our console games, then you should also be arguing that we have a “right” to sell our Steam keys.

        I don’t see how this is anything more than deliberately ignoring logic in favour of more link-bait windmill-tilting.

        • SanguineAngel says:

          I don’t think he was specifically talking about console was he? Did I misread it all?

          He seemed to me to be arguing against ALL the practices and symptoms of an industry rushing to battle the threat of a 2nd hand market that isn’t a threat at all.

    • Jimbo says:

      But… aren’t Steam prices/sales set by (or in conjunction with) the publisher? Not a whole lot other publishers can do about that, short of price-fixing.

  9. c-Row says:

    It’s pretty easy – give us games we have a reason to come back to and replay so we don’t want to trade them in.

    • YourMessageHere says:

      This. I only buy a few games, and never things I have any intention of selling on. If it’s that disposable, it’s not worth money to start with.

  10. DrScuttles says:

    Interesting read and a counterpoint that needed expressing… but pre-owned (digital download) PC games are an altogether different fish in the percolator. I used to trade crappy Saturn games to a little store in the UK’s smallest city, but they would never accept my PC games.
    Is it Green Man Gaming that allows you to trade in your games? Either way, that’s a model that I wish Steam, Origin et al would look into. But then it also begs the question, how do people not abuse the buggery out of that? Although surely people who were going to pirate a game would simply torrent it rather than go through the bother of buying, cracking and trading in a game.

    • Consumatopia says:

      I imagine if you “trade in” an old digital game, it just ceases to exist–it’s not like they’ll then sell a “used” license, right?

      The real problem would be letting you sell or give that license to other people once you’ve played the game.

  11. Duke of Chutney says:

    Mr Brownes article is essentially pure, unrefined bull****.

    the second hand market in other creative industries; books, films, music etc is not generally blamed for the homogenisation of said industry. Every novelist on earth isn’t trying to replicate J,K Rowling because the existence of second hand book shops.

    Alright hollywood probably hates 2nd hand DvD sales but their real issue is cinema takings not dvds.

    Mr Browne is really missing the game development industries major problem. Which i with my incredible 0 years experience in the industry describe as thus; Production side economics in the industry are always growing, while consumer side is roughly static (or doesnt keep pace with production side anyway). In short games cost more in production cost with each new generation, graphics, code, etc take longer and more staff and cost more, but the price of retail games in the uk has only risen by about 30% (totally subjective statistic) in the time i’ve been playing games (since the early 90s). Consumers basically expect the latest in graphical and technical brilliance in their games for roughly the same prices they were paying 5 or 10 years ago. This is ultimatly a loosing situation for the mainstream games industry. Arguing that all of a sudden second hand sales and piracy are the real threat is to ignore the basics. From what i see, it appears that game developers go bust fairly regularly, or come close. MY guess is that the market is close to saturation for big developers. This is all basic economics and has nothing to do with immoral customers stealing the just deserves of the producers.

  12. Casimir Effect says:

    I long for the day when the singleplayer and multiplayer components of games are sold seperately at a reduced price point or together as normal. Then I’d feel happier buying these 4-6 hour long games where all the value is in the MP which I couldn’t care less about.

    • YourMessageHere says:

      I feel the same from the other side of the spectrum. I really like CoD multiplayer, but I honestly feel somewhat reprehensible supporting the pure shit of the singleplayer side. With that they can split it into three, the campaign, the multiplayer and the spec ops/zombies.

  13. Squire says:

    My comments aren’t coming through.

  14. Radiant says:

    Great article Walker.
    Thank you for pointing out that 50 quid is not a trivial amount of money to spend.

    It’s absolutely ridiculous that we can’t re-sell something we have purchased.
    Imagine if they tried to do that with a car?

    I don’t care what fucking EULA loop hole they can claim to dis-allow a re-sale publishers can fuck off.

  15. trjp says:

    Whilst companies could lobby to have the concept of not ‘owning’ a game (just paying for a limited right to play it) to be enshrined in law, most countries currently forbid anyone placing restrictions on the resale of goods (for good reason) and so they can moan all the like, it would be illegal to do anything about it.

    People complain that trade-ins result in a resale which the publisher/developer doesn’t directly benefit from – but that is offset by the fact that it results in money being made freed-up for someone to spend on another title – which someone DOES benefit from (and sooner or later, everyone benefits from everyone elses ‘loss’).

    If resale of console games were stopped tomorrow, I’m fairly sure that the 360/PS3/Wii software market would crash – sales are already in decline, any further reduction would be a massive blow from which I’m not sure anyone could recover.

    If publishers decide they do want a ‘rental’ or license to play’ model, they’ll have to back away from the £40+ pricepoint too – because at that price, few games are worth the risk. A quick look at the Steam Sales Top 10 shows that few ‘full price’ titles last long in there.

    Resale is a long-dead concept in PC gaming anyway tho surely??

  16. Aardvarkk says:

    It’s pretty telling when Richard Browne’s first piece of evidence is a second-hand story about a ridiculous scenario:

    “A colleague of mine brought to light how bad this has become just the other week. He went into his local GameStop and was point blank REFUSED the option of buying the game he went to get new. After pressuring the sales assistant for a few minutes he finally got his new game – but only after the assistant got his manager’s approval to sell it to him. “

    Would this also mean an end to console game rentals?

