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Secondhand Games Stifle Innovation?
Via GameSetWatch, an article at the Guardian relaying a message from publishers. They say that, though you may be enjoying those second-hand games, they may be forcing you to choke down the sequels that plague the industry. From the article: "'We recognise the secondhand games market is part of the revenue mix, for retailers at least,' said a spokesman. 'However, if it continues to grow, it could potentially starve us of the funds necessary for research and development, and therefore, developers will be less willing to take a risk on new and genre-diversifying titles. It's this creative diversity that makes the games industry so popular, and without sustained funding from new software sales, this could be at risk.'"
The symptoms:
People are buying piles of second hand games.
It's cutting into your profits.
The problem:
You've set your price-point too high for the duration that your games are enjoyable.
The solutions:
Lower your price or
Make games that people will want to retain longer.
Bitching that your retailers are against you because they can't make money selling first-hand games is stupid. Retailers adapt to what makes money. If you lower you prices so they can run thicker margins on the new product, they will push your products accordingly.
This is not rocket science. Open to the pages of your marketing book where they show that setting a jukebox to play a song for a quarter will earn twice the money as one requiring one dollar but playing four songs.
Read, think, repeat until clued.
The interesting issue that I don't see brought up often is the fact that assuming the media remains in tact a video game's quality never reduces over time. Sure the box and manual can get damaged, but let's just assume we are talking about the game itself. Used games will only go down in price because of lack of demand, never because the actually quality of the game changes like most items in the "pre-owned" market does.
So the argument wasn't ridiculous enough when the RIAA railed against stores selling used CDs, or when book publishers railed against used book stores? Somehow, because they're games instead of books, it magically makes sense now?
I imagine thrift shops are preventing the clothing industry from innovating, too?
It's this creative diversity that makes the games industry so popular, and without sustained funding from new software sales, this could be at risk.
Here is how we will see the proliferation of "activation servers" and the like systems where purchasing a "used" copy of a game simply buys you a coaster. Copyrighted materials (in the US at least, and from the article the EC) are covered under the doctrine of first sale: once a work in "fixed form" is sold, that fixed form is transferable to anyone else by any method desired. The used book, CD and game industries survive only because of this doctrine.
Activation servers add an additional wrinkle to the mix: you can still legally sell the bits, but the activation code isn't going to work when you take it home. When you complain to the company, they will (correctly) tell you that the code has already been used. Thus, the idea of used games will be a thing of the past. Of course, so will be the idea of tossing an old CD into your machine and expecting it to do anything but say "activation server could not be reached".
All this will be couched in terms of "the benefit of the consumer" while in reality kicking them in the teeth.
Sig under construction since 1998.
If the games were that good to begin with, people wouldn't have waited til they have become second hand and bought them when they were new. Secondly, if they were really that good of a game then chances are people would be less willing to part awith them for cash, making them harder to buy second hand.
This is just an exscuse for greed and lack of effort by developers... Truth be told, I bet uninnovative sequels perpetuate second hand retail industry.
"I am the king of the Romans, and am superior to rules of grammar!"
-Sigismund, Holy Roman Emperor (1368-1437)
... and pay the Senate to make used game sales illegal.
What bothers me is this:
"However, if it continues to grow, it could potentially starve us of the funds necessary for research and development, and therefore, developers will be less willing to take a risk on new and genre-diversifying titles."
This isn't a chicken-or-egg problem, we know new games came before used games. Therefore, this entire cycle was started with new games that had a high degree of suckage, and these high-suckage games were published before the used game industry took off (because, again, new games came first).
The solution seems obvious: publish good games. The better the game, the less likely the owner will sell it back to the store. And if it's really good, they'll buy the same game two or three times (witness Nintendo's business model on the GBA). But making the "We need to make crap games to pay for good games" argument that Hollywood has been touting for the past 50 years or so is simply going to land them in the same place Hollywood is now.
Oh, puh-leeze. The publishers are 'warning us' 'for our own good' than secondhand game sales are 'hurting development'.
