Gamestop CEO Dismisses EA's Free DLC Plan

[John Funk]

Gamestop CEO Dismisses EA's Free DLC Plan

Gamestop CEO Dan DeMatteo doesn't think EA's "Project Ten Dollar" policy of giving free DLC to buyers of new games will matter much to the people who prefer to buy pre-owned copies.

In recent months, EA has made much ado about its new Project Five Dollar Footlong - er, sorry, that's "Project Ten Dollar," a policy that includes roughly $10 worth of DLC content free with new copies of the game. This content must be purchased separately for everyone else, as an incentive for consumers to buy games new and not used - a practice which only results in revenue for the retailer, and not the game's publisher.

However, while some retailers have warned that the Project Ten Dollar approach might hurt consumers [http://www.escapistmagazine.com/news/view/98497-Retailers-Warn-Project-Ten-Dollar-Will-Hurt-Consumers], GameStop CEO Dan DeMatteo doesn't think that it will matter much to the people who buy used games - and in fact sees DLC as a way that publishers and used-games retailers can work together to benefit all parties involved.

"Through our years in the used business, we have learned that the second-hand user is a value-oriented consumer ... we don't believe that a $10 add-on piece of DLC is compelling to a used game buyer," DeMatteo told analysts in a conference call as reported by GamaSutra [http://www.gamasutra.com/view/news/27731/GameStop_Publishers_Can_Participate_In_Used_Biz_Via_DLC.php].

I'm not sure exactly what he's trying to say, though. His point seems to be that people who buy games second-hand are looking to get more bang for their buck - which makes perfect sense - but then goes on to say that the same people wouldn't want to get $10 worth of content for free. I may be misreading it, but that just comes off as confusing to me.

DeMatteo's other point, though, seems a lot more coherent at first: Publishers shouldn't be afraid of the used-game industry, because they can still cash in and profit off of pre-owned sales thanks to DLC, which can be promoted in the physical retail stores that sell the used games in the first place.

"We can market and execute DLC sales right in-store," explained DeMatteo. "There's a tremendous opportunity for us to encourage software developers and publishers to create DLC because we'll be able to market it. It's very difficult to discover, find... add-on content with the tools available [currently]."

So, he's saying that publishers can profit off of used game sales thanks to DLC. Which... is exactly what Project Ten Dollar is, minus the whole "bundling it free with the new copy of the game."

I'm really not seeing the difference here. Maybe I'm just missing something?

Permalink

 

[sheic99]

Can someone explain this to me coherently, because I must be missing something here.

 

[JRCB]

But... that's the point of... what?

Somebody smack this man! He is speaking nonsense! I'll get the fish!

 

[oppp7]

Goddammit now I want a sub...
OT: As much as I like preowned games, I admit they do screw over the developers a little. The whole status of ideas and copyrighting them is still being debated to a degree.

 

[rembrandtqeinstein]

Used game retail outlets are a cancer in the game industry. They are worse than pirates because they turn a potential buyer into a non-buyer. In theory they give more money to new game buyers to buy more new games but in reality the wankers behind the counter do everything in their power to get the game seller to spend they money on more used games.

It should be legal to punch any sales guy in the face who asks "Don't you like saving money?" when you refuse his pitch. Actually I think it should be legal to punch sales guys for any reason but that line is particularly infuriating.

 

[deleted_scifidownbeat]

DELETED

 

[Gildan Bladeborn]

It's marketing speak designed to confuse you Funk! The real message here is "Please oh please oh please don't make us irrelevant" - everything else is a smokescreen.

 

[Sixties Spidey]

Oh my God... This man clearly has NO idea what he's talking about, is he?

Let's take a Project Ten Dollar game. Mass Effect 2's a very infamous/famous example.

If the Cerberus network DLC is 15 dollars on Live, then subtract 15 dollars from 60 dollars. That's about 45 dollars right there. Now let's get this clear. YOU ARE PAYING 45 DOLLARS FOR THE ACTUAL GAME PLUS THE 15 DOLLAR DLC. If anything, they are selling you more content at a bit of a lower price. If you bought it used, or second hand, chances are you've been ripped off and as a result, you have absolutely no right to ***** WHATSOEVER.

This man should just get his head out of his ass and realize that the advent of digitally distributed content and brick and mortar retail stores like Gamestop are going to have to co-exist in this market.

 

[Onyx Oblivion]

This man is clearly an idiot.

He deserves this:

 

[Rathy]

I see how it makes sense, but its not very direct. Buying a 'new' used game that is still near its starting value makes little sense unless you just really want to save a few bucks, and care less about the DLC. They lose out in this case, but its because they chose to be cheap. Some people may go and buy said DLC a bit later, then giving some profit to EA, but I imagine many will still remain cheap.

