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.'"

Comments

i sell them for profit

[Anonymous Coward]

to stupid people that ask dumb questions

Absolutely! Down with 'used' products!

[Anonymous Coward]

Just as used car sales are bad for auto manufacturers, and home resales are bad for builders, and garage sales are bad for retailers, ... and ..., ... and ...

Re:Absolutely! Down with 'used' products!

[91degrees]

Cars and houses are a little different though. The extremely high cost means that the market wouldn't be viable without reselling.

The garage sales comparison is fair though.

Re:Absolutely! Down with 'used' products!

[David Gerard]

Watching Nyan Cat on YouTube is S*T*E*A*L*I*N*G from the band of live musicians you should be paying money to perform every time you play a video.

Re:Absolutely! Down with 'used' products!

[arth1]

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.

Re:Absolutely! Down with 'used' products!

[jank1887]

"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.

Re:Absolutely! Down with 'used' products!

[jbolden]

I don't know that this is true. It would change the market considerably though. The long term rental / lease market would be much larger with cars. If you wipe that out too then costs would just have to be much lower.

Houses... its hard to imagine what a world is like where you can't resell land.

Re:Absolutely! Down with 'used' products!

[PopeRatzo]

Cars and houses are a little different though. The extremely high cost means that the market wouldn't be viable without reselling.

Have you bought a game recently?

Re:Absolutely! Down with 'used' products!

[mwvdlee]

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?

Re:Absolutely! Down with 'used' products!

[91degrees]

Which is a perfectly valid point.

I thought it was illustrated with a poor example. Perhaps you think it's good to illustrate good points with bad examples, but I think it tends to detract from the argument rather than contribute, and if I find myself agreeing with people I like them to agree with solid arguments.

Re:Absolutely! Down with 'used' products!

[evilRhino]

I think reducing the supply of an item (the used car market in this example) actually leads to increased cost.

Re:Absolutely! Down with 'used' products!

[CrzyP]

Relatively speaking, it is the same exact thing. To a 13 year old, buying a video game is just like a 30 year old buying a car. Relatively, to a 13 year old, that video game has just as much value as a car does to a 30 year old. It doesn't matter that the car costs 500-1000 times more than the game, the principal behind it is the same. Regarding your comment on the financing, there are people out there that do consider financing video games in bulk, maybe included in a package deal with a TV or something, but the games are still included in that financing. Not probably, but still possible. On the other hand, publishers could argue that the code on the physical media is licensed and not owned by the consumer. But the way around it, I think, is for consumers and Gamestop to say they are selling/buying the physical media and not the code on it. Who knows, its just the publishers trying to squeeze every penny out even if it isn't possible just like the publishers in the RIAA have been doing for the last decade.

Re:Absolutely! Down with 'used' products!

[kyrio]

completely different marketplace with completely different goods and a completely different price and selling structure

How do any of those things you listed differ between buying and selling games, cars or houses, other than goods themselves? Can you not buy or sell a house for $1? Do you not exchange money or other property to acquire either of those? Can I not purchase a car for $200? What happens when I purchase two or three brand new games, do they magically cost less than $140-$210 just because they are games?

Try thinking, next time, before posting retarded shit.

Re:Absolutely! Down with 'used' products!

[91degrees]

Have you bought a game recently?

I bought a Wii fit the other day. Does that count? Bought it brand new, on impulse with the cash in my wallet.

Re:Absolutely! Down with 'used' products!

[ryanmc1]

And how would the price come down? The price of a car or house is made up of the cost of parts and the cost of labor, which of those two would go down so the house or car would cost less? Like computers there is not a lot of overhead/wiggle room in those markets. How many house builders do you know that make multi millions? Most of the ones I know struggle to make ends meet just like I do. If there was a big markup in housing those builders would be sitting on piles of cash.

Re:Absolutely! Down with 'used' products!

[jythie]

Actually, that is exactly how the game industry is set up. In public they might complain about how used sales are stealing their profits and fantasize about, how if used sales went away, they could charge the same price and no one would notice... but when you actually talk to marketing or other stakeholders in setting prices they are quite aware of the used market and price accordingly. Any publisher that doesn't take into account how used sales will effect how many units they ship vs cost to produce is pretty amateur and will learn a harsh lesson pretty quickly.

So in a very real way it is already working and has been for quite some time. But just like movie studios, record labels, and book publishers, they still like throwing a public hissy fit and trying to stamp out something they see as profiting off them.... but behind closed doors cooler heads usually prevail, esp when you bring in executives who actually look at the full economic ecosystem of their industry.

I think one of the problems here is the industry insiders we generally here ranting about this are generally not the ones who have much of a background in business but have been promoted (self or not) into a position where they have to address such issues, but have not adjusted their worldview to take into account things that are not immediately on their ledger.

Re:Absolutely! Down with 'used' products!

[Schwhat]

Apples to oranges. Different products needs different styles of evaluation. I do not know what used sales where you can get about a 33% profit for each sale. You buy the game for $60 (not including taxes), the next week you try to sell it back to them; they are willing to give you 40-50% of the $60 - with no taxes back :( Then they turn around and put it back onto the shelves at $55. Someone else buys it, they charge them the $55 and tax ( I swear they could be probably shady with the tax and put it into their profit pockets since the turnaround is so quick they don't have to put in any paperwork of ever buying the game used from you ). So an estimated 33% plus 8% tax (which if they are being shady) - that's a 40% profit. That's probably where the hate fro Gamestop is coming from. Less shady tactics and less profit per used sale would garner better PR and less flak.

Re:Absolutely! Down with 'used' products!

[nedlohs]

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).

Re:Absolutely! Down with 'used' products!

[VortexCortex]

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.

Re:Absolutely! Down with 'used' products!

[Cute Fuzzy Bunny]

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!

Re:Absolutely! Down with 'used' products!

[Cute Fuzzy Bunny]

And the point OP was making is that used goods are bad for manufacturers in any market. And it still stands. So...congratulations on your pedantry?

The funny part is, this is completely wrong. A used market serves the customers who can't afford new, and is an entry point for a customer to become a new product purchaser. It very rarely harms the manufacturer as the used market 'customer' would rarely be a new product customer due to the price points. In fact, the manufacturer often benefits from the used market in terms of spare parts, add-ons and so forth.

Re:Absolutely! Down with 'used' products!

[VGPowerlord]

Simple: You'd need to lower the price to increase demand in order to cover your fixed costs (the costs you have regardless of the number of units sold).

If you can't cover your fixed and variable costs based on the demand for your products, kiss your business goodbye... or try to get the government to give you a bailout.

Re:Absolutely! Down with 'used' products!

[pyrr]

Scarcity only leads to slightly increased cost; however, with computer games, scarcity is rarely a factor except during the first couple weeks of release, and only with the physical store-bought copies of the game. There's essentially an infinite supply of digitally-delivered copies. Even in the first few months after release, the value is high due to the novelty and cutting-edge factor, but once the novelty and "prestige" of being one of the first to complete the game wears off, their prices tend to fall quickly because another game with better technology is going to be capturing everyone's attention.

In that regard, one could almost consider software to be consumable even if the license and media is transferable. If it's obsolete, it has negligible resale value when its owner upgrades.

This is even more true of Steam games. Since they are not transferable, they have no resale value even if not completely obsolete, and their retail value generally drops precipitously. The new releases may be at retail for a couple of months, then they drop off to the sub-$10 range by about the 1-year mark.

There's just no way to compare objects with some scarcity and high residual value (a used car's value or utility isn't diminished all that much by advances in technology and novelty) & one of the highest-scarcity commodities on the market (real property), to ephemeral, semi-tangible goods like computer games or software.

Re:Absolutely! Down with 'used' products!

[hairyfeet]

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.

Re:Absolutely! Down with 'used' products!

[Githaron]

There is only a handful of games out there that are worth $60 - $70 dollars. I usually wait for sales when I buy games.

Re:Absolutely! Down with 'used' products!

[Githaron]

You are forgetting the cost of having employees, a building, games that never get resold, and any other overhead they have. That said, I don't know why anyone would buy a used game when they can buy a brand new one for $5 more. I also don't know why they would turn around and sell it a couple weeks later for half of what they paid for it.

Re:Absolutely! Down with 'used' products!

[drinkypoo]

I bought a Wii fit the other day. Does that count? Bought it brand new, on impulse with the cash in my wallet.

I don't want you to feel guilty or anything, but a lot of families have had to move in with family in a house that didn't really have the room for them and are eating ramen right now. Pretty sure they're not buying too many new games.

Re:Absolutely! Down with 'used' products!

[jank1887]

So, when people started selling cars, before completing the first sale the industry made sure that there was a system of used car dealers is place to handle the expected used car market? No, the used car market appeared to fill a need, to facilitate the transfer of value while value was still present. New car dealers will buy used cars, and maybe sell them, but there are used car dealers who do nothing but used cars. no money to the manufacturer, but they fill a marketplace need.

"Perhaps they should set themselves up that way"
They have. Gamestop is the equivalent to the Used Car Dealer. The use of the car as a downpayment on another car is equivalent to what Gamestop's doing here: trade in your old ___, we give you some credit toward the purchase of a __. the credit is less than what we'll resell for so we can make a profit despite the overhead. Oh, and your credit can be applied toward either a new ___ or a used ___." You missed that part of the car analogy. While the ability to trade in a car can put money toward a new car, it often goes toward a slightly newer used car.

If there is a problem with the car/home analogy, it's not in trying to compare items of different magnitude in value. It's in how they lose value. Physical goods lose value through both wear and time, whereas video games only lose value with time. That car loses thousands in value the minute you drive it off the lot, because it's lost its 'virgin' state. Physical condition and quality can no longer be absolutely guaranteed. Not so with a game. The game has almost zero loss of value over the first few weeks/months. Hence, the resale market for new releases is skewed.