Note: it's not crappy ass games that are hurting you, it's not mindless sequelitis, it's not buggy games that need 15 patches before they arrive in stores, and it's not the fact that Blizzard is eating all your lunches, no, it's those awful secondhand games.
Suuuuuuuuuuure.
I buy a lot of used games, since I like not spending huge amounts of cash on new titles. And you know what? I can buy 15 copies of trashy games I know I don't want, but it's often a pain in the ass to find a good used copy of something I actually care about playing, because people don't often sell good games. The secondary market is flooded with older versions of sports games, obsoleted by the industry's own revenue model for sports games, and crap. Cry me a river, EA.
So, publishers are bent out of shape that games last for years, and we all trade them back and forth in the same way used CDs, tapes, and records have been for decades? They're afraid we're going to stop buying new games because we're buying used ones? They want more money (that goes without saying)?
Yeah. Cry me a river. Here are my thoughts:
1. The game industry is making money hand over fist. They may WANT a license to print money, they may feel that all of us gamers should spend all our income on their brand new stuff and never look for a bargain, but tough luck -- the world doesn't work that way. If we all got whatever we wanted, whenever I got lonely or horny I'd clap my hands, yell "Doughnut!" and a gorgeous hottie with an oral fixation would appear. See -- I just clapped. NOTHING! So why should they get whatever fool thing THEY want?
2. Used games COME FROM SOMEWHERE. They don't just suddenly appear, the Used Game Fairy doesn't bring them around in her "naughty nurse" uniform, and they're not gifts from aliens. Every used game was purchased by someone, brand new, at some point. So, the game publishers DID get paid for them! Their problem is, they're not getting paid for them ANY MORE. Again, too fucking bad. That's life. I'd love it if my ex girlfriend had to come over three times a week and do me, but she doesn't (too damn stubborn).
3. A PURCHASE IS A PURCHASE. Once we buy our games fair and square, we can sell them to anybody we want to. We can trade them for cigarettes and beer if we feel like it. We can give them to homeless people to use as ninja stars when fratboys annoy them. We can do whatever we like with them. BECAUSE WE BOUGHT THEM, for much more than they're conceivably worth, by the way. All the pissing and moaning in the world won't convince me that once I buy a game, I shouldn't sell it or trade it in for a new one. It's mine, I'll do whatever I want with it.
4. FINALLY, seriously now, isn't it ridiculous that they're now trying to pretend that it's the used game market that causes game companies to put out derivative dreck? YEAH, I see how that works. It's not that game companies are pushing their developers to exhaustion, outsourcing a lot of their activities, making UNBELIEVABLY shitty movie tie-in games (if you can call them games), and in general, treating the public like they'll buy anything if they put the right face on the package. Oh, no, if sales slow down it must be because all the customers are EVIL! Yeah, we're all just penny-pinching Meanies. I see...
Well, that's my rant for now. I'll leave you with this thought:
Do I buy a lot of used games? Yes, I do.
Do I buy a lot of new games? Well, actually, yes on that one also.
Am I a freeloader? NO. I spend more money on this crap than most people.
Do I feel like anyone appreciates my business? NO.
You know, this stuff isn't that complicated. It's about treating me like a customer, appreciating my business, and giving me good value. If you can't do that, there's nothing you can sell me.
Has the Games industry been having chats with the music industry or something?
Its sounds to me like exactly the same sort of "I know our products suck at the moment but if you guys gave us more money we'd make better products, honest" line.
Part of the rise in used sales has to be due to the rising price of new games. I am not willing to spend $50 or more on a game unless I know, ahead of time, that it's one of the best games ever made. And it had also better have more than 10 hours of gameplay in it. Otherwise, I'll wait till the price drops or I see a used copy.
There's a huge difference in terms of impulse spending between $30 and $50. If I have the choice between a $25 used copy and a $30 new copy, I'll buy new. Over $30 and I'll try to find it cheaper somehow. If you think you can't sell your game for $30 and make a profit, then you need to think about what you can offer as a value add, either as something you can't get with the used copy or something that will encourage people to not sell theirs in the first place. If you want to compete and be successful in the marketplace, innovate. Don't bitch at your customers for not giving you enough money. Capitalism is not charity. If your game isn't selling it's because you didn't make something worth buying new.