    • frightlever says:

      I’ve seen similar stories all over the internet for years. It’s a very likely scenario. Read some of the blogs from ex-Gamestop staff.

    • mendel says:

      Not a ridiculous scenario. The full-price game may have been a dud (= a shitty game for the price), lots of people traded it in (instead of playing it to the end, or keeping it on their shelf), and the store is going to get stuck with the cost of all that traded-in stock if they can’t shift it.

      Now if the trade-in option didn’t exist, players would have waited for reviews to come out before plonking down their money, the review would’ve panned the game, and the publisher’s sales would have been hurt exactly the same. Pity we don’t get to know which game it was, or that might’ve been obvious.

      That’s not the fault of the consumer nor of the trade-in system, though.

  17. andyhavens says:

    Here’s when I stopped reading the original article. Read this paragraph carefully:

    The real cost of used games is the death of single player gaming. How do I stop churn? I implement multiplayer and attempt to keep my disc with my consumer playing online against their friends. It works wonderfully for Call of Duty – no doubt it can work wonderfully for me. The problem is, at what cost? Countless millions of dollars would be the answer. Let’s take a great example, one of my favorite game series released on this generation – Uncharted. What on Earth was the point of taking the completely single player experience of Uncharted 1 and bolting on an entirely new game to Nathan Drake’s second adventure? The multiplayer game (brilliantly executed as one would expect of the Naughty Dog team) had absolutely nothing to do with the single player experience, and from my perspective had absolutely zero interest from me as a consumer, and I’m not alone in that. I hate to think what it cost to make, refine, balance and tune – but I can guarantee it added a whole lot of zeroes to the budget, and made the P&L look a lot more challenging. And it’s all aimed at stopping the game churn. Now a lot of people probably derived a lot of enjoyment out of it, and in Uncharted’s case it seemed to have no material effect on the quality of the single player experience – but I’d say Uncharted is most certainly the outlier in this because few people have the resources of Sony and Naughty Dog.

    Uh… it’s *either* a “great example” of what you’re talking about, *or* it’s an “outlier.” It can’t be both. You’re not making the sense. Stop with it please now.

    My take? I buy very few games at “full price” anymore; some very few ones (Skyrim) are worth every penny and won’t go down in price for 2 years, so there you go. Make an awesome game, I’ll drop $60 every time. On the console side, I either by used or wait for the price to drop in 4-6 months, which it often does for B-titles. On the PC side… same deal. I’m buying almost all my games off Steam, so I wait for price drops or buy bargain games while biding time until the next A-title that I’ll pay full boat for (Diablo 3).

    Console games that suck more come back in greater numbers, and go down in price both as new and used. PC games that suck more drop on Steam more quickly. Selah.

  18. MiniMatt says:

    It’s pretty much accepted fact that second hand bookstores, headed by the very epitomy of evil – the Oxfam shop, destroyed the written word as we know it.

    Or the other thing.

    • Bhazor says:

      Because it also costs millions of dollars and employing hundreds of people to write a book. They really aren’t comparable.

      Authors didn’t go bankrupt. But the publishers did and publishers are much closer to game developers.

      • Kandon Arc says:

        Last I checked there were still a whole bunch of publishers around. Enough to form a price fixing cartel with Apple apparently.

      • mondomau says:

        You’re both onto a red herring here – downfall of so many book publishers has eff all to do with secondhand bookshops and far more to do with the decline of interest in books generally, combined with digital distribution (which actually stops resale). So a worthless comparison, really.

      • MiniMatt says:

        Yes it’s perhaps not the best comparison, but that’s the trouble with comparisons – there really is no product that’s directly comparable with any other – picking holes in the differences does not necessarily eliminate the underlying argument.

        Gazillions of pounds and thousands of man hours went into developing my car – but I’m still allowed to sell it.

        Perhaps a closer analagy would be movie DVDs – huge investment went into their making, they like games are entertainment rather than practical, they’re both more ultimately more ethereal rather than physical products. But gifting my old movies to the jumble sale isn’t an illegal act.

        All are products which people tend to feel instictively that they “own”, to pass on as they please (this feeling not necessarily affected by terms and conditions small print). Ford don’t consider used sales to equate directly to a lost brand new sale, Warner Bros don’t consider each second hand DVD sold at the Scout jumble sale to equate to a lost sale.

        • Bhazor says:

          A second hand Ford is worth a third of its original cost and they don’t want you to buy that car at all. They don’t want someone to buy a 6 six year old car they want you to pay for this years model.

          You also don’t seem to understand how movie makers make money. They get multiple pay days, they’re paid when the film is released in cinemas, they’re paid when they get interviewed about the film and they’re paid when they sell the rights of the movie to a distributer. The movie makers don’t especially care about people buying second hand dvds because they already made their money selling distribution rights. They don’t care how many it sell and how many of those are second hand. In contrast the game makers have a single pay day and thats when that game is shipped. They feel every lost sale far worse than a movie maker feels each lost DVD sale.

          Theres also the growing trend of movie studios streaming their films as a rental completely bypassing the whole DVD/Blu Ray situation.