Re:Absolutely! Down with 'used' products!

[Seumas]

All of these discussions trying to justify somehow restricting the ability of someone to sell a product they have is absurd and offensive. To who in the hell is "well, it prevents a company from making even MORE money" a viable rationalization for stripping a consumer of their rights?

Re:Absolutely! Down with 'used' products!

[Seumas]

It's a couple days work after taxes. Is 16hrs of work for a 4-8hr game really "affordable"?

Re:Absolutely! Down with 'used' products!

[91degrees]

The dirty ugly truth is that YOU sir or madam are an elitist.

Maybe. Not sure what difference that makes to this being a poor example.

I still think it's a bad example. Perhaps it's an example that makes sense to poor kids who've never bought a car, but they're hardly the people who need to be convinced that a used market is beneficial.

The people you want to convince are "elitists" like me. Well, maybe not exactly like me. I think that a used games market is pretty harmless and find the article makes a compelling argument that it's actually beneficial. But that's because the article makes a compelling argument that's targeted towards the people it wants to convince. Comparing it to the used car market suggests to me that the poster hasn't really thought this through.

Given that I find it not convincing, how convincing do you think it would be to someone not on the side of the used games market? Are they going to think "Gosh! I'd never thought of it like that", or are they going to think what I do?

Re:Absolutely! Down with 'used' products!

[91degrees]

Sure, but this seems to be a different argument. I do agree. Preventing the sale of used games would be harmful to some people, but really my argument is simply that the other guy used a poor example to illustrate his position.

Re:Absolutely! Down with 'used' products!

[91degrees]

Does this mean that if we prevented the resale of video games, the prices would fall as well? That would seem to follow, but it doesn't really feel right.

Re:Absolutely! Down with 'used' products!

[91degrees]

The typical gamer is older than that though, will be buying a game in a shop, for cash, will not be willing to be upsold to a higher value game, and will readily accept a used game instead of a brand new one if the price is better. They may or may not use game credit, but the majority do not. The markup for the retailer is huge. The games industry believes that the losses from people buying used games instead of new ones is greater than the profits made from trade-ins. They believe, rightly or wrongly, that they would do better if used game sales were abolished.

The car industry knows with absolute certainty that almost 100% of the trade in value of cars will go to buying cars, and that the vast majority of buyers will use their old car in part to finance the new car. The markup from the retailer is small, so even if they do make a nominal loss, each purchaser of each generation of sale makes a substantial portion of the purchase price of a new car. They are absolutely certain that their industry simply wouldn't work if used car sales were eliminated.

You want to argue that the games industry is wrong? Go ahead. The article makes a good case for it. You want to argue that the games industry is wrong because this model works for the car industry? It's not a very convincing argument. Being right for the wrong reasons is not a good position.

Re:Absolutely! Down with 'used' products!

[Schwhat]

Yeah, but those are pretty much universal costs that any place that buys and sells used things will incur. Just as a used car needs space to store, a salesman to sell it, and a possibility where it doesn't get sold. What is apples to orange is that most used cars need additional clean-up/inspection/etc. thus incurring more cost. Video games they just open the case to verify it's not scratched up too much and then shove it onto the shelf. While I don't know who would actually buy a used game where the used price is about 90-95% of the new price; I do know that people do sell games back ASAP if: 1) it was not the game they thought it would be; so they don't like playing it or 2) they don't see any replay value to keep the game after finishing the game once. They need to do it ASAP as video games price can be a bit more volatile; as the game could easily drop down to $40-45 half a month later.

Re:Absolutely! Down with 'used' products!

[jank1887]

"I don't know why anyone would buy a used game when they can buy a brand new one for $5 more"
because it's the exact same game. For $5 less. Unless they're getting more value for that $5, they see no reason to spend $5 more.

"I also don't know why they would turn around and sell it a couple weeks later for half of what they paid for it."
Because they're done with it. They've played it through and there's no replay value, or they've played enough to realize they don't want to play it anymore. Why wouldn't you opt for half your money back that you could put toward another game. Either you'd enjoy it more, or could repeat the process. If he doesn't want to play it any more, then it has zero value to him on the shelf, but a value of 50% of retail if he trades it in.

The "why's" are based on simple math. Now, you might not do it, because you have a different criteria for placing value on things. But the industry evidence points to the process above being the norm.

Re:Absolutely! Down with 'used' products!

[ghostdoc]

I think part of the problem here is the ridiculous situation the USA got itself into with regard to lobbying.

Shrill screeching from an established industry about how they're about to be destroyed (and with them all those jobs) has a tendency to convert into tax breaks, improved legal protection, even whole brand new restrictions on trade that favour the incumbent players.

So, as you say, the cooler heads prevail and behind the scenes are perfectly aware of the market conditions and how to cope with them, and the shrieking for help is a deliberate, cynical tactic.

Re:Absolutely! Down with 'used' products!

[Richy_T]

The car loses that much value when driven off the lot through mostly psychological reasons. Same with a game. Would you buy a game from me for $45 when Walmart is selling it at the same price?

If you eliminate the used market, prices for new will have to drop to accomodate. That benefits people like me who can afford to buy a game and put it on the shelf until it can only be considered landfill-fodder and is bad for those who rely on trade-ins to finance their gaming hobby. And that, indeed is bad for the industry as a whole.

Re:Absolutely! Down with 'used' products!

[Richy_T]

It wasn't an example, it was a rhetorical question intended to imply that games are expensive where you had claimed they weren't.

Re:Absolutely! Down with 'used' products!

[91degrees]

I was referring to the example right at the top of the thread - i.e. the used cars market.

Compared with cars, I maintain that video games are pretty cheap.

Re:Absolutely! Down with 'used' products!

[PopeRatzo]

I bought a Wii fit the other day. Does that count?

No.

Re:Absolutely! Down with 'used' products!

[SurfaceMount]

"Imagine a world without Publishers, where the folks working at the studio still get paid for the work they do"

Someone has to put down the money upfront.
There may be two years worth of development before the game goes to market, thats two years of wages, rent, PC's, electricity, insurance. Then you have to put down more money for the production of physical media, even at $2 per DVD+Case+Manual its big money to lay down. There is also the legal minefield with various game mechanics patented, hand over more cash for legal experts to evaluate. Then pay for your game to be classified in a bunch of countries, who all want you to pay their fee before being allowed to distribute within the country.
Marketing makes a big difference, stands at E3 aren't free, many publications will only run your "sneak peaks" for payment, games shops will only display your posters and give the premium shelf space for payment.

All that has be paid for before you start seeing any return, where does that money come from? Dont expect a bank to just swing your game studio a few million worth of loans.
Return on investment is not a guaranteed thing, plenty of games fail to break even.

Its often the publishers paying all these upfront costs with advances to the games studio.

Re:Absolutely! Down with 'used' products!

[91degrees]

They have. Gamestop is the equivalent to the Used Car Dealer.

The numbers are so different as to make this very much not true.

I sell my old car for say $4000. The dealer sells it for $5000. That $5000 goes to buying a new car. While that used car technically competes with the new cars, the manufacturer knows that he gets 80% of that in new car sales. But the manufacturer knows that most people who want a new car aren't going to be satisfied with a used car, and the used car buyer isn't going to go for a new car if the one they want used isn't available.

Gamestop pays $20 for a used game. Sells it for $50. That competes directly with a new game at $70. A gamer is going to be just as happy with the used game. The publisher gets just 40% of that resale price.

So I'll rephrase my point as a question. Do you think there's any reasonable possibility, that what works in one of these situations will not work in the other?

Re:Absolutely! Down with 'used' products!

[LordLucless]

Who exactly is going to be paying the game developers in this scenario?

The same people who do now - the end users.

And with what?

Uh, money?

You're suggesting the entire industry should be financed by Kickstarter

Or similar services. Kickstarter is good for indie projects - I imagine you'd need a more professional system, that details project milestones and holds money in escrow for projects requiring higher-value contributions. Hell, existing big name titles can pretty much do this already with pre-orders two years in advance.

You seem incredulous that "normal people" could generate enough money to fund game development. In practice, they already do - more than enough actually, as the publishers skim a sweet cut off the top before passing down what's left to the developers.

Re:Absolutely! Down with 'used' products!

[nedlohs]

You completely ignore the sale side of the used car. I know people who buy a new car every few years, when doing so they sell their old car. They couldn't afford to do that if they couldn't sell their old car and so would have to buy a new car less often if selling a used car was made illegal. Hence demand (from them) would fall.

Sure there would be an increase in demand for new cars from the people who currently buy used cars, but they usually have less money to spend and so many will do without (keep the existing car running longer or whatever) rather than buy new instead of used.

Re:Absolutely! Down with 'used' products!

[tlhIngan]

Who exactly is going to be paying the game developers in this scenario?

The same people who do now - the end users.

You do realize most games flop, right? For every Halo/Gears of War/Uncharted there's probably dozens others that fail to recoup their initial costs. Having the end user pay for the flop? That'll go over real well - someone has to make up the difference between the cost and the revenue.

You're suggesting the entire industry should be financed by Kickstarter

Or similar services. Kickstarter is good for indie projects - I imagine you'd need a more professional system, that details project milestones and holds money in escrow for projects requiring higher-value contributions. Hell, existing big name titles can pretty much do this already with pre-orders two years in advance.

You seem incredulous that "normal people" could generate enough money to fund game development. In practice, they already do - more than enough actually, as the publishers skim a sweet cut off the top before passing down what's left to the developers.

