The Second-Hand Games Market...
Published Monday 14 Sep 2009 6:33pm |
16
Tags: Second hand games, second-hand games, rental, downloadable media
Are second-hand games damaging the gaming industry?
Does anybody care? only joking.
There isn't going to be a straight answer, and we're now at the point where various implementations and strategies are being put in place to restrict second-hand (SH) sales. So here's the skinny:
Developers make their money from game sales by taking a cut from the retailer for every new game sold (1). When a SH game is sold, there is no developer/publisher cut (1). To put this in context, one article reported an estimated revenue of $2m (US), 100 million units sold, and 1/3 of all games sold per annum were SH (2). To further put this in context, the same article reports that SH sales affect as few as 5% of NG sales (across many titles)(2). NG trade-in's typically occur around 2 months post release date (after game completion)(2). By then, there is usually a marked down price.
Let's not forget that economically, we're in the pooper, and without trade-in's and cut prices, many gamers wouldn't be playing, causing trouble for retailers (10).
So there's alot of money to be made, but it's not really affecting the new game sales. So what's the issue? who's complaing? which big time corporate developer/publisher spat the dummy out?
Do you guess it? EA
EA claim that games are the `intellectual property` of their developers and do not decline with wear and tear like many SH markets (cars, clothing etc) (3) thereby not justifying price reductions. Personally i'm not sure how viable this point is because games don't age well, and can become redundant graphically and in terms of gameplay with greater progress in technology and forms of media. Plus the discs get scratched (snap!).
That's why EA plan to incorporate several business models to combat the SH market, such as download sales (3). Anyone who owns an Xbox 360 will know XBLA has become incredibly successful, with the likes of Peggle, Trials HD, Castle Crashers, Shadow Complex etc selling well, and mostly exclusive to the console(4). PC fans probably know Steam by Valve, that distributes games via download, and concentrates on good support (5).
Other strategies include `rental only` game versions, as used by GAME (6), Love film (7), Gamehog (8) etc, with added focus on possible special addition downloads that a SH buyer wouldn't get because they've already been used by the game's predecessor (3). Some companies have stated this isn't going to be a solution as such, but it is something to pursue (9).
I can see a few problems here all ready. Mainly kids trying to get hold of their parents credit cards, lost or damaged rentals, and Internet restrictions on data usage (thank you Telecom) for downloading 8gb games. It's not like retailers are going to give developers/publishers a small fee on SH games because it eats their profits.
In conclusion, we all already seeing the strategies set in place by companies attempting to squeeze out that last drop of money. If you cut the retailers out the equation, and the production costs of discs, boxes, and manuals, then alot more money can be made for developers. Hell, what's the point of even having a DVD drive if your not selling games on discs?
Think about it
COMMENTS (16)
Anyway, the whole "You're buying a license, not a product" thing has been proven to be hypocritical multiple times. I'm buy a license? So my baby sister decided to use my disc as a frisbee, but that's okay because I didn't buy a product, but a license. So you'll be happy to send me a replacement disc. What? I didn't buy a license but a product and you don't have to replace the disc? Well, I guess I can start making multiple copies in case this kind of thing happens again. You can't, you say? It violates copyright and the licensing agreement?
(-_-)
It's even worse with console games. At least many PC games have some sort of EULA and TOU that you are supposed to read before installing. Console games have no license agreement except the imaginary one you are supposed to have signed which is only ever used to the advantage of one party.
This is why I like Steam and don't like console games (retail or downloadable -- I'm looking at you, sh*tty Microsoft DRM).
I worked out that if I paid the full retail value for all of my games I own (not consoles) I would have spent $40,000 on games.
Strangely I don't think anyone wants to do that.
Good second blog though man! Keep up the good work!
"Want this $100.00 game? trade in 4 games and get it for $30.00! Wow! what a bargain!"
"One Pokemon for GBA? right, thats 12 cents"
f*ck you EB
Thats why XBLA and PSN games have become popular, because they are only a fraction of the cost and u still get a game that gives hours of fun. Problem will arise from large download games like the 'Games on Demand' now on XBL, as you said bandwidth limits in NZ will kill that idea.
Me for one since buying a 360 at the start of the year I have 8-9 games, and where did i get them? all from trademe... havent bought one from a retailer and i never will at the $120+ prioe tag. I dont even by the SH games from retailers because half the time they are still overpriced especially popular titles
F**k I hate DRM
Yay for piracy... jokes guys
Its rubbish that its come to this but hey, they have to make their dollars somehow.
What about games that are collectable, hard to get hold of? Are they saying that if I don't like a game enough to keep, I should throw it away instead of swapping/reselling it?
Cool blog.
I can definitely see both sides. As a gamer I love big flashy games with über graphics, mega storylines, massive worlds to explore and out of this world production values and these things all cost and they cost millions to develop in this HD era. BUT they're increasingly taking the piss with games coming out in special editions that cost upwards of $150 or else they come packed in with some crappy trinkets and up goes the price again! I'm sure that if the new game prices were always under $100 (day 1) with older titles (2-6 months later) always under $50 then new game sales would increase massively!
As for devaluation of games, EA can't seriously think that a PS1 game sitting on the shelf in EB is worth $100+?!?! WTF?! EB might TRY and sell it for that because that's how they roll but it's ludicrous to think that games don't devalue over time as newer-better-faster gaming systems are rolled out that offer all kinds of new gaming experiences?!
And don't get me started on buying games over broadband?! Uncharted 2 weighs in at 25GB, most data caps in NZ are 10-20GB PER MONTH?! Doesn't add up does it!?
Anyway I could rant on for hours about all this and would probably get less and less coherent so I'll stop now :-)
Well, do be honest, if the price for games wasn't so horrendous here in comparison to the US then secondhand wouldn't be such a problem.
I worked out that if I paid the full retail value for all of my games I own (not consoles) I would have spent $40,000 on games.
Strangely I don't think anyone wants to do that.
Good second blog though man! Keep up the good work!
Well, do be honest, if the price for games wasn't so horrendous here in comparison to the US then secondhand wouldn't be such a problem.
I worked out that if I paid the full retail value for all of my games I own (not consoles) I would have spent $40,000 on games.
Strangely I don't think anyone wants to do that.
Good second blog though man! Keep up the good work!
Digital distribution will eventually spell the end (or at least major decline) of the second hand market. I have no problem with that, as long as prices are reasonable. For example I'm happy to buy games during Steam sales that I probably would have otherwise picked up second hand (if at all).
Generally speaking, less second hand sales -> more money in developer pockets -> better games. Hopefully anyway.
And if they opt for download only, yeah like you said that can be a b*tch with the low data caps we have in this country.
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