          • MiniMatt says:

            Again all you seem to be doing here is pointing at the differences between two products and claiming that these differences undermine the basic argument that people feel instinctively that they “own” their products and can dispose of them how they wish.

            You say that Ford “don’t want someone to buy a 6 six year old car they want you to pay for this years model” – I’d agree with that, that’s exactly my point – Ford may very well prefer you to buy a brand new car rather than buy a second hand one but there’s not a thing they can do about it and rightly so. People are free to acquire second hand goods and people are free to sell their goods second hand.

            You then go onto the differences between movies DVDs and game DVDs initially claiming movie studios don’t care about second hand sales because of multiple pay days (ignoring that total revenue is all that’s important, having it split into three different streams doesn’t mean they get three times the money) – but then go on to note “the growing trend of movie studios streaming their films as a rental completely bypassing the whole DVD/Blu Ray situation” – which would imply that they very much do care about second hand sales and are trying to pull the exact same trick as game publishers via different methods.

            Yes, video games are different to every other product in your house. Socks are also different to every other product in your house. You can likely resell every other product in your house.

  19. sleepisthebrotherofdeath says:

    >And when a game costs quite so much money in the first place – £45/$60

    Two words: Steam sales.
    In the past year I’ve bought dozens of games and only one (portal2) cost me more than £12.

    • Ichi_1 says:

      Or you could just sell your game when you’re done to fund another one. Steam doesn’t really work out any cheaper for AAA titles, if anything it’s more expensive. I bought Fifa 12 for £40 new. I played it for 6 months and traded it in for £25.

      Alternatively I could’ve bought Fifa on Origin for £40 and then never got a resale back on it. Basically companies like EA and Activision price games too highly and then complain because people are buying other games that are a more reasonable price.

      The same goes for Skyrim on Steam. Actually I just got that off of LoveFilm, realised it was cr*p, played it for a couple of weeks and then sent it back

  20. pkt-zer0 says:

    Eliminating second-hand sales worked out pretty nicely for Steam AND customers, if only you take a look at Steam sales.

    • Ichi_1 says:

      Ignoring the indie scene which is a huge part of the reason why Steam is so popular, basically it’s popular because people are idiots.

      Buy Skryim from Amazon for £40 new and then sell it to CEX for £25 when finished with it to buy another game or buy from Steam for £40 and get no resale? Hmm let me think…

      Actually Steam is a good example of how to make money with a different tactic from the norm. People buy on Steam because it is easy to use and they get the mod community/updates etc… built in. It makes people’s lives easier. On the other hand you have companies like EA and Ubisoft trying to d*ck all over everyone and then being surprised when people go elsewhere

      • Brun says:

        Buy Skryim from Amazon for £40 new and then sell it to CEX for £25 when finished with it to buy another game or buy from Steam for £40 and get no resale? Hmm let me think…

        Skyrim is a bad example because a lot of people bought the Steam (PC) version because of the mod support.

  21. HothMonster says:

    Why would Richard choose that picture for the article. It looks like he is about to meet his in-laws for the first time and has just realized he suddenly shit himself.

    I haven’t bought a console game in ages but I went to pick up Dark Souls the other day and it was less than a 5$ difference between the new and used price. Do people really go for used with only a 5$ difference? On the off chance they give me a bad disc and I have to drive back over and argue with a clerk I just lost more than 5$ worth of my time.

    • SoggySilicon says:

      RPG’s and the like (especially on the PS3) are typically 10~20 percent higher in cost than “other” genre games. The system has an especially low number of sku’s per total games available keeping the resale and I suppose “intrinsic” value higher.

      RPG’s on “lock out” mediums (console based) (cartridge, CD-rom, DVD, Blu-Ray) are typically more sought after in the aftermarket, with some of the older games fetching handsome ransoms.

      such as…

      http://www.videogamecentral.com/sega-saturn-panzer-dragoon-saga-used/

      • HothMonster says:

        Its was for xbox. But if I understand you what you are saying is there was not much of a differential because (probably) there is not much saturation for that genre and particularly that game in the used market. Which does make a lot of sense. About 10 years ago I worked at a small independent 2nd hand game/movie store and it was always funny to see most of the NES games selling for 2$ but a couple titles marked for 50-100$.

        It seemed to me like the 5$ difference was pretty common, I noticed it on DS and thought “well thats stupid” and looked at a couple other games to see if was the same and it was but I wasn’t paying all that much attention to which games/genres ect. I just noticed that it was common through all price tiers no matter if the new game was 60, 40, 20, 15 dollars the used copy was just 5$ less.

        • malkav11 says:

          That’s how Gamestop tends to price things these days, at least. You only save anything meaningful over a new copy by buying into their economy and taking advantage of stuff like buy 2 get 1 free sales and the discount card that comes with a subscription to their in-house magazine GameInformer (which is actually not that bad, considering). For my part I’m much more inclined to just get it on PC or if I’m to buy used on console at least snag it from Gamefly, where the prices are typically more like 33+% off and all packaging is pristine because only the disc is shipped to rental customers.