It's a great way to ensure only popular crap gets published - endless Halo/Gears of War/Unchated/God of War/Tetris games that sell millions and make tons of profit. The ones that break even will probably sell to those who paid up and disappear. The further a game strays from the tried and true moneymakers, the less likely it's going to get any money.

Truth is - plenty of kickstarter projects fail. Plenty of game kickstarter projects fail to meet funding. Now granted most are probably crap games to begin with, but there's guaranteed to be some that are real gems, just enough people didn't "get it" to warrant tossing a few bucks at it.

Gaming would become an even more dismal place than it would be today if the only reason games proceed to be developed is due to established audiences willing to buy it.

Re:Absolutely! Down with 'used' products!

[kyrio]

Are you really so foolish to believe that removing the used game market would magically drop the prices on unused retail products? That's what it sounds like you're saying. If anything, the prices will just go up.

Re:Absolutely! Down with 'used' products!

[LordLucless]

You do realize most games flop, right? For every Halo/Gears of War/Uncharted there's probably dozens others that fail to recoup their initial costs

No, those sort of "flops" will never get their initial funding, and thus will never get made. I'm sure people will fund games that fail to live up to expectations, but then, that happens with the traditional method too - after all, how many people purchased Daikatana?

It's a great way to ensure only popular crap gets published - endless Halo/Gears of War/Unchated/God of War/Tetris games that sell millions and make tons of profit

Yeah, because when you look at its track record that's what's been made - Shadowrun (turn-based RPG), Doublefine (Adventure Game), Banner Saga (old school hand-animated turn based combat). As opposed to the stuff the traditional publishing houses churn out.

Truth is - plenty of kickstarter projects fail. Plenty of game kickstarter projects fail to meet funding.

And, as you've said, plenty of commercial games are flops. Plenty don't get greenlit either, because some random executive doesn't get it.

Re:Absolutely! Down with 'used' products!

[Richy_T]

I would suggest that it's not clear cut and could be argued either way. Which probably means that it depends on factors which would have to be identified and quantified to take the discussion any further

Every single industry that sells tangible products

[Anonymous Coward]

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.

17%?

[Anonymous Coward]

Gamestop does not make 100% of game sales, so losing that would in no way be NEAR 17% of all sales in the gaming industry.

Re:17%?

[Goaway]

And of course, some part of that 17% is used sales, where the money goes straight into Gamestop's own pockets.

Re:17%?

[FyRE666]

Additionally, if they used the credits to buy other used games, then that money goes direct to Gamestop.

Re:17%?

[DMorritt]

If you're the sort of person that has a game you want to trade in, and trade it in for another used game, then I guess, in a few weeks or months you'll be trading that one in for another? How is this not helping the industry? Everyone needs to make money somehow, if Gamestop are getting a slice of the new and used games I don't see a problem with that, they have supply, there is a demand (for cheaper used games as well as the latest ones). Not everyone wants to buy the latest blockbuster.

The fact that someone can trade in a game, and use that as credit for the next game they want to play is a good thing, I know/knew people that buy/bought a moderate number of games and used this method, if they couldn't part fund next months new release with an old game they no longer play, they probably wouldn't have bought it at all (or waited till the price was cut to a reasonable level, after all games are quite expensive).

Personally I think a thriving second hand industry is a good indication that the games industry as a whole is doing well, it's not the consumers fault that games are released with limited replay value, if they don't want people reselling games, give people a reason to want to keep them in the first place!

Re:17%?

[DarkOx]

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.

Re:17%?

[plover]

If the behavior at Gamestop represents the behavior of an average consumer and of an average game retailer, then that means the same thing happens at other game stores. So yes, that would be near 17% across the board. And Gamestop is one of the largest game retailers out there, so they do statistically represent a large fraction of how the trade-in gaming industry operates.

Stores like Target and Walmart sell new games but don't take trade-ins. Plus it doesn't account for on line sale channels like Steam, where trading doesn't work at all. But all together, game stores that accept trades do have a big impact on the industry. Quibbling over a percent or two of correctness from the slashdot submitter isn't the point: the point is that used game trade-ins matter.

Re:17%?

[Anonymous Coward]

If you don't like it you can undercut their 19.99 on ebay and make the same markup yourself. Of course then YOU have to sit on the stock until it moves and do all that business shit.

Re:17%?

[aaarrrgggh]

When they pay you $0.25, they don't expect to sell it; they are making a market. It is likely to take more used games off the market so they don't need to compete at half the re-sale price.

Re:17%?

[Anonymous Coward]

And imagine that!! If you took the time to actually read the summary, you'd see this line:
"70 percent of income consumers make from trading games goes straight back into buying brand new games."

Which indicates while 70% of the 17% is for buying brand new games, 30% is for used games.

My only irk with them is the lousy pricing they offer on used games. I understand the game can sit and sit, and they need some mark up.. but when you trade in a game for say 25 cents, and you see the sticker print out they'll put on your game once you get your cash and that sticker reads $19.99 or so.. that's one hell of a mark up

I work for GS corp and I don't like the purchase back price vs the resale price that we do, however, I would like to add what really happens.

When an item is purchased back to the GS store, they sit in queue for a week or so, then all used items (games, hardware, iOS devices, etc) are sent back to Grapevine, TX to the refurb center. Here the disks are repaired for scratches (as best as possible), artwork and boxes are checked providing new ones when possible, iOS screens, buttons, backs, etc. are replaced, hardware (console and controllers) are tested and repaired if need, cleaned and everything is packaged back up. After this they take another short (literally acorss the highway) trip to the local DC. From here they are either shipped to the local stores or to replenish the other DCs for their local stores. Once a store receives the item, they mark it with their regions resale value and restock it.

Additional to the sit and sit comment, all of this happens and costs GS money for repairs and shipping (x3). It is a punch in the balls to sale it for $9 and see it listed for $original price - $5 though, thus I do not disagree with you on.

Re:17%?

[kyrio]

Didn't you just trade it in so you could get a bigger discount off a new game?

Re:17%?

[dhaines]

Which indicates while 70% of the 17% is for buying brand new games, 30% is for used games.

Nope, 30% of the 17% is for Mountain Dew and pizza.

Re:17%?

[Richy_T]

Additionally, if the profits were that outrageous, they would soon face serious competition.

Re:17%?

[Goaway]

No, 70% goes into buying games, and 30% goes somewhere else. The "brand new" makes it sound like it's new games, but there's no reason to take that at face value, as it might just as well be "brand new" as in "games the buy didn't have before".

But...but...but

[Anonymous Coward]

Don't all these Games players have infinity deep pockets and can all afford to buy new and just throw away?

Re:But...but...but

[ZeroSumHappiness]

This needs some modding up. I would never have gotten into video games if I could only afford one once a quarter. Used games meant I could buy a game every month when I was a teenager. This broadened my experience and helped cement gaming into my life experience. I probably wouldn't be buying a couple games a month nowadays if I couldn't buy a game a month back then. Luckily, games commonly sell on sale for $5 or less nowadays so new gamers will still be able to experience a wide array of games if they so desire.

The industry can't just assume that they'll be able to sell all of the AAA titles to all of the gamers every time one goes on sale.

Re:But...but...but

[Krishnoid]

I would never have gotten into video games if I could only afford one once a quarter.

Isn't that how all arcade games used to be priced?

Re:But...but...but

[jmerlin]

There's the fundamental logic failure that these companies don't comprehend. It's not about whether you can sell more new copies and that you're losing money when Gamestop sells a used copy, it's that a used copy WAS SOLD TO A PERSON LOOKING TO BUY A USED COPY. When I want a used game, I look in the used games bin. I don't look in the used games bin, walk over to the shiny "new" display, and buy a new copy. Likewise, I don't look at the "new" display and walk over to the used games bin and buy a used game. When I want a new game, I buy a new game. When I want a used game, I buy a used game. Selling a used game does not in any way impact a new game sale. They don't harm the industry. I am unwilling to buy MOST games at full retail price, but am willing to try them when I can recoup most of my lost by buying used and re-selling when I'm done. If they want me to buy more new games at full price, they should make fewer shitty games and just expect to be able to sell every B quality title at $60 a pop with no replay value and 20 hours of gameplay max. This is the same reason most people don't buy games at full price on Steam (they are OK with throwing away $5 to try a game, but not $30). They are two entirely different markets. What these game companies fail to comprehend is that they are typically mutually exclusive, and the used market keeps their game franchises, IP, and related products alive for a LOT longer than forcing people to buy and throw away new copies every time.

and in other news...

[Zemran]

... bears really do shite in the woods.

Re:and in other news...

[VortexCortex]

... bears really do shite in the woods.

...and Publishers actually shit where they eat.

Incomplete analysis

[Anonymous Coward]

No stats on guys about to buy a new game, and ultimately deciding to buy plastic bags full of old games instead.

A 2yo's idea of copyright

[David Gerard]

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.

Re:A 2yo's idea of copyright

[Anonymous Coward]

if you're going to use a specific term like syllogism, use it correctly

1. I deserve all money spent on anyway way on the game/book/whatever
2. People are making money from selling used copies of my game/book/whatever
3. Therefore I deserve the money people make from selling those used copies

Re:A 2yo's idea of copyright

[David Gerard]

You are, of course, quite correct :-)

70 percent of income consumers make

[guises]

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.

Re:70 percent of income consumers make

[jbolden]

Paying a low price and selling for a lot... i.e. a large spread indicates the market isn't very competitive or that Gamestop's service is considered extremely valuable by their customers relative to their competitors. I suspect the later. That people selling to Gamestop really like the brick and mortar vs. Ebay.

