Critical Miss: #32

[Moriarty70]

No problem I live to please, it wasn't supposed to be serious I thought you would be able to tell that from the retarded extremes I pushed the example to, chances of something like that ever happening is absurdly low.

Came through loud and clear, but it still took me a second. I'm on the back end of a head cold so my thoughts still has a lovely fuzzy/foggy element. Also, it's not far off what some people have been claiming.

 

[Onyx Oblivion]

I don't always find these comics funny...but yet...I'm always entertained, just the same.

 

[Meggiepants]

Name one other industry where used items do not lose any actual value and can be resold for a few dollars less (can happen multiple times) then a new copy days/weeks after release where all "buyers" experience the exact same product with no differences due to being "used".

And because you make similar points, this also adresses those.

Snip

The used book business. I was a manager for a used books store for three years. We sold new books as well as used books.

Here is how the model worked, see if it sounds familiar:

Someone comes in with a stack of used books. We looked at the cover price, and paid 1/2 the cover price in credit at the store, and 1/4 the price in cash. Condition wasn't really an issue unless a book was trashed, meaning dropped in water. Scuffs, bent pages, cracked spines, these things did not matter because the people who bought the books just wanted to read the content. People buying used books aren't looking for collectables, those would actually be more valuable than the retail price of most books after a year or so.

They then could purchase more used or new books from us using their credit, or walk out with some cash.

We had regular customers and we would see the same books over and over again. Books that were hot, we would continue to pay half cover price for. Books that were older, got less money.

Sound familiar?

The profit was indeed high. But, and here is the biggest problem with many complaints you get from people about buying used things, it did not mean we were millionaires. Granted, video games sell for more, but the idea is the same.

You have to consider we had many expenses to pay for. The rental of the storefront, the bills to keep the store running, no matter the number of customers we had, could be a bad day, could be a good day, we still paid the same amount every day in heating, cooling, electricity and water. The cash output for those who did not want credit. This may not sound like a big deal, but some titles will stay on the shelf for weeks, months or even years before we get our investment back. You also have to pay the employees for working at your store, the biggest expense of them all.

Gamestop solves some of these problems by being a chain, but they still have these issues. I'm not saying it's not profitable, I'm just saying it isn't like they are getting $30 every time they sell a game. They get a portion of that.

This is probably the biggest reason I do not understand the big todo over selling used games. I can't remember a time where the used book industry was looked upon as something evil like this. In fact, authors regularly came to the used book stores to sign copies of their books. They have a soft spot for used books stores because they frequent them. And they get nothing more in return for us selling their books used. This is no different than the gaming industry.

 

[Jared]

...I never even thought of it like that. This is so very, very true! No one kicking a fuss about this!

 

[JEBWrench]

...I never even thought of it like that. This is so very, very true! No one kicking a fuss about this!

No one's kicking a fuss about this, because it isn't true. It's a bad analogy. Very, very, atrociously bad.

A car's effectiveness is directly limited by its age and amount of use. Video games are significantly less hindered. Also, as pointed out earlier, you get limited service on used cars in the form of maintenance, warranty, and features like OnStar, unless bought from a certified dealership.

 

[Duffy13]

Here's my issue. If a game is indeed USED, doesn't that imply that someone has USED it? As in, gone to a store, given the money necessary to purchase the game, then later given that game to someone else? So the game we are talking about has already been purchased, the publisher has already made money on that copy of the game. So now....what, they want to be paid twice? Don't really get it.

The Pubs have only gotten money from one person though, they want their cut for every person who plays the game ever. So they equate used sales to outright piracy since it has the same effect on them (I doubt that 10 people may own a single used game millions can get a single pirated copy) all they're trying to do is guilt trip everyone into buying everything new so they can fill their solid gold pools with liquid platinum instead of just liquid silver.

You're ignoring that most of the video game specific shops purposefully order smaller numbers of new games (thus less money to the developers) because they are anticipating the resell. In fact it's encouraged to get preorders explicitly so they can cut down on spare "new" copies. They have the numbers to back up such a business maneuver. I'm not going to say it's an easy fix, but the "problem" is definitely there.

 

[Duffy13]

Name one other industry where used items do not lose any actual value and can be resold for a few dollars less (can happen multiple times) then a new copy days/weeks after release where all "buyers" experience the exact same product with no differences due to being "used".

And because you make similar points, this also adresses those.

