InstantAction CEO: Retailers Are "Parasites and Thieves"

[Abanic]

I sold my car once and I didn't feel obliged to share any of that money with Buick. I wonder if Mr. Castle has ever sold any of his own property. Has Mr. Castle ever sold a car, or his home, or his old TV? Would he feel obliged to share his money with Ford, or his house builder, or Sony? I don't think so, and yet he feels that game companies should get another cut when their games are resold.

In what land does this make sense? Was he beaten in the head by an irate game player? Maybe he ate lead paint as a child...

A car is a physical object, subject to deterioration and such.

A video game is, for the most part, intellectual property which you, the buyer, or the retailer, do not have the rights to. A game is merely a "pass", it's not ownership.

So, uh, there's a world of difference.

And as it is pretty common in the business world or in the world in general, both sides are kind of greedy dicks and no matter where the argument goes it's the consumers who get fucked.

OK, if it helps you out, you may replace the word "car" with the word "book" and the word "home" with "DVD"; the point I was trying to make still remains.

 

[veloper]

The worst thing you can say about those retailers is that they exploit morons and imbeciles.

Trade in games for a dime and then buy used for almost full price? Trade directly with other gamers instead.

 

[squid5580]

-snip-

Once, again. We are not talking about you. You can do whatever the hell you want with your games. Talking about "freedom" is just playing into the retailer's hands and taking it up the ass. We're talking about massive corporations exploiting the video game industry and you for excessive profit.

Also, not sure what jewel encrusted copies of games you're getting $30 for, but all but brand-new high demand games have a trade-in value of under $7. Most falling in the $2-$4 range. Games which are then stuck back on the shelf for $50. I haven't seen pricing like you're talking about since gamestop bought out the local video game retailer (funcoland it was called). If you still have one of those, you're clearly not talking about the same thing everyone else is.

preorder

No, preorders are not driving new sales, they're driving used sales. Preorders exist to give retailers a harder quantification of demand for an unreleased title months/weeks before actual distribution negotiations begin. They'll buy just enough new copies to fill their preorders plus another 2-3 per store for first-day walk-ins. They know most copies will come back, thus driving their business model. They don't worry about digital distribution because their primary stable of revolving doors think they're expressing their freedom and getting a good deal by getting fucked over.

-snip-

Okay dude, that was mostly gibberish. Its nothing even resembling a leap in logic to say every used sale is a lost sale of a new copy (unless you're confusing trade-ins for "used sales,").

The used game model is only viable because used games are slightly cheaper than new copies. The problem is used games will always be cheaper than new copies. If publishers start asking for a smaller cut of the proceeds from new copies in hopes of driving down the retail cost and driving up sales, theres no guarantee retailers would even pass on the price cut and its absolutely certain used copies would still be cheaper than new copies. Enter project $10, day one dlc, and other such crap, and publishers are actually driving up used sales by making each copy seem less valuable.

Publishers/developers are greedy pricks for wanting money for their works. Retailers are saintly angels providing games to the downtrodden masses for slightly less than the cost of new games.

Then you have this, which is just baffling. Retailers aren't doing this out of the kindness of their hearts. They're doing this because first sale doctrine doesn't differentiate between individuals and massive corporations. Allowing them to sell each copy multiple times for exponential increase in margin. I don't know how or why a large corporation selling one copy multiple times is okay in your minds...

There just seems to be a ton of confusion here. One says "used games are killing the industry," another says, "YEAH, WELL, ITS MY GAME I CAN GIVE IT TO BILLY IF I WANT THEY JUST GREEDY," and someone else just gives up pushing this particular rock of knowledge up the mountain of ignorance. Also pretty sure some people are confusing "trade-ins" with "used sales." They're certainly part of the model, but publishers/developers really only care about (and are entitled to) money when a copy is sold to a new person.

Once again at least attempt to do some research before spouting nonsense please. Do you really think that people are so stupid to sell their newer games for 2-4 dollars. You could at the very least go to the GS website and see what they are offering. 40 bucks for Alan Wake. Sure if you take a game like Bulletwitch in yes of course you aren't going to get more than a buck or 2 for it.

And this is the last thing I am going to say on the matter. They are entitled to money for each sale when it is a new sale not every new person. Just like every other business that sells stuff to consumers. You can deny it or try to change the facts all you want but the bottom line is every business is treated equally. Clothes, cars. furniture, jewelery everything but food (cuz no one should ever buy used food). Just because they are game developers does not mean they deserve special treatment no matter the circumstances.

 

[squid5580]

Why aren't retailers forced to give a portion of their used game sales to the game makers? Seriously, it would solve this problem immediately.

