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Publishers Want a Slice of Used Game Market
grigory writes "GameStop's business model depends on a healthy flow of used games: incredibly '[GameStop] enjoys a 48 percent profit margin on used games.' Game publishers do not see a cut of the secondary sale because it falls under the first sale doctrine. Now, some
publishers and manufacturers want a piece of the pie. 'One marketing executive, who did not want to be identified for fear of angering GameStop and other retailers, said the used game sale market is still depriving publishers of money because it gives consumers an all-too-easy alternative to buying a new game.' Interesting picture of companies fighting for your business, and (surprise!) complaining about being left out of the money stream."
Steam only works on PC games. If you notice, a Gamestop stocks only the top... 10 or so PC games (in a tiny shelf hidden from everything else). That's because they can't resell them. They have more PS2 games than they do PC.
Seriously, about 60% of the store is resold merchandise. They stopped being a games retailer and became a pawn shop years ago. When will they buy my gold watch?
hookers and grits.
I hadn't purchased anything from Gamestop until recently. My employer moved offices recently and now we are across the street from a Gamestop. I went over to purchase LIttle Big Planet and they assumed I wanted the used copy. There was only $5 difference between the used and the new and I figured I'd rather get the new. I knew something was up when the guy behind the counter kept telling me I could save a few dollars if I got the used one. Was I really sure I wanted the new one? Are you really sure? I figured they must be doing very will with their used games. Most of the store is full of used games.
What does Gamestop pay for used games? They must have some soft of dynamic system that keeps track of demand and quantity on hand before they quote a price. Is it worthwhile to sell games to Gamestop? They wanted to sell me on a membership card that would give me 15% when I sold a game to them.
The few games that I have bought used were from Gamefly. The nice thing about Gamefly is they at least give you a *new* case (not a beat up and gross one), cover art, and the booklet. I supposed I'm picky though, I don't buy a game unless I know I really want to keep a copy for a long time.
Courts here in the US have already affirmed the rights of a user to re-sell software, despite licensing agreements. See Autodesk: http://arstechnica.com/tech-policy/news/2008/05/court-smacks-autodesk-affirms-right-to-sell-used-software.ars I can't find any follow-up, but I like to think that the decision stuck. I understand their *wanting* more money, but yeah: First Sale Doctrine. I think a MUCH 'better' way for them to deal with this is through first-sale exclusives. i.e., "Buy Gears of War 2 and get a multiplayer map pack code." That way, anyone that buys a new copy, gets the code. I would also recommend that they ALSO offer the same map packs online for, say, $10, so that even if a person buys the game secondarily, if they want the "full" multiplayer experience, they can still get it. I guess they could 'force' users towards brand new retail copies by not offering the map pack except as redeemable by a code, but that just seems like lost sales to me. I really think that game publishers need to stop being crybabies about secondhand games and find a way to make their product more valuable to the consumers. Or make the games cheaper: I'd certainly rather spend $40 on a new game than $60. (Although that's being generous: Gamestop's policy seems to be the Wal*Mart approach "New = $60, used = $57.99"). Ideally, though, games (both new and used) would be cheaper.
Personally, I never buy a game unless I think it's something that I want to keep. I don't think it's right to give a publisher $60 for a game that I will only get 20 hours play out of, regardless of whether or not I can sell it later. I buy a lot of WiiWare games simply because they are only $10. I really don't mind if I only play it for 5 hours when I only pay $10. Personally, I think publishers of all media (games, books, software, music, movies) would do a lot better if they sold their products for a cheaper price. Don't make me think about buying it. Make it pure impulse, and you will set a lot more product.
Anthropic principle: We see the universe the way it is because if it were different we would not be here to see it.
that's a really good point. For example, I don't mind paying extra for a toyota or an apple computer in part because I know that when I sell it, I get more back too. I do take that into account when I compare prices of cars and computers. Oddly I think most people do not.
Given that I don't buy things I anticipate selling anytime soon, considering resale value is secondary to meeting my demands. For example, with computers I still have mine from a decade ago. Given the depreciation rate of computers, resale value is pretty low on the list. Basically, paying extra for a feature I don't want in order to increase the resale value doesn't motivate me because it won't increase the resale over the additional cost. Why spend $500 on something to increase the resale $200?
Cars? I buy them to last a decade or more in my possession - Of course, the reason toyotas have higher resale values when used is that they last forever - that's a consideration.
I don't read AC A human right
An identical situation - where the original producer gets a cut of every subsequent sale - has been happening across Europe in one particular very high value market for nearly a decade now. It's called droit de suite, and it's granted on art sold at auctions to make sure that impecunious artists get a cut of the multimillion resale values of their art. http://en.wikipedia.org/wiki/Resale_right It's a pretty contentious issue, especially for us mercantile Brits.
That hourly rate neglects risk. Not all games are created equal. There's a certain risk that you're going to get a game, open it up, start to play it, and realize it sucks.
If you realize a $60 game sucks, you're out $60, or at least ($60 - (resale value)). If you've only paid $10, that's the most you risk losing.
Consumers are understandably wary of plunking down more than a couple of bucks unless they're very sure they're going to like the game. This is why it's a lot easier to gain traction and marketshare in the low end "casual game" end of the market, but also why there seems to be so little innovation at the high end. People are willing to take risks only when they don't have too much skin in the game.
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