Re:70 percent of income consumers make

[Anonymous Coward]

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.

What monopoly? In selling games? I'm pretty sure amazon, best buy and walmart have something to say about that. Unless you mean trading in and selling used games. But than there's Amazon and the lesser known used stores (play and trade, etc).

Gamestop may be the biggest, but they are far from a monopoly.

Re:70 percent of income consumers make

[Rogerborg]

selling [used games] for only slightly less than the new price, while pushing used games sales instead of new ones

If Joe Gamer is choosing to spend $50 on Final Ghost Warfare Ball 2011 than $60 on Final Ghost Warfare Ball 2012, maybe the industry should consider writing an original game once in a while.

Gamestop's behavior here is contemptible, leveraging its monopoly

I agree, it was way harsh when they successfully put eBay, Amazon Marketplace, Craigslist and yard sales out of business.

Re:70 percent of income consumers make

[ryanmc1]

Which came first, The high prices for games, or Gamestop. From what I see, the only reason Gamestop exists is to fill a need in the market. If the Game developers wanted Gamestop to cease to exist, all they have to do is lower the price of there games to the point where reselling them is pointless.

Personally I don't buy games until they have been out for a year or two so that the price comes down to about $10, then I keep the game forever. If new games only cost $20 I think Gamespot would find it very hard to stay in business because the resale value of games would be greatly diminished. I really don't think many gamers would trade in a game for $5. However when games cost $70 and you can recover $50, trading in a game is a lot more interesting.

Re:70 percent of income consumers make

[Telvin_3d]

Joe Gamer is not buying "Final Ghost Warfare Ball 2011" for $50 instead of the new "2012" for $60. Joe Gamer is buying "2012" for $55 used two weeks after "2012" came out.

It's not the old games market that the game companies care about. Some kids spending $5-$10 on a few older titles? Whatever. A large number of customers willing to pay basically full retail price for new games having their money diverted? That they care about.

Re:70 percent of income consumers make

[drinkypoo]

Joe Gamer is buying "2012" for $55 used two weeks after "2012" came out.

If "2012" only has two weeks' worth of gameplay in it and it costs more than $55 then the publisher is hereby cordially invited to go fuck themselves. Games should have replay value and if they don't then that's their own damned fault.

Re:70 percent of income consumers make

[Telvin_3d]

Really? Say game costs $60. Gets played for an average of 4 hours/night for two weeks. That's $1 an hour of entertainment. A damn sign better than just about any other media you can purchase. Sure, there are a handful of games out there that deserve hundreds of hours of play, but even the play-and-forget kind of games represent some of the best bang for the buck.

Re:70 percent of income consumers make

[drinkypoo]

That's $1 an hour of entertainment. A damn sign better than just about any other media you can purchase

Or say that it gets played an average of one hour a night for two weeks. Or say that it gets played once and resold. Or say anything you want to make it fit your theory. A book that costs me $8 and takes me eight hours to read (I read faster than anyone I know) provides the same value as your hypothetical situation and the fight for rent-seeking over books has been fought and won by The People a long time ago.

Re:70 percent of income consumers make

[Telvin_3d]

Is that $8 book a brand new best seller? No, it is not. It has been out for a few years. If you buy old games they also have a better cost/entertainment value. Buy a little older game on a Steam sale or used and the entertainment cost is pennies an hour.

Books are great value, but a new release book ($30) that takes 10 hours to read (for a slow reader) is $3 an hour of entertainment.

Re:70 percent of income consumers make

[drinkypoo]

Unless you really have to be part of the server abuse that is the new release of a multiplayer game or need a title to install the homebrew channel before they lock out that back door, it is much better to wait for the rerelease of the game anyway. Bug fixes, sometimes you get some DLC bundled...

Re:70 percent of income consumers make

[SillyHamster]

Of course, while Gamestop's behavior here is contemptible ...

So horrible of Gamestop to provide used games to people who want them. It's so demeaning.

Horror - they even buy used games from people who want to sell them! Is there no decency?

... leveraging its monopoly to undercut the very industry that supports ...

That word, I do not think it means what you think it means.

Monopoly - literally, single seller.

When Best Buy, Amazon, eBay, individuals, and an endless assortment of businesses all sell used games, calling "Gamestop" a "single seller" is to throw away the meaning of words.

No one has to shop at Gamestop. No one has to sell at Gamestop. They are not a monopoly (or monopsony) in any meaningful sense. The contempt you pour on them is undeserved, because its customers have options - and still choose to bring their business to Gamestop.

Educate people if you think they can do better, but don't blame Gamestop for providing a useful service.

Poor Analogy

[eldavojohn]

Just as used car sales are bad for auto manufacturers, and home resales are bad for builders, and garage sales are bad for retailers, ... and ..., ... and ...

This is a fairly poor analogy in the same way that calling file sharing "theft" is a poor label. The value of the game isn't the physical cartridge or disc on which the game comes -- sure, the manual and external artwork to the packaging may have some value to you and especially to collectors. But the real value of a game is that copyrighted information and artwork and writing stored in a digital manner on whatever medium.

I still think you should be able to sell secondhand copyrighted information, I really do. But I also think it's a poor comparison when the value of the car isn't so much the intellectual property but more so it's got X lbs of steel and other materials specially arranged to get you from point A to point B. Games are artwork, not vehicles.

Better comparisons are books and DVDs. Of course, I'm sure those industries want secondhand sales abolished as well to keep their sales up and I totally disagree with that considering how much I shell out for said objects.

Me, personally, I've learned my lesson. I sold my Ocarina of Time collectors games a while ago and now truly regret it (I had thought that one day N64 cartridges would be as unplayable as NES cartridges but they appear to work for much longer). So I maintain a library next to my books and movies. Sure you might think it looks "tacky" but I think that attitude will change in the near future. I played my dad's pong game, my kids will probably play my Zelda games.

Re:Poor Analogy

[edwdig]

NES games are still playable. The problem is the NES itself - the connector the cartridge slides into gets bent out of shape. It's easy to open the system up and swap the connector. The new part only costs a few dollars.

Blowing on the cartridges never actually did anything to make them work. What did help was simply taking the cartridge out and putting it back in. It would sit differently, and eventually it would sit well enough to make a solid connection with the bent connector.

Re:Poor Analogy

[Anonymous Coward]

Blowing on the cartridges never actually did anything to make them work.

BLASPHEMY!

Re:Poor Analogy

[TFAFalcon]

But will they play them on a NES, or will they just download them from piratebay and fire up an emulator?

Re:Poor Analogy

[dywolf]

The IP is not the source of value, or rather it is irrelevent to the value.

The value for a game comes essentially from its usability. In this case, the gameplay, the enjoyment. You can load a game with tons of IP but that doesnt mean it has any value.

Value is determined by the market.
Market makes this determination according to demand.
Demand for games is determined by enjoyability.

And that is why highly enjoyable games are worth more on a trade in, while others are not.

Re:Poor Analogy

[xouumalperxe]

Well, you're still paying for the engineering that went into the car, which is also intellectual property.

Re:Poor Analogy

[Rogerborg]

Let's stick to analogies that we can all understand.

Last week, I changed a suspension link on my wife's car, and GM's Revenue Actualization Department served me a notice for depriving them of the profit I'd stolen from them by not simply buying a new car.

Re:Poor Analogy

[lister king of smeg]

i always found cleaning them with rubbing alcohol and quetips helped

Re:Poor Analogy

[lister king of smeg]

i play my nes but i also have an emulator that i play when not home

Re:Poor Analogy

[Hatta]

I had thought that one day N64 cartridges would be as unplayable as NES cartridges but they appear to work for much longer

N64 cartridges are as unplayable as NES cartridges. They are both completely non-unplayable.

Re:Poor Analogy

[rjr162]

I still believe blowing worked. And I refuse to change that! Say it ain't so!!

On a side note, my friend's old Nextel Motorola phone started throwing fits after about a year of use.. he'd plug in his charger (the wall charger that actually came IN THE BOX with the phone), and when he plugged it in the phone would say "Incompatible charger". It didn't matter how many times he removed it and plugged it back in, it would *always* display that message... UNLESS he blew into the connector port on the phone before plugging it in. Once he did that, it would work just fine.

Re:Poor Analogy

[drinkypoo]

I still think you should be able to sell secondhand copyrighted information, I really do. But I also think it's a poor comparison when the value of the car isn't so much the intellectual property but more so it's got X lbs of steel and other materials specially arranged to get you from point A to point B. Games are artwork, not vehicles.

In the case of a video game that comes on a disc it's really quite irrelevant that one is IP-based and the other not, although all modern cars have copyright-protected components. The issue is that you buy it knowing that you can resell it, for however little. And the really valuable games can be sold on eBay or Amazon for good money, for instance I got $63 for the Metroid Trilogy for Wii in the fancy metal case after paying $10 for it at a yard sale. (If anyone is wondering, I bought it with the thought that I would play it, but found it to be lame because the wiimote still isn't precise enough unless you're in a dark room etc.)

Re:Poor Analogy

[FatLittleMonkey]

I still think you should be able to sell secondhand copyrighted information, I really do. [...] Games are artwork, not vehicles.

Do you think the publishing industry that wants royalties from (or bans of) used game sales feels the same about other art resale? How many of their executives voluntarily paid the original painter/sculptor a percentage of the purchase price of the artwork they have bought or sold for their corporation or themselves? (Or only ever bought artworks directly from the artist, shunning the resale market?) I'm guessing none.