Why should they? The dev made a game. They sold that copy of that game. They made their money off of it. So if you forced EB or GS or whoever to pay a % of the profits to the dev then they are double dipping. How is that fair to EB or GS? Then who are the thieves?

Because it's the same problem with piracy, how someone else is making money off of the game designers' ideas while the designers get nothing.

Not really sure if it's the same scale, though.

No it really isn't. Piracy involves taking what you don't own and giving it away. Reselling a game or trading it in to GS is not. You are doing what you want with your property which is the disc. That is what you bought. And just like everything else you own and sell the manufacturers don't see a dime. Yet you don't hear them complain about it.

But it's hurting the game designers, apparently. If the system is flawed it has to be changed.
Edit: Also, you own the CD, not the information.

Yes that is what I have been saying all along. The disc itself is mine. Not the information on the disc.

And it all depends on who you ask. There was another article not so very long ago where another CEO said used games were great because they help sell new games. And if I could only remember the title I would post a link. So if one says yes and another says no who is right?

 

[pneuma08]

No, preorders are not driving new sales, they're driving used sales. Preorders exist to give retailers a harder quantification of demand for an unreleased title months/weeks before actual distribution negotiations begin. They'll buy just enough new copies to fill their preorders plus another 2-3 per store for first-day walk-ins. They know most copies will come back, thus driving their business model. They don't worry about digital distribution because their primary stable of revolving doors think they're expressing their freedom and getting a good deal by getting fucked over.

I really shouldn't be posting this because you basically are arguing what I said against what I said, and that should be the end of things. Nonetheless, here's your argument:

"Preorders are not driving new sales" because "they know most copies will come back" - conveniently leaving out the middle step of they sold them in the first place. Preorders drive new sales because new sales ultimately drives used sales, the key part here you can't just ignore the middle bit because it ultimately ends up somewhere else.

Also: colloquially, "most" copies don't come back, and even with sales from other retail stores, it takes a while before used supply overtakes the initial new supply. I'd love to see some numbers on this, though.

Other inaccuracies or fallacies:
1. An extra 2-3 per store is an extreme lowball (true perhaps around the area of 1-2 preorders). In fact, one reason why preorders are pushed so hard is that they're a hard sell because most people (rightly) believe they can just pop in a the weekend after a release and buy it. (Yeah, there are counterexample extremes like Red Dead Redemption (at least in my area) but that's due to the flawed, predictive nature of preorders and shipping supply - basically interest in the game didn't spike until after the first shipments went out and the early reviews rolled in, but I digress.)
2. You're assuming that selling games to Gamestop is always a bad deal. This, like many other blanket statements, is false. A shrewd customer - and yes they do exist - can take advantage of various offers and deals to even exceed the mean value of alternatives. I can link you to another thread where I did some price analysis of Gamestop vs Ebay and the results were surprising.
3. I can say easily that your price range is inaccurate, but it all depends on what you're trading in. There's a cool thread over at Cheap Ass Gamer [http://www.cheapassgamer.com/forums/showthread.php?p=6952150] that really puts things into perspective. I really wish Gamestop would just post that information publicly, as I'm not sure reserving it does them much good.
-- To clarify, I'm not saying it's always a place to get a good deal, just that to say that it's never a place to get a good deal is going too far.
4. Pointing out that the publishers are being greedy doesn't ameliorate the retailers. They're greedy, too. That's the way the market rolls. I mean, the extreme used by the other side isn't any better, being that retailers are terrible, terrible people simply because they post large profits. "Why can't they share some of that wealth, huh?" - well, tough beans, that's how the world works.

Seriously, though, the industry has a lot more problems than used sales. Its blockbuster-centric nature currently precluding fresh thoughts, the huge risks faced by both publishers and consumers exacerbated by the emphasis on preorders. In my mind the secondary market isn't a problem but rather (if anything) it aggravates an existing problem. It magically going away won't solve anything, it just changes the formula.

 

[sabercrusader]

Buying a game Used is the equivalent of piracy. In either case, the developer doesn't get paid.

Wrong, the game has to have been bought before for it to be "used". The Developer gets paid but they don't get a second $60 cause said person bought the game used.

Besides what if that "used" game they buy gets them so into the series that they buy the collecters edition of the sequels, i know this is a what if case but it is possible.

The same can be applied to piracy - if you like, you buy it, or you buy the sequel.[/quote]

Yes you are right and in those cases, piracy can help developers becuase video games cost WAY too much for people just to be buying them and hope that they are actually good.