 

[Matt_LRR]

I think the message here is actually "a 10$ piece of add-on content is not an object of value to the average game buyer"

Vsitors to sites like this one are aware of DLC markets, how it's being used in the industry, and that there is more content available to gamers than is accesible on the disc alone, we are hardcore gamers. The average game consumer doesn't know this - and even if they are aware of it in some capacity, they probably don't know which games it applies to and probably aren't thinking about it at the point of sale.

So when a game retailer says "I have a used copy for $5 less" the buyer isn't calculating the "59.99-$5=54.99+10$ for DLC=64.99 - hey! that's not a deal!" they're just seeing it as an immediate cost savings. And project $10 DLC really doesn't matter, by and large for used sales - and such a program is patently bad for consumers.

On the flip side, if the consuming public does catch on, I'll place bets that used retailers simply start widening the price difference on used games, and reducing trade values accordingly.

You can get dragon age new for $60, or you can buy it used for $45. The catch being that instead of trading for 35, it now trades for 25.

Gamestop thereby mitigates the concern over losing value in the form of DLC by reducing the cost to compensate. And because they've sunk the trade value, they've maintained their margin on the used product as well.

Again, this program is patently bad for consumers, but now it is bad for consumers AND has failed to effectively incentivize new sales.

GS maintains the status quo, EA now probably loses evn MORE game sales due to the further reduced price point of used drawing consumers who are less interested in the DLC content, and the consumer pays for the whole ordeal on the back end in lost resale value.

Project $10 is a neat idea, but I gave it a few months before GS starts building workarounds into the system - assuming $10 is successful enough to even warrant it.

Either way, it's certainly not helping consumers any.

Edit: ...or my spelling, apparently.


-m

Matt_LRR doesn't just play an industry analyst on ENN

 

[dududf]

I think the message here is actually "a 10$ piece of add-on content is not an object of value to the average game buyer"

Visitors to sites like this one are aware of DLC markets, how it's being used in the industry, and that there is more content available to gamers than is accessible on the disc alone, we are hardcore gamers. The average game consumer doesn't know this - and even if they are aware of it in some capacity, they probably don't know which games it applies to and probably aren't thinking about it at the point of sale.

So when a game retailer says "I have a used copy for $5 less" the buyer isn't calculating the "59.99-$5=54.99+10$ for DLC=64.99 - hey! that's not a deal!" they're just seeing it as an immediate cost savings. And project $10 DLC really doesn't matter, by and large for used sales - and such a program is patently bad for consumers.

On the flip side, if the consuming public does catch on, I'll place bets that used retailers simply start widening the price difference on used games, and reducing trade values accordingly.

You can get dragon age new for $60, or you can buy it used for $45. The catch being that instead of trading for 35, it now trades for 25.

Gamestop thereby mitigates the concern over losing value in the form of DLC by reducing the cost to compensate. And because they've sunk the trade value, they've maintained their margin on the used product as well.

Again, this program is patently bad for consumers, but now it is bad for consumers AND has failed to effectively give an incentive new sales.

GS maintains the status quo, EA now probably loses even MORE game sales due to the further reduced price point of used drawing consumers who are less interested in the DLC content, and the consumer pays for the whole ordeal on the back end in lost resale value.

Project $10 is a neat idea, but I gave it a few months before GS starts building workarounds into the system - assuming $10 is successful enough to even warrant it.

Either way, it's certainly not helping consumers any.

Edit: ...or my spelling, apparently.


-m

Matt_LRR doesn't just play an industry analyst on ENN

Fixed it for yeah.

It wasn't that bad, just a couple of errors.
____________________________________________


This man is Crazy.

It looks like a win win to me. Devs get money from the DLC, and used guys don't get thrown out of business, and yet he's complaining about it.

 

[Snotnarok]

Sorry for the anger but that guy is a fucking idiot. He said nothing "It's bad because mumble mumble mumble!"

I've got 2 games that feature the "project 10 dollar" and it's been awesome. Hey new Mass Effect 2 DLC! Really? I get it for FREE" New Bad Company 2 content? FREE. I've been happily buying these games new (I know I got 'em on PC but shut up I'm trying to make a point here) because I know I'd want the content and not want to really pay for it. Now if I didn't care about it I could go and buy it used and just skip it. It's offering gamers an incentive support the company (opposed to buying it used where they get none) which is fine by me.

 

[razzach]

Oh please. DLCs are the new marketing issue here. Game publishers remove contents that should have been in the original game just to make players/consumers buy them, earning them an extra buck.

