Jimquisition: When The Starscreams Kill Used Games

[chozo_hybrid]

Snip.

I can't speak for where you're from, but I used to work at a game retailer in NZ before Gamestop bought the company out. I left when that happened, they offered me the same position, but I could no longer adjust prices for sales to regular customers. I would be able to know knock $5 here and there for people who came in a lot, we didn't earn commission but we had a lot of respect from our consumer base.

I can tell you right now, that when the PS3 launched for $1200, yes, that's right we paid literally double for the machine compared to the US, I bet that will continue this generation. You want to know how much the store made off that sale? $19.80. I remember it well, because I thought it was bullshit the first time I saw it.

http://en.wikipedia.org/wiki/PlayStation_3_launch#Release_Data_and_Pricing I know it's Wikipedia, but for the 60 gig launch model it was $1200 - Look at the release data and pricing section. I'm not joking.

As for actual games, we usually got around 15% - 25% of the sale, keep in mind that games for for $100 - $120 at release over here.

 

[TheThirdChild]

I'd imagine the reason steam does sales is the simple fact that people like sales; they like it when stuff is cheaper to buy. It's also probably the logic that a small sale is better than no sale, especially if the buyer would never buy the product at the full price.

The next group they'll blame will be indie developers for stealing all the profit with there cheaper produced games.
That or modders...

 

[-Dragmire-]

Retailers only getting 1% of the item's worth?

Of course not,I don't know where Jim's been getting these numbers from but its closer to 10-15%. I know people don't like Pachter for his infamous predictions but he probably knows his shit when it comes to business side of the industry.

http://www.gametrailers.com/videos/qba2o2/pach-attack--episode-111 (sorry I have no idea how to embed a GT video)

From 2:40,he explains who gets what from a $60 game.

That sounds about right. I scanned The Legend of Zelda: Skyward Sword before buying it and the store cost was about $42 and was sold for $49.99. Still, I don't think a retailer can survive solely on that.

 

[Fappy]

I really liked the chill background music in this episode.

It will be interesting to see what happens to the debate if the Xbone goes through with its plan to neuter used games and PS4 does not. We may actually have a way to measure how used games affect overall sales by comparing the PS4 and Xbone.

 

[badgersprite]

Jim, you're fucking awesome.

I actually have a hand in the demise of the games industry.

I rarely buy used. I buy new, sealed games at significant discounts.
I wait. I wait for prices to drop. It hurts retail (sorry Best Buy, but you can suck it), it hurts the publishers, and it hurts the developers (unfortunately).

Spec Ops The Line for less than $20? Don't mind if I do.
Bayonetta for $10? Sure, why not.



The main thing hurting games right now is the fact that you don't need them. It's not like they're as important as water or gasoline. I got rid of cable years ago. Didn't need it. No smartphone either. Just a dumb prepaid.

And I can live without the Xbox One.
Deal with it, Microsoft.

And this is what I think is the problem with the video game model at the moment. Video games are pretty much the only major entertainment industry in which the costs and profits are placed entirely on the backs of consumers. Selling games can no longer be the only way these companies make their profits, because that's a totally ludicrous model to base your system on especially when video games do not have the biggest or most reliable audience, because consumers are rational beings who are going to make the most economically sound decisions they can as well. Even with a really successful game, you can't guarantee that will amount to more than two million or so copies sold, especially soon after the game's release when they make the most money off of sales.

And, you know what the problem with that is, don't you? They realise that too.

Seriously, don't be at all surprised if the Xbone turns out to be full of nothing but ads or if Microsoft does end up selling your information to advertisers in order to make money. I wouldn't even be shocked if full-length ads show up in or around games themselves.

They will do anything if they think it will help them turn a profit.

 

[warmachine]

You think the games industry will run out of scapegoats? If used and rental games are killed off, higher prices can be charged and more money diverted to marketing and inventing scapegoats. Facts don't mean much if they're drowned by lies and fabrications.

 

[DonTsetsi]

This reminds me of the electricity "market" in my country. We have no choice of provider and the government made deals with the owners of green (and not only green) energy power plants to buy at increased costs. Now the prices are too high, electricity use is falling and the produced electricity is much more than we need. We can't sell it abroad because of the high prices, which makes our power bills GO UP to accommodate the deals with power plant owners. All electricity is bought, even if only half (or less) is used! And the best/worst thing is that we have, on paper, some of the cheapest electricity in the EU. The statistic doesn't take the extra fees into account. These fees are about 110-120% of the base price! And then there is the 20% tax, which makes the actual price about 2,6 times the one in the statistic!
What I want to say is that monopoly is a BAD THING. Any decrease in purchases could lead to overt or covert (buying features for Xbox live, paying for people observing the game, paying for local multiplayer, paying for use of the same console by different individuals) increase in prices. Numbers can always be manipulated into convincing someone who has no choice of provider.

