GameStop Wants To Sell Secondhand Digital Download Video Games

MojoKid writes "GameStop makes a killing selling used videogames, but what happens to that business model when digital distribution platforms run physical media out of town? That's not anything to worry about today, tomorrow, next week, or even next year, but at some point, GameStop will have to deal with the direction the games industry is headed, and it may already have a solution. GameStop CEO Paul Raines recently brought up the possibility of reselling used digital downloads."

Comments

Good Luck

[NalosLayor]

Putting an end to Gamestop's business model is exactly what the publishers intended to do when they started moving to digital downloads. Add to that the DMCA which makes it illegal to circumvent such practices and the non-existence of the right of first sale for digital goods and Gamestop is up a creek without a paddle. And as much as I dislike Gamestop, so are we.

Re:Good Luck

[wmbetts]

If I were going to attempt this I wouldn't be selling used games, but whole accounts. For example you have a steam account with games x,y, and z and a steam account with just game x. I would pay you more for account 1 than account 2. There's already market places setup for things like wow accounts. A quick google search pulled up something called armorybids. Yeah, it's against their ToS, but it's not illegal yet.

Re:Good Luck

[Telvin_3d]

eBay items will evaporate as will the low prices.

Except that's not how it's worked in practice. If you look at Steam all the old titles are still available and for cheap. Brand new and fully patched and cheaper than they sell for used at GameStop. When every player represents a sale and inventory space is unlimited there is a huge incentive for continued support and aggressive price drops.

Last week on the big Steam summer sale I picked up copies of Batman: Arkham Asylum for $4 and KoTOR (I lost my discs years ago and have been wanting another play-through) for $2. The system works. And works far better for every level from the developers to the consumers. The only people is does not serve better are parasitic rent seekers like GameStop.

Re:Good Luck

[hairyfeet]

Won't happen until you can get the ISPs to quit overselling the living hell out of their networks and then slapping nasty caps just to make sure you don't use what you pay for!

Don't you just love when irony is so moist and delicious? On the one hand you have a set of greedy publishing bastards that want to take away first sale, but to do so they have to get around the greedy ISP bastards that want to oversell and cap the shit out of their networks.

Kinda sad when there isn't anyone to actually root for, Gamestop charging crazy prices while giving jack shit for trade ins, the ISPs capping your asses, or the media corps wanting to take away first sale and nickel and dime you with DLC so that a $60 game actually costs $130 just to get what you would have gotten before in the box...wow what a carnival of sucktitude!

Re:Good Luck

[hairyfeet]

Actually last time I went into Gamestop (a couple of months ago when my nephew wanted to go there as part of his BDay) they were seriously big into gift cards for things like Steam, WoW, and just about every other MMO and game seller you can name. Made it easy for a kid like him to get some extra goodies on his favorite Korean MMO without having to worry about having a CC or trying to get his parents to use theirs which they sure as hell wouldn't on some funky overseas MMO.

But I got to agree about the Steam sales, its great to not only load up on the new stuff but to get the old games you may have missed. I personally got the HL 1 collection (lost my HL 1 disc ages ago and never got around to Blue Shift or Opposing force) for like $5, my oldest got him some TF classic for $2, not to mention the newer games like Bulletstorm, Saints Row 3 (we all got that one, its a hoot in co-op) as well as some indies like Trine 2 and both boys got the dungeon defenders series which they are playing the hell out of.

I just have to wonder how many publishers other than Valve will let you keep playing old games? i mean I fired up HL 1 DM and TF Classic and was blasting in full servers within seconds, but you look at a company like EA and they won't let you run your own servers and pull the plug after like a year and a half for many games. Who is gonna want to buy older games if half the game is broken?

Re:Good Luck

[interkin3tic]

TF classic is more of an exception than a rule. Oftentimes with games that have tacked on multiplayer, it becomes a ghost town long before the servers are taken down. GTA IV, I hopped on multiplayer maybe two years after it had come out. Aside from free roam, no one was playing. Doesn't matter if the servers are still up if no one is playing.

Presumably, any games with multiplayer options that are dead, the pricing will have to reflect that.

Re:Good Luck

[Lisias]

At the same time it is incredibly destructive and long-term death spiral for the industry and consumers as a whole.

Please elaborate.

As far as I'm concerned, selling used goods drives a industry into a spiral death only when the industry itself is already stagnated and obsolete.

When people refuses to buy new things from, sticking with the old ones, the problem is YOU.

Re:Good Luck

[viperidaenz]

Since its against the tos, what's to stop them closing the accounts when they find they've been sold? That'll lower the value and demand for "second hand" accounts bit.