And it's that "One rule for the industry, another for the artists" that so many people despise. I might be sympathetic to artists and creators, but I know that the industry isn't. Indeed, the industry has always gone out of its way to screw the artists, needing to be dragged kicking and screaming to respect artists rights. Therefore any "moral" argument the industry makes is always going to be seen as a lie; a lie to support an immoral industry at the expense of the artists, the consumers, and our culture.

[Not a criticism of your argument, just an observation.]

Re:Poor Analogy

[CheshireDragon]

I found that blowing in them softly with hot breath actually worked better than just blowing in them. I also believe that it was the blowing in them that worked and not just reinserting them because the connectors were bent out of shape. I agree that this would happen years and years down the line, but I bought a brand new NES a few years after my first one and it had the same problem. Blowing in the game resolved that issue.

Re:Poor Analogy

[BronsCon]

-1, Troll? No, try +1, Truth. I'm a developer, this is something that would be trivial for me to actually do, but I enjoy developing my work, so I release new stuff once in a while.

Price discrimination

[Vintermann]

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.

Buying patterns

[jem]

I am a hoarder. I would never trade in my games. I would never sell them on. I also buy games infrequently.

The people that I know who buy games a lot, always trade in their old games. They wouldn't be able to afford as many games otherwise.

It is nice to think that you have have people who buy lots of games and hoard them forever. Maybe if we gave those gamers free money then it could happen.

Re:Buying patterns

[Bigbutt]

Yea, that's pretty much me too. I buy a few games I want to play, mostly nostalgia I guess (Diablo III, Starcraft II). I don't buy used games (I figure it has a code which has already been used). And I keep them until they likely can't be used any more, overcome by OS upgrades.

[John]

Failed business model.

[RyuuzakiTetsuya]

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?

Re:Failed business model.

[SuricouRaven]

Production costs have increased. These aren't the days where gamers will be so easily satisfied with pixel-art, five-poly spaceships and text for dialog*. A top-tier game these days needs much larger teams making highly detailed resources from textures to level design, and even voice actors. It's exactly the same situation that raised the cost of hollywood movie production: Standards rose, to the point where audiences would reject any movie that used obviously painted backdrops and cheap special effects. If you look back at some of the movies considered great classics**, you can see that the production cost would suit the Asylum. It's a feedback loop of expense: The more money is spent on production, the more buyers demand and so the more must be spent to meet their expectations next time.

*Final fantasy excepted.
** The Birds is a good example. Painted backdrops and stuffed models on string, but it scared people back then.

Re:Failed business model.

[MysteriousPreacher]

In 2010, the video gaming industry made 66 BILLION. Saganesque billions and billions and they can't turn a healthy enough profit?

66 billion? In their fevered minds this number can always be higher. Look at Paramount's Al Perry and his response to Louis CK pulling in over a million dollars in just a few days of offering his stand-up show video DRM-free. A success perhaps? No, could have made more money if he'd used DRM. Perry and his ilk are fundamentally wedded to preserving the existing business model, or replacing it with something so hopelessly draconian and self-defeating as to all but kill the very product they're trying to "monetize".

Re:Failed business model.

[DMorritt]

Not really, I doubt development costs are the main issue, those ads on TV, bus stops and the internet probably chew more money up than 100 people working for 2 years. If you have 100 people working for two years and they turn out a steaming pile of crap, then they get what they deserve. If they are making the next BF or COD however they can roll in their swimming pools of cash.

I think there is a lot of smoke and mirrors in this industry.

Re:Failed business model.

[MysteriousPreacher]

Production costs have increased

Rising production costs aren't a problem so long as the market itself will offset them, either through being willing to pay more, or through volume. Where it gets risky though is when a single project can represent so much risk that a company can be ruined by it, but then the rewards are pretty good if it pays off. To use movie examples, look at how much cash Avatar brought in, but then contrast that with John Carter. It's a risky business creating AAA content, and it's likely going to be the preserve of companies with very deep pockets. They're in this business because they can make money.

And yes, Final Fantasy definitely had a pretty minimal budget for dialogue, but I find that pretty consistent in anime. The quality of animation was a bit better though than the usual stuttering and repetitive style I'd associate with anime.

Re:Failed business model.

[jank1887]

let me point you to Angry Birds, Zombies vs Aliens, and many of the early, top-selling Wii games. You make a fun game, price it right, people will buy it and play. If you can't make a high cost game and recoup your costs, too bad. You played and lost. such is business, maybe next time you'll do a better cost-benefit analysis.

Re:Failed business model.

[sohmc]

Production costs have increased.

And the market is responding appropriately. A few people are willing to pay $60 for a new game. Others are not willing to pay that much, but would pay $30 plus a few months (after all, time has a cost). Others will pay no more than $10 and are willing to wait years.

The gaming industry has a few options:

1. Find a way to control costs, which I submit is already being done with the number of sequels, etc. instead of brand new content
2. Increase the price, which they've done since demand for brand new games has decreased and demand for used games has increased (granted, the demand for used games increased because people don't want to pay the higher price)
3. Move to a product-key model where each device must be registered. This seems to be the direction gaming studios are moving.
4. Decrease the price for the game, hoping that people will purchase new instead of used.

This option is probably not going to happen since it requires long-term thinking. You're hedging that more people will purchase the game new if the price is so low that it negates the savings of buying it used. It also would discouraging selling since the owner wouldn't recoup much of the cost anyway.

But when has the gaming/music/movie industry ever been this forward-thinking without being forced to?

Re:Failed business model.

[Junta]

They have increased, but not *nearly* so much as film production costs have increased. To pick two examples, Call of Duty: Black ops had a reported budget of $10 million. Despite being a tad older now, it still is priced at $30 a pop on amazon. How to train your dragon had a budget of $165 million and can be had for $20 a copy on Blu-Ray, in line with moderately new releases. The games industry is making the *MPAA* look reasonable by comparison. Per-unit pricing is what *really* frustrates people, though for the sake of drama throwing out the $66 billion is more interesting. I don't think anyone would begrudge $66 billion to the industry of the pricing and behaviors were a bit reasonable.

Also, gamers are still satisfied with sprites (see many popular IOS/Android games) and modest-detail spaceships (see sins of a solar empire). There is a very profitable market segment that care more about the gameplay than artistry. There is certainly a market for visually overwhelming gaming, but that does not preclude people actually looking for a fun game to play.

Really, the only digital distribution industry that I think has their stuff *mostly* together is the recording industry. Legitimate DRM-free copies of music to actually *own* at reasonable pricing, ad-supported streaming. RIAA lawyers still go overboard in some cases, but the general business model has gotten pretty damn consumer friendly. Meanwhile ebooks, movies, and games are still dominated by DRM and hubris around pricing that interfeces with pricing for optimal revenue. ('if someone doesn't want to spend $60 to appreciate my work, they don't deserve to'). There are bright points (Frictional games DRM-free donloads, Baen e-books, don't know any movie examples), but in general I'm looking forward to a day these other industries mature like the music industry did.

Re:Failed business model.

[Rogerborg]

look at how much cash Avatar brought in, but then contrast that with John Carter

But one of those had a script so insultingly trite, cliched, superficial and full of plot holes that it practically induced aneurysms in anyone with half a brain, and the other was John Carter.

Re:Failed business model.

[alen]

BS

the marketing budgets of the big name games are two to three times the dev budget. its like any mature industry. advertising and marketing take the most money.

how much did that idiotic stunt cost EA to send ME3 copies into space?

Re:Failed business model.

[kyrio]

Let's just say those 100 developers are making $20/hour (I don't know how much they really get paid), and they all work for 40 hours every week for two years.

40*52*20*100*2=$8320000

How much money does this game, that has 100 developers and takes two years to code, make? When this game sells a few million copies at $80, what kind of profit will it have made?

Looks like developing a game is pretty inexpensive, after all.

Re:Failed business model.

[nedlohs]

The Blu-Ray of How to train your dragon isn't the only product made with that $165 million. There was also the cinema release, the sales of play rights to various cable/broadcast entities, the sales of streaming rights, and probably a few more I can't be bothered thinking of. Whereas a video game just has the video game - there's no cinema release, there's no selling broadcast rights to Fox.

When you gross $495 million at the box office the "film production costs" for the Blu-Ray release are effectively $-330 million if you want to compare it with a video game production cost and game sales.

But yes games are stupidly expensive and I'm amazed people actually buy them. Though that might be part of the reason for the current large supply of "indie" games which is a good thing (in my opinion anyway). Luckily PC games go down in price pretty quick, so people like me who play single player games can just wait for the inevitable "game of the year" with all the DLC bundled for half the price (and then buy that on sale itself).

Re:Failed business model.

[cryptizard]

Except that:
1) Developers and artists make more money than that
2) There are additional departments (marketing, testing, HR, accounting, etc) and costs (infrastructure, certification, publishing)
3) Games don't sell for $80
4) The developer only gets a fraction of the retail price
5) A game that sells a million copies is considered extremely successful

Re:Failed business model.

[Red Flayer]

For videogames you simply don't have that kind of market. So spending the same kind of money to make an AAA game that WILL NEVER EVER reach the same kind of audience as a blockbuster film is just PLAIN STUPID. It is for all intents and purposes economic suicide.

Except, of course, the blockbuster video games who have made bank for their publisher (GTA IV comes to mind, > $100 million in dev costs, > 22 million units sold).

You claim that COD and other AAA videogames don't change the equation, but I don't think you have a leg to stand on with that claim. The numbers don't lie -- blockbuster games with blockbuster budgets can make a ton of money.

Re:Failed business model.

[kyrio]

Development costs. 100 people working for 2 yeras isn't cheap.

