The Real Cost of Used Games

http://www.gamesindustry.biz/articles/2012-04-12-the-real-cost-of-used-games

by hythloday • 14 years ago

30 45 14 years ago

tomgallard2• 14 years ago

The author makes the point that consumers purchasing used games deprives the studios of revenues that can be put towards future titles.

But the same could be said of used books, used furniture, used anything!

The only difference is that, with games, it is now technically feasible (I'm sure IKEA would love it if you couldn't resell their furniture second-hand, so everyone had to buy directly from them).

It really angers me that this approach is even legal.

lclarkmichalek• 14 years ago

Well the main difference between used physical goods and used games is that there is loss of quality between buying a used game and buying a new game, meaning that a game could be sold and traded in many times before being undesirable, which is not true for the vast majority of books.

catchthewheel• 14 years ago

There is a loss of quality with games---the discs still get wear and tear. One of the reasons I'm wary of buying used games is that the disc is almost always badly scratched.

ssdsa• 14 years ago

While we clearly see that there is a huge market for used games (see GameStop), there isn't any comparable market for used books and used furniture, at least not here in Germany. Every avid reader I know likes to read new books and cannot stand to read used books coming from some unknown pre-owner, because you never know how dirty his hands were when he was reading the book. Ever tried to sell used books on eBay? Don't bother, even if you put them up for 1 EUR starting price, you end up having more work to do (communication, check payment, shipping) than you'll earn. And don't get me started on used furniture. While new furniture can be really expensive, when you try to sell your previously expensive furniture, nobody wants to buy it.

tomgallard2• 14 years ago

In the UK at least there's a decent market for 2nd hand books via 2nd hand bookshops and charity shops (not on the scale of the used game market though I think).

We always try to buy furniture 2nd hand- for the price of a chipboard IKEA wardrobe you can normally get a big, solid wood, Victorian one which is quite likely to last a lot longer!

hartror• 14 years ago

That certainly isn't the norm here in Australia, second hand books, clothing and even furniture are actually cool in certain circles.

I myself own more second hand books than new ones.

dazzawazza• 14 years ago

I frequently buy used book from Amazon here in the UK. They are cheaper and it's good to recycle.

I have a large collection of electronics books which are often expensive and electronics is only a hobby for me so it's hard to justify the cost. Sometimes you have to buy second hand books, many of the definitive Z80 books are out of print.

I started buying second hand books as a child. I wanted books on philosophy and this was the only way I could own works about Descarte, Locke et al without begging my parents for tens of pounds (my income way about £1 a week back then). I've even come to like seeing other peoples notes in the margins. I often wonder "What are they thinking?" when they highlight different sections of the text.

hej• 14 years ago

Book lending is big in Germany, though (between individuals, not only from libraries). But, yeah, there is no money made there.

Used books are very popular among students, though, but that is once again something different.

hythloday2• 14 years ago

I thought the more novel and interesting point the author made is that the presence of used games distorts the market away from easily onsellable games and towards "evil" features like one-time DLC codes and egregious multiplayer modes. AFAIK that doesn't happen in books or furniture (or any other industry that I know of).

soup10• 14 years ago

There is no wear and tear with digital goods, which makes them a different beast. Even though the author is obviously biased, the article posits some valid points I think.

-If gamestop really is strongly pushing used games over new, that's messed up and definitely hurts game developers and enriches gamestop(the useless middleman). It causes titles to have less longevity, which means studios end up caring less about time-less quality and more about releasing sequels.

-Piracy and used game sales have had negative effects on the quality of games. This is pretty obvious, many games now require an always on internet connection to play, many games now do DLC and micro-transactions, less single-player games, no LAN in starcraft 2 :(, less AAA pc games.

I think the model is fine if it's like what steam games do. You have an account, and purchase a non-transferable non-revokable license to play the game. Of course the lock-in with steam isn't great. Ideally there would be a "global" service that tracks games you've purchased in different digital stores.

icebraining• 14 years ago

There is no wear and tear with digital goods, which makes them a different beast.

The games he's talking about are sold in DVDs, and Gamestop can't exactly clone them, so yes, there's wear and tear. Pure digital game sales are usually not resealable anyway.

barrkel• 14 years ago

Consumers selling games gives them revenue they can put towards buying new games.

I think the economic incentives aren't so negative. There are many games I would not want to sell at any price that is less than for the game sold new (perhaps in the bargain bin, with age); the replay value is just too high. Good games with replay value are exactly the games I want to buy, and they also happen to be the games I wouldn't want to sell.

