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What Happens To Your Used Games?
silentbrad writes "GameStop's bosses are obviously tired of hearing about how used games are killing gaming, about how unfair they are on the producers of the games who get nothing from their resale. One astonishing stat is repeated by three different managers during presentations. 70 percent of income consumers make from trading games goes straight back into buying brand new games. GameStop argues that used games are an essential currency in supporting the games business. The normal behavior is for guys to come into stores with their plastic bags full of old games, and trade them so that they can buy the new Call of Duty, Madden, Gears of War. GameStop says 17 percent of its sales are paid in trade credits. The implication is clear — if the games industry lost 17 percent of its sales tomorrow, that would be a bad day for the publishers and developers.'"
I'm tired of hearing it as well - because other businesses with narrower margins have survived some form of First Sale Doctrine for literally centuries at this point.
When people buy stuff, sometimes they sell it. You don't get that money, because you already sold the product. Suck it the hell up.
Artists and companies both share a toddler's idea of ownership: "if I thought about it, it's mine."
The syllogism goes something like:
1. Someone, somewhere, is making money from something I am tangentially involved in.
2. Therefore, THEY STOLE IT FROM ME!!!!!!
The economic notion that you can't capture all the value you create if you want to maximise your take appears a bit complicated for them.
http://rocknerd.co.uk
70% of nothing is still nothing. The complaint is that Gamestop is making fat wads off of used games by paying out nothing and selling them for only slightly less than the new price, while pushing used games sales instead of new ones. No one cares what Joe Gamer does with the pittance that he makes.
Of course, while Gamestop's behavior here is contemptible, leveraging its monopoly to undercut the very industry that supports it, there's nothing whatsoever wrong with used game sales in general. No more so than used books or other media. The real shame is that this is the direction that the big publishers are trying to push the debate into - blaming used game sales for their declining profits, to justify more and more DRM.
A used games market allows effective price discrimination, because some people couldn't justify buying a new game unless they knew they could recoup some of the costs after using it.
In this market, price discrimination is a good thing. It allows publishers to still sell copies (and thus get something) to those who can't afford to buy a game at full price. They could have cut Gamestop out of the loop by doing this themselves, but that would demand realistic discounts on older/less popular games, something the publishers appear unwilling to do.
xkcd is not in the sudoers file. This incident will be reported.
In 2010, the video gaming industry made 66 BILLION. Saganesque billions and billions and they can't turn a healthy enough profit?
The business model for gaming has failed. The answer isn't digital either. Digital distribution only makes it easier to fail in the market place and do it faster too.
The problem is management. Management is failing in a big way. Even with Valve, Sony, Microsoft, Nintendo, Google and Apple's pound of flesh, there's no way in hell margins so thin that used game sales threaten it can be considered "healthy." Even in volume. Maybe especially considering the volume that some games sell at.
Where the fuck is all that money going? Is it a matter of creative Hollywood accounting or is there bigger costs involved with pushing pixels through silicon?
Non impediti ratione cogitationus.
I'm tired of hearing it as well - because other businesses with narrower margins have survived some form of First Sale Doctrine for literally centuries at this point.
Of course, some of them have not. And, crucially, that's a good thing, too.
If they get rid of the used games market, they better be prepared to charge less money for games. Right now Batman Arkham City is thirty bucks on PSN. The game of the year edition is the same price on Amazon (which I think has all the DLC included). Amazon is also offering 15 dollars to buy the used version back.
If they're going to sell a less complete version of the game that can't be resold or brought over a friend's house, takes up a ton of hard drive space and doesn't have to be manufactured and shipped, I should think they could pass at least some of the savings on to me.
...we cannot have people reading copyrighted material for free!
Seriously where is this sort of BS going to stop?
Cars and houses are a little different though. The extremely high cost means that the market wouldn't be viable without reselling.
Just like with games, then.
What, you don't think $70 for renting a game that's simple enough for your grandmother to play (although she might not like chain mail bikinis) is extremely high cost?
In the past, the pewter figurine, book, packet of pocket fluff, cards and and a cloth map made you feel you got some value. Now you pay four times as much for way less content. Sure, you feel entitled to spread the pain of the high price around by re-selling it after the four hours it took to get tired of it.