          And it’s that sort of predatory ridiculousness that I think tends to set off the most protest over used games. I don’t think there’s a reasonable case to be made against the ability to resell one’s games at all, but Gamestop’s relentless focus on selling used games that are barely cheaper with terrible trade in values? I’m not sure that’s doing anyone any good except Gamestop. But unfortunately they’ve become synonymous with the market.

  22. zaphod42 says:

    If used game sales are killing the games industry, then are video rental stores killing hollywood? No. Thats bullshit. Thats the same “lets punish the pirates and ignore our customers!” argument that business has been so caught up in.

    BUSINESS IS NOT ABOUT FAIR. Its not about “getting revenge” on those people who “stole” your art. Business is about making money. Business is about satisfying customers.

    The problem is we don’t know what games are. Some people act like they’re a good, some act like they’re a service. PICK ONE, you can’t have your cake and eat it too.

    EITHER, Games are a GOOD, they cost $60, but I OWN them, I can play them FOR LIFE, and I can SELL THEM to whoever I goddamn want to, because its my property,

    OR they’re a SERVICE, in which case they’re temporary, I have to agree to your rules to use them, you can take them away, and I can’t sell it. BUT THEN ITS ONLY WORTH AT MOST $15-20. You cannot charge me $60 for that. It isn’t enough value.

    That is the problem. They’re charging for $60 but only offering us $20 of value. So after we beat the game, we get our $20 worth, we try to sell the game to recoup that $40 loss.

    Games are massively miss-marketed right now. Just go look at all the steam sales. Games suddenly for sale for $5-10. FIVE DOLLARS FOR AAA GAMES! And you know what? THEY’RE MAKING TONS OF MONEY.

    Video games are a virtual medium. You can sell them at almost no cost, especially with digital distribution. All of your cost is in R&D, there’s no manufacturing. So even if you sell your game for $1, you’re making profits.

  23. The Sombrero Kid says:

    tiered pricing is essential but the concept of second hand is a bad thing except as an enabler of price tiering with modern forms of price tiering the second hand debate is moot – you used to be able to buy games for £3 if you gave up access to your old games, now you can buy games for £3 if you wait for the price to meet what you want to pay.

    • HothMonster says:

      Thankfully Valve realized they can make more money buy selling games cheaply and that the buzz from the sale will generate more full priced sales or we would never see digital games come down in cost.

      Look at Blizzard games, Starcraft 2 is almost two years old but still sells at full price. They have no reason to drop the price because there is no used market to drive them down. If you take the 2nd hand market out of console games I have a feeling most companies are going to go the Blizzard route and let them sit around at 50$-60$ a pop for 4 years. Retail outlets really only make a couple dollars on new game sales so its not like Wal-mart or Bes buy can put it on sale unless they want to sell at a loss to just dump inventory.

  24. D3xter says:

    I’m Pro-Consumer in about any way imaginable. I want people to be able to trade, re-sell their games, give them to friends etc. and I want the likes of “Spawn Installations” present in StarCraft so more people can play Online with the same copy…

    What I CAN’T agree with is that GameStop and other “gaming shops” operating on the same basis are actually GOOD for the industry. They are abusing these rights given to consumers for profits, halving the actual sales of the games by about 50% by now and are also abusing their consumers incidentally by “acquiring” the games back from them for as low as possible and still selling them for about 55$/€. More often than not you’d get the games much cheaper by going to Amazon or other Retailers NEW and you could make more money selling your games on eBay… Theirs is a parasitary business model leeching all money possible from both sides.

    Lower prices won’t help and are a fallacy. If every game would cost 30$/€ henceforth they’d just sell them slightly below that price point and buy them even lower and nothing would change…
    Example: http://www.gamestop.com/ps3/games/batman-arkham-city/76724
    http://www.amazon.com/Batman-Arkham-City-Playstation-3/dp/B002I0F5M8/

    • trjp says:

      Whilst an aggressive pre-owned sales/purchase/markup strategy isn’t ideal for the industry as a whole, it’s quite legal and proper for them to do it (just like any store buying goods for resale, they expect to make a profit from it and there’s an element of risk too).

      If publishers don’t like a store’s approach to this, they have the option of not dealing with them at all – simply don’t sell them any new stock.

      As a buyer, you also have the option of snubbing them – but that’s as much as you can do.

      Consumers or publishers do not have the right to demand changes in the law which manipulate the free market in their favour – even considering it is a massive sign of a company unable to compete and which we should hope will die sooner rather than later.

    • mendel says:

      If you want to sell an excellent game you can do it on e.g. amazon and be assured an easy sale; if you do it with games that aren’t as good or downright bad, you know you won’t get a lot of them sold privately, so you take them to the store to trade in. The store does this because it wants to sell you a new game from the money it gave you (and a little extra), but now they are stuck with a bagful of games of which they will sell only a small fraction – and that fraction must recoup the trade-in cost of the whole bag.

      It’s not as obvious a calculation as you make out.

      • D3xter says:

        Except they have stats systems of what games sell in which branches and at what price, and they have the ability to ship those games between them, while the customer doesn’t.

        I’ve also heard that the employees love to fool small children about the worth of what they are selling since it’s policy to get the lowest price possible, giving them 2-5$ and selling for 45-50$ or similar. It’s a put-up job… Additionally heard from people that they don’t accept older games than whatever (say last years NHL game) saying they’d “have to pay them” since the cost of “refurbishing” would be higher than what it would be worth or similar.

