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Buy Second-Hand Games, Stifle Creativity?

Thanks to GameSpot for its 'GameSpotting' editorial discussing why buying second-hand games could have a negative effect on videogame creators. The author points out: "You know, Nintendo, Sony, and Microsoft must have a real love/hate relationship with stores that stock used games alongside their new games [since buying used games doesn't give] the game developers, or the game publishers a thin, red cent. Instead, the retailer is enjoying a nice, fat profit margin, where the markup is in the neighborhood of 200 to 1000 percent." He goes on to argue: "Buying used is equivalent to the game not selling at all in the eyes of developers and publishers, and when games don't sell, they don't get sequels and excellent concepts and, therefore, opportunities are lost."

31 of 217 comments (clear)

  1. Maybe they should take a hint. by Mark_MF-WN · · Score: 5, Insightful
    Maybe game developers and publishers should take a hint about what the sweet spot for pricing is.

    Why are business-types so colossaly stupid? The success of used games should indicate that selling games for two thirds of what they cost now would dramatically increase their sales. Instead of complaining, they could just take advantage of that trend. Losing 33% of your per-game revenue is irrelevant if you double total sales -- and since per-unit production costs are negligble, that's a pretty reasonable scenario.

    1. Re:Maybe they should take a hint. by Tuvai · · Score: 4, Insightful

      If they sold the games for two-thirds of their original price, the price of second hand software would simply fall to even lower levels, and the cycle would repeat.

      True, more games will be bought brand new, but these will be purchases from the usual suspects, the ones with either the loyalty, lack of patience, or high amounts of cash to be able to go out and purchase software at release. The large numbers of those who hawk second hand software will simply shrug their shoulders and wait for the even cheaper castoffs to arrive. I severely doubt we shall see a sharp enough spike to cover the massive developmental costs of games these days.

      There is little the developers can do to stop this in this valued free market, except go for the big launch, as it is the sleeper hits that tend to be screwed over the most.

    2. Re:Maybe they should take a hint. by TeknoType · · Score: 3, Insightful

      True, but there comes a point where the price is JUST right - where the % increase in new customers is equal to the % decrease in price.

      Taking your assumption and the root comment numbers as an example:
      Let's say there are 30,000 people interested in the game but only 10,000 are willing to pay for the game at $60. The industry recognizes the used game industry is meeting the demand of the rest of the 20,000 and decide to cut the price by 33%. By doing so, purchases increase by 50% (according to the root post).

      Original Revenue = 10,000 * $60 = $300,000
      New Revenue1 = 15,000 * $40 = $600,000 (100% increase in revenue)

      Now, let's assume a smaller % of consumers will convert over with the same % change in price, 20% instead of 33%....

      New Revenue1 = $600,000
      New Revenue2 = 18,000 * $27 = $486,000 (19% DECREASE in revenue)

      Even though these are rough estimates, it turns out there will eventually be a point when it's best for companies to stop at a given price point than continue the 'cycle'.

    3. Re:Maybe they should take a hint. by Fizzl · · Score: 4, Insightful
      If they sold the games for two-thirds of their original price, the price of second hand software would simply fall to even lower levels, and the cycle would repeat.

      I disagree. There is just a spot where it is worthwhile to sell your used game instead of keeping it 'just for collection'. If the prices would dramatically drop, it would be much rarer ocassion that someone would want to part from their original game for miniscule payback. Also, the demand for second-hand games would decline if the games would be reasonably priced. Say, 20 euros for the latest hit game would make me buy games just for the heck of it.

      Currently I only play EverQuest and Americas Army. They have decent value for money (I buy EverQuest expansions when they hit the cheapo-bin at my local store). I'm not going to cough up 50 euros for yet-another-FPS.

    4. Re:Maybe they should take a hint. by Delphiki · · Score: 4, Insightful
      Wow, I always wonder all the greatest minds in business decide to spend all of their time reading slashdot. And you don't even work in business! What a horrible waste. You could revolutionize the gaming industry.