But my case still stands, used games are not piracy, it has to have been bought before for it to be "used" and i will stand by that, now of course if i can buy a used game for say..$15, or buy a new game for $20, i'll go with the new game cause $5 bucks isin't much.Besides most new games that have "used" versions that are sold for only $5 less then what the new game is worth, be that $60 or $70 and the used game price won't drop intil it dosen't matter that the developer gets money anymore as long as the game is good, the used game price will be at the most, $10 less. Also notice how i'm not even bringing up games that are impossible to get new anymore into the equation, i could carry this argument a whole lot longer with that.

 

[sephiroth1991]

Who buys a used game for $30

also hows that corporate image going?

 

[Cynical skeptic]

conveniently leaving out the middle step of they sold them in the first place

That also excuses piracy. Its also irrelevant.

If several people play a game once, then trade it in for a pittance towards another used game, the various players can be viewed as concurrent. So the "new sale" becomes identical to the "used sale," except no one who matters is seeing any of the proceeds. Pretty much like piracy.

The reason this is an issue, the reason used sales are intrinsically parasitic is because they are only viable, they only exist because new copies "cost too much." Even if the price difference is only around $5. Since this will never change, as retailers have full control over retail pricing, it still continues to boggle my mind

You can also stop acting like people sell used food for the purpose of consumption, it just makes you look impossibly dense. You may as well try to argue cars are consumables. The problem is video games are consumable products that do not depreciate. This confuses every pre-existing business model and doctrine.

But the main, core issue, that everyone on your side likes to forget is thus, you would rather support the growth of a pointless retail chain than a video game developer/publisher to save $5-10 off each game purchase. If you truly feel this way, save [the entire cost of a game] and just download it. From there, you don't have a loophole-legal copy to confuse the issue. You are stealing the game. If you like the game enough, you can then choose to actually contribute something to people who matter.

And this is the last thing I am going to say on the matter. They are entitled to money for each sale when it is a new sale not every new person.

I, also, love how confused and insane this bit looks simply because there isn't an agreed upon etymology for the subject at hand.

 

[Antari]

I'd have to say the InstantAction CEO is a parasite ...

 

[Optimystic]

For those who hate Gamestop and the insane markup they put on used games, there's these great services called Amazon and eBay that people can use instead. The problem is that everyone would rather drive to the brick-and-mortar moneytrap with their used games than lick a stamp.

 

[Pendragon9]

Well, hard for me to feel sorry for most of these companies. They charge me upwards of 60 bucks for a single game, then badger me for online fees while putting advertising right in the damn game or loading screen. Serves you right for spending so much money on nothing but graphics and gouging your customers with high costs and DRM. You can only hide behind Supply and Demand so long.

THEN AGAIN, I hate Gamestop for ripping me off and leeching money off of gamers using games they don't even make. I can see this guy's point. I once traded in 20 games and barely got 30 dollars back. Provided most were subpar shovelware bought by my parents when I was 13, it was still inexcusable. I feel like an idiot now that I know they rip gamers off. -_-

 

[squid5580]

conveniently leaving out the middle step of they sold them in the first place

That also excuses piracy. Its also irrelevant.

If several people play a game once, then trade it in for a pittance towards another used game, the various players can be viewed as concurrent. So the "new sale" becomes identical to the "used sale," except no one who matters is seeing any of the proceeds. Pretty much like piracy.

The reason this is an issue, the reason used sales are intrinsically parasitic is because they are only viable, they only exist because new copies "cost too much." Even if the price difference is only around $5. Since this will never change, as retailers have full control over retail pricing, it still continues to boggle my mind

You can also stop acting like people sell used food for the purpose of consumption, it just makes you look impossibly dense. You may as well try to argue cars are consumables. The problem is video games are consumable products that do not depreciate. This confuses every pre-existing business model and doctrine.

But the main, core issue, that everyone on your side likes to forget is thus, you would rather support the growth of a pointless retail chain than a video game developer/publisher to save $5-10 off each game purchase. If you truly feel this way, save [the entire cost of a game] and just download it. From there, you don't have a loophole-legal copy to confuse the issue. You are stealing the game. If you like the game enough, you can then choose to actually contribute something to people who matter.

And this is the last thing I am going to say on the matter. They are entitled to money for each sale when it is a new sale not every new person.

I, also, love how confused and insane this bit looks simply because there isn't an agreed upon etymology for the subject at hand.

Piracy is taking something which you don't own and giving it away. Buying or selling a used game is buying or selling the physical disc, the very thing you pay for when you put down the 60 bucks. Huge difference.

 

[pneuma08]

conveniently leaving out the middle step of they sold them in the first place

That also excuses piracy. Its also irrelevant.

