Bargains Are for Cheaters

[squid5580]

I bought Legendary used for 29 bucks. I could have bought it new months before. You wanna know why I waited for so long. Simple because I didn't feel it was worth the 69 bucks they were asking for it. Hell I was waiting for it to drop to $20 because that is the value I assigned it.

Now when you can justify charging me 69 bucks for Halo 3 or COD 4. And in the same breath expect me to pay 69 bucks for Deadly Premonition or Terminator Salvation or Legendary then we can actually begin this discussion. As long as you insist are charging me a flat rate no matter the quality then I will be forced to assign my own value to the game. Since you are being greedy and not doing exactly that (with a few exceptions that do charge less than average) you made your bed as far as I am concerned.

 

[Jumwa]

About time somebody else said all this. And very well said too!

The self-entitled whining of the games industry is not only absurd, it's just not practical. If you want more customers and more money, offer more value.

Either that, or fight an uphill battle, investing millions into lobbying against pirates, used games, new protection services and trying to inconvenience your paying customers. That'll do it too, right?

 

[Krakyn]

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I imagine you don't understand what it's like to not have much of a budget. If there's no used game market, those people who bought the game used likely can't afford the game new, so it goes from Gamestop making money and the company losing none, to Gamestop not making money and the company losing none. The developer/publisher can't make hypothetical profits. If you take money from a publisher or they have to do a mass recall or something, sure, they lost money. But if their product just doesn't sell new copies, that's not a loss, that's a neutrality.
...

You have to factor in the "hypothetical profts", however. That's the entire principle of opportunity cost: yes, you might have made five bucks, but if you had done something different then you could have made ten. Thus, you lost five bucks. While that's not the exactly the same principle that's in play in the games market, it's the same idea.

While you are correct that it's the base principle, the opportunity cost is only valid if there are solid numbers involved, like costs and results. How much the company would've made without the existence of the used game market is hypothetical and imaginary, and I would even say arbitrary. Because the consumers of used games face a price threshold, the imaginary profits that the developers/publishers like you to think they would make is invalid.

 

[StriderShinryu]

Pretty much what I've been saying all along. The issue isn't really about GameStop's parasitic business practices, it's about game companies allowing them to operate that way by not intelligently pricing their products. If games had a more intelligent approach to pricing in the first place, Gamers wouldn't be shoved into buying used copies as the only way to get some sort of deal and GameStop wouldn't make anywhere near as much money off of selling used copies for only $5 or $10 less than a new copy because gamers wouldn't pay that knowing a real price cut was eminent.

As far as MW2 and other similar titles (like pretty much all Nintendo brand titles) goes, however, I think that's something of a sticky point because I would imagine people are still buying the games for that much. A real price cut on those titles beyond maybe $10 or $15 off might generate a few extra sales but if they're selling full price copies then I can see why they wouldn't lower the price. My concern is when I go into a store and I see the same copy of the same game sitting on a shelf for months for the same price it had at launch. Those are the particular titles that I think would benefit most from an intelligent pricing scheme.

One error in the column is the statement that people who buy used copies of the Project $10 style games have to buy the P$10 content. They don't. That's a choice the buyer has to make and it's the trade off for buying used instead of new. I, for instance, played a used copy of ME2 and did not pay for the P$10 content. I loved the game and had a complete and full experience. The same would be the case if I bought a used game that needed P$10 to unlock the online modes. If I had no intent to play online anyway, I could choose to not pay the extra fee and would still have a full and complete experience. At this point, and certainly it may change, but right now there is NO necessity to buy P$10 content.

Finally, kudos for mentioning the one aspect that so many people seem to "forget." The game revenue model IS NOT the same as the revenue models for other entertainment media. You can't compare how a game generates it's revenue to how movies, music, books, etc. generate their revenue. Movies, music, books, etc. all have various points of entry and various revenue streams that hit all sorts of demographics. Games, not including DLC as it requires an initial purchase anyway, have only one source of revenue, that being a new copy sale. Also, with that single point, games have a much higher buy in price than any other type of entertainment media. There are no grounds for a direct comparison.

 

[Shamanic Rhythm]

I was under the impression that like any creative media, the original artists (in this case, the developers) are only entitled to something miniscule like 5% of game sales, and most of their revenue comes from direct cash advances from the publishers. The bulk of the money from game sales goes to publishers, hence, they, not developers, are the ones complaining about being hurt by used game sales. And to them I say cry me a river.