Well, the counter argument to this is that the, let's call them 'informational', goods don't depreciate with use like a tangible product does. A (pressed) game disk will be just as functional in 5 years
And so will a book. In fact, a book will easily outlast CDs and DVDs. That doesn't mean that if I sell a book I have read, I steal from the author (or his publisher's grandchildren, more likely).
First sale. It's not just a good idea, it's the law.
"But it's irrelevant."
how on earth is it irrelevant? It doesn't matter if I'm buying a $10 watch at Walmart. If it has resale _value_, that is something that will and should affect the initial 'price that the market will bear' for the good.
Things have value. Houses have value in the fact that they are still good for their intended purpose after many years of use. When you move, you sell them instead of abandoning them because they still have value, and you can trade on that value. The 'price the market will bear' for your house is based on it's value to the market.
A used car has value in proportion to its features and how much useful life it still has. It wears down over the years, and by the time mileage reaches 100k it has significantly less value than it did at 20k. But value has not reached zero, hence I can find someone to buy it for a few thousand dollars because to them, it has value worth paying for.
If publishers are insisting that people throw away the value left in the good that they would normally resell, then the prices better come down to reflect that loss of value in the product.
Cars and houses have high prices because of the value present in the resale market. The fact that there is Value left in the items is the cause, the prices are not. The used game market being what it is shows that there is still value in used games, just as there is in used books, electronics, cars, houses, etc.
Hardly.
It goes to pay the guy behind the counter, it goes to the power company to keep the lights on. It goes to local sales and property taxes, it goes an insurance company who has the policy on the store, etc. Does Game Stop get lots on Contribution margin in this case sure, but they have lots of fixed cost overhead.
They are preforming a service many find useful the offer a market place and facilitate it by functioning as a broker. If you want to keep more of the sale price for a game your selling there is ebay and Craig's list. Its going to be lots more work on your part though, and when the sale happens is when you find a buyer rather than anytime you are ready.
Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html
The problem is the time it takes for people to think about selling their games. Each new generation of games might be 'better' (yes I know only the graphics improve with most other things getting worse and worse), but a new game from a series will be released once a year at best, while the customer will be thinking about selling the old game in a couple of weeks.
Game maker should be thinking about ways to keep players playing the games they buy, rather then preventing them from selling them.
But if the trade-in of cars and houses was banned, the prices of cars and houses would go down to make it a viable market.
Surely the value of a product which cannot be traded in would be percieved as less than a product which can be traded in?
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I think reducing the supply of an item (the used car market in this example) actually leads to increased cost.
Most used games end up in landfills, polluting our water supply and threatening our air quality. But a disconcertingly large portion of them are shipped to low wage countries like India, China or Phillipines. There rag pickers with no protective equipment, no purify, no bounds checker, not even a basic UMR checker pick them apart and make piles and piles of code. Toxic code, with no input validation, teeming with buffer over runs, wild pointers, Freed Memory Reads/Writes, spaghetti code, with tons and tons of long jumps and GOTO calls, at some instances code with even COME FROM calls are being pulled and recycled. Please take care of your used games and recycle them properly paying some attention to Mother Earth.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Banning used car sales sets the supply of used cars to 0, at which point supply and demand are irrelevant as there is no market, assuming we are ignoring illegal markets. If we aren't ignoring illegal markets, then it would depend on the details of the law and whether selling or buying was "worse"
It would not affect the supply for new cars. It would affect the demand for new cars though. For many people if they can't sell their old car they won't be buying a new car as often, so the demand for new cars will go down. So the price of new cars will fall, or the supply will then fall (or both of course - which or the relative amounts will depend on how much profit magin and cost cutting potential there is).
If publishers are insisting that people throw away the value left in the good that they would normally resell, then the prices better come down to reflect that loss of value in the product.
I agree. The other thing is -- When you build a car, you do work, and the worker gets paid for that work once. Publishers do not need to exist. The game makers that work at the studios get paid once for the work they do, just like any other worker. Once their work is done the configuration of bits is literally in near infinite supply thanks to how little it costs to replicate digital information. Basic economics 101: Price tends to Zero as Supply approaches infinity, regardless of Demand or Cost to create.