An anti-used game policy would really help (a) linear, low-interactivity experience-based games, and possibly (b) duds. I'm not a fan of either.

rbanffy2• 14 years ago

I think IKEA (and others) solve the problem by making their goods fragile. If your couch falls apart, you won't be able to resell it.

ryandvm• 14 years ago

And if you don't by some games new, they don't work quite as well. I don't see the problem here.

If you don't like what a company is doing, don't buy the product.

Paul_S• 14 years ago

Articles that start with "I've been in the industry for x years" usually end with "waahhh, I don't like changing my business model". Don't want a second hand market? Use digital distribution. Oh, I forgot, you've been in the industry for x years and they didn't have digital distribution back then (except of course for BBSs and programs broadcast by terrestrial TV and even satellites).

I like the changes the industry is going through now - like crowd-sourcing. Gamers taking back the market from non-gamers or at least cutting out a substantial niche for themselves again.

Speaking of wasting money and developer time. Do you know what's a complete and counterproductive waste of money? DRM. And you want more of it.

MarkPNeyer2• 14 years ago

the "cost" this guy attributes to used games has nothing to do with used games, and everything to do with a culture so controlled by money that making games fun isn't the point - making money is.

i watched a talk by the head of analytics at zynga, talking about how awesome their analytics system is, and how much they learned from it. for example, after a lot of research, they found out that people don't like clicking for no reason. thanks to that promethian leap of insight, there is now at least a little bit of attention being paid to how to get people to want to click things.

most of the internet is funded by advertisement. we use the massive computing resources at our disposal to learn everything we can about people, not to help them out, but to find out the best way of convincing them they'll be happier if they had the New Thing - which is clearly superior to the Old Thing, and (unlike Old Thing, Older Thing, and Thing Beta) will make them happy.

of course, this is a better use of computing resources than, say, wall street, which is computing, to fractions of a cent, just how much of other people's money a room full of wildly shouting cocaine-fueled neanderthals will become convinced that other rooms of testosterone-addled meatheads will be convinced that the entire assortment of powerful computers, suit-wearing sociopaths, and useful idiot politicians that control the world economy will become convinced about its collective conviction about the upper limit any of its members is willing exchange for an agreement to exchange three thousand pounds of pork for $2.25 a pound, in three months time.

oh yeah, and all of them make about 100 times as much as the guy who actually grows the pigs for a living, who is almost as naive as the guy who wants to make the game fun, regardless of how much money it makes him.

CJefferson• 14 years ago

> the "cost" this guy attributes to used games has nothing to do with used games, and everything to do with a culture so controlled by money that making games fun isn't the point - making money is.

Unfortunately making good games is a full-time job, and people who don't make money don't eat. Your viewpoint seems too simplistic.

Tloewald2• 14 years ago

No one is stopping them from making money. They want to sell goods that are _artificially_ prevented from being resold. I can resell DVDs but Hollywood staggers on.

If the games industry switches to DRMed electronic delivery (as per the App store) then we'll probably end unable to resell, but I won't be like you're selling me a physical object specifically sabotaged to prevent being passed on.

astrodust• 14 years ago

There's "making money" as in making a decent living on a respectable game, and there's "making money" like pulling down $500M in sales in the first month.

Too many game studios are looking for one thing and one thing only: Blockbusters. They don't care about things that are merely profitable.

This criticism of the used game overlooks a lot of other factors. One is that games have a vanishingly short shelf-life because the producers want to clear the deck for another title. If the studios don't value the games three months out, why should the consumers? It's stale. Either sell it or throw it out, that's what they're telegraphing here.

MarkPNeyer2• 14 years ago

> people who don't make money don't eat

this is very true - and it's a completely absurd relic of a time when only a tiny fraction of a civilization's resources could be used for anything other than agriculture.

most of our economic systems were developed to deal with scarcity that no longer exists - to insist that people must work if they are to be allowed to eat is just as silly as insisting that people must work if they are to be allowed to breathe.

mostlyListening• 14 years ago

I am sure that most designers and programmers working on games are driven by passion to make great games. But they will be hired, paid, and managed by another bunch who need to pay at least partial attention to making money. It is like the partnership between the start-up founders and venture capitalists: the fact that the latters are driven by desire to make money does not negate the passion of the former to make great apps.

And the point of the article is that if the incentives of money guys get subverted, their decisions will get subverted and that subversion which will trickle down the entire production chain.

angusiguess• 14 years ago

I'm getting a pretty sensationalist vibe off of this article, it's got the feeling of something written by a lobbyist.

Used games don't strike me as the cause of game variety disappearing, but instead the increasingly large amount invested in each individual project, discouraging all but the safest options.