      Oh wait, maybe not. Maybe you just over simplified the situation and assumed everyone else is an idiot. Hey, you think if they dropped the price for games, then maybe people would start selling used games cheaper so it really wouldn't help their sales that much? No... that's crazy talk. Or gee, maybe they've done a little marketing research that suggests they wouldn't be able to double sales by cutting the price in half. Nah, "business-types" are colossoly stupid as you so aptly put it. They must have just not thought of it because they aren't smart like you.

      --

      Feel free to mod me "-1 - Angry Jerk".

  2. bullshit. by dunkelfalke · · Score: 4, Interesting

    if you sell used games you get money to buy new games. so simple.

    --
    Conservatism: The fear that somewhere, somehow, someone you think is your inferior is being treated as your equal.
    1. Re:bullshit. by MachDelta · · Score: 4, Interesting

      Very true. I bought a used game a while back (one of the Neverwinter Nights expansions) that had the previous owners' receipt in it. Out of curiosity, I looked to see what he had sold and bought. He sold 5 or 6 games/expansions for around $85 (Canadian), and bought 3 new ones (2 full games, 1 expansion) for something like $130. So the publishers and developers got ~$40 out of him, he got 3 new games, the retailer (EBGames) got to cash in on me, and I boosted my love for Bioware with their +2 Expansion of Funness.

      Whats wrong with that?

  3. This is stupid. by togofspookware · · Score: 5, Insightful

    Yeah, and when I buy a used couch, the couch manufacturing companies don't get my money either. So what? I wanted a couch, and the guy selling it didn't, so I bought it. That's how a free market works. Of *course* they'd rather I bought a new one!

    --
    Duct tape, XML, democracy: Not doing the job? Use more.
    1. Re:This is stupid. by Genom · · Score: 3, Insightful
      Cripple games so they stop working after a certain amount of time, or only work on a single game console. ...and I'd have to stop buying games completely. As it is, I generally tend to finish the games I buy 1-2 *years* after I actually buy them. Sometimes less, sometimes more (and sometimes never...)

      The cycle generally goes:
      • Buy new game
      • Play 30-60% of new game
      • Other things need attention
      • Forget about game for 3-6 months
      • Look at game shelf..."Oh yeah, I really ought to complete that sometime..."
      • Other things need attention
      • Forget about game agaun for 3-6 months
      • Eventually pop it in again, finish it, and move it to the "finished" pile


      If they only worked for 3 months or so, I'd hardly finish anything!
  4. You're problem is what exactly? by Torgo's+Pizza · · Score: 4, Insightful

    This was settled in court ages ago. What are you going to do? Put Ebay, Blockbuster, flea markets, Goodwill and used car lots out of business as well? It's pretty much a consumer's right to sell, trade in or do whatever he wants to his purchase. It's not like game publishers also don't get into this as well. How else do you explain the collector's editions, multiple covers, numbered boxes and special editions? Sorry, but the crying towel for this subject was used long, long ago.

  5. Sounds like a lot of bull to me by Flyboy+Connor · · Score: 3, Interesting

    Many publishers release repackaged versions of their games a year or so after the original release, usually priced $5-$10. If they can profit from that, new games are way overpriced. If they cannot profit from that, someone buying a second-hand game a year after its release doesn't cost them a cent.

    1. Re:Sounds like a lot of bull to me by KDR_11k · · Score: 3, Informative

      They can profit from that because the development costs have been paid for by the customers of the full priced version. Sometimes it's just stores cleaning out their inventory, though.

      --
      Justice is the sheep getting arrested while an impartial judge declares the vote void.
  6. Now also banning... by michaelggreer · · Score: 3, Funny

    used books, used cars, used houses...all of that creativity stifled!

  7. Be thankful... by Tuvai · · Score: 3, Interesting

    That you don't live in Japan, where the software developers have been known to not only take a dim view to retailers stocking second hand software, but also actively clamp down on it.