 

[StriderShinryu]

I was under the impression that like any creative media, the original artists (in this case, the developers) are only entitled to something miniscule like 5% of game sales, and most of their revenue comes from direct cash advances from the publishers. The bulk of the money from game sales goes to publishers, hence, they, not developers, are the ones complaining about being hurt by used game sales. And to them I say cry me a river.

While it may be true that publishers take more than their fair share of income on a title, the publishers do still need income to pay developers to make more games.

 

[Prof. Monkeypox]

Damn straight. I hated being guilted by developers just for being a smart shopper. I'm not pirating the damn game. I'm still putting good money down to play it. Gamestop is, meanwhile, making a killing, and you're blaming the people who would pay your price if you just made it a few dollars cheaper?

 

[esperandote]

The only publishers that have been lowering their older games prices are the ones that have released "Essentials collections". I have then Resident Evil and Devil May Cry ones.

 

[Geoffrey42]

A. The Project Ten Dollar punishes Gamestop, albeit in a roundabout, delayed fashion. By removing value from used games, publishers/developers can succeed (in the long run) in lowering gamers perceived value of used games, which will lower the price point that the market will bear for used games. Long-term, if it is widely enough accepted, and consistently enforced, they'll succeed in reducing Gamestop et al.'s margins on used games, while extracting at least a portion of that money for themselves (obviously not everyone still buying used will be interested in paying for whatever lost functionality there may be). I think the biggest loser in the Project Ten Dollar scheme is the renter (or the library loaner); they're already interested in the lowest investment way to enjoy a game, and having to pay 10 dollars to get to the full thing (which is typically a far larger investment than the rental itself) just means they're likely to be completely locked out of that content.

B. While games don't have the up-front low-cost one-time option like movies, I feel like they DO have price reductions over time. There are exceptions, like Modern Warfare, but they are exceptions. Most other games, 1-2 years later, while still incredibly relevant and enjoyable gaming experiences, tend to be 50-75% cheaper (new) than they were at release. $20 is the sweet spot, as far as I'm concerned, and I don't buy used. While it's worth arguing that the individual exceptions would be better off if they followed a faster discount model, and that the market as a whole could do with accelerating their discounting given the relatively short hype window and lack of secondary release window (like movies do with "Now available on DVD" ads), the idea that the games industry does NOT engage in this kind of practice is blatantly false. And, as many people have pointed out, the PC market for digital distribution has been engaged in an accelerated form of this practice for quite some time (and my Steam library is chock full because of it).

I've raged about game prices too, Why can I still find Halo 3 for 50 bucks? The game is 3 years old. I'll repeat this for emphasis THREE years old.

Ummm... I can also find just about every game ever, still being sold for its MSRP, by shady dealers on Amazon. But the highest asking price for a product is not reflective of the market. Halo 3 is $30 or less, on average, and if you had access to the right Target, $7.48. [a href=www.cheapassgamer.com]Cheapassgamer.com ftw[/a].

C. Just have to throw in that I find Gamestop's argument for how used game sales actually help absolutely hilarious. They say that people trade in old games to purchase new games, and therefore the used games sales boosts new games sales. This argument is so incredibly myopic (by viewing that sale of used games TO gamestop and the subsequent new game purchase independently from the cashflow represented by the sale by gamestop of the used game TO other gamers), I can't help but laugh.

Damn straight. I hated being guilted by developers just for being a smart shopper. I'm not pirating the damn game. I'm still putting good money down to play it. Gamestop is, meanwhile, making a killing, and you're blaming the people who would pay your price if you just made it a few dollars cheaper?

Somehow I find it hard to believe that, if the release price were the same as the current used game price, you would be perfectly happy to buy the game new. You obviously wouldn't find the exact same discount equally worthwhile in purchasing the used copy, at the newly discounted price off of the lower retail price. I.E. $60 new, $50 used "Oh, heavens, if only the new copy were $50, I would buy it instead!". Bam. $50 new, $42 used. You're telling me you wouldn't still buy used? Moving the price point down increases the market size (by making the cheapest point of entry even cheaper), but it doesn't change the value proposition of new vs. used, and it doesn't change Gamestop's business model.

 

[RobfromtheGulag]

As per usual a good article.

I had my hackles up when I went in, but Shamus makes some good points.

And just to nitpick:
Amazon buys and sells used games too, probably a good percentage of what Gamestop does. Just saying.

It would seem that a lot of gamers grew up and got their dream jobs working as devs because there are so many posting comments; I remember back in 95 playing Doom, being a game developer was like being Aquaman or something... They simply didn't exist.