Imagine a world without Publishers, where the folks working at the studio still get paid for the work they do -- Like a Homebuilder gets a contract to build a house. The builder doesn't get money each time someone moves into the house, she's done her work, she's got other houses to build. So, the game developer gets his paycheck and contracts to make more games. The current publisher model relies on enforcing artificial scarcity because the publisher needs to add cost to distribution to support their very existence, but they don't actually need to exist!
All Software, Art, Games, etc. can be given away for next to nothing after they are created if we pay the creators enough to create them (we'd have already paid for them to do the work). I find it odd when people spread FUD about systems like Kickstarter -- These systems are merely allowing the game creators and artists to get paid up front for their work, a sane business model not based on artificial scarcity -- What's scarce is the ability to configure the bits, not the bits. There will necessarily be a transitionary period while we bootstrap ourselves into the new publishing model. However, right now some developers and artists are actually able to stop emulating Publishers. They can stop extorting their customers via artificial scarcity, by asking for enough money up front to cover the cost their development costs (accounting for profit -- like the way a mechanic factors profit into her prices).
Essentially, my point is that the current game economy is RIDICULOUS. Paying trumped up fees for 1's and 0's in order for publishers to get paid multiple times for doing little or nothing isn't economically tenable, it doesn't make any sense. The price of games CAN be reduced to what it costs to make them simply by circumventing the extortionist & middlemen: Publishers.
As for value for money - that's something you consider before you make the purchase, surely.
The game developers are double whammy-ing the value proposition. I used to feel okay about paying $50 for a new game if I knew I could sell it some day for $20 as a pristine used title. But with attempts to kill the used game market and the more recent one-time use DLC that costs $10 to buy if you purchase the game used, I can't be sure to get that $20. I'm also not going to pay $20 for a used game if I have to buy $10 worth of DLC for it or the licensing is a problem.
I'm sure the game developers figured they found a way to make a free $10 off of the used gamer. Way I look at it is they reduced the reasonable new cost by $10.
Here's how that plays out at my house. Usually I buy 3-4 used games every month or two, and sell two old ones. Three or four times a year I'll buy a new major title release. Often I buy a used title from a series and then buy the rest of the series new if the price is right. But I got stung a few times by the $10 DLC needed to play the whole game. That's resulted in buying no games at all for a while until I sorted out that pretty much everything new has that problem.
So I'll start buying games again around the holiday season. Used. Old enough that they don't have the DLC problem. No new releases or other games of any kind that require a DLC purchase.
Once again a business decides that they'd rather have no money on their own terms, instead of making some money on the customers terms. Good luck with that guys!
Oh please! The dirty ugly truth is that YOU sir or madam are an elitist. Why can I say that? because i will bet my last nickel you have never been poor and what you and the industry don't want to wrap your snooty little noses around is that poor people game too in fact its pretty God damned obvious that a hell of a lot of them game, or else gamestop wouldn't have a market.
Tell me, when is the last time you sold a game? have you EVER sold a game? While I haven't I've known plenty that have and it was because they couldn't afford a new game otherwise which is exactly what they are pointing out in TFA. To YOU sir $70 may not be much, but to others its quite a lot. I always keep a couple of sub $100 P4 towers in my shop, do I LIKE the P4? fuck no, i hate the damned thing, don't like the XP that is on 'em either but the simple fact is there are people that can't afford better and unlike an elitist I serve everybody, rich and poor alike.
So maybe you and the games industry should get your nose out of the air and smell reality a little. look around, see that suffering? its called a Global recession Chuck, and games aren't required like food and rent. i may have money but since ditching the consoles i haven't spent a dime over $25 for any single game thanks to Steam and i don't care if your game is the second coming of Christ me and my family never will. We have better things to spend our money on that give greedy publishers $60+ (more like $130 by the time they gouge us for all the "DLC" they cut out) and you and the industry might want to think about that.
But no, the short sighted retarded as fuck "damn all but the quarterly reports" attitude of Wall street that is killing this country infects the gaming industry like ass cancer so they'll happily slit their own throats and be shocked! Shocked I tell you! When they kill gamestop and their sales go DOWN and not up. Faced with being gouged and no way to offset the costs many will just wash their hands. Don't worry though, HTPCs that can game are cheaper than ever and I'll be happy to take that business as will Valve.
ACs don't waste your time replying, your posts are never seen by me.