Eidos Exec: Pre-Owned Sales Threaten Retailers

[Jandau]

What makes the video game industry so damn special?

This is the question that bothers me every time used games sales come up in an article. I've yet to get a serious and sensible answer.

To clarify, why does the game industry feel like they should be immune to second hand trade. Cars, clothes, movies, music, furniture, etc. Almost every non-consumeable product has a second hand market and none of those industries are crying over it constantly. What makes the games industry entitled to special treatment?

 

[pneuma08]

While that's all well and good, I can't help but think of how there is no way to kill a secondary market. I mean, as long as there is supply ("I have this game I don't want anymore") and demand ("Hey, I don't have that game") and a way to get supply to demand, there is a market. Complaining about it might as well be complaining about how we don't live in a magical fantasy realm where we all can fly and donuts rain from the sky.

Nonetheless, let's look at the GOOD things the secondary market can do, since we can't get rid of it. For the consumer, stocking older games and cheaper games is a necessity. If I want to play Shadow of the Colossus or Ico, they don't print those games anymore, so I must turn to the secondary market. Furthermore, not everyone can afford to (or is willing to) buy the latest and greatest; there are people who still pick up Fifa 2006 for the PS2, and who haven't upgraded since the Gamecube/Xbox era.

Even publishers and developers have much to gain from the secondary market - just walk into any Gamestop and marvel at the amount of marketing staring at you while Gamestop TV and their sales associates hype up the newest releases and upcoming reserve titles. All of this is pandering to the primary market, and Gamestop and its ilk simply wouldn't exist without the secondary market.

And DLC is all well and good but I still have a few beefs with it. As mentioned previously, you can't get rid of a digital copy of a title, it's stuck with you (with a few exceptions like World of Goo). I can't even lend it to a friend to try out, let alone give it away or sell it. Besides that, I wonder about the people who do not have internet, or perhaps wifi in the case of DSi and especially the PSPGo. Not everyone has or cares to get/(pay to) setup broadband and wifi, and if digital distribution becomes the norm there has to be new and different distribution channels to get to those people.

 

[Aztek463]

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.

I'm in the same boat, although some games can justify their price more than others. I would be willing to pay the $50-$60 for a game (say, an RPG) if the single player campaign was on the longer side, a good number of subplots/subquests, different outcomes depending on how you played, etc.

What I don't get is how some games with a very short single player campaign (from what I've heard, Modern Warfare 2 has a pretty short campaign) can justify the $60 price tag. Sure, you can have multiplayer out of the wazoo, but I don't think that cuts it.

Also, why the hate for Gamestop?

 

[dunxy]

Nah Worgen, I always have a sticky beak in any EB I come across and have been doing so for years, and the situation is the same across the board, at least here Down under.I'm not sure were you are from,I suspect the situation may be different in other countries were there is more competition.

To give you an example, a few months ago I purchased a Logitech x3dpro. RRP on Logitechs website is $69.95AUD, ticket price in EB is $79.95! Ticket price in 3 other retailers in the same shopping center is below the $50 mark.

Sure you could no doubt get a better price, but so many people don't bother to bargain and do just pay ticket price, and to have a ticket price on something above the RRP is in my opinion a very bad thing.

 

[Samurai Goomba]

You know, used game sales keep the companies in business who sell and hype up your new games.

Just saying. They want to get rid of all used game sales? Fine, because that's the day I stop buying games. Unless game prices start going way down, that is. Besides, I'm of the opinion that when you buy something, you should be able to freely sell it whenever you want for whatever people will pay.

 

[Samurai Goomba]

What makes the video game industry so damn special?

This is the question that bothers me every time used games sales come up in an article. I've yet to get a serious and sensible answer.

To clarify, why does the game industry feel like they should be immune to second hand trade. Cars, clothes, movies, music, furniture, etc. Almost every non-consumeable product has a second hand market and none of those industries are crying over it constantly. What makes the games industry entitled to special treatment?

Exactly.

And to those crying "Intellectual property!", the same could be said about books, movies, music... Even the freaking $80 sweaters wealthy jerks buy around Christmas time.

 

[rainman2203]

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?

Well DVD's are a rather special case. Studios (might) break even or make some profit on a film release, but they make bank on DVD sales. I suppose every product that has any sort of durability has to deal with resale issues. They should deal with it.

 

[Snotnarok]

Here's a great idea for the entire console gaming industry to think about, look at Steam and see how much money they're making because they put their games on sale and actually give good reasons to buy the game!!

I got World at War for half price and that's about the most I would pay for something like that, I got Mirrors Edge for 5 bucks, awesome price.

I think console publishers have this odd idea about them the more you charge the more you make, but when you charge less in a sale and a ton of people buy in I think that will sum it up, you make more money.

 

[Aurgelmir]

And DLC is all well and good but I still have a few beefs with it. As mentioned previously, you can't get rid of a digital copy of a title, it's stuck with you (with a few exceptions like World of Goo). I can't even lend it to a friend to try out, let alone give it away or sell it. Besides that, I wonder about the people who do not have internet, or perhaps wifi in the case of DSi and especially the PSPGo. Not everyone has or cares to get/(pay to) setup broadband and wifi, and if digital distribution becomes the norm there has to be new and different distribution channels to get to those people.

You have a point, making everything digital will hurt the developers a lot. Looking back at how many games I have given way and been given for Christmas and other times, I can just wonder how this would have ended up in other gifts instead.

Borrowing games is a great way for people to save money also, but you know the developers hate that too.

But what happened to music? I used to borrow CDs all the time back in the day... how do we relate to music these days?