  8. Community support by cgenman · · Score: 4, Interesting

    Community support goes a long way to getting a sequal made. Prince of Persia: SOT sold pretty poorly overall, but because of the tremendous buzz surrounding it the Prince of Persia line is suddenly revitalized. It's never about how well this game sold, it's about how well people think the next game will sell. Part of that is based upon sales numbers, but a large part of that is based around the size of the community around the game. Used games greatly foster community.

    Furthermore, the reason used game prices are so high (besides EB's fat profit margin) is that not enough people sell their games. People become attached to them, like good books or movies, and don't want to give them up. Also, because they retail for 50 and sell for 5, people understandably are shocked by the depreciation. If you want to support gaming as a hobby, go third party. Sell back any games that you don't play anymore, and sell them to the smaller local stores that haven't been gobbled up by the major chain.

    Cry no tears for Nintendo. It is true that their profits were cut in half this year, but that was cut in half to a half billion dollars. Used games are necessarily a diminishing-returns phenomenon. Most games launch at a rediculous price, and are quickly reduced as demand subsides. Very few people resell their games, and the few that do generally plow that money right back into the hobby of gaming. Does that mean the copy of Metroid Prime you picked up used for 20 bucks from a local mom-and-pop videogame store doesn't pay Nintendo a penny? Yes, but the same could be said of reselling movies, cars, furnature, or anything else in life. Nintendo made their money. Sony made their money. Microsoft made their money. If the person who paid for that game wants to sell it to plow even more money back into their hobby than I can't see how this hurts the gaming ecosystem.

    As a game developer, I welcome the practice. Heck, I own a used copy of one of the games I helped develop, which I picked up for 11 dollars.

  9. I buy used games... by wheresdrew · · Score: 5, Insightful
    ...because they're cheaper.

    That's the bottom line. Ebay, Gamestop, EB Games or local independent game shops, it's all good. Saves me money and allows me to buy more games. If they want to sell more copies of newer titles, I see two options:

    1. Make the game worth $50

    2. Make the game cost less than $50

    1. Re:I buy used games... by ConceptJunkie · · Score: 3, Insightful

      That's just a specific instance of #1.

      I buy used games all the time. At $5-$10/each I don't mind if I find myself spending much time with only one out of every 3 or 4 titles. Games are a funny thing, you often have to own them for a while before you know for sure if you really want them. If I drop $50 for a game, it better be something really special... and I'm no starving college student anymore. I can afford those games, but I just don't feel it's worth it. Most of the games I've spent the most time with lately I picked up in bargain bins, and I can never predict if something that gets me hooked will be one I picked up for $20 (or occasionally $30 or 40 or more), or some obscure or older bargain I get for $5.

      --
      You are in a maze of twisty little passages, all alike.
  10. What, and lose a mere 5-10% of the used margin? by Inoshiro · · Score: 3, Insightful

    When people trade in a game that at 5$, and the store sells it for 20$, they're making a healthy profit. Even if the game companies go ahead and decide to drop prices of their new games by 1/3rd, the used stores can still absorb that easily because they're paying about 60% to as low as 2% of the final price of a used game to take it in.

    What's worse, you've suddenly made used game trade ins more valuable because they can get more new games or used games for the same amount of trade ins!

    Natuarally, this is why providers are trying to move to a model where you don't own the content (online). I don't like that either. There are still game companies out there, though, that can make games that are worth enough that I'll hang on to them after I beat them, even if they have limited replayability (like Beyond Good and Evil, or Deus Ex: TIW).

    --
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    Internet Explorer (n): Another bug -- that is, a feature that can't be turned off -- in Windows.
  11. Game sales by Flyboy+Connor · · Score: 4, Interesting

    Game developers told me that the first three months after a game is released are crucial: that's when they sell the most of them. Everything after that period is nice, but if they didn't make a profit in the first three months, they never will. I am quite certain that in those first three months it would be rare to encounter a second-hand version of a game. Of course, you will find the warez-rip in the first three days after a game's release...

