Eidos Exec: Pre-Owned Sales Threaten Retailers

Andy Chalk

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Nov 12, 2002
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Eidos Exec: Pre-Owned Sales Threaten Retailers


Eidos [http://www.eidos.com/] Life President Ian Livingstone says the popularity of pre-owned games will ultimately hurt retailers as game developers and publishers are forced away from conventional sales channels in order to maximize their revenues.

We all know by now that used videogame sales are one of the most pervasive evils facing the industry today, responsible for everything from reduced publisher revenues to global warming. And while sales of pre-owned games may be the only way retailers like EB Games [http://www.gamestop.com] can earn kind of decent profit in a business that is otherwise characterized by razor-thin margins, Livingstone says that conventional retailers will eventually end up hurting themselves by encouraging the market.

"You can't exactly claim that the [second-hand] practice is good for publishers or developers," he told MCV [http://www.mcvuk.com/news/36712/Livingstone-Pre-owned-threatens-boxed-market]. "Development costs continue to rise and content creators need to benefit from the sales of their goods wherever they occur. If no revenue share is offered by retail on sales of pre-owned titles, content owners will develop creative online ways to ensure consumers retain ownership of their games."

One recent example of a "creative online way" to encourage gamers to avoid the pre-owned market can be found in the new Dragon Age: Origins [http://www.bioware.com]. New copies of the game include a single-use code for a free download of "The Stone Prisoner" DLC, which adds a new NPC, quest, items and more; people who purchase a second-hand copy of the game and want the DLC will have to pay $15 for it. But Livingstone says that's only the beginning.

"In the short term this might be authorization codes, identification codes or essential online data necessary to play," he continued. "In the long term, there will be less boxed product."

It's an easy prediction to make, since it's all but certain that there will be less boxed product in the long term anyway. Aside from a few curmudgeonly hold-overs who enjoy their boxes, discs, manuals and not being tied down to any particular distribution service when they want to play their games, people enjoy the convenience of digital distribution and its continued growth is virtually guaranteed. That will no doubt help bring about a reduction in pre-owned game sales in the long run, yes, but is that necessarily going to translate into more money in the publisher's pockets? That's a different matter entirely, and I have my doubts.

(And no, I don't know what a "life president" is.)


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Sparrow

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I can't argue with the guy. What he says seems to make sense.

And if Wikipedia is anything to go by... President for Life means: "President for Life is a title assumed by some dictators to remove their term limit, in the hope that their authority, legitimacy, and term will never be disputed."
 

Worgen

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Whatever, just wash your hands.
ehh, I forsee digital only as the downfall of gaming since really unless publishers cut the price of games, a $60 investment that you cant hope to get any money back on will really cut the number of games that people will end up buying. One of the main reasons I see for consoles currently beating the pc is that there is a really active used game market for consoles and the pc is really lacking that aside from outright piracy. I love my pc gaming but being able to trade in a game your tired of sometimes makes me think twice about a pc game
 

Trivun

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Agreed, the guy does make sense. But at the same time, gamers are unlikely to steer clear of pre-owned games if it means getting great games for lower prices. Unless such implementations become widespread, and we see fewer boxed games or codes and online activation that prevent people selling games on (like I suffered from when trying to sell my PC copy of L4D, as the graphics are crap on my laptop and I wanted to get the Xbox version), then people will continue to buy pre-owned games and make a quick buck selling or trading in their older titles. I've done it plenty myself, there are loads of old games that I've subsequently sold when I've tired of them, and plenty of great pre-owned games I've bought on the cheap. Even if retailers stop stocking pre-owned games, places like Craigslist and eBay will continue to sell them peer-to-peer. Personally, I'd suggest that retailers offer a percentage of profits from pre-owned titles to the original developers and publishers. Not enough to deeply cut into their profits, but enough to satisfy publishers and allow them to still make some money from their backlog of games. That way, gamers still benefit from cheaper pre-owned games, and the revenue is shared between retailers and publishers, making everyone somewhat happy.
 

Low Key

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The single use DLC is a great idea. If they take it much further than that, expect system modding to rise in popularity.

Developers and publishers need to figure out a way to decrease the bottom line on games. The only reason people like me actively hunt for pre-owned deals is because I simply can't afford $60 a pop everytime I want a different game, and I'd venture to say I speak for a lot of people since I am in the college student demographic.
 

rainman2203

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A videogame developer saying that pre-owned games hurt sales is like saying used cars are bad for automakers. Either way it makes sense, but that's just the way it is. Maybe if games didn't cost 40% of what the console to play it on does, people wouldn't bother getting them used.
 

Coldsnap

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You know I've never understood why the video game industry is pretty much the only industry that is allowed to rail on and try and prevent second hand sales.
 