And why are selling used games much more "sinister" to the public eye? Here is the big issue of consumerism - in material and immaterial goods. Games/Programs/Applications and other immaterial goods are considered taboo to resell, because the producers of these products want to earn more without putting in more effort. Just think, a new weapons/stage/char face for $10!!! when you can buy a whole new game for $30-50! And these DLCs are made using technologies available already, not being developed (as in making a new game) so it should have cost less than that!

As for Gamestop reselling, please note that I am talking about selling the whole product completely - including cd-keys and all, not simply making a copy (which the pirates do). People are getting hoodwinked about their rights. If you buy a book, you can resell it in a used books bookstore. As long as you don't make a copy of the book, it is COMPLETELY LEGAL. Now, in the gaming industry, why is it bad to resell a game? You are also giving up your rights to that product completely. Please do not confuse yourselves with game developers marketing speeches. Matt DeMatteo was completely right. Those who buy used games are not interested in spending more bucks just to get some DLC. They are more interested in buying a product here and now, with the current funds available to them. DLC indeed...

If you want to spend money on games that you expect to be good, and then was disappointed because of the lack of quality (which seems to be the trend nowadays, just look at the recently released games in 2008-2010, only few games are true gems...) what would you do? Just leave it in your closet to rot? Or you could use Gamestop to sell them, at least you could have some of your money back (and someone else who maybe will like that game could buy it at a lower price). What the game developers are missing is that Gamestop creates more consumers...those who cannot afford games can buy them at Gamestop. And those who CAN afford games, will sell those games they didn't like and get those revenues to buy ADDITIONAL games. In addition, gamestop promotes games. When a great game created in ancient times (i.e. too long ago, that the game developers stopped publishing it), and you cannot buy them anywhere, you go to Gamestop, and most likely you will find it there. This way, players will be reminded that this company made a classic game and maybe, just maybe, their new game is just as good, or even better. This is one of the major reason that Amazon, e-Bay, etc. is thriving! They also sell used games, but they also generate free advertisements!

 

[razzach]

Sorry for the anger but that guy is a fucking idiot. He said nothing "It's bad because mumble mumble mumble!"

I've got 2 games that feature the "project 10 dollar" and it's been awesome. Hey new Mass Effect 2 DLC! Really? I get it for FREE" New Bad Company 2 content? FREE. I've been happily buying these games new (I know I got 'em on PC but shut up I'm trying to make a point here) because I know I'd want the content and not want to really pay for it. Now if I didn't care about it I could go and buy it used and just skip it. It's offering gamers an incentive support the company (opposed to buying it used where they get none) which is fine by me.

Yup, you got it for FREE. When you should have gotten it for FREE, when the game shipped. Seriously, most of you people think that these DLCs are so good, the developers do it just to get additional revenues from players. Ingenious huh. These DLCs are content the developers cut from the main game and then resell it to players to get additional revenue. Ingenious huh.

Besides other game developers GIVE these DLCs for free! Look at Stardock's Galactic Civilizations - they do not copy protect their games, but they offer a huge amount of DLCs on their site for players who REGISTER their copies. This way, they earn player support and they also give huge amounts of DLC for FREE...not to sell it again just to skin players...

 

[John Funk]

Oh please. DLCs are the new marketing issue here. Game publishers remove contents that should have been in the original game just to make players/consumers buy them, earning them an extra buck.

Bull.

Pucky.

95% of the time, this is patently false and saying it honestly just demonstrates a gross failure to understand how software is actually made. Take off your tinfoil hat, please.

 

[Echolocating]

Maybe I'm just missing something?

Maybe your not greedy and ignorant enough to understand? ;-)

 

[Jack and Calumon]

Woohoo! Keep saying stuff mr CEO. It justs makes me more glad that your store isn't in the UK!

Calumon: ummm... Jack?

No... no... That's not possible.

Calumon: Search your Local City Jack. Together, Gamestop and HMV will rule the Game sellers like father and son!

NOOOOOOOOOOO!!!

[sup]Calumon: okay I read it. Now can we play?[/sup]

 

[StriderShinryu]

The problem with this chap's reasoning is that, in general, GameStop is charging so much that with $10 in effect you are actually going to end up paying more if you decide on the DLC at some point. The Cerberus Net in ME2 costs you $15 if you don't buy a new copy, but good old GameStop sells the game for only $5 less used than it is new. It's pretty simple math and the more companies that do things like this, the more it will become public knowledge that GameStop is ripping you off if you buy a used game there.

Now, if he were talking about a different store that actually charges reasonable prices for it's used games he would have a strong point. The people who are most interested in DLC, especially day 1 perk style DLC, are generally going to be buying the game new. Someone who is a bargain hunter won't be buying the game at (or maybe even near) launch and really is just looking for the most game for their money. They would be perfectly willing to pay, say, $40 instead of $60 even if it meant they weren't getting the perk DLC for free.