Snip

The used book business. I was a manager for a used books store for three years. We sold new books as well as used books.

Here is how the model worked, see if it sounds familiar:

snip

That's the best comparable market example I've seen.

Some questions that pop to mind:
1. As a bookseller did you explicitly avoid stocking "new" copies and push/rely on used turnover?
2. How big is the mark-up on books?
3. Are the numbers truly comparable? A game game can cost several million, a book costs on average what and generates how much?
4. Are books less of an investment from the author's standpoint? (Monetary)
5. How different is the distribution/selling overhead?
6. Is the used book market of comparable scale to games?

 

[ItsAPaul]

They aren't. Used games sell for 90-95% of the original price, cars much less. Condition also doesn't matter on used games. I'd never buy a game used if it's still available new since saving $3 or so isn't worth getting it secondhand (or saving none if it's a good game on gamecube for instance), but apparently I'm crazy like that.

 

[DaOysterboy]

Now, a few things happen:

- The developer has lost a legitimate sale from a person intending to buy the game new. This is the main concern in this whole debate. Nobody is arguing about old used games in the bulk bin for $15 each. Those are practically vaporware, and the traditional concept of "used" games. Cheap and plentiful.

This is just my OCD flaring up I'm sure, but "vaporware" is stuff that never gets released (i.e. Duke Nukem Forever). Stuff that gets released but nobody cares? I dunno, I've heard some people call it "crapware" but I don't know if that's the most common term.

- The customer gets what they think is a "new" game. It was practically full price, and had a nice little discount that offset sales tax a bit. They're going to possibly play online on dev funded/hosted (and by dev funded, I mean funded by game sales) servers. They may need to download patches. They may also be calling support numbers to ask for help from the dev funded support staff when something breaks. They are going to be wondering where the sequel is to the game in a year or so when the company doesn't make enough from sales to warrant making a sequel.

This bit of the argument I raise an eyebrow at. They would have to do all of these things for the original owner. When the original owner sells it though, he is no longer consuming their resources for multiplayer, tech support, etc. He no longer uses those resources and the individual he sold them to is now utilizing them. They are still only supporting one copy of the game. It's identical to the support required for a guy who buys the game, never sells it, and plays it until he can't afford the electrical bill anymore. The whole "ongoing costs" argument is rather unconvincing.

But then I play PC games and usually only buy the "$15 bin material that nobody cares about" anyway. In my opinion, games are overpriced. Lots of people are willing to pay $60 for a new game on release day. I'd rather play 2008's greatest hits for $20-30. Publishers acknowledge this by slowly dropping prices over the course of 1-3 years. So they get the most money from both me and the people who camped out overnight to pick up a hot fresh copy. It also means I don't have to buy brand new hardware every 6 months.

 

[Kross]

The used book business. I was a manager for a used books store for three years. We sold new books as well as used books.

Thanks for the detailed response!

The problem with the current video game industry is that most games suffer from a very short half-life of profitability. Unlike a good book, which can be reprinted and resold indefinitely; going back and playing older games, while well worth it for those dedicated enough to do so, doesn't help those making a living off of creating games as much as it probably should.

One of the main reasons for this is technology upgrades making old games "ugly" or incompatible to newer operating systems - While Quake or X-Com may be great games (and boy have I played me some X-Com), have fun setting up Dosbox and making them playable. While the wonderful people behind Steam have started to bring some abandonware back, it's still a rare exception, and even rarer where the original "Authors" of the games see any residual from such efforts.

Then there's the price curve in general. A solid fantasy novel 10-15 years ago will still sell right alongside new books for almost the same price. A used book in high demand will be reprinted indefinitely as old copies fall apart and new copies become rare. A used game will be played and returned repeatedly for very little loss, and likely copied for free much more often then a book is scanned and reprinted for free (different issue, but all related to the same core problem for developers).

A "new" used game will still take support staff and equipment/bandwidth if it has any online component, which most these days do. Or any other types of support relating to other issues (rarer, but still a concern for those that need it). This all costs money, which comes from sales of the game. It's an issue that just doesn't come up for book publishing.

The creative force behind a book is typically a single person, with one or several editors. A person who is in an industry which is fairly notorious for not being highly paying even for that individual (unless they can turn it into other forms of non book merchandising - See: Harry Potter). The creative force behind a game sold in stores is usually several programmers (likely with a separate designer), several artists (and for games in stores, this means dedicated artists for graphics, animation, modeling, and audio at the very least), bug testers and other quality assurance (sometimes one person, usually many more), usually one or more writers, and someone to manage all these people. You may have only a few people in each of these categories in a small studio, typically the teams working on a published game number in the dozens.