Re:Good Luck

[interkin3tic]

It also means there's no returning a stinker though. It's rare that I buy a game soon after it comes out. It's also rare that a game I'm counting down the days until release turns out to be bad, but it has happened. Kingdom hearts 2 for example, I bought it new the day after it was released, and sold it back to gamestop about a week later. I really hated it, but ended up spending less than $10 on it because I was able to sell it back.

Not saying it helps overall, but in a few rare cases it does work out better for us.

Re:Good Luck

[wmbetts]

Blizzard does exactly that. I'm sure it stops some people from buying them, but based on the prices I saw on that website it seems some people are willing to pay outrageous amounts for some accounts.

Re:Good Luck

[gallondr00nk]

Last week on the big Steam summer sale I picked up copies of Batman: Arkham Asylum for $4 and KoTOR (I lost my discs years ago and have been wanting another play-through) for $2. The system works. And works far better for every level from the developers to the consumers. The only people is does not serve better are parasitic rent seekers like GameStop.

I take exception to the idea that Steam is better for consumers. WIth physical media, I buy the game, I own the disk, and then I'm responsible for what I do with it. I've got originals of games from 1995 on CD.

With Steam, I give up:
          - Physical ownership of the game medium.
          - The ability just to install it standalone w/o client software.
          - Control of patches and updates.*
          - The ability to resell or transfer ownership.
          - Guaranteed access to the game.

Valve might seem all nice now, but what if in 5 years time they go the Origin route and start ditching game support? Or jacking prices because they own a virtual monopoly on game distribution? I can see both happening one day. Dominent market positions get abused.

Steam might grant a little convenience, but takes a lot of control. Is it worth it? Hardly.

Older Steam games are cheap only because Valve decide they are. In the second hand market, it's because the market values it at that price. At the risk of sounding like a wanky free-marketeer, I'd rather have the latter. Yes Valve set prices based on demand, but with Steam the ball is entirely in their court.

* I own Saints Row 2 on Steam. Every time it updates to current, the game becomes hideously unstable on my machine. Stopping it from patching is nigh on impossible.

Re:Good Luck

[hairyfeet]

But something like the Steam sales can actually get people to playing the MP again if it exists. For an example I've been racking up some kills in Bioshock II MP and that was pretty lonely before the Steam sale, but since it was put on sale for 75% off there are plenty of fresh splicers for me to do my aerodash into a shotgun blast or rocket to the face bit.

If they are honest though and say "MP is dead" upfront so I can get that choice? Not a problem but I think that frankly they should at least release the server code when they are gonna walk away so we can host our own. Sadly more likely they just won't tell us the MP is dead until we've already paid and tried to use it. This is the only industry I know of where they can sell you something that doesn't work and you can't even get your money back, what a rip.

Re:Good Luck

[Anonymous Coward]

How on earth are GameStop "parasitic rent seekers"? They buy used games, that people don't want any more, and sell them to other people for a markup. Or to put it another way, they match up people who want to sell games with people who want to buy games, in exchange for a commission. That's a useful service, not parasitism. And interaction with them is purely voluntary - you always have the option of buying the game new - so they're not seeking rent on existing transactions.

You can argue that their markup is too high for the service they provide, and there's some validity to that. But there's nothing stopping anything else from entering the used-games market and undercutting them if they can - and the fact that no one else really does indicates that they're charging a fair price for their services.

The real oddity is that they're competing in a market where the marginal cost of new product is close to zero (say, 10c per downloaded game to run the file server). There's nothing stopping the game publishers from selling their games so low that GameStop can't possible complete, as in the examples you gave. But that cuts into their profits - they maximise their profits when they set a somewhat higher price. In fact, if it weren't for the need to compete with second-hand games from GameStop, the price of new games would probably be significantly higher.

Re:Good Luck

[Lumpy]

Which is why I dont care about MP anymore. I dont even redeem the DLC codes to enable it. There are only TWO I do MP on.

Modern BF3 and Black Ops. and both are to tplay with buddies that were ex seals to just utterly crush the kiddies running around with N00b tubes. it's amazing how you can wax a camper and set up a couple of claymores and watch the fool wax himself by running back to his camping spot.

Re:Good Luck

[Barefoot Monkey]

Nope. Unfortunately, Steam doesn't have any mechanism for controlling whether or not it updates games. The setting that you describe merely exposes a flag (that frequently gets set and unset automatically) for whether the game should be updated in the background. Steam often either disregards that or silently sets it back to "Always keep this game up to date" at odd times. Also, whenever you run a game Steam tends to do an update regardless and switches the setting back to "Always keep this game up to date" for you.

Re:Good Luck

[Telvin_3d]

The most destructive aspect has nothing to do with the 'old' games. The stuff that people pay $5-$15 for after it's been out for a couple years is a natural secondary market. It wold exist with or without GameStop and no one cares very much, one way or another, about these sales. The problem is with GameStop's approach ot new games.