        • HothMonster says:

          What he said isn’t a lie. They do not sell 100% of their inventory and do need to sell games for a considerable profit to make up for that unsold inventory, or before the game ends up in the 5$ bin selling for a loss. But what you say is probably also true, they do not need to sell the games that high. Part of this is the consumers fault, don’t sell your games for nothing and don’t buy used for 5$ less then new. Part of it is them needing to offset the risk of buying product they might never sell. Part of it is surely greed too.

          The employees don’t fool anyone. Those kids make 7$ an hour (or whatever) either way. They pull up the game and say the system says its worth 3$ so I can give you 3$ for it. They may push a little and say, you wont do better anywhere else but they don’t scam individual customers they just do what the system tells them.

          Sports games (as was your example) are impossible to sell. Everyone buys them and has no need for them a year later. Also not many people go buy used madden 09 after madden 11 has been released. So they don’t have much time to flip the used game. Game stores usually have more of Madden XX within the first 3 months of release then they will ever turn around. If you walked in there with an old but hard to find game they would hop all over it. But like you said they have a stats system that tracks these things and they know when they have more of something then they can sell, and that happens real quick for sports games.

  25. Milky1985 says:

    I suppose a second point could be that the origional article was anti gamestop more than anything else. I also think that while the situation mentioend in the article does happen it is the exception not the rule!

    But you have to ask why gamestop push the second hand so much. There was a chart (i think posted on this very site actually) a while back that showed where each penny of your £40 goes, how much goes to publisher (a lot) , how much goes to retailer , developer etc.

    Yes its jsut a guestimate but maybe another question to ask is if the retailer got a bit more for the first hand sale would they need to push the second hand.

    Everyone yells at gamestop game etc for not handing back some of hte second hand pie money but maybe they wouldn’t need to hog the whole pie if the publishers would share a bit more of theres as well.

    No i’m not in the industry so i don’t know the numbers, but stuff liek that might help the devide if publishers really want more control over the second hand market (if we want them to have control anyway)

    I know i need to done a flame proof jacket for mentioning this so let me get the jacket (that is NOT TIN FOIL) and put it on before the throwers come out. Thanks

  26. Pantsman says:

    Games priced as premium items? Surely you jest, Mr. Walker! Why, just this past Holiday season, I purchased more than fifteen games for a sum total of just over a hundred dollars!

  27. Brun says:

    Chris Kohler wrote another article about this back in August 2010 that summed up the entire issue quite nicely in one question:

    “Or is it that not enough people want the games that they’re making for the price at which they’re trying to sell them?

    Yes Chris, I believe that is EXACTLY what the problem is. Price and quantity are too high, quality is too low. Browne would have us all believe that were used games left unchecked, publishers would eventually have to reduce the quality (and quantity) of games to make them profitable. That is, of course, the EASY way out for publishers.

    But he completely ignores the other approach: learn how to make games of the same quality for less money. As the Wired article indicates, game budgets have absolutely skyrocketed in the past 5 years. I’m not that familiar with how games are made, but as far as I know, the same basic processes and methods have been used to make games for at LEAST the past decade. Given that we’ve had two hardware generations during that period you’d think that there would have been similar evolution in “gamecraft” beyond the simple fidelity enhancements enabled by the newer hardware.

  28. Malibu Stacey says:

    You know what I do when something is priced higher than I’m willing to pay? I don’t buy it.
    If I really want it, I wait until the price comes down to something more agreeable. Unfortunately I appear to be a minority that can live without having to experience the latest content the very second it becomes available. I mean it’s not like there’s much content released every year/month/day so I can see how people might be on edge constantly waiting for stuff to consume.

    Also how does this have anything to do with PC games again?

  29. shaydeeadi says:

    If used games are such a mortal enemy of publishers then why can’t they work out a way to sell older games new for less? In most stores that sell new/preowned they are mixed together in a way to compel you to get the pre-owned one. On games that are 3 months old (or less.) If I want to get a game inside 12 months old I don’t want to buy someone else’s crappy scratched disk (more to the point if the game if that new and already traded in why am I buying this?) and some Game/Station employees have really irked me by trying to push the preowned when I want a new, sealed copy.. Ahem

    So if stores were to negotiate a lower rate for games that aren’t 5m+ sellers after 3-4 months to stimulate sales and to please publishers while selling stock at a rate and price that is good for the shops (turning a profit) and consumers (buying a 4 month old game new, at £20-25.) The production costs for DVD’s must be so rock bottom right now it can’t be that big a deal to press more of them. M$ and Sony have been phasing out the ‘Platinum’ games a bit this generation and they need to bring that crap back. If Amazon can manage to sell 4-6 month old games new at sub £20 then specialist stores can bloody well do it too. I understand the tax dodging that Amazon do in our lands so up to £25? Eh? Guys?

    • mendel says:

      “why can’t they work out a way to sell older games new for less?” They can and they do, and the store that accepts trade-ins must shift them before that happens or their stock will suddenly be worthless.

  30. psyk says:

    Try to never sell my games, I brought them for a reason. Only time I’ve sold games on is when I sold my ps2.