You've gone on to list other things that aren't relevant in the least. He was saying that development is what costs a fortune, and it doesn't (even if you double their pay, and I know they don't get paid that much). Ignoring the small cost of development, if you look at how much money is made from a single game, all of the other costs still don't add up to a loss. Companies like EA wouldn't exist if they were losing money on every game. Small companies that sell only in the thousands of tens of thousands of units wouldn't be making games if they were only making losses on every game.

Corporate Math

[Arancaytar]

No, see? If used games were not resellable, those 17% would be paid in extra money that all gamers have an infinite amount of. It couldn't possibly result in a loss in sales due to reduced disposable income.

Re:Corporate Math

[petermgreen]

The game retailers (it's not just gamestation) are not going to buy a used game unless they think they can resell it at a profit.

So while some gamers may have had a little more money for new games as a result of selling a bagful of old games (something a gamer can clearly only do occasionally, otherwise they would run out of games to sell) other gamers must be spending money that could have been spent on new games on used games and afaict most of the money those gamers are spending on used games goes to the retailers, not to the people who trade in the bags of used games.

On the other hand used game sales are probablly the only reason specialist game retailers in town centers have remained viable for so long (though they seem to be struggling now at least here in the UK) and i'm not convinced losing them would be a good thing for the gaming industry.

Re:Corporate Math

[drinkypoo]

other gamers must be spending money that could have been spent on new games on used games

Could is not would. Some people maintain certain purchase price points on principle. Like, I don't believe in spending more than fifty bucks on a new game. Maybe that's unrealistic in the face of inflation, but it's still how I feel. Another is that most people won't spend more than $300 on a game console.

Re:Every single industry that sells tangible produ

[wild_quinine]

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.

Downloadable games should be cheaper

[Anonymous Coward]

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.

Re:Downloadable games should be cheaper

[Darkness404]

Cheaper and more accessible. What needs to happen is for there to be a truly global market for games, I always had hoped that digital distribution would help create that, but it hasn't. You need to be able to choose the region you want your game in when you digitally download because the versions aren't identical and it doesn't cost extra to ship. Want the Japanese version of the game on the Japanese release date? Download it! Want the European version with some added features/languages? Download it! Want the American version sold at Wal-Mart on disk? Download it! They also need to release back-libraries quickly. Had the Nintendo Wii (and 3DS) shipped with every first party NES/SNES/N64 game on the Virtual Console it would have been awesome for retro-gamers (again also, let us download games for other regions so there's a legal way to play the obscure SNES RPGs released only in Japan) but instead they release 1 or 2 games a week thus negating a lot of the possible benefits.

Re:Downloadable games should be cheaper

[VGPowerlord]

Would now be a bad time to point out that I got Arkham Asylum GOTY, Arkham City and all its DLC, and Gotham City Impostors and all its DLC all for $25 through Steam a few weeks ago?

Ban libraries....

[JaJ_D]

...we cannot have people reading copyrighted material for free!

Seriously where is this sort of BS going to stop?

Re:Ban libraries....

[Anonymous Coward]

Ban libraries...we cannot have people reading copyrighted material for free!

Libraries are not free. They are, at best, pre-paid by local taxes.

Seriously where is this sort of BS going to stop?

You could start by not saying that public libraries are free.

Re:Ban libraries....

[speculatrix]

mod parent up!

Actually, here in the UK it's been worked out that it would be cheaper to close all the libraries and give all active library users a bunch of amazon vouchers and a kindle.

Re:Ban libraries....

[Anonymous Coward]

In my town in the US, our library has already started doing something similar to that. You can check out ebooks from the library through thier website. Once you check out the book, it takes you to amazon.com where you download it to your kindle for 14 days. Love it!

Re:Ban libraries....

[Trepidity]

Well yes, and GameStop is not free either, nor are their used game sales. The question is whether each additional re-user should make a new payment to the original copyright holder, which they typically don't at either used [book|game] stores or at libraries.

Re:Ban libraries....

[Shagg]

You say that in jest, but that's exactly what Publishers are trying to do.

Re:Ban libraries....

[Krishnoid]

Actually, here in the UK it's been worked out that it would be cheaper to close all the libraries

Which is what this guy was complaining about.

Re:Every single industry that sells tangible produ

[Artraze]

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, though your, say, lawn mower will probably be all gunked up with grass, rusting a bit and have some wear on the engine.

Of course, we all know this is pretty bunk. Game disks get scratched fairly easily, or the booklets/cases get lost and there are plenty of physical goods that keep their value as. Computer are such a thing: aside from a possible aging hard disk, they pretty much run just as well as when they were new. Still, there's only very limited used computer market. Why? Simple: New computers offer something more than used computers; usually they're faster and/or draw less power. Intel spends their time making better chips and exploring new markets, rather than complaining about how unfair it is that people trade used computers or don't every one released. Game companies should do the same. Offer something worth buying and people will buy it. Don't shovel out a new revision of the same old crap and complain when people are content to swap the old version and skip the new one.

Re:Every single industry that sells tangible produ

[arth1]

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.

Who is this a problem for?

[Alkonaut]

No-resale, DRM, always-on etc. is fine by me. I license something, I don't buy it. I don't expect to be able to transfer my license to anyone and I don't even expect to be able to play the game myself in a few years. So a game for me is 1-2 years of entertainment, without resale. If the price of a game feels to steep for what I'll get, I'll just NOT buy it. If it turns out I can resale in a few years from now, or that the game will be open sourced or DRM/always-on removed, then that is a BONUS, and something I didn't expect when I bought it.

As long as the seller is upfront with what I'm paying for, I can choose to not buy it. The unforgivable failures on game producers behalf is when they have DRM servers not working, or *hidden* caveats such as no-resale licenses, always-on requirements and so on. As long as I can make an informed decision I'm happy.

Re:Who is this a problem for?

[omnichad]

It's a problem for me. I still play Myst now and then (released in 1993 - that's 19 years ago), I love the original Sonic The Hedgehog, and I own a Wii and 3DS. I want a good value for my money, and I don't buy games I won't want to replay in 10-15 years when it's new again to me. I just opened a Steam account 2 weeks ago because I could get World of Goo for $2.50. I was holding out for a physical CD, but the price never came close. I loved the game Machinarium, but ordered it from the UK to get it on CD-ROM, because I don't want to lose it in the future.

I still buy most of my music as CD, and the rest as DRM-free. DVD's and Blu-Rays that are ripped, since there will always be a way to access it.

Re:Who is this a problem for?

[Alkonaut]

I think you represent a tiny minority of computer game buyers. As such, studios adapting to your needs probably aren't doing it for business reasons.

In 1993 you bought a physical item when you bought the game. Today you buy (license) the experience of playing the game. For a while at least. In 5 years I don't think you will be able to find major game titles on physical media. If you don't pay for DLC you aren't an attractive customer anyway, so DVD/bd users just risk being people without Internet connections and their credit cards registered at purchase (I.e. bad customers).

There will always be indie games which have none of this of course. I'm no talking 90% of the games bu 90% of the dollars, which is what is relevant really.

Re:Who is this a problem for?

[omnichad]

You certainly did ask who. I was happy to tell you. I wouldn't say it's a tiny minority that would prefer this. But a small minority that refuses to accept the change. Most others would prefer another way, but will comply just to get their fix. If I buy a dl game for Wii and my Wii breaks, I have to re-buy it for my new Wii. That's broken. I know not all DRM systems are like this, but it's a prime example of the distrust that I have for any DRM-based system to be available in perpetuity.

Also, forgetting the individual consumer side, this means that our ability as a society to archive our culture is about to disappear.

Re:Every single industry that sells tangible produ

[dkleinsc]

More to the point, anyone trying to claim a portion of the proceeds from every resale is just engaging in rent-seeking. You sold it, it's not yours anymore, and you should have no say in what they do with it after.

They sit around and take up space...

[jacknifetoaswan]

All my games sit around for about four years, until my dad finally upgrades to the previous generation console. Seriously, he finally bought himself a PS2 about three years ago, so he got all my old games, but really all he'll play is Tetris, MLB Baseball, and a couple other randoms.

Re:They sit around and take up space...

[cheros]

Junior, don't embarras me in front of my office colleagues or I'll put a comment on your Facebook thingy about what you did with fish fingers. Dad. :)

Re:Every single industry that sells tangible produ

[gutnor]

Suck it the hell up.

That is indeed a question of principle. Lots of consumer regulation are not (should not be) thought with the business in mind, but with the customer in mind. You cannot sell dangerous product, make false advertisement, lie in the ingredient list, and ... you cannot profit from your product resale. There is no point arguing if this is good for business or not, that is beside the point.

Of course, we may open the discussion if first sale doctrine is still actually relevant, but the profit margin of game studio and there relatively insignificant impact on economy compared to cars and house market and nobody seem to complain about those ones.

Wait, What?

[MacGyver2210]

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.

Is GameStop now the only place that sells games in the world? Losing 17% of GameStop sales is not equal to losing 17% of overall sales. Also, GameStop has this nasty habit(which I have seen countless times myself) of taking pristine used games and selling them as new. They often only cut ~$1 to $5 off a recent used game's price, which is ridiculous for a $60 game. If someone already had that game, and used the crap out of it, it is no longer worth $58. They already paid the premium to the distributor and the developer, so that becomes pure profit that goes right into their corporate pockets.

There's also the issues of $60 for a disc-only game without manual or proper case, and totally chewed discs that they won't accept returns on, but will instead try to make you pay the difference for a new copy. They are slimy as hell, regardless of why people don't like them.

Re:Wait, What?

[Rogerborg]

I say! This is an outrage! These bits have been... used! The 1s have gone flaccid.