 

[Eve Charm]

Don't worry, they'll always be scapegoats, Like the Xbox one having crappy sales will be the new problem.

 

[Adventurer2626]

Jim, you are the Three Dog of the video game industry. Tell it like it is.

 

[Nurb]

Retailers only getting 1% of the item's worth?

Of course not,I don't know where Jim's been getting these numbers from but its closer to 10-15%. I know people don't like Pachter for his infamous predictions but he probably knows his shit when it comes to business side of the industry.

http://www.gametrailers.com/videos/qba2o2/pach-attack--episode-111 (sorry I have no idea how to embed a GT video)

From 2:40,he explains who gets what from a $60 game.

No, retailers don't make more than a few dollars from game and system sales, I know because I worked retail all the years I was in school. The higher-ups said often about how little they were able to get. Where they make their money is in ACCESSORIES. As much as half of an accessory item's price is store profit, and why they'll try to load you up on them whenever you buy a new system.

 

[kwerboom]

In the car market, you buy a new 2013 car in the 2013 product year not used 2013 car in the 2013 product year. If you are in the market for a used car in the 2013 product year, you will usually be buying something from 1995 to 2010 just to keep the price affordable. Buying a 2010 car in the 2013 product year isn't robbing the auto industry of a new sale.

The second hand market isn't evil. What's evil is when a second hand sale is happening the weekend after a new product is released instead of a half year to a year down the road. Its not what GameStop does, its how GameStop does it that's bad.

Apples and oranges.
You trade in a car when you need/want a new one. Could be anything from a year to 5 years(?).
You trade in a game when your done with it. These days that can be as low as 8 hours after purchase. After that it mostly comes down to replay value and personal preference(some people trade-in, some hoard).

You think Gamestop should sit on a pile of games till they've been out a year, to protect the publisher ?
Thats not their business. If publishers want less people to buy used, they should make games people want to keep.

I was always more in favor of video game rental like what BlockBuster was starting to do with games before it went belly up. GameStop, more than BlockBuster, is in a better position to do this with games. GameStop could set up rental agreements with the big publishers to get game discs in return for a small cut of the rental price to the publishers. Gamers, who want to play the latest releases and have no interest in owning the game forever, could get their rentals from their trusty GameStop. It could be a GameFly setup with a brick-and-mortar store, no waiting for the mail or a download and just a drive to the local GameStop. And then a half year out to a year out, GameStop could do what every movie rental place does and put the discs on sale.

Having a game rental component would service those who are constantly buying and selling their games, since they are only buying and selling games because they have no way to temporarily rent them. This would negate the loss of a first sale by publishers for people who aren't really customers in the traditional sense and the gains publishers money from those who are 'renters' in the truest sense.

Of course, this is just a pipe dream. GameStop is making a killing off of twisting the concept of the second hand market and the publishers are too short sighted and too stubborn to do anything different. Thus developers and customers continue to get burned by the Triple A market.

 

[Zato-1]

Well said, Jim. Ben Kuchera is wrong and you are right about this.

 

[Cooperblack]

Gaming is a weird business, I can buy a car used, Books second hand and even garden tiles that other people have used..but games NO, Because it just hurts the industry you see, The publishers have actually convinced us that buying something used(witch is normal in other industries) is a harmful action when it comes to games.. man we're such suckers.

And how the hell did they manage to convince us that the game you have in your hand, That you have bought with your money is really not a product but a service??

Such a weird business.

 

[PBMcNair]

I was always more in favor of video game rental like what BlockBuster was starting to do with games before it went belly up.

Was Blockbuster doing something special with rentals ? Or do you just mean renting games in general.
I think the last time I rented a game was somewhere in the PS1 era, so I'm not sure when it stopped being a thing.

And how are Gamestop "twisting the concept of a second hand market" ? You buy something, get your use out of it, then can sell it/trade it in or keep it. Or microwave it, use it as a coaster or a frisbee, pretty much whatever you want to do with it, its yours. They're probably not giving you a great deal, but thats why I don't trade in games (with a few exceptions).

And I don't believe second-hand games are why "developers and customers continue to get burned by the Triple A market".
Bloated budgets for mediocre games with bad marketing and unrealistic targets are much more likely culprits.

 

[Altorin]

If it wasn't for rentals and used games, I would have never bought every final fantasy, (except X-2 and XIII-2 cause yeah for those two you don't deserve my money). I would never bought Soul Reaver trilogy. Grand Turismo, Zelda Ocarina of Time, and the list can go on and on.