 

[Casimir_Effect]

TL-DR version: You don't need to get the game on day 1 when it costs an arm & a leg.

Sorry if anyone feels insulted by anything in there, it's just a question baffled me for a while.

For me it comes down to a question of voting for good content with my wallet. Sequel and future original games are green lit largely on the initial sales of a game. Yes, I could save myself a few dollars by waiting a bit, but if everyone does this for the games I like, then I'll stop seeing the content I want to see in games.

I realize not everyone has the money to do this, I respect that. But I do, and I use my purchasing power in the market place to send a small message to the publishers...I like this, please make more.

Okay, I can definitely see your point and do agree with it. But I would also say that, in the long run, it would be worth harming the industry for a game generation or two. Where it is right now isn't a good place. I don't fully understand why game developement costs have exploded so much recently. Sure, for games with the scope of GTA 4 is makes some sense, as creating something that large is a massive undertaking. But for MW2, which lasts all of 5 hours to finish, uses an upgraded form of the previous engine, and had a solid multiplayer infrastructure in place, how does developement cost that many million dollars (over $100million wasn't it?). And why can the smaller studios always do far more with an amount of money than the larger ones? The only answer I can think of is that developers fill with hubris as soon as they have a successful game and then start wasting money all over the place.

The systemic problem seems to be that the biggest AAA companies have to have this insanely fast sequel turnaround. If the game doesn't sell well straight away, the publisher counts it as a fail and shelves the brand (eg. Alpha Protocol). But the games which aren't hyped to hell and back, and are still big name games, they seem to get more of a chance. Their sales are usually taken over a far longer time resulting in a sequel being greenlit further down the road (like The Witcher).

Perhaps my error is seeing this as too much of a pc gamer. We don't get the massive games as much now, and are (for better of worse) harder to please in many ways. So publishers realise that they have to evaluate a games performance over a suitably long time, allowing for word of mouth, reviews or curiosity to bring them sales. Here I would reference games such as Sins of a Solar Empire, Torchlight and Mount & Blade. These are not big expensive games. There is still a risk attached, but this is alleviated by the developer continually supporting the game thus endearing it more to the people who play. And if the first game of a series is treated this way by its creators, then I think people are more willing to pump a higher price into the second one. I may well pick up The Witcher 2 when it's new (allowing the typical 1 month buffer to allow them to patch any problems, of course) because I want to support CD Projekt. The way they kept patching The Witcher and then did the whole Enhanced Edition for it, releasing that content to people who owned it originally for free, was what more companies should do.

 

[pneuma08]

Both are being implemented, although the former is being pushed hard by GameStop, a fact that I can't understand. Why would developers agree to give special prizes to people who bought the game from the leeches at GameStop? It seems silly.

It's simple, because Gamestop sells new games too. Lots and lots of new games, much more new games than used games; it's just that the margin is much higher for used games. For all the "leech"-ing that Gamestop does, it is not entirely a negative force on the industry.

What I don't understand is why publishers are trying to guilt-trip people into not buying used. If they're not customers, everything should be done to try and make them customers - isn't that the point of marketing? Saying, "We don't care about you because you're not our customer" is the opposite of what they should be doing.

 

[oranger]

Of course this is a reasonable solution, but its wee bit too close to "caring for the consumer" for certain industrially sociopathic CEO's, isn't it? it might seem weak...

 

[keserak]

If I don't buy a new game off of a Gamestop shelf, the developer loses nothing. Gamestop already paid the developer for the game in order to put it on the shelves. Half of the argument is invalid from the get-go.

The point is that with used games, via one purchase over the life of that particular disc via used game sales, it could have 2-5 owners. So while there are 2-5 people who'd like to play the game, only one copy is ever actually sold by the store/publisher. Publishers want to make it so each of those 2-5 people each buy a copy of the game.

Also, as for the argument that gamestop bought the game from the publisher already. If gamestop sells all the new copies it has, it will order more, bringing even more money to the publisher.

That argument is invalid. The problem is Hicerion makes a not only invalid, but completely impossible assumption: that for every game, everyone who seeks to play it would buy it at the publisher's price. Shamus just finished saying that full price is unacceptable for many games and literally millions of people agree -- else rental wouldn't be such a big part of our culture. In effect, this assumption allows the publisher to blame the consumer for the publisher's incompetent marketing scheme. It would be like Toyota saying it was the drivers' damn fault that Toyota couldn't make cars that could stop accelerating after the gas pedal was released.