    • electric_noodle says:

      Same. The main problem i have with these issues is that attempts to smash the used game market will also annihilate the lending-between-friends market and indeed sofa gaming. Maybe im an idealist in wishing it to continue but for me its an issue of community and physically barring you from enjoying console games with your friends unless you have the foresight to bring not only your game but the entire damn console with you. Thankfully Steam/PSN/XBL allow this to contiue in a gimped form by activating accounts on different consoles/computers but its worrying and certainly alienating to those people who dont know these ‘loopholes’.

      I want the PS2 era back >_>

  31. electric_noodle says:

    Maybe i’m in the ignorant minority here but i’d love it if publishers decided to roll back costs to a more sustainable level. You can make both profitable, enjoyable games without hiring half the cast of Battlestar Galactica and running adverts 24/7 on prime time television. Hell, keep graphic and processor requirements the same for the next 5 years and i’d be perfectly happy.

    Dont get me wrong, i love me some purdy lookin games but i think that there should be a greater consciousness to the bloody huge risk that is involved in throwing vast sums of money to make more shiny things. Its not something thats “expected” in the industry or amongst gamers, at least not enough to prevent you from taking this route.

    People talk about entitlement amongst gamers but there also seems to be a certain level of entitlement amongst some publishers that if they spend a metric crapton on a game, it is the consumer’s responsibility to foot the bill. If the consumers dont pay up, well obviously its because of piracy/used game sales/2012.

  32. Consumatopia says:

    The real danger here is that arbitrary restrictions make the argument against piracy harder. “Don’t pirate, it’s wrong to play games you don’t own”. Well, okay, if I own it, I can sell it, right? “You don’t actually own the game you just get a non-transferable license to play the game”. So you’re asking people to pay money for things they don’t own.

    It makes legal sense, of course, but it represents a shift in norms. Software companies are trying to build a new set of norms for the digital era. Fine, but they shouldn’t be shocked when pirates try to shift norms in a different way. The rhetoric against piracy is built on intuitions taken from the physical world (e.g. “You wouldn’t steal a car, you wouldn’t steal a handbag, you wouldn’t steal a television…”) so anything that disrupts those intuitions is dangerous.

    If nobody actually “owned” their houses and land, they all just “licensed” them from architects who could put arbitrary, even retroactive restrictions on how people use and resell the houses they are licensed to live in, fewer people would respect private property–and more people would steal cars/handbags etc.

    • mendel says:

      You wouldn’t mind if I sold my car, handbag, or televison on the second-hand market, would you? ;-)

    • Furtled says:

      That’s the crux of my issue with licenses, why should I pay £40 to rent a game? If that’s the case I might as well pay £3 instead and not have the box cluttering up the living room once I’m done.

    • InternetBatman says:

      This and absolutely this. A lot of companies are trying to make the traditional idea of property obsolete in the digital era. This will probably hurt them in the long run, because one of the benefits of property is that it’s easily understood and provides a clear moral choice. Also, it applies equally to everyone, so it’s easy to empathize with the owner of the property.

  33. AmateurScience says:

    This is an battle between retailers and publishers that will largely disappear once consoles take on digital distribution wholesale (make no mistake that WILL happen) and the whole concept of a pre-owned game will vanish. Films are going that way too and (slowly) books too.

    Fact is PC has been like that since the era of the affordable CD-R. PC games have only had resale value if they were rare or collectable since then. I think there’s going to be a bit of a convulsion in the games industry soon. Physical media is on it’s way out and some pubs and retailers are not going to survive the transition.

    • Brun says:

      We’ve got at LEAST another generation to go before consoles embrace Digital Distribution. Around 25% of consoles (or at least Xbox 360s) are not connected to the internet. Not only that, but console gamers aren’t used to digital distribution so the transition will have to be very gradual to avoid alienating them.

      • electric_noodle says:

        Dont forget the price factor, £50 is the standard going rate for retail releases on PSN from my own experience. If they’re trying to push digital distribution its with an asthmatic donkey at the moment.

    • Furtled says:

      Physical media won’t die off that soon, to go full digital you’d need everyone on high speed internet, which (in the UK at least) is a good way off happening, you also lose out on people buying games as gifts or impulse buys in supermarkets and the like.

  34. Lord Custard Smingleigh says:

    Wait, I thought the problem was piracy.

    • Brun says:

      Used sales are just the console world’s version of piracy. When a publisher makes a big-budget game that has terrible sales on consoles, they blame used sales. When it has terrible sales on PC, they blame piracy.

      • mendel says:

        Yeah, but terrible games having terrible sales are the ones people try to get rid of first — by selling them used or trading them in, of course. There’s a correlation, but he’s got the causation the wrong way backwards.

        • HothMonster says:

          Too true. The better a game is the slower its second hand availability really develops. Shit game though you can get those anywhere.

  35. Lemming says:

    THQ, who gambled everything on the uDraw, ladies and gentlemen!

  36. mendel says:

    John, thanks for taking the trouble to swiftly rebut Richard Browne on the same turf. It was a pleasure to read.

    I had hoped you would point out that the industry doesn’t add online content to “stop churn”, as Mr Browne seems to think (and rest much his argument upon), they do it because they hope to stop illegal copying, and they also do it because customers demand it, having become used to the idea of enjoying playing games with friends.