If you don't like seeing GameStop's nasty habit "countless times", perhaps you should stop shopping there?

Re:Wait, What?

[nedlohs]

If someone already had that game, and used the crap out of it, it is no longer worth $58.

If someone will pay $58 for it (without being deceived about what it is) then clearly it is in fact worth $58.

precedent

[slashmydots]

They know damn well that trade ins fund new games. What they really want is a cut. Well, guess what. Gamestop makes money off used games so that's a huge "NO" from them and if they pursue legal means, well, that's a dead end. Autodesk (makers of AutoCAD) attempted to stop everyone from reselling their software after its initial purchase and completely and utterly lost that court case. They must have thought they were some sort of magical exemption from a free market economy.

a good car analogy

[speculatrix]

Most people who buy new cars do so when trading in their old one.

Imagine if people couldn't trade in their old car and had to keep it forever or have it scrapped/recycled?

Or, imagine that if they sold the car, half the features on the car stopped working.. say, because the radio required a non-transferable licence key which expired when sold, so requiring the new owner to buy their own.

Depreciation of used cars would be even worse than it is now, and the reduced sale price of used cars would fall and people would be hold onto them longer. New car sales would also fall significantly in response, and either manufacturers or dealers would reduce their prices to try and boost sales, or simply that there would be a big shake-down and manufacturers and dealers would go out of business to allow the survivors to maintain volume and margins.

In the meantime, "piracy" would increase as people found work-arounds to renable or retrofit features to their cars to add and restore features "stolen" by official dealer network. There would be a boost in jobs for people to repair or maintain older cars, and cost of spares would rise, and thus growth in third party components, and a backlash from manufacturers trying to copyright, patent or trademark spares to prevent that loss of revenue to unauthorised parts manufacturers.

Re:a good car analogy

[Rogerborg]

Analogy fails because each car after the first one costs the manufacturer a significant proportion of its sticker price to make. A game costs about $1, depending on how fancy the packaging is.

Curiously, that doesn't invalidate your point, it strengthens it.

Re:Don't run on Windows7

[speculatrix]

so, basically, your not part of the demographic discussed in this article and so irrelevant, other than having spent a small amount on some games.

Everyone is a tad contemptible...

[Junta]

Game publishers price in a way that pretty much demands a secondary market. The path to make used sales irrelevant is easy: lower prices so there isn't appreciable profit to be had by trying to facilitate a used market. People don't wan't to pay $60 on a game they'll, on average, maybe play for a week before being done with it. This is the most effective strategy that can possible be done.

On gamestop's end, the delta between the money they give for someone trading in and the price they put on it is huge. That delta is likely the bit that the game industry finds problematic. Percentage wise, it's far more severe than other used markets get away with (a used car sees maybe 15-40% markup between trade-in and resale, gamestop is more on the order of 100-300% from what I understand).

If publishers decreased their price just enough and not too much, they'll be able to get as much, if not more, overall revenue in the gaming industry without leaving room for a secondary market. If revenue is flat compared to the current circumstances, at least Gamestop's markup would be going to publishers/developers instead of Gamestop.

Incidently, if they *did* succeed in eliminating the secondary market without taking steps to adjust pricing, revenue would take a potentially sharp dip. It might be tempting to think the money spent would be constant, that people would just buy one new $60 game instead of 3 used $20 games. However, people tend to get more careless with their spending when spending in small chunks, so they may be more rulectant to even buy one $60 title than five $20 titles spread out over a bit of time.

Re:Everyone is a tad contemptible...

[tompaulco]

Game publishers price in a way that pretty much demands a secondary market. The path to make used sales irrelevant is easy: lower prices so there isn't appreciable profit to be had by trying to facilitate a used market. People don't wan't to pay $60 on a game they'll, on average, maybe play for a week before being done with it. This is the most effective strategy that can possible be done.
I guess the game companies are pandering to people like me, who buy a game with the intent to play it until they have finished it, found all the easter eggs and gotten 100% on all the subgames and side quests. I got Skyrim and Final Fantasy XIII-2 for Christmas and I have not even opened FF yet. I have over 200 hours into Skyrim and I am not done yet. That's about 30 cents per hour of entertainment.
Now I understand that there are people who just want to ooh and ah at the eye candy for a couple of hours, download some cheats to get through the storyline in record time and then move on to the next game. perhaps game companies should shove out some low cost shiny drivel for $10 to appease that group.

Re:Depreciation is the real issue

[biodata]

When something is 'new' the publishers spend a lot of money advertising it, so more people want it, so they charge more. Once they stop advertising, noone wants it so it gets a lot cheaper. This is the way these weird content markets work (music, film, games, books). Due to the advertising, and people's 'shiny shiny' mentality, some people are willing to pay more for something when it is new. I don't understand it myself, and only buy old things, recycled things, and 'used' content. The content industries try to argue that if I wasn't allowed to buy used things I would buy more new ones, but this is just not true.

Re:Every single industry that sells tangible produ

[roman_mir]

Every single industry that sells tangible products

- yeah, but in some cases it's not the industry that prevents tangible products from being resold. How is that secondary market for used condoms doing?

Re:Every single industry that sells tangible produ

[TFAFalcon]

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.

Another problem waiting for you..

[cheros]

One I discovered with very old games: max rotation speed.

If the game is *really* old, it may be on a CD that was designed to spin at maybe 8x speed. No prizes for guess what happens when that gets spun up to 48x, but it's very spectacular and the shrapnel most likely nukes the optics in the drive.

Hmm, that's a game in itself :).

Next up: recycling game CDs by using them as clay pigeons..

Re:Another problem waiting for you..

[cheros]

I'm old enough to recall the introduction of CDs as data carriers, when you needed a soundblaster card to interface instead of jacking it simply into an IDE chain.

In addition, I never have treated CDs as as indestructible as they were originally labelled, I have an engineering background and care of the devices I work with is thus second nature. Yet, I have seen three CDs from those days turn into schrapnel (or heard, to be accurate :) ) - 3 separate occasions, 3 separate drives, 3 separate sets of circumstances with only one common factor: the age of the CDs.

And that they were child games - maybe the content was just too much for the material :)

Re:Every single industry that sells tangible produ

[mwvdlee]

Individual companies perhaps but not an entire business (as in "market") as a whole. If there is sufficient demand, there is a viable business model.
It might not be the business model that some companies want, but that just means they misjudge reality.
Even buggy-whips are still being made.

Used Games Helping Market

[lunatic1969]

I don't think used games are killing the market. I think they're helping it. I'm sure I'm not the only one on the planet that has paid $ 60 or more for a game only to find out it's absolute crap. If it wasn't for used games or Gamefly I wouldn't buy any games at all.

You are all looking at it backwards

[rjejr]

The gaming industry doesn't care if YOU sell or trade in your used game. That's First Doctrine and that is correct. Yard sale, eBay, Craig's list, it's yours, do with it what you want. But Gamestop isn't just selling it's used games, it's making money as a middleman and that is what bothers the industry, their entire business model is making tons of money off of selling used games FOR A PROFIT. When you sell your used game, you are almost always selling it for less than you paid for it, but when Gamestop sells a game they are selling it for more than they paid for it. That's the problem. Gamestop is MAKING money, not losing money like you and I do when we sell a used game. The industry feels Gamestop is getting rich off of their hard work. Which they are. So they have a point.

Re:Every single industry that sells tangible produ

[dywolf]

Game Depreciation: graphics, AI, usability (drivers, OS, hardware reqruiements), ease of use features not implemented that now taken for granted.

Please remind me...

[mwvdlee]

What is stopping game publishers from buying back and reselling the second hand games themselves?

Re:One-sided story

[Rogerborg]

Your argument is that it's more ethical to sell a used Ford than a used Honda, because the Ford will fall apart first and then you have to buy another one?

Or did you perhaps not think that one through?

I keep them

[drxenos]

I still have every game I've ever purchased. The first one from 1978.

Dear Games Industry accountants

[Rogerborg]

If people would rather pay $50 for Final Ghost Warfare Ball 2011 than $60 for Final Ghost Warfare Ball 2012, then maybe you should write some original games once in a while instead of serving up re-heated leftovers as haute cuisine.

Re:Don't run on Windows7

[prezkennedy.org]

Cool story bro.

I got this gym pass for like $40 a month*. Except I don't like to go to the gym, but I said what the heck... I'll try it anyways. So I never ended up using it, but I can still arm wrestle the best and win. Like this one time I tied with my ex-Army friend. He's one tough sonofa...

Also I ride a bike sometimes, it's fun. I might get my own when I move, not sure yet. Anyways so getting back to it I guess I wasn't the target audience for the gym**?

* I didn't really get a pass.
** What does this have to do with anything?

The graveyard of used games.

[140Mandak262Jamuna]

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.

Re:Every single industry that sells tangible produ

[ryanmc1]

Games,movies,music,etc are not sold, they are licensed, and only to the original purchaser. So it would make sense for the license to not include resale rights, or to require that each subsequent purchaser also license the content from the producer of said content.

The cheese has moved

[pac0rro]

Perhaps we are seeing a change in the business model towards pre-purchasing that open the field with a lot of possibilities and enhancements. The traditional market won't dissapear but the cheese has moved and it hurts to some companies and distributors.

Thus, projects that in the past would never see the light (like DayOne) now can get a niche of followers and collaborators.