I will repeat myself again:
Developers and Publishers are greedy beasts, only counting their profits.

I still think digital is the way we are going, but it has its issues still, and if the developers go there to early they will just be shooting themselves in the foot.

 

[Grampy_bone]

What a dipshit. Why should videogames be immune to first sale doctrine? What makes them so special? The profitability of second-hand sales is a sign that they are overvaluing their products. I've said it before and I'll say it again; if the game industry dropped their prices in half they'd double their sales and put Gamestop out of business overnight.

When you look at the used game shelves at Gamestop, what do you see? A ton of awesome games for a low price? Nope, you see shitty games no one wants. When someone buys a good game, they keep it. When they buy a shitty one, they sell it back to try to recoup the loss.

People like this Eidos jackoff and Activision's Kotick think they can jack up the prices and cut out retail and everyone will just buy the shit anyway. Little do they realize that every time you hike the prices or move to a higher market you are shedding customers, and no business can survive that forever.

 

[jebussaves88]

They seem to forget that without preowned games, the industry may well have not survived as well as it has up to this point. Back in the early 90's I remember it being somewhat difficult to find a new game over an preowned one even if you wanted to. There are many people who would not be sitting with 360's or ps3's in their living rooms if it wasn't for the incentive of preowned games.

 

[jono793]

"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. "


I draw your attention to this article from Kotaku:

http://kotaku.com/5409036/stardock-steam-has-70-of-pc-download-market

For all their sabre-rattling about digitising the video game industry, nobody wants to talk about the digital sales figures for some reason; paticularly when placed in comparison to CD/DVD sales. This is most likely because the digital platform have thus far failed to be the money-spinner that industry hoped it would be, and to live up to the promise of breaking the despicable second hand games trade; apparently the gaming moral equivalent to human traffiking!

You can be sure, if Steam, et al. were generating even a two digit fraction of all sales, that the industry, far from hiding the figures, would have them emblazoned upon a mighty battle standard for all to see! Moreover, if there was any real money in the digital marketplace then EB/Gamestop (US) Game/Gamestation (UK) would have their own steam-type service by now! They haven't. It probably doesn't!

The only other explaination I can think of for this reluctance is mentioned in the article. If Steam really does account for anything like 70% of the D.D. Market, then the industry is likely pooing their pants; assuming for the moment that D.D. Sales are even comparable to high street ones (which I doubt). No single high-street games retailer commands the sort of market share that Steam does. I doubt that any games developer/publisher wants to trade the current distribution network, however unscrupulous and amoral it may be, with the current digital distribution in which Valve has an essential monopoly!

 

[Worgen]

Nah Worgen, I always have a sticky beak in any EB I come across and have been doing so for years, and the situation is the same across the board, at least here Down under.I'm not sure were you are from,I suspect the situation may be different in other countries were there is more competition.

To give you an example, a few months ago I purchased a Logitech x3dpro. RRP on Logitechs website is $69.95AUD, ticket price in EB is $79.95! Ticket price in 3 other retailers in the same shopping center is below the $50 mark.

Sure you could no doubt get a better price, but so many people don't bother to bargain and do just pay ticket price, and to have a ticket price on something above the RRP is in my opinion a very bad thing.

they still sell hardware at the gamestops/ebs there? damn the last time I saw hardware at stores in the US was back when I was like 15... altho granted I never really looked at it there since I have a frys near me

 

[AceDiamond]

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 and I suppose you'd try to dish them out then? Good luck not winding up in a coma within the first 10 people. Go back to your picket line.

On a less aggressive note, I can see where he's coming from and yet I find it laughable. The pre-owned music business didn't kill music stores, after all. It's more likely that larger retailers ended up doing that.

 

[BloodRed Pixel]

easy answer to avoid resales:

just make the games so cheap that it´s better times spent to let them rott in the shelf than taking on the work to sell them. I never buy new unless it´s discounted.

I have several online game-service accounts and they make special offers so cheap I don´t mind if they rott in my virtual closet.

The only new games I spent on these days is for the iPhone, when they are discounted.

 

[SovietSecrets]

Eh I hate buying pre-owned games anyways. I like a clean disc with no dings on it thank you very much.

 

[Altorin]

it makes sense because we're thinking of this like a new chess player. We are only seeing how our pieces move for this turn.

companies like GameStop have this all planned out. You don't think they have contingencies if you attempt to undermine them? They'll find a way to sell your game, even if it seems utterly RIDICULOUS to us, it'll work for them.

 

[domicius]

Well, it's true that retailers will lose out as developers start pushing produce through other channels.

Gamestop etc get all the money from a second hand sale, while developers het none. Gamestop furthermore won't sell the game cheaper , but rather promote its second hand sales, so that the developer can't use lower prices to increase sales because the retailer will resist this. The retailer meanwhile is happy to lower his own prices to sell more second hand units.

This is why we currently have huge "media event" launches. It's the best way to sell the most copies at full price, since after launch most people will buy the cheaper second hand unit, at prices which the developer can't match.

Developers/Publisher are ultimately happy to sell a game cheaper at some point after launch, since this increases sales. Digital distribution has in fact brought down software prices judging by how cheap Good Ole Games and Steam can be for older games (not to mention great bundles).

Incidentally, this lack of developer pricing flexibility it's also why Microsoft's strategy of moving all distribution to digital for Xbox will fail. It's all well and good making a "walled orchard" where the consumer has to take it or leave it. But realistically, many fewer people would buy a console if they could ONLY buy new releases, and developers can't survive in an atmosphere there aren't enough console owners.

But that's a different reply for a future news-item, I'm sure.