Devs love that people enjoy their games, just like an author loves anyone who appreciates their prose. But the cost of entry to make a high quality game (and by cost of entry, I mean being able to convince someone else with money to take a chance on you, or already have a profitable game under your belt to have money to make more) is such that the impact of lost sales in the first few months of a game is severe and has resulted in many people without jobs who would otherwise be entertaining us with whatever other ideas they had in the works.

Or, they go on to make cheaper games with less staff and less production, and most of all, less physical copies. Which has worked out fine for many people. But the reasons for them making the cheaper games aren't because that's what they enjoyed, it's because they can't make a living working on the cool stuff. It also means that many, many people will never see their games without searching for them online. Not being able to afford the prestige or publishing agreements to put your game in a store means a lot of people miss out on great experiences.

Short version: Good books hold up better after 10 years then almost any game (See: The Bible), and have ways of making money for the duration. (non-subscription) boxed games make money for a few years at best, and then aren't much more then a portfolio item to get people to check out the new game being worked on by the same people.

This is just my OCD flaring up I'm sure, but "vaporware" is stuff that never gets released (i.e. Duke Nukem Forever). Stuff that gets released but nobody cares? I dunno, I've heard some people call it "crapware" but I don't know if that's the most common term.

Woops, wrong term. I meant Abandonware.

This bit of the argument I raise an eyebrow at. They would have to do all of these things for the original owner. When the original owner sells it though, he is no longer consuming their resources for multiplayer, tech support, etc. He no longer uses those resources and the individual he sold them to is now utilizing them. They are still only supporting one copy of the game. It's identical to the support required for a guy who buys the game, never sells it, and plays it until he can't afford the electrical bill anymore. The whole "ongoing costs" argument is rather unconvincing.

Hmm, fair point. I may have been recycling the piracy argument there accidentally. In terms of piracy it's much more appropriate. Thanks for pointing it out!

 

[Meggiepants]

]

That's the best comparable market example I've seen.

Some questions that pop to mind:
1. As a bookseller did you explicitly avoid stocking "new" copies and push/rely on used turnover?

As a used bookseller, a majority of our sales were used. We devoted only 10% of the store to new books. These were only the bestsellers, as the profit we made on these books was very low and we could not compete with large new book sellers like Barnes & Noble who sold their new books at a steep discount. It was in our best interest as a business model to push the used items. And our customers generally expected to get used when they visited, because they were looking for bargains.

2. How big is the mark-up on books?

It depends on new or used. New books, we made roughly 10% of the total cost. So a $6 book, we'd charge $5.40. You can't get cover price for new books with the competition out there. Used, we made closer to 30% on average, some more some less. If we had a book we paid $3 trade/$1.50 cash, for instance, (not unusual for paperbacks at the time, this was in the later 90s) we'd mark it for $5. But if it didn't sell for a year, we had to mark it down in order to move it. But a hot title, we sold for about 15-20% off the cover price. The demand was high enough that we could sell it even at that price fairly quickly. It isn't quite as simple as saying, we marked things up this much. As the market fluctuates, so did the prices we could expect to get for an item.

3. Are the numbers truly comparable? A game game can cost several million, a book costs on average what and generates how much?

It depends on the book, but that isn't an issue. Unless you're implying that the value of an item somehow gives it a special class in the marketplace? Our thing costs more to make so we have more rights then you do? Yes, videogames cost more to make, but they also make more money. The bigger the risk, the bigger the payout. Hundreds of thousands of books are published each year. Very few of them make in the millions.

4. Are books less of an investment from the author's standpoint? (Monetary)

See previous comment. But I would suspect authors would find that insulting, that their work is somehow less protected or is less of a personal investment than a video game.

5. How different is the distribution/selling overhead?

Hard for me to address. I've never run a Gamestop. I know that both have the same basic requirements to operate. I know that Gamestop must output a higher amount of money in their investment (used games) than a used book store. But as I said, bigger risk, bigger gains. They might pay you $30 for a game that won't sell until the game comes out as a "Greatest Hits" title, in which case, they would actually lose money on that investment. This is probably factored into their store model as it was in our model.