If you can turn off your brain to the utter blargness of it all, both X-2 and XIII-2 have decent mechanics and are probably better "games" then their respective predecessors. They're certainly more entertaining to actually play. I don't blame you for not wanting to play them though.

 

[Flunk]

Well Jim, you're up there saying what we're all thinking. The Xbox One reveal was horror show for us gamers. Nothing they announced sounded good at all. I've already crossed it off my list and I'm never going to buy one (I have a 360, which I've been happy with).

P.S. I actually think that Final Fantasy XIII-2 is probably the best Final Fantasy game since X. You do have to put up with the whiny annoying protagonists but it's not really any worse than normal for a JRPG (try playing Star Ocean:The Last Hope, that game has the most annoying cast of characters in any game I've ever played and HORRIBLE voice acting).

 

[badgersprite]

In the car market, you buy a new 2013 car in the 2013 product year not used 2013 car in the 2013 product year. If you are in the market for a used car in the 2013 product year, you will usually be buying something from 1995 to 2010 just to keep the price affordable. Buying a 2010 car in the 2013 product year isn't robbing the auto industry of a new sale.

The second hand market isn't evil. What's evil is when a second hand sale is happening the weekend after a new product is released instead of a half year to a year down the road. Its not what GameStop does, its how GameStop does it that's bad.

Apples and oranges.
You trade in a car when you need/want a new one. Could be anything from a year to 5 years(?).
You trade in a game when your done with it. These days that can be as low as 8 hours after purchase. After that it mostly comes down to replay value and personal preference(some people trade-in, some hoard).

You think Gamestop should sit on a pile of games till they've been out a year, to protect the publisher ?
Thats not their business. If publishers want less people to buy used, they should make games people want to keep.

I was always more in favor of video game rental like what BlockBuster was starting to do with games before it went belly up. GameStop, more than BlockBuster, is in a better position to do this with games. GameStop could set up rental agreements with the big publishers to get game discs in return for a small cut of the rental price to the publishers. Gamers, who want to play the latest releases and have no interest in owning the game forever, could get their rentals from their trusty GameStop. It could be a GameFly setup with a brick-and-mortar store, no waiting for the mail or a download and just a drive to the local GameStop. And then a half year out to a year out, GameStop could do what every movie rental place does and put the discs on sale.

Having a game rental component would service those who are constantly buying and selling their games, since they are only buying and selling games because they have no way to temporarily rent them. This would negate the loss of a first sale by publishers for people who aren't really customers in the traditional sense and the gains publishers money from those who are 'renters' in the truest sense.

Of course, this is just a pipe dream. GameStop is making a killing off of twisting the concept of the second hand market and the publishers are too short sighted and too stubborn to do anything different. Thus developers and customers continue to get burned by the Triple A market.

They're also ridiculously paranoid about piracy. I mean, you might think they have a point that renting games enables people to make copies and distribute them for free or whatever, which is something that you definitely can't do with a car, but that never stopped blockbuster or iTunes from renting movies to people. They can be ripped by people who know what they're doing and distributed online for free. You can rip a game that you buy at full price just as easily as a game you rent or whatever.

The EC guys talked about a really good idea for a model that I think would work brilliantly. You rent a game for a few days, and, if you like it, all the money you spent on renting that game so far goes to your purchase of a full game, meaning there is no risk at all to the consumer if they decide to rent a game for a while in order to try it. If I put $5 towards trying a game out, I now have to pay $5 less if I decide to buy the game at full price. Everyone gets their money's worth. Everyone's a winner.

 

[Sneezeguard]

Yup, the publisher will never reduce the price of games if they feel the market is used to a certain price and will pay it. How many threads/people have there been complaining about the price of games in Austraila? I think they pay in Austraila twice what we pay in England for games.

 

[badgersprite]

Yup, the publisher will never reduce the price of games if they feel the market is used to a certain price and will pay it. How many threads/people have there been complaining about the price of games in Austraila? I think they pay in Austraila twice what we pay in England for games.

We generally do, but it's a little more complicated than that, and you're quite right that a lot of it just has to do with setting games at prices that they know they can get away with. Speaking broadly, everything in Australia is more expensive. Money basically is just not worth as much within our own country, so having to pay so much more for games is something that they kind of got away with here for a very long time. On a more positive note, game prices tend to drop very rapidly here, so, unless a game is really successful or selling really well, it will probably drop down to a decent price within a few weeks of its release, or a few months if you're patient.

Additionally, I've noticed game's starting prices are generally lower than they used to be anyway. So, instead of games coming out on shelves at $120, they start at $100. It's still bullshit that they're that high, but it does seem to be improving.