Bite the hand.
I'm sorry, but it's NOT MY PROBLEM. If the game industry can't get its act together and put some games on the shelves that are actually FUN, then I'll stick to older games that ARE.
Consumers don't owe the industry any favors, especially after years of being treated like:
- criminals via abusive copy protection mechanisms and unfair return policies
- sheep via releasing non-innovative games over and over again, with poor support and quality control
Also, explain this:
- If the innovative games aren't out there, then how the HELL is buying the CRAP that *IS* on the shelves going to help any?
Answer: IT WON'T.
- How will buying the CRAP that IS on the shelves going to encourage publishers to market games that aren't CRAP?
Answer: IT WON'T.
Arguing about vi versus Emacs is like arguing whether it's better to make fire by rubbing sticks or banging rocks.
"We recognise the secondhand book market is part of the revenue mix, for retailers at least," said a spokesman. "However, if it continues to grow, it could potentially starve us of the funds necessary for research and development, and therefore, authors will be less willing to take a risk on new and genre-diversifying titles. It's this creative diversity that makes the book industry so popular, and without sustained funding from new book sales, this could be at risk."
Infuriate left and right
If the games industry were to start starving, they would actually start taking more risks in an attempt to capture more sales. When you are backed into a corner do you take more or less risks to get out? The industry must be doing very well to be making the same games over and over. If you didn't notice, the people who have the least money innovate the most. So it sounds to me that the effect of used games is to help increase the quality of new titles. Buy more Used games!! Its good for the Industry!
Let's say that I'm a games publisher. I sell you a game that offers, say, 100 hours of interesting play. After the purchase you have three options:
1) Sell it after a short while. OK, it wasn't to your taste. Sorry. If it's a good game, there won't be too many people in your situation.
2) Sell it after a longer while. I'm glad you enjoyed it. Most people into this sort of thing will have bought it new by now. And whoever picked it up second-hand will hopefully buy my next game new, once they've enjoyed this one.
3) Keep it. Groovy.
Oh, what's that? You've made a game with 10 hours of play? Well, sucks to be you. Let's hope that if it's a truly fucking awesome 10 hours the media will have pushed it to the point that your first-weekend sales will be through the roof. If you've crapped out ten hours of digital tedium you're probably screwed, and a good thing too.
Bottom line: make a good game with a decent replay value and you won't haemorrhage money through second-hand sales.
I miss the days when a business that no longer provided quality products to their customers slowly faded away and went out of business. These days, we have the RIAA, MPAA, and now the game industry trying to point the finger for their lackluster sales at everyone but themselves. Not only that, they sue their own customers (and brag about it in the news!) and if that wasn't enough, they line of the pockets of politicians everywhere to pass laws basically designed to keep them in business.
Apple on the other hand seems to be actively listening to their customers and gives them what they want, rather than what the aforementioned companies do, which is try to tell us (the consumers) what we should want, and after they have watched another failure, sue us for not liking their products.
/rant off
To compete with the used game channel for older titles, why not just make their back catalogues available for cheaper prices? If a title is selling for $20 used, drop the new price to $20-$25. The negligible price difference will probably prompt all but the most frugal (cheap?) customers to buy the new copy instead of the used one.
Besides that, the paltry cost of producing a box, disc, and manual is nothing compared to the $x that they could make from selling another new (reduced-price) copy. Yes, they spent a lot of money on development, and they need to earn it back somehow. So do they choose to not compete with used copies -- and earn $0 in the process -- or instead choose to make money by giving people an incentive to buy a new copy?
Nintendo, Sony, and MS already do this for a lot of their older titles. Any publisher that doesn't is either stupid, stubborn, or both.
--Jeremy
Jesus was a liberal
You have two options. First is requiring activation, thus making the secondary copy useless. Other posters have pointed this out. This is terrible.