Aurgelmir

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Ok, I can understand that it lowers sales for the developers, but lets look at it this way:

Lets say I have $60 to buy entertainment for this month, so I wasn't able to buy the game of last month then, so I buy it pre-owned now. In the end I end up with a game I can enjoy and some extra spending money I can use on other entertainments (Like the Cinema).

You see developers, we the customer, cant afford everything you want to sell us. Even if you do away with pre-owned games and pirate copies, you will not sell that many more games.
In the end I only have those $60 and I might not be tempted to buy last moths games if all I can afford next month game.

Sure I don't care much about GameStop, they can go belly up for all I care, but we should net view them as the evil here.
It is the developers fault for already selling very expensive product.

Sadly I doubt that going the downloadable rout will end in cheaper games for us, in the end all developers are greedy.
 

Standby

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rainman2203 said:
A videogame developer saying that pre-owned games hurt sales is like saying used cars are bad for automakers. Either way it makes sense, but that's just the way it is. Maybe if games didn't cost 40% of what the console to play it on does, people wouldn't bother getting them used.
Couldn't you apply that same logic to DVD's or CD's?
 

ItsAPaul

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Thumbs up to whatever kills Gamestop. Every gamer that goes there for something released in the past year should be slapped upon entry and exit.
 

zidine100

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Wait we are allowed to buy the product, but we are not alllowed to sell it on because its hurting sales...

Oh god, the charity shops are the tool of the devil, taking donations of products (not specifically video games here) and selling them on....THEY MUST BE STOPED! / sarcasum, i would have made a more video game relaed analogy but that came to my head first so.... This is also to point out that other types of sales do not complain about pre owned products.
 

Aurgelmir

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Standby said:
rainman2203 said:
A videogame developer saying that pre-owned games hurt sales is like saying used cars are bad for automakers. Either way it makes sense, but that's just the way it is. Maybe if games didn't cost 40% of what the console to play it on does, people wouldn't bother getting them used.
Couldn't you apply that same logic to DVD's or CD's?
I would say thought that the pre-owned sales on CDs and DVDs might not be as big as with games, since both of those tend to be something people collect.
 

Over_Krill

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I wish i had to pay $60 USD for a game in Australia they get to about $120 which is 110.979 USD i am sorry i can not feel sorry for game developers and publishers i just can't.
At least half of my game collection is pre-owned for this reason.
 

Jared

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Aurgelmir said:
Sadly I doubt that going the downloadable rout will end in cheaper games for us, in the end all developers are greedy.
They seem to be getting more and more like that everyday...its kinda sad really...

Whatever happened to the good ol' days when it was not just a corporate enterprise but for entertainment..

Le sigh
 

eframson

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For what it's worth, after 2DBoy made a bunch of money and got all popular with World of Goo, they just went ahead and decided that they wanted to share the game with everyone, not just those who can necessarily afford the full retail price.
 

ufork

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ItsAPaul said:
Thumbs up to whatever kills Gamestop. Every gamer that goes there for something released in the past year should be slapped upon entry and exit.
and why is that exactly
 

Worgen

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Whatever, just wash your hands.
ItsAPaul said:
Thumbs up to whatever kills Gamestop. Every gamer that goes there for something released in the past year should be slapped upon entry and exit.
yeah whats with the hate for gamestop? Sure they tend to give rather bad trade in amounts but they tend to have better game deals then wallmart and most other places.
 

dunxy

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"And while sales of pre-owned games may be the only way retailers like GameStop and EB Games can earn kind of decent profit in a business that is otherwise characterized by razor-thin margins"

Wow,for this i just had to post.

Can't comment on GameStop, But the words EB and Razor-thin margins do not belong in the same book let alone sentence! They are rip of merchants of the highest degree, I regularly see things marked at 10-20% ABOVE the RRP while many other retailers sell at 20% or more below.They also have prices listed way on their website different to in store, and if you don't check first and call them on it you can end up paying a lot more than you should.These kind of business practices deserve no respect.

I have no problem with the selling used games, just i don't know how anybody could think a retailer such as EB would need to just to turn a profit!
 

Worgen

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Whatever, just wash your hands.
dunxy said:
"And while sales of pre-owned games may be the only way retailers like GameStop and EB Games can earn kind of decent profit in a business that is otherwise characterized by razor-thin margins"

Wow,for this i just had to post.

Can't comment on GameStop, But the words EB and Razor-thin margins do not belong in the same book let alone sentence! They are rip of merchants of the highest degree, I regularly see things marked at 10-20% ABOVE the RRP while many other retailers sell at 20% or more below.They also have prices listed way on their website different to in store, and if you don't check first and call them on it you can end up paying a lot more than you should.These kind of business practices deserve no respect.

I have no problem with the selling used games, just i don't know how anybody could think a retailer such as EB would need to just to turn a profit!
gamestop bought out eb awhile go, and it sounds like you have just gone to lazy stores or something, the ones I go to almost always have lower prices then most other stores that sell games