Brand new game comes out for $50. Even for the biggest titles GamStop only brings a couple copies outside of pre-orders. This is deliberate. Game is bought on release day and played for a week. Then it is sold back to GameStop for $25. GameStop then sells it used for $45. They can do that because they deliberately underdstock titles. Often it is used or nothing. This will hapen a couple times the first month of release before the demand dies down. After that the sell back price drops to almost nothing. And the developer sees only the cut of the initial sale.

Yes, this is legal. It even saves a few dollars for the first couple customers. But it means that the developers only make money out of one in three PAYING customers. The people who are willing and able to pay full price on launch day. It is not an issue of people choosing old goods due to a stagnant industry. It's a problem of the new money being diverted before it can reward new development.

Re:Good Luck

[Robadob]

Only way to play games without them needing to be updated is by running in offline mode, but the game must be 100% upto date when you log into offline mode the first time else it will refuse to run as far as i know.

Re:Good Luck

[hairyfeet]

Those type of game frankly ruin the fun for me. While I'm all for having a little strategy in MP those type of games are strictly "If you sink X number of hours you slaughter, if not you're fucked". Its like TF2, My oldest wins sniper competitions on that thing all the time but God knows how many hours he's sunk into it. I watched him play one time and I had to die laughing because some old Vietnam Vet was on the chat going "Will someone take out that Goddamned VC sniper already?" and I actually had to explain to him what a VC was, although looking at his camo outfit I have to admit...he did dress like a classic VC.

To me a good MP should be "easy to play, hard to master" where noobs aren't instakilled in 3 seconds so the community grows and people are actually friendly when they play. The last MP I really sank any time into was the MechWarriors series (Man am I dating myself with THAT reference!) because if one got some friends around you could actually use WWII battle strategies. We used to rack up crazy numbers using the Pacific War's "big blue blanket" in that me and another guy would be in the center with ultraheavies as your battleships, the mediums would be the destroyers covering our flank and sides, and the cruisers would be farther out and lure the "hot dog" shadowcat players into the kill zone. When we used to run into another group it was like The Battle Of Midway with all the rounds flying in massive waves at each other, now THAT was a battle!

Meh, its a shame your ex seals don't play TF2, I'm sure my oldest would like the challenge. So far he's gone up against Army and Marines and bagged 'em both, he's a deadly little sucker, never see him coming..

GameStop *has* a digital distribution platform

[greenreaper]

It's called GameStop PC Downloads - aka Impulse, bought from Stardock last year.

GameStop has also been getting into the refurbished iDevice market. There will always be hardware of some kind to (re)sell.

Re:GameStop *has* a digital distribution platform

[interkin3tic]

I worked at a gamestop for a summer. If that store was representative of gamestops elsewhere, they make their money on 12 to 18 year olds guys who have nothing but disposable income, buy electronic toys when they first come out at high prices, then get tired of them and would rather get a fraction of the price back than let the thing rot in their closet. They buy that stuff and sell to other 12 to 18 year olds at a markup.

That group isn't going anywhere anytime soon, sure, iphones might be the next thing, but I'm skeptical that they can make the same profit margin or sales volumes as they did with used games. I'm sure people are buying used iDevices at gamestop, but I can't see it ever eclipsing new sales, authorized refurbishers, or direct from apple. Gamestop is going to shrink as a result of this no matter how much they diversify.

Re:Interesting, but it wont help Gamestop

[Anonymous Coward]

On countries where there theres the right to resell and the right to reverse engenieer to get compatibility, they could do something like Garena + hacking the executables to make them work without steam. Provided that each game sold is backed by a license, it would be legal in my country.

Can't stop reselling in the EU

[Alain Williams]

I note that recently the Court of Justice of the European Union rejected an attempt by Oracle to stop the sale of secondhand licences on software downloaded over the internet. It seems to me that reselling of games software should also be allowed under the same ruling.

Re:Can't stop reselling in the EU

[bussdriver]

Tell that to the lawyers; most politicians are lawyers. They love to create issues out of nothing, it boosts their business.

Sometimes I wonder if politicians are trying to be programmers and make Judges into computers; except they have zero software engineering skills and their profession (and their own law firms they have a vested interest in) greatly benefits from "bugs" in their legal code.

"Digital"

[fa2k]

Why does everyone have to call it "digital" (digital copies, etc)? Software is digital by definition, including that on CDs and floppies. And if you say it's short for "digital downloads", that doesn't make sense either, as "digital" is a useless qualifier (all downloads are digital).

Wait... Let me get this straight...

[retroworks]

You mean, if I bought it, I own it? I can resell it? I remember that battle, way back when, and we recorded our LPs onto cassette tapes.