6. Is the used book market of comparable scale to games?

Yes. And if you count online sales as well, certainly. There is a huge market for used books. In just about ever city I've ever lived, there is a used book store somewhere, often more than one, and some that even specialize in particular themes, like children's books.

Some large retailers even do it. The Barnes & Noble in Rochester Hills, MI where I once lived had a very large used book section. This would be similar to the Wal-mart used games model.

But yet again, it shouldn't matter. It seems to me people are villanizing a practice because they dislike the company. If it weren't Gamestop, it would be someone else. In fact, it is someone else. It's lots of someone elses. I understand people don't like Gamestop, they call them a pawn shop. But Gamestop actually does more for the gaming business than Joe Schmo selling his game on Craigslist or Amazon or Ebay. Because Schmo isn't going to pressure you to buy new games with incentives and annoying clerks. They aren't going to upsale the Special Edition or try to sell you a magazine designed to sell you more video games.

Gamestop, unlike the other places you buy used games from, specialize in selling you gaming industry related items. As I have said before, it's more of a symbiotic relationship than the game companies are willing to admit. They are an easy target because that is all they do. But this is happening in other places as well, and it happens in any industry where it is profitable to sell something used. I understand buying used is less dollars directly for that title. But such is the case for anything being sold used.

 

[Meggiepants]

Snip

I'm sorry, but I think we are going to have to agree to disagree. Simply because something costs more to make, does not give it special rights. Just because the circumstance surrounding games means they have to make their profit in the first few months by selling only new games, does not mean they get special treatment. It simply means their business model will have to adapt.

If you created a product that requires special laws and treatment within the market in order to be profitable, then your business model is flawed. Saying individuals can do what they like with their property except in this special case is not something I can stand behind. We either say people cannot sell their used property, or they can. And if they can, then businesses should be allowed to exist to facilitate this.

Making copies of something is a completely unrelated issue. Then you are no longer selling your property. You are distributing stolen property.

I love video games too, and I hope they succeed, but I am not willing to change property laws in order to help them. I have no problem with things like Project $10, but I take issue with the current trend of villanizing those who wish to purchase and sell used games. Because at the root of every argument is the idea that games deserve special treatment.

 

[The Wooster]

Curious as to the specific intent of this strip as it appears to support whichever side of the argument the reader happens to favor. Was this done on purpose? Or are the authors picking a side? Or lucky coincidence? Reflection of the human psyche?

While her analogy is insane (Erin is a reflection of crazy internet people who try to dramatise every argument with ridiculous statements. The opposite end of the spectrum is "buying second hand is piracy" which is also complete bullshit) I agree with her, I'm against Publishers directly attacking the second hand market.

As always the comic is very much pro-consumer and as always, the consumer is getting caught in the crossfire between publishers and a group of greedy dickheads. I'm not pro-gamestop. Hell, no one is pro gamestop, not even the people who work there. But the average gamer, who does not make all that much money, should have the right to resell his/her games to a rd party, be that another gamer or some giant soul sucking corp like gamestop. The idea that not paying full price for a product when you don't have to (Even if the savings at somewhere like gamestop are pitiful) is somehow immoral is ridiculous and insulting. Supporting a dying business model is not doing the developers or publishers any favours, it'll just make it hurt all the more when it finally crashes and burns.

If publishers want to oust second hand games the solution should be the carrot, not the stick. Steam has succesfully wiped out second hand gaming on the PC and you see precious little complaints about that. Why? Because the advantages of being able to download your games at any time and anywhere (as well as fair pricing with excellent sales) goes a long way to outweighing the fact that you don't really own the product you paid for.

Finally I'm also frustrated publishers are playing this "support us because you love us" card. They can't have it both ways You can't grow to an immense size, nickle and dime people over shitty DLC and make millions a year and still maintain an intimate relationship with your customers.

 

[Kross]

Snip

I'm sorry, but I think we are going to have to agree to disagree. Simply because something costs more to make, does not give it special rights. Just because the circumstance surrounding games means they have to make their profit in the first few months by selling only new games, does not mean they get special treatment.

Fair enough. Although, I didn't want to give the impression that they needed/deserved special treatment under the law, just that undercutting new games does indeed hurt developers where they eat. And as someone who has several friends who make their living off of creating video games, it's not something I personally support for my listed reasons - and for those who might agree with some of my points, I'm happy if I've convinced them to find ways to support their studios of choice directly.

Game developers are smart people, and are obviously coming up with ways to work around the problems within the existing system (like Project $10 or digital distribution). We just need to support the ones that work with our own buying habits.