    • Brun says:

      I had hoped you would point out that the industry doesn’t add online content to “stop churn”, as Mr Browne seems to think (and rest much his argument upon), they do it because they hope to stop illegal copying, and they also do it because customers demand it, having become used to the idea of enjoying playing games with friends.

      The industry adds online content to games that shouldn’t have it in order to stop churn. For games like Call of Duty or Starcraft the online multiplayer component is a core part of the game and should exist. For traditionally single-player games like Uncharted – as Browne points out – multiplayer is just a bolted-on item designed to reduce churn.

      Some games (The Elder Scrolls) should be single-player and only single-player. Making them multiplayer will distract the developers and divert resources and money away from making the single-player experience the best it can be.

  37. Jason Moyer says:

    $60 to support a publisher/developer who invested millions of dollars or $55 to support a retail chain who paid some shmuck off the street $20 for the game? I’d say the moral highground is worth the extra $5.

    • sinister agent says:

      I buy things because I want them, not because I have fancy notions about helping some poor downtrodden multimillion dollar industry.

      “Support the dev!” in this context is a fatuous argument. You could justify literally any price by saying that. Sixty quid, you say? Don’t you want to support the developers? You should be paying at least twice that, you freeloader.

      I do see your point about the markups by retailers, though. But then, the only reason they can do that in the first place is because new games are so overpriced. If the new games weren’t overpriced, the second hand market wouldn’t be so powerful, because people would simply buy more games outright instead of trading their old ones in. Lower the price and there’s no worthwhile profit margin in second hand sales. It’s really that simple.

  38. MiniMatt says:

    I suppose another argument is “where does the money go?”. When someone buys a second hand game for £10 rather than brand new for £40 they have £30 more disposable income – this £30 doesn’t disappear into the ether. Now it may well get spent on booze or ciggies or pizza, but bearing in mind it’s in the pocket of a gamer then there’s a darn good chance it’ll go toward their brand new purchase of Mega Man Punch 2000.

    Since so many game publishers are seemingly pushing this absurd and evidence deficient line that every used sale represents a lost new purchase I feel justified in making the equally absurd and evidence deficient statement that every single pound saved via a second hand purchase gets spent within the video game industry.

    edit: this point made far better by Chris Kohler’s article, including linking to http://www.gamasutra.com/php-bin/news_index.php?story=18163 which has actual facts showing second hand savings being returned direct to publishers.

    • sinister agent says:

      Absolutely. It’s bizarre how many commentators in the entertainment industry (and it seems the games industry is the worst offender, though that may just be that I’m closer to it) seem to think that everyone has an infinite well of money, and/or has one and only one hobby, and no bills to pay, places to visit, holidays to save up for, etc, etc.

    • Jimbo says:

      “When someone buys a second hand game for £10 rather than brand new for £40 they have £30 more disposable income.”

      More like £35 / £40 / £5 respectively.

  39. Furtled says:

    If memory serves used games sales were banned for a while in Japan with the ban lifted in 2001 and Japan has a much higher concentration of gamers who power through games then swap them for something else – can’t find any concrete figures on the impact of lifting the ban mind.

    There’s also a really interesting interview with CD Projekt on the subject of used games here: http://www.eurogamer.net/articles/2012-02-07-witcher-2-dev-next-xbox-not-playing-pre-owned-games-a-bad-thing

  40. Eschwen says:

    A lot of the commenters here don’t really understand the interaction between publishers and retailers, and therefore aren’t seeing this issue from all angles. Publishers don’t sell games directly to customers, they sell them to retailers. Retailers agree to buy a certain number of each game based on how well they think it will sell, and they do so at a price that is well below what the customer pays. Retailers also have agreements with publishers to return unsold stock for a refund after a certain period of time.

    The problem is this: Retailers control the number of copies of new games that enter the retail channel.
    Let’s be clear here: Retailers control supply AND price. Retailers also have a side-business (used sales) that makes them a lot of money and are motivated to keep the supply of new games low so that they can sell more used games to people who might otherwise buy new. So in order to foster this side of their business, they choose to buy fewer copies of new games from publishers, which in turn reduces the amount of money publishers get from the retail channel. Which ultimately results in publishers raising the price of the new game that they sell to the retailer because they’re selling fewer and fewer new copies to their retail partners and still have the same costs.

    This is not conjecture. I have seen it first hand over many years.

    So let’s all be very clear when we talk about this issue. The problem is not that a used game market exists, or that customers participate in that market. The problem is how retailers abuse their relationship with publishers to artificially bolster the used market because it makes them more money.

    • SoggySilicon says:

      Right there with you… worked for “that company that will remain nameless” for several years, from management to distribution… what your saying is accurate and precise.

      The difficulty here in many respects has been the larger publishers basing “unit sales” figures on the very sales in which they are making through the retail chain. The change has been slow to the online distribution model for both the brick and mortar and the publishers both trying to get in on the digital act.

      That said, DLC has been a sufficient answer to the question, to provide another profit outlet off an end user who purchases the product second hand. Yet again, the brick and mortar has offered several DLC options by purchases title x,y,z through a particular distributor.