Playing the violin on behalf of the indies seems disingenuous too, many of them publish via Steam or online stores of some description, where a used market can only exist if explicitly enabled.

Tichy• 14 years ago

There are not even any numbers in the article. What percentage of games bought are used? In theory one copy could serve all gamers, given infinite time. But the reality is most people want the latest and greatest and are not gong to wait for used game to become available.

Also, dear publishers, if you prevent me selling the game, it's price for me has just increased by the resale value. So don't be surprised if I buy less games.

kghose• 14 years ago

Wait: margins on used games are higher than on new games?

hythloday2• 14 years ago

Yep. When I last looked at this, the margin for retailers of new AAA games is a couple of quid out of 40; the margin for used games is up to £10, and probably indirectly higher because you can choose e.g. how much stock you take of a poorly selling game.

chollida1• 14 years ago

I wouldn't be surprised at all.

If a store buys back a used game at $5 and sells it for $20 they make $15.

I forget the exact break down now, but I remember a new blockbuster brought in something like $5 a copy to the store, as the publisher, studio, console manufacturer, etc all need to be paid out of the new title's sale.

teamonkey• 14 years ago

It's in the range of 50-100% margin for used copies, in the order of 10% for new.

As a result they sell used titles very aggressively, selling used copies for only a couple of dollars less than new and actively persuading customers to choose a used copy instead of new.

DanBC• 14 years ago

The author makes some odd conclusions.

Second hand games allow a user to buy a new game with the safety net of selling it if they hate it. Preventing me from selling a game I hate means I'm less likely to risk buying new games.

Surely that means experimental games are less likely?

josyw• 14 years ago

I don't think that the author has concluded that experimental games are less likely; rather, games without a multiplayer component, such as those pushed by Tim Schafer, will not be picked up due to the churn.

Confusion• 14 years ago

  The real cost of used games is the damage that is being 
  wrought on the creativity and variety of games available 
  to the consumer

Yeah, because it's a well known fact that being able to resell your used book has for ages 'damaged the creativity and variety of books available to the consumer'. Our writers have been severely creatively impaired and there are hardly any books available... oh wait, that's actually not how it is.

Any measure to prevent the ability to play 'used games' will be reverse engineered and circumvented. Combined with the first-sale doctrine, this will always allow the reselling and playing of used games. If you don't like it, why don't you, you know, think of a creative solution?

liquid_x• 14 years ago

Yes, but how many bookstores sell both new and used books?

On the other hand most of the PC gamers buy games that are activated on Steam, Origin or Battle.Net and that causes the resell value of the plastic disc to fall to Zero

Tloewald2• 14 years ago

Powells. Many college bookstores. Amazon.

The bookstores that don't are in many cases going bankrupt.

I agree DRMed electronic copies cannot be resold, which is good insofar as it may represent a disintermediation of the sales process and cost saving to the customer -- but if EA wants $60 from me for what it used to get for selling me a disk I could sell, lend, or give away, then that's not right.

I have no objection with EA wholesaling games to me.

rbanffy2• 14 years ago

... or just find something else to do.

I don't think my soon-to-arrive daughter will find as much fun in Pac Man or Space Invaders as I did, but I'm quite sure the arms race in game development cost really got out of hand. Maybe the industry should focus on games they could sell for a profit for less than US$20.

With everyone carrying at least one internet-connected PS3 equivalent in their pockets, I don't see a bright future for consoles anyway.

ajuc• 14 years ago

He skipped over the real problem - the middle man. GameStop is making it harder to sell new games, than game developers would like. Is the answer forbidding people to play used games?

Because my answer is selling your game on the sites that allow people to buy a new game as easily, or easier than used one. Preferably add value and sell it with soundtrack, making-of, sth like this, and without DRM. Just like CD Projekt RED did with Witcher 2. Somehow they've sold over million copies of single player, then-PC-only game.

They even got sued by their box publisher over disabling DRM in every version of Witcher 2, when DRM prevented people to play the damn game.

This shows whose interest it is to prevent people from playing games they buy.

lucian1900• 14 years ago

That's stupid, and fuck you for having this attitude towards your customers.

Used games spread the very high cost of games across several people. Do you think anyone would buy £60 games if they knew they don't have the option of selling them after they've finished them? It also lets people sell games they end up hating.

Make games cheaper, bring back demos and used games will be less popular.

aw3c2• 14 years ago

Another market that goes to http://en.wikipedia.org/wiki/Planned_obsolescence ?

There is a great documentary (from Arte I think) about this, cannot find links right now.