I like how you take my argument out of context and then pretend it's for a different argument. Wait, no I don't.

But as to your main argument, there is a point there, but I have to ask: would it be wrong for two people to chip in half the price of a game and then share it?

Also, the fundamental difference between "used games" and "piracy" and why one is illegal and the other is not is the notion of copyright. A software pirate can hand out the game to 1000 people and still have it, a seller no longer has a copy after it is sold. The key difference in the market then is supply - while theoretically a used seller can sell the same game many times over, realistically their supply is scarce, and it takes a very long time for used game sales to match (let alone overlap) new game sales, none of which applies to piracy. The difference in profits is because of the difference in margins and the difference in costs (that is, it costs more to develop a game than it does to maintain a storefront).

Oh, and games do depreciate in value over time (with a few exceptions). For instance, mid-generation PS2 games simply aren't worth as much as a game released a week ago (assuming equal condition, and again barring some rare exceptions). They just don't require maintenance like a car. They're much more closely related to books, if you want a legacy market.

 

[Cynical skeptic]

-snip-

Sir, that is your entire argument. "Used games is okay because publishers/developers saw revenue for one of the ten times a copy was sold."

Also, your anecdote is meaningless. Since there is no way to get two sales from "two guys who can't afford to spend more than [half the retail price of game]," that one sale can't be viewed as anything other than "one sale." It isn't a net of zero (one up, one down), it isn't a lost sale, its simply one sale. Also trading games between friends are not lost sales, because they also never would have been sales. Which also applies to every single pirated game.

Semantic arguments supporting used games also support piracy. Period. There is simply no way around it, as the core issues behind both are utterly identical. "Leeching revenue." The problem is no one can prove pirated copies are actual lost sales, while used sales require demand for new copies to move at all. Thus, every single used sale is a lost sale of a new copy.

 

[pneuma08]

Not sure what the point is in continuing long past the point of anyone else caring, but -

-snip-

Sir, that is your entire argument. "Used games is okay because publishers/developers saw revenue for one of the ten times a copy was sold."

I don't recall making an argument about used sales, I've just been picking apart yours. (The "conveniently..." quote of mine was on the topic of preorders and their impact upon new sales.) My main argument is, "your perceptions about the market are flawed and inaccurate."

Also, your anecdote is meaningless. Since there is no way to get two sales from "two guys who can't afford to spend more than [half the retail price of game]," that one sale can't be viewed as anything other than "one sale." It isn't a net of zero (one up, one down), it isn't a lost sale, its simply one sale.

This argument is a fallacy because you are assuming that they did so because they couldn't afford to. What if they did so simply to save money?

Also trading games between friends are not lost sales, because they also never would have been sales.

Also a fallacy for the same reasons (incorrect assumptions). As a specific example, I personally did not purchase Alpha Protocol - even though I had every intention of doing so - because a friend purchased it first. He actually talked me out of it, and to this day I still have his copy sitting on my coffee table.

Which also applies to every single pirated game.

Also an assumption, but not as easily refutable and probably true (although "every single" makes it incredibly unlikely, even if it's not far from the truth).

Semantic arguments supporting used games also support piracy. Period.

I still haven't seen you address squid's argument of, "selling a game you own is okay, giving out games you don't own is not okay". I'm not sure how the former supports piracy, considering the key word of "ownership".

There is simply no way around it, as the core issues behind both are utterly identical. "Leeching revenue."

Besides the notions of copyright, intellectual property, and personal ownership. I think the problem is that "leeching revenue" is only a problem for the bottom line of one of the parties involved in this scenario. Should the law protect the big business or should it protect the right of the individual, and should the right of an individual extend to a company? - those are the concerns. All of these concerns are separate from piracy because pirates have no legal claim to ownership at all, and are clearly acting in an illegal manner.

The problem is no one can prove pirated copies are actual lost sales, while used sales require demand for new copies to move at all. Thus, every single used sale is a lost sale of a new copy.

Also incorrect. I've met people who absolutely refuse to buy new, and the "buy threshold" for people can vary to the extent that it simply isn't cost-effective to produce a new copy for people to buy a new copy. As an example, sitting next to me is a copy of Bully for the PC. It is used, and I paid $2 for it. I would not have bought it if it was not $2. There is no way to print a disc, packaging, mold a case and ship this one copy at a retail price of $2 such that profit is made. How on earth is my purchase a lost sale to the likes of Rockstar?