      It’s like eating your own legs and asking for sauce. A publisher saying “used is killing me”, while offering specialized DLC through the same retailer, begs a certain credulity. Let’s not even broach the topic of “scoring and reviewing” of titles. Which is clearly contaminated “more now than ever”.

      Moving over to larger mail order distributors has been another answer, eliminating the used to new bias which is ABSOLUTELY pervasive in the brick and mortar. (Personally I have earned thousands in bonuses ALONE by pushing my stores to sell through used). There is certainly a “motivation” to work this scheme.

      Trouble is, the sheer amount of “insider trading” concerning stocks, mergers, and buyouts is EXTREMELY pervasive behind the fourth wall. Millionaires and instant retirees have been made overnight. This further muddies the waters when trying to derive “what is actually happening” in this or any other industry.

      While I do think that there are many “good” hard working people that feel certain ways about certain things, it is certainly through the looking glass of “beliefs”, not the cold hard facts.

      Consumers vote their wallets. Advent digital “moralities” are cheap, often times vacant unsubstantiated bullshit to drive a particular perspective or emergent model. That is going to be true for just about any particular stand (if one wants to call it a debate) which is certainly isn’t.

      I “could” almost feel bad for a publisher, had I not seen, with my own eyes, several at the top of the food chain trade in shares of companies that where “about to be” bought out, and make 20~30 percent on the share’s increase… it “borders” on criminal. There is little to no concern for an industry, there is a tremendous amount of concern for personal wealth building. Consumer be damned.

      • Bostec says:

        You Sir, SoggySilicon, have hit the nail on the head right there, have no truer words been spoken? Capitalism at its utter most finest.

  41. Kefren says:

    Anyone who sells anything would rather all customers bought their own. It doesn’t matter whether they make computer games, machine guns, or chairs. They see more profit that way.

    However, people like to be able to sell things on at a loss, or to buy second-hand cheaper. They can recover costs/save money that way. It’s also less of a waste of resources. The customer (everyone in the world) benefits this way.

    Obvsiously they are different viewpoints depending on where you come from, but sharing and trading and reusing is the more flexible, greener option. Trying to restrict this is never going to be popular, and rightly so. Thanks for speaking out on the issue, John. It’s why I come to RPS. (Along with the games news, gentlemanly banter, and bargain top hats).

  42. Torgen says:

    As someone who worked in game retail years ago, the console gamer only sees “free money” for games that they have *zero* intention of playing any more, and are just cluttering their house. Add to that the promotions retailers would give, such as “trade in any three (or five) games on this list and get the upcoming BlockBuster Manshooter XII FREE!”

    From a “behind the counter” view of the average consumer, buyers were buying MORE new games as a result of being able to trade in new games. The retailer is willing to take the $10 or $20 hit on the new game (it isn’t coming out of the publishers profits for sure) in order to hit sales numbers incentives and also to get items that they will double that $20 on. So, not only does the retailer get more money, the publisher does too.

    This recent “war on used games” by the publishers is them banking that improving the tail on a title by blocking used games will bring more money than losing the extra first-week sales that are attributable to allowing trade ins. That is a very, very dangerous bet, as you’re making enemies of a major outlet for your product.

  43. Rikard Peterson says:

    That dog in the picture looks really familiar, but I can’t place it. (I think it may have been some book I had as a child.) Can someone please enlighten me?

    • Johnny Lizard says:

      It’s the Magic Roundabout. The dog’s called Dougal. (At least in the UK – it’s a redubbed French animation)

      • Rikard Peterson says:

        Thanks – that gave me enough to go on to find a Wikipedia page on it. Wikipedia tells me that the dog’s name in French is Pollux, and that rings true, so that’s probably what he’s called in Swedish too. There definitely was a book when I was young.

  44. Johnny Lizard says:

    This article is completely wrong-headed. The current cycle of falling profits, lack of risk-taking, shamelessly profiteering DLC, tacked-on multiplayer, DRM-related unplayability, ludicrous mum-appropriating EULAs, infinite sequels and general lack of care and attention that goes into the typical major release is entirely the fault of those shadowy enemies of the industry: pirates, resellers, sale-hangers, gold farmers, gangsters, pirates, Russians, homophobes, school-shooters, bundles, pirates, retailers, Chinamen, Steam sales, soccer moms, trolls, moles, Keith Vaz, Jack Thompson, class action lawsuits, pirates, corporation tax, whiny entitled gamers, hackers, and pirates. The publishers are doing a flawless job, I tell you.

  45. Bostec says:

    If only The Movies was released around this time, it would be racking it up in DLC content 10x over.

  46. malkav11 says:

    Incidentally, this tired line of bullshit cropping up in the editorial content of not one but two consecutive issues at the tail end of my subscription to the relaunched EGM was a major factor in my decision not to renew said subscription. I’m glad to see that as with many other issues RPS has the correct end of the stick.

  47. DOLBYdigital says:

    It’s good to see everyone at least agrees on something…. that our industry is going in the wrong direction! I won’t pretend to know any answers but I think its good for the consumers of an industry to first realize the problems and then find ways to support the solutions…

    Me personally…. I support indies and modders…. I doubt that is fixing anything but I feel its me spending my time and money towards aspects of the industry that I like :)

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