Synaesthesia• 14 years ago

Physical distribution will soon be dead. $50-60 games at a store is giving way to $1-20 games online, I don't mind that they're DRM'ed - I'm happy knowing the developers get a bigger cut and they're affordable.

"The variety of games out there is shrinking" - that's not true! There are more and more varied games out there than ever before, thanks to the App Store, Steam, XBOX Live and Wii Shop.

agentultra• 14 years ago

This article seems rather sensationalist -- lack of numbers, doesn't explain what "churn," is, and draws a strong conclusion from all of it.

Personally I don't see any creativity lacking in the AAA market. They've been delivering some of the best games they have ever delivered in the last couple of years. They're not known for "risky," games. Risk to them is a new title without a number on the end of its name. The kinds of games they're interested in developing are action-oriented experiences with long story arcs and mascot characters. I still buy plenty of these games and enjoy them quite a bit.

The only thing that the strong presence of a second-hand market indicates to me is that price is an issue with consumers. New AAA titles are walking into the $100 range which will limit the number of games I'll buy in a year drastically... which if I'm not the only one with a limited budget that thinks this way... could only mean that the industry will see more "hit" and "miss" behavior... but without any real numbers it's just speculation, isn't it?

I just hope the console makers aren't using this same speculation to drive the decision to include new anti-used-games features in the next generation of consoles.

celticninja• 14 years ago

This guys issue is with gamestop and their retail practices, not with used games. I buy new games, then when I no longer want them I sell them on ebay or amazon to fund the purchase of my next games (whether new or used). My used games I buy from ebay, usually from sellers like me who dont want to get ripped off trading in my copy for the store to give me pittance and put it back on the shelf with a £15 mark up on what they paid me for it.

Any system that implements a "no used games" hardware option will see a resultant drop in sales. When we hear that MS and Sony are looking at less powerful next gen consoles and selling at cost rather than loss then they are not going to want to risk taking a hit on sales, especially if only one or the other does it. If they both do it then that is dangerosuly close to collusion.

kapowaz• 14 years ago

Richard doesn't do himself any favours in how he goes about persuading the reader of his point. Judging by a lot of the comments here on HN a most people read the opening couple of paragraphs then drew their own conclusions, which may or may not have been on the money.

The important take-away point for me (which I've never seen expressed before) is that so long as publishers are fearful of the pre-owned market, they will spend (waste?) development resources on features whose sole purpose is to further retention and disincentivise reselling games. Some of those features will be fun, but they will potentially alienate some gamers who feel they're no longer getting good value in their game. Witness how the First-Person Shooter genre has transitioned from story-based campaigns with a small multiplayer component into a far more multiplayer-centric experience, with a short single-player campaign which a lot of gamers simply ignore. Similar things have happened in other genres too.

Where I find myself disagreeing with Richard is that because GameStop have ‘used the nuclear option’ already, publishers and console manufacturers should do the same; when your customers are the collateral in this exchange, they won't thank you for it. We're also in a period of upheaval with videogame retail (I don't know how well GameStop is doing, but certainly in the UK high street videogame retailers are dying). Maybe in a few more years’ time the problem will solve itself, with the majority of customers choosing to buy direct from online retailers; the tactics that GameStop employs that have such a dramatic effect can't be employed when you're selling second-hand games through Amazon.

I can't think of a good interim solution off the top of my head, maybe there ought to be more stringent laws to prevent retailers from pushing used stock over new stock, or that they're prohibited from selling used stock at more than a certain percentage of the cost of new. These ideas probably have holes, but I'd rather see something along these lines pushed than see consumers be punished for somebody else's war.

mgcross• 14 years ago

I've purchased more than my fair share from GameStop and have never encountered such pressure to buy used. What I have encountered is pressure to pre-order new titles and a subscription to 'Game Informer', a magazine that promotes new titles in the form of previews, teasers and reviews.

I simply wouldn't buy games at a $59 price point if it didn't include the ability to trade or even just let friends borrow.

I really, really love games, but my preference has shifted toward indie and 2D. There are exceptions (Fallout 3), but most AAA console titles impart too much of a 'Michael Bay' experience and aesthetic for my tastes.

thalur• 14 years ago

"The rebuttal of course is usually the same. Used games fuel new game sales; this is GameStop's response and some buy into it. Of course, in reality it's pure conjecture without any evidence."

...just like most of this article then. I doubt many dispute the outcome (decline in game quality, trend towards multiplayer or DLC), but the author hasn't even shown a correlation let alone cause.

FWIW I don't agree with the rebuttal quoted here. I would simply point to the same trend in Hollywood movies. Greed and risk aversion have done the damage, not piracy or second hand sales.

The Real Cost of Used Games

Related Stories