Also, your numbers continue to have no grounding in reality. That is, according to the Wall Street Journal [http://online.wsj.com/article/SB123249378212700025.html], Gamestop's 2008 numbers say that used games account for only only 23% of Gamestop's revenue, which makes you wonder what the other 77% is, especially considering they make (again from the article) 2.5 to roughly 7 times as much profit from them. This means that if used games were outselling new at a rate of 9:1, then that would imply that Gamestop made ~75% of its revenue from selling consoles, accessories, magazines, and strategy guides, which is absolutely absurd.

What if it were the other way around, what if Gamestop sells 9 new games for every 1 used game? Going even further, what if its mere existence generated 2 new game sales for every 1 used game sale (because of its awareness, marketing, and sales) - a net gain for the publishers? Would this justify its existence in your eyes, or would they still be merely a parasite on the market? Of course all of this is hypothetical, but is there any proof this isn't the case?

Finally, quit using absolutes, they make your argument absurd from any realistic point of view.

 

[Atmos Duality]

"Publishers are the ones who are taking all the risk," he believes. "They're paying for development, pay for the marketing - the retailer has zero risk. It's all consignment anyway: if a product doesn't sell, they box it up and send it back to the publisher. I'm sorry their margins are eroding, but that's not the publishers problem. To use a loophole in the law to just gouge them is just unacceptable."

This just might be the stupidest fucking thing I've read all month.

No risk??? REALLY??

Retail is a cutthroat business, I'll give them that, but saying it has NO RISK?
That's beyond stupid. Of course there's risk!

Oh, and those POOOR PUBLISHERS. EA is back in the Fortune 500, with their (few) competitors not far behind.
Consider the hundreds of thousands of businesses in the USA. Just...consider that.
These people are in no financial danger; they just want to fuck over the customer.

No, this isn't a case about the POOOR Publishers getting a fair break; it's about the Publishers trying to establish control over the one part of the gaming industry that they don't have yet: Distribution.

The Used Game Market provides customers a way around the bullshit of not being able to take back a game they didn't like or want. You can bet that if the publishers gain control over that, there will be zero refunds.
They can afford to start scamming people, but because it's strictly a license and not a product, they don't have to provide any legal recompense unless they get sued (cases they aren't likely to lose).

 

[Gindil]

He uses an analogy to describe his point: "If we make something like woolen blankets and we start eating the sheep, pretty soon, we have no more woolen blankets. It's taking from the one thing that's making you money. If we stop making games, they stop being able to sell them." To Castle, shrinking margins in retail are not an excuse, because used games are "shrinking the publishers' margins so we're all shrinking and are going to go out of business."

Has this guy never had a gyro?

 

[Gindil]

"Publishers are the ones who are taking all the risk," he believes. "They're paying for development, pay for the marketing - the retailer has zero risk. It's all consignment anyway: if a product doesn't sell, they box it up and send it back to the publisher. I'm sorry their margins are eroding, but that's not the publishers problem. To use a loophole in the law to just gouge them is just unacceptable."

This just might be the stupidest fucking thing I've read all month.

No risk??? REALLY??

Retail is a cutthroat business, I'll give them that, but saying it has NO RISK?
That's beyond stupid. Of course there's risk!

Oh, and those POOOR PUBLISHERS. EA is back in the Fortune 500, with their (few) competitors not far behind.
Consider the hundreds of thousands of businesses in the USA. Just...consider that.
These people are in no financial danger; they just want to fuck over the customer.

No, this isn't a case about the POOOR Publishers getting a fair break; it's about the Publishers trying to establish control over the one part of the gaming industry that they don't have yet: Distribution.

The Used Game Market provides customers a way around the bullshit of not being able to take back a game they didn't like or want. You can bet that if the publishers gain control over that, there will be zero refunds.
They can afford to start scamming people, but because it's strictly a license and not a product, they don't have to provide any legal recompense unless they get sued (cases they aren't likely to lose).

Two things would happen...

1) Piracy would skyrocket to Brazilian levels

2) You'll see the industry implode as used games are sold at an exponential rate.

They might want to ease this one out instead of clamor to try to take advantage in one stroke.

 

[Bellvedere]

Pfft there's hardly any profit in new games and practically none at all for new consoles . If game retailers didn't have the pre-owned profits then they wouldn't be able to sell the new games so the publishers could make money either. Ar least stores that sell a variety of products can make up the losses in other departments.

Also give retailers some slack it's a cruel and unforgiving business.

 

[DayDark]

Look Developers, and publishers, I can see your pain with used game industry but I'm a student who usually gets his money for new games by trading in other games, now I'm not doing it to hurt you, but your not providing me with a means to trade my game without damaging your potential income.

Make your own used game market an I will happily deal with you. I'm not trading in my game because I want to hurt your business.