Every person playing the game is NOT, and I can't believe this still needs to be said, NOT a potential sale. This is because:

a) Many, many games suck ass and are played in order to discover whether or not they suck ass.
b) Many games market themselves poorly -- and it's no coincidence that many of these poorly-marketed games suck ass. Corporations play bait-and-switch and deceptive games with customers in every field; it would be incredible if video games were an exception. What is the consumer response? Rental and used sales.
c) Many games aren't worth buying even if they aren't failures. As has already been noted, many games aren't worth the initial price but are worth a markdown price.
d) Because of the inane pricing scheme, old games aren't carried by major retailors, with rare exception.
e) Many gamers don't have a lot of money and the current prices are extroardinary considering the game content.

What each of these elements have in common is that they are the exclusive purview of the publisher to manipulate, but this entire "used/rent = piracy" insult is a pathetic and cowardly retreat from that fact. Customers have no ability to directly control how games are advertised to themselves or their pricing schemes, but customers are to blame for publisher failures in those areas. Goodness, this sounds a lot like the resentment towards customers displayed in the DRM issue. Why, it's almost as if there is a common theme here. . .

You know the real cheaters? Those damn gamers who borrow stuff from the library! . . . Why do you think no one raises a stink about free media from libraries?

You know, that's an interesting point. I've never heard anyone complain about this.

Actually, there are people who do complain about libraries. No, seriously. I remember a library going up in TX once got some richer residents pissed off (their perspective: "if you want books, you could just buy books"). Again, there are people more than selfish enough, and more than arrogant enough, to manifest this as a legitimate political perspective.

 

[Geoffrey42]

Forgot one point I wanted to make: the comments from THQ which sparked all of this were overly bitter and combative. And, the overall sentiment that the used market is persona non grata to the developers and publishers is silly. Just because you missed a gamer with the original purchase, there is still value to be extracted: subscriptions, DLC, licensed products outside of the game, and assuming you can please them enough to get them hooked on your brand (or your studio), a possible original retail purchase of the sequel and any other spin-offs. Just because someone can't necessarily afford to buy new today, doesn't mean it isn't worth turning them into a lifetime customer.

 

[oranger]

A. The Project Ten Dollar punishes Gamestop, albeit in a roundabout, delayed fashion. By removing value from used games, publishers/developers can succeed (in the long run) in lowering gamers perceived value of used games, which will lower the price point that the market will bear for used games. Long-term, if it is widely enough accepted, and consistently enforced, they'll succeed in reducing Gamestop et al.'s margins on used games, while extracting at least a portion of that money for themselves (obviously not everyone still buying used will be interested in paying for whatever lost functionality there may be). I think the biggest loser in the Project Ten Dollar scheme is the renter (or the library loaner); they're already interested in the lowest investment way to enjoy a game, and having to pay 10 dollars to get to the full thing (which is typically a far larger investment than the rental itself) just means they're likely to be completely locked out of that content.

B. While games don't have the up-front low-cost one-time option like movies, I feel like they DO have price reductions over time. There are exceptions, like Modern Warfare, but they are exceptions. Most other games, 1-2 years later, while still incredibly relevant and enjoyable gaming experiences, tend to be 50-75% cheaper (new) than they were at release. $20 is the sweet spot, as far as I'm concerned, and I don't buy used. While it's worth arguing that the individual exceptions would be better off if they followed a faster discount model, and that the market as a whole could do with accelerating their discounting given the relatively short hype window and lack of secondary release window (like movies do with "Now available on DVD" ads), the idea that the games industry does NOT engage in this kind of practice is blatantly false. And, as many people have pointed out, the PC market for digital distribution has been engaged in an accelerated form of this practice for quite some time (and my Steam library is chock full because of it).

I've raged about game prices too, Why can I still find Halo 3 for 50 bucks? The game is 3 years old. I'll repeat this for emphasis THREE years old.

Ummm... I can also find just about every game ever, still being sold for its MSRP, by shady dealers on Amazon. But the highest asking price for a product is not reflective of the market. Halo 3 is $30 or less, on average, and if you had access to the right Target, $7.48. [a href=www.cheapassgamer.com]Cheapassgamer.com ftw[/a].

C. Just have to throw in that I find Gamestop's argument for how used game sales actually help absolutely hilarious. They say that people trade in old games to purchase new games, and therefore the used games sales boosts new games sales. This argument is so incredibly myopic (by viewing that sale of used games TO gamestop and the subsequent new game purchase independently from the cashflow represented by the sale by gamestop of the used game TO other gamers), I can't help but laugh.