  12. Used equivalence to not selling by chaosmage42 · · Score: 3, Insightful

    It is true that when someone buys a used game, the game company sees no money, but they saw money when the game was originally sold. Someone had to not like the game enough to sell it back so that it could appear on the used market. So the effect of the game appearing not to sell is partially true, the original owner would rather sie had not purchased the game. This means out of the 2 buyers of the game, only one would buy it if given a second chance. The company only receives one buyers money. This is fair {unlike the ridiculous markups on used games!}.

    If people are selling games after playing through them, it is usually long enough after the release that these purchases would not affect the company's income very much. {Another case is that the game has little-no replay value, and here the company is paying for it.}

    On the other hand, the author of the article makes good points and I do agree with him about supporting the companies {or local bands!} that one likes. Also, much of his arguements are about console games, which i feel have a larger used market than PC games {and I am almost entirely a PC gamer}.

    "Trigonometry is good for your soul"
    -The Mathematicians

    --

    done
  13. Did you read the article? by Ayanami+Rei · · Score: 3, Interesting

    Look, that's not what's being argued here. The problem is when a retailer sells the same game used that it is also selling retail.
    This is not about games that are no longer in release.
    The retailer knows that it can make a lot of money by placing title "XYZ" used for $45 next to "XYZ" retail for $50, while only giving the seller of the used title a pittance in exchange. That markup is pure profit for the retailer, which helps neither game producer or player.

    Here's my test to know whether your money is going to the right place:

    1) If a used game is being sold for more than 75% the retail price, STOP, buy the game retail.
    2) Ask the clerk how much the store would give you if you SOLD them a copy of that game. If the difference between that price and the used price is more than 50% of the retail price, STOP! Buy the game retail.
    3) If the game isn't available retail, then it doesn't matter, buy it used.

    The tests in 1 and 2 make sure that the store isn't ripping you and the publisher off. You'd be better off looking through ebay listings for that kind of markup.

    --
    THIS THING CAN TURN ON A DIME, MACROSSZERO STYLE ALSO FUCK BETA, ~NYORON
  14. Re:Sorry, by obeythefist · · Score: 3, Interesting

    It's a little different though.

    The reality is, piracy doesn't actually take that much money away from the publisher, because people who pirate would generally go without instead of shelling out $99AUD for the latest cludged console converted catastrophy for PC. Much like the MP3 market where it's shown time and time again that if people don't pirate MP3's, it doesn't mean they'll buy more CD's.

    But the person who walks into a game shop and shells out $99 for two used games would otherwise have spent that money on a brand new game and given that money to the publisher instead of the shop owner. Again the RIAA/ARIA are pretty livid about the second hand CD market. This market represents an even bigger threat to the RIAA than 2nd hand selling computer games... because SimCity 2000 looks awful by todays standards, but The Beatles still sound as good as they did all those years ago.

    --
    I am government man, come from the government. The government has sent me. -- G.I.R.
  15. Re:Well, unless they license it otherwise. by ln+-sf+head+ass · · Score: 3, Informative

    Three words: First. Sale. Doctrine.

  16. Developers are crying to the wrong people by neura · · Score: 5, Interesting

    Just like the music industry, the artists (developers) should be bitching out the publisher for ripping them off. Publishers make most of the money and do the least amount of actual work. Not saying they don't do much work. Everybody involved does a lot of work, but they have by far the largest payoff.

  17. Greased Up Jesus On A Pogo Stick! by limekiller4 · · Score: 4, Insightful

    When the fuck did it become the gamer's duty to subsidize a skewed pricing tier? This reeks of "if we don't rape you for $16 for every CD, you won't get to listen to the inspired strains of the Backstreet Boys, oh hell!" RIAA shill.

    First, creativity will always exist. If it flounders, an opportunity will emerge. There will always be people for whom the "work" is more akin to "love" and will do it not only cheaper but better than the competition. Linux*cough*linux.

    Second, if old games were $15 and new games were $25, would this problem exist?

    Believe it or not, I'm fairly tolerant of self-indulgent Slashdot posts. But this one takes the cake.