Or you could take another route. Nintendo is doing this in some ways. Sell the games to people cheaper than used. Sell electronic copies. Make it in my interest to go buy a game for $30 from you, instead of $25 from the game retailer. Most games, after an initial period, sell next to nothing. So why leave the game on the shelves at $50 and let retails sell 'em used for $25 when you could sell them on-demand for $25. Basically, Live Arcade for more recent (and bigger) games. This is where the future is. We all know it. It is just a question of when we get there.
Comment forecast: Bits of genius surrounded by a sea of mediocrity.
It also makes me laugh to read that "developers will be less willing to take a risk on new and genre-diversifying titles." I didn't realise more than a hand full were doing this? (How good is Psychonauts anyone?) The rest are like Hollywood producers: there is no art, just business.
I buy secondhand because I'm not paying $70 for a derivative first person shooter. If you put out an original game, I'll buy it at full market price. I purchased Civ 4, Deus Ex, and System Shock 2 at full market price. I purchased Deus Ex 2 for $10 secondhand from a seedy retailer.
Produce something I want to actually buy and then we can argue the economics of me buying it new. The chicken/egg argument isn't appropriate right now until these original games are actually getting killed by the secondhand market.
This actually did happen a while ago (in the 70's or 80's), programmers were tired of not getting credit for making the games and they eventually just quit and started there own companies to make there own games. I think it will happen soon, once EA dies, i think alot of the smaller companies will have a pretty good spotlight.
But if you combine both arguments, you get a more accurate prediction of the future. If you just play out the game publisher's argument, you will see that they may be right. It does starve them of revenue. And that may, in turn, make them reluctant to spend money on risky titles or innovate. Now add in the "bad games" affect that this could create in the marketplace. What happens? Existing publishers lose money and, if they continue their approach, eventually either stagnate and get by with low growth or even go out of business.
But if you focus on the marketplace instead of on the existing stakeholders, you see that the situation will address itself somehow. Obviously even the "bad" games have some market value if people are willing to buy them at a lower price point. So existing publishers could simply adjust their prices to compete with the second-hand market. Just because they made the same title that is being sold used doesn't mean they have a right to continued revenue on it. They made their revenue when they sold it the first time. However, if they lower their price after a time on a new box of the game then they can also share in the long term market for certain titles. They often do this by repacking titles with extra stuff like levels etc.
What happens to those publishers who don't adapt to the market (as opposed to their current desire to adapt the market to them)? There is some radical that happens! New publishers start up and actually develop business models to exist in the market. They do things like publish titles with higher demand and/or they develop business models to survive the peaks and troughs of publishing high visibility titles. Valve is a classic example of this kind of competing company. You can hate many of their practices, but you at least have to acknowledge that they have found a different way to profit in the market. They focus on revenue from add-ons, they "took back" the margins that the publisher was previously taking, and they developed different licenses for game cafes.
I think it is ridiculous the number of people, including executives at large game publishing companies, that claim they are so pro free market, but they constantly want to adapt the market to what they want instead of vice versa.
The profit margins on new games are so slim that retailers like EBGames are making their money on the resale of used games. If no one buys used games, who's going to retail all of the new games?
Game Retailers Make Money On The Margins
Blaming second hand games is a cop out. I think the problem is the 4+ million dollar budget needed in order to make a modern game. We seem to be paying more and getting less when it comes to gaming these days. Perhaps if we look at the reasons that games have become more expensive over the past 10 years, we can change the entire economic model of game development to make the most out of the development dollars.
It's not just that games are more expensive to develop these days, but the problem is that we are overall seeing less creativity in gameplay. The xbox in particular lacks creative design. It seems like the Japanese games for the playstation and nintendo have a lot more creativity and depth than the American made Xbox titles. For the xbox all we see are generic shooters, generic war simulation games, generic sports games, and of course the often terrible movie based games. Just go through the list of xbox games and you will see that most fall in those categories.
They say that developers are not taking chances on innovation these days so that they don't lose their investments. By not taking chances, they are losing their money. Players can only buy the same style of sports game for so long until they realize the old game is about the same as the new. Give us a reason to buy a new game, developers! Better graphics just don't cut it anymore.