 

[Meggiepants]

Snip

I'm sorry, but I think we are going to have to agree to disagree. Simply because something costs more to make, does not give it special rights. Just because the circumstance surrounding games means they have to make their profit in the first few months by selling only new games, does not mean they get special treatment.

Fair enough. Although, I didn't want to give the impression that they needed/deserved special treatment under the law, just that undercutting new games does indeed hurt developers where they eat. And as someone who has several friends who make their living off of creating video games, it's not something I personally support for my listed reasons - and for those who might agree with some of my points, I'm happy if I've convinced them to find ways to support their studios of choice directly.

Game developers are smart people, and are obviously coming up with ways to work around the problems within the existing system (like Project $10 or digital distribution). We just need to support the ones that work with our own buying habits.

And on that point we agree. People should use their wallets to support whatever system they find agreeable. I also believe buying new is the best way to support a company. I just think people who buy used shouldn't be villanized for working within a system that is completely legal and ethical by the standards of any other industry, market or product.

 

[The Wooster]

Curious as to the specific intent of this strip as it appears to support whichever side of the argument the reader happens to favor. Was this done on purpose? Or are the authors picking a side? Or lucky coincidence? Reflection of the human psyche?

While her analogy is insane (Erin is a reflection of crazy internet people who try to dramatise every argument with ridiculous statements. The opposite end of the spectrum is "buying second hand is piracy" which is also complete bullshit) I'm against Publishers directly attacking the second hand market.

As always the comic is very much pro-consumer and as always, the consumer is getting caught in the crossfire between publishers and a group of greedy dickheads. I'm not pro-gamestop. Hell, no one is pro gamestop, not even the people who work there. But the average gamer, who does not make all that much money, should have the right to resell his/her games to a rd party, be that another gamer or some giant soul sucking corp like gamestop. The idea that not paying full price for a product when you don't have to (Even if the savings at somewhere like gamestop are pitiful) is somehow immoral is ridiculous and insulting. Supporting a dying business model is not doing the developers or publishers any favours, it'll just make it hurt all the more when it finally crashes and burns.

If publishers want to oust second hand games the solution should be the carrot, not the stick. Steam has succesfully wiped out second hand gaming on the PC and you see precious little complaints about that. Why? Because the advantages of being able to download your games at any time and anywhere (as well as fair pricing with excellent sales) goes a long way to outweighing the fact that you don't really own the product you paid for.

Finally I'm also frustrated publishers are playing this "support us because you love us" card. They can't have it both ways You can't grow to an immense size, nickle and dime people over shitty DLC and make millions a year and still maintain an intimate relationship with your customers.

In case you didn't notice, the consumer has that right. There's nobody with a gun to their head making them download the DLC as the original user. They could leave it intact and then insist on a higher dollar value when they resale because it's still go the free DLC available. The only thing that's happened is that games now have a way to indicate "wear and tear". After all, the reason a used car costs less isn't just because somebody's driven it, but because you can expect you'll have to put money into repairing it sooner than if you bought it new. But if somebody kept it in immaculate condition, they can charge premium dollar for their used vehicle. Now games are the same way.

That's a fair point. I was arguing against the anti-used game stance in general rather than project ten dollar in particular.

 

[whaleswiththumbs]

One thing that confuses me is why are they complaining about the second-hand market all of a sudden? They didn't do this shit a year ago, why now?

Greed. I keep thinking back to what Shamus(i think?) said that almost every other market for pretty much everything, the price goes down when the product goes old or when sales go down. (not saying you specifically, Irridium) If you haven't read his article, you really should, it's mind blowing "simple" solution to this stupid problem

 

[Irridium]

One thing that confuses me is why are they complaining about the second-hand market all of a sudden? They didn't do this shit a year ago, why now?

Greed. I keep thinking back to what Shamus(i think?) said that almost every other market for pretty much everything, the price goes down when the product goes old or when sales go down. (not saying you specifically, Irridium) If you haven't read his article, you really should, it's mind blowing "simple" solution to this stupid problem

Don't worry. I've read it and agree.

Honestly all Gamestop is doing is fulfilling a void left by Publishers. If publishers want to stop us buying used, then they should lower the price overtime. And adjust prices to compensate for other currencies(1 Dollar =/= 1 Euro) Because there are loads of people who would be glad to buy new and not buy from Gamestop.