Damn straight. I hated being guilted by developers just for being a smart shopper. I'm not pirating the damn game. I'm still putting good money down to play it. Gamestop is, meanwhile, making a killing, and you're blaming the people who would pay your price if you just made it a few dollars cheaper?

Somehow I find it hard to believe that, if the release price were the same as the current used game price, you would be perfectly happy to buy the game new. You obviously wouldn't find the exact same discount equally worthwhile in purchasing the used copy, at the newly discounted price off of the lower retail price. I.E. $60 new, $50 used "Oh, heavens, if only the new copy were $50, I would buy it instead!". Bam. $50 new, $42 used. You're telling me you wouldn't still buy used? Moving the price point down increases the market size (by making the cheapest point of entry even cheaper), but it doesn't change the value proposition of new vs. used, and it doesn't change Gamestop's business model.

This assumes that there is no absolutely reasonable price point, that there is no price where gamers will say "Oh, that's not too expensive, and the (new unit) box comes with shiny stuff!"

 

[Greenansatsu]

My question is, if publishers are upset that the used games market is making money, why don't they themselves get into the used games market. Set up a program so that a game player can send in a game back to the publisher and get a 10% coupon off on their next purchase on that publishers game, or 500 Microsoft points card or something. Then take the game and disc give a light buffing and repackage it, put a guaranteed new-used game sticker on it, and send it back to the retailers for 20 dollars off. On a standard $60 dollar game they've just sold it twice for $94 dollars, $100 if the game player is like me and loses the coupon, yes its not the $120 they could have gotten but its better than only $60, and $45 in Gamestops pocket.

 

[Geoffrey42]

Damn straight. I hated being guilted by developers just for being a smart shopper. I'm not pirating the damn game. I'm still putting good money down to play it. Gamestop is, meanwhile, making a killing, and you're blaming the people who would pay your price if you just made it a few dollars cheaper?

Somehow I find it hard to believe that, if the release price were the same as the current used game price, you would be perfectly happy to buy the game new. You obviously wouldn't find the exact same discount equally worthwhile in purchasing the used copy, at the newly discounted price off of the lower retail price. I.E. $60 new, $50 used "Oh, heavens, if only the new copy were $50, I would buy it instead!". Bam. $50 new, $42 used. You're telling me you wouldn't still buy used? Moving the price point down increases the market size (by making the cheapest point of entry even cheaper), but it doesn't change the value proposition of new vs. used, and it doesn't change Gamestop's business model.

This assumes that there is no absolutely reasonable price point, that there is no price where gamers will say "Oh, that's not too expensive, and the (new unit) box comes with shiny stuff!"

Actually, I was assuming that the possible range for reasonable launch game prices would still be in the ballpark of current prices (i.e. assuming that retail AAA releases will never be $15 2010 A.D. dollars), and that the remaining leeway between ~$5 (the used game seller's apparent tolerant point for value of game I no longer care about) and the resulting retail price was still sufficient for Gamestop to offer a discount equivalent to the value of "shiny stuff" found in the new version and still operate a profitable margin.

The point you're describing is not an "absolutely reasonable price point"; dollar value "absolute"s in an economic sense are silly. It's "price point at which the used game seller can no longer profitably provide a sufficient discount to entice the customer to forgo the shiny stuff". My assumption is that no such cross section exists within the current ballpark of pricing and margins.

 

[Deacon Cole]

Or you can just keep whining for gamers to pay extra in a bad economy when a cheaper alternative is readily available, while at the same time haranguing them with DRM and micro-transactions. I'm sure you can re-shape the long-understood consumer behavior of the average human being if you can just make them feel guilty enough.

Damn fucking skippy.

Anyone who is works for a publisher of any kind of media who does things like whine about the secondary market should be fired immediately, their homes taken away from them, and they should be forced to scrounge for food from a garbage can.

Anyone in any kind of business who thinks that guilt is a valid marketing tool should no longer be in business. It is not your customers' fault you are terrible at business, boys. Now grow up or get out.

Mark my words, if they manage to shut down the secondary market, by whatever means, then they will be cutting off their own legs and scrotums to scratch their ears. What this will do is cause fewer people to even bother purchasing game consoles in the first place because all the games will be full price and therefore too expensive. If they do this, then it is possible there will be another video game crash like in 1984. Then they will really have something to whine about as they sift through the contents of the dumpster behind a Chinese restaurant.

 

[oranger]

Is there a word for intelligent sounding troll?