    --
    My .02,
    Limekiller
  18. Who the hell are they trying to kid? by geminidomino · · Score: 3, Insightful

    when games don't sell, they don't get sequels and excellent concepts and, therefore, opportunities are lost.

    For every one "Deus Ex" (Not TIW), "Beyond Good & Evil", or "Castlevania: SotN", they bury us in steaming, greasy piles of rehashed "Starwars: Episode 3.14159 Racer", "Final Fantasy 34", "Super Mario Strip Poker", and the "[sport name] [year]" EA crap.

    Add to that underestimating demand for a game (Suikoden II, anyone?), a general "Screw the customers" attitude (That's right, SquareEnix, I'm talking to you, bitches), and you've got a right mess. Boo hoo. Stop trying to fleece me for $50 for a 10 hour game, and I'll stop buying it used.

  19. In other news by thefirelane · · Score: 3, Insightful

    The video game industry says not buying a game stifles creativity.

    Seriously, how does this stifle creativity? If X people want a game, and want to continue playing it then X people will do so.

    All resale prevents is from a game selling wildly upon high expectations, and not backing it up with long term playability. It sounds like it actually encourages creativity, because it makes them need to have an actually solid game

  20. Good by Monofilament · · Score: 3, Interesting

    A developer should really look at themselves if they see that there are a whole lot of copies of "Random blow the crap outa something" game on the shelves at their local EB.

    I could care less if they make a profit on it .. they already sold it once.. if its being sold used there is a reason somebody wanted to get rid of it... and that onus is on the game developer.

    If the game sucks .. it sucks ... or if its an iffy title that not as many people will like .. than they're not gonna get a skewed view of how many copies sold.

    In my own opinion only the game developers hurt themselves with used games... if the game was that kickass, then there would be no reason somebody would wanna sell it back.

    In fact i'm glad some game developers lose money cause i sell back games or buy used games .. half the time its cause some game sucked ass. I'd rather stick it to them by getting somewhat of my money back for the time that they stole from me for playing their horrid game. So many come to mind its mind boggling.

    Businesses fail .. thats life .. if you're a sucky game developer .. at least keep in mind just by your existance you're forcing a good developer to keep on their game.. you're doing a public service .. but further than that if your game sucks, it sucks, and its not supposed to sell.

    --


    Who makes you Sig?
  21. Re:Well, unless they license it otherwise. by Kris_J · · Score: 3, Informative
    That's illegal, they can't restrict that.
    Oh? Which law prohibits them from doing that?
    First Sale doctrine. Part of Copyright law.
  22. Basic Economics says "nonsense." by Fished · · Score: 3, Insightful
    What this article ignores is that, at least in theory, the value of the first sale of the game is enhanced by the fact that I can resell it used. Simply, I am willing to pay more for it because I know that I can resell it for some fraction of that when I'm done. Yes, the publishers would make more if I never bought a game that wasn't new, but that's simply not the economic system we operate under.

    Instead of whining, publishers should work on making games that continue to be interesting after you've played them through once. Consider books, or movies, CD's. Although there is a used market for each, the market is not nearly as robust as the used games market. This is attributable to a couple of factors: first, the ridiculously high cost of games and, second, the fact that most games are worth playing only once if that. If games, like movies and books, were enjoyable to reuse and were not quite so expensive, people would be much less inclined to trade them in.

    --
    "He who would learn astronomy, and other recondite arts, let him go elsewhere. " -- John Calvin, commenting on Genesis 1
  23. What buying used *really* means... by stienman · · Score: 3, Interesting

    Buying used means:
    * The original owner didn't find the story satisfying enough to keep
    * The original owner sold it to buy a newer game
    * The original owner's younger brother needed ca$h fa$t and those rich nigerian people with slight banking problems won't put out to a 12 year old

    In either of the first two cases, the game publisher's shouldn't continue the series - it was good for a few weeks/months of game play, but wasn't a classic, or is not good for group play.

    -Adam