It makes new sales possible

[captainstormy]

I don't know about most people here, but to me and my dozen or so gamer friends trade ins are important. Don't get me wrong, I'd still play games and buy new games if it weren't possible to get trade in value for my old games. But it would be a whole lot less. Without trade ins I would probably only buy the few games a year that I actually want. I like games like Skyrim (which you could easily play for 2 years alone) or RPGs that take hundreds of hours. To me, those are worth 60-70 bucks because I get so much time out of them. What I wouldn't do, is get games that I don't particularly care about just to play with my friends. For example. I've already pre-ordered and paid off Border Lands 2. I wasn't a big fan of the first game, but my friends were and I like playing with them. So since I can trade in a few games and it only cost me around 30-35 out of pocket I don't mind spending that to play with them. However, if I had to buy it fully out of pocket, I wouldn't. I used to horde my games and never trade them in. Then I moved, and realized I had several dozen PS2 games (and no working PS2). Traded them in for more than 300 bucks in store credit at gamestop. I used all of that for new 360 games. I know it isn't the same as me buying it out of pocket, but game stop still had to buy that new copy to be able to sell it to me, so it basically is. The studio got paid either way. Yea, gamestop probably sold those for well more than twice that, which is what the studios are really mad about. But the fact remains that they wouldn't get nearly as many sales without trade ins.

Diffrence Between Video Games and Cars

[mastershake82]

I see a lot of comments here comparing the profits of video games to cars or TVs or other physical utilitarian devices.

The main difference, in my opinion, is that in the first year of owning a car or TV, only the first owner (or first owner's family) can get value from it. In the first year of life of a game disc, 12 people can get value from that one disc. And the value of the game disc is the same and never degrades or needs maintenance.

I don't think you'll see Bungie, Epic, or Infinity Ward complaining about this. They've figured it out... you sell people the game and give them a great multiplayer mode (or some other reason) to hang onto it, and they will. Used copies will be few and far between.

The people who are really suffering are those that make truly fantastic single player games. Prince of Persia comes to mind... it was great, I thoroughly enjoyed it. All 20 hours of it... and on my schedule, that's 5 days of having the game to do 100% of everything there is to do. So I rent it. I actually rent all games that have no multiplayer aspect. The only games I purchase are the ones I can see myself playing online still, 6 months down the line. You might say make the games longer, which is an option, but I personally don't WANT to invest more than 20 hours into any single player experience, and to be honest, when it is longer, like 100+ hours for a Final Fantasy game, you spend most of that time not having fun, just trying to level up to do everything.

This applies to DVDs and to a lesser extend music as well. One DVD can easily fully serve a group of 20 people in one week if they pass it around and watch it in groups.

I'll leave you with this... I think more than the disc, game companies, movie companies, etc are selling you the experience. The experience of playing through the game or the experience of watching the movie. And I believe they should be compensated for each experience they provide. I do think that $60 is a bit much for a video game, but I think it's to compensate for rentals and used game sales. Once everything goes digital, we will see a shift. Let's say that for every 1 copy of a new game that is bought, 2 people probably play that disc, on average, could be more or less, not sure. So $60 provides 2 play experiences. The publisher sees approx $30 per experience in this model, but assuming the first copy was $60 and the used copy was $55. That's $115 spent, and Gamestop probably paid the original owner about $25 for it, so they paid $35 for the experience. If the second owner sells it back very quickly for $25, then he would have paid only $30, bringing this in line with the above of $30 per experience. So $65 spent total for two plays, or $32.5 per experience. If the publishers had complete control over this, the players could have each spent less money for the same amount of, or more (because they get to keep the game), game.

However, it may be be a utopian thought to think the publishers would pass these savings onto us completely, I like to dream.

PIF'd

[jplindy]

What happens to my used games? The ones that are any good get passed along to anybody that wants them if I'm not still playing them. The ones that are not so hot hit the dumpster.

Honestly now

[Runefox]

Just how much value does trading used games at Gamestop have over other avenues? Gamestop's entire business model relies on the trade of used games at rock-bottom prices so that they can then sell them at about a 500% (or higher) profit. Of course they sit on old stock for a while, but even at their fire-sale pricing for really ancient stuff they'd typically be breaking even.

The biggest problem is not that Gamestop offers the ability to trade used games for (credit towards) new games; The problem is that Gamestop offers incentives to trade new releases back as soon as possible, and then - crucially - turns around and immediately offers them for sale while undercutting the new releases, which does indeed hurt developers. While Halo 3 did phenomenally well when it launched, I personally saw many used copies available at a local EB Games on the shelf right next to the new copies on launch day. This is like making a home release of a movie available while it's still in theatrical release - It undercuts profits at a critical time.

I've said it before, but what needs to happen is to regulate when used copies are available on store shelves. Used games in themselves aren't evil, nor is the ability to trade back to the store early on. However, the way Gamestop and similar companies operate by making used copies available for sale immediately and advertising them alongside new (especially considering that a used game is, in theory, no different than a new game at this early stage) is the major driving force behind anti-used game tactics that publishers and developers are beginning to make use of.

If Gamestop wants its business model to continue without alienating developers like it has been, and without having to fight anti-used tactics like have been deployed recently, they need to step up to the plate and offer some kind of compromise on street dates where the "premiere" of a game is off-limits for used sale. Otherwise, the push for single-use digital distribution and locked-down hard-copies will only continue at an ever-increasing pace.

Re:Every single industry that sells tangible produ

[s0nicfreak]

Except with games, they are not selling the tangible product; they are selling a license to use the software, a copy of which just happens to be contained on a tangible product.

Who cares what happens

[thetoadwarrior]

We buy the games and it's our right sell them. The game industry should quit being so damn greedy. If used game sales genuinely hurt them then they're living beyond their means. That's their problem not ours.

Re:Every single industry that sells tangible produ

[s0nicfreak]

That only applies to companies that make/publish only 1 series. For the majority of game companies, which make/publish multiple series, it is in their best interest to get you playing another game in a couple of weeks rather than sticking with 1 game for a year until the sequel comes out.

Re:Every single industry that sells tangible produ

[Githaron]

Game maker should be thinking about ways to keep players playing the games they buy, rather then preventing them from selling them.

That would also have the side effect of making games actually worth $60 or more. If I think I am going to get a lot of playtime out of a game, I am willing to pay proportionally more for it.

Reasoning isn't quite there

[Kimomaru]

In the first place, Gamestop games are generally overpriced so I don't feel like they're doing anyone a favor with the in-store credit situation. Take, for instance, practically any new release; too often I can find a better deal on a brand new game just on eBay (especially if the title is super-eagerly anticipated). Second, my understanding (although I may need to be corrected here) is that game trade-ins are treated differently in terms of taxation than straightup purchases (as in not taxed at all). So, Gamestop can trade a game in over and over and over again at levels that are great for them but remarkably low for the consumer so that the consumer can buy games where I can get a better deal anywhere else. So, no I don't buy his reasoning. Digital distribution can't get hear fast enough as far as I'm concerned. Steam forever, Gamestop never.

Re:Every single industry that sells tangible produ

[ultranova]

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, though your, say, lawn mower will probably be all gunked up with grass, rusting a bit and have some wear on the engine.

And the counter argument to that is: so?

Industries exist to satisfy needs. They are means to an end, not ends by themselves. Trying to artificially drive up demand once natural demand has been satisfied is our goold old friend the Broken Window Fallacy.

Game companies should do the same. Offer something worth buying and people will buy it.

You're making a mistake here. You're accepting the unstated assumption that game companies existing has positive value by itself, and are trying to figure out ways for them to continue doing so. It is important to reject this assumption, because if society survives the looming energy crisis the accelerating development of technology will make more and more products basically free - just remember the article about an automated 3D printer a few days back, and think what happens once we can print low-tolerance spare parts (or even effectively download a car, to paraphrase a tired cliche). We don't want post-scarcity held back by artificial scarcity, but there are plenty of people who do, so it's important to clarify these concepts - specifically that an industry collapsing because its product became worthless due to its abundance is a good thing.

Re:Every single industry that sells tangible produ

[Soluzar]

If you read the sections of the US Code which contain the first sale doctrine, you'd notice that it was actually written precisely with this in mind. At least such is my interpretation of the sections.

http://www.law.cornell.edu/uscode/text/17/106

http://www.law.cornell.edu/uscode/text/17/109

I'd be curious to know if you can see the interpretation that I took from reading those sections. I'm not a lawyer, nor an American, but when I was looking to find what the American legal situation was like, that's what I found.

Steps

[Frankie70]

From that point on I have bought and sold all my games on half.com. The games there are vastly cheaper and on re-sale you usually get 50%-75% return on investment

half.com
1) Buy used game at 50-75% of new price
2) resell them vastly cheaper than a new one.
3).....
4) Profit

What's the missing step?

Re:Every single industry that sells tangible produ

[jank1887]

Pretty sure the GP meant businesses == companies. Other businesses have survived, some have not. hence, the buggy-whip market had to substantially adjust expectations when the automobile came around.

Re:Giveaway

[couchslug]

"And my old Civilization, original box, 4 3.5" dd floppies and a manual, I'm not giving up on that. Ever! Got that sometime in the early 90s and even this year I have played a couple of games, it's still that awesome."

Do yourself a favor and image those floppies (dd, Winimage, whatever) so when they fail you can easily write a new set.

Re:Every single industry that sells tangible produ

[Dusty101]

Except that in the event of damage, you've got no chance of getting a free replacement disc containing the material that you supposedly already "licensed". You are expected to re-buy the disc, so you have, in fact, been sold a physical item.

This is where the argument falls down: the companies are trying to have their cake & eat it.

Re:Agreed

[humanrev]

Long live steam.

You better hope so, otherwise all those games will cease to function should Valve go out of business.

Long life GOG.com.

Re:Every single industry that sells tangible produ

[caitsith01]

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.

Of course they do.

Have you ever followed the price of a new release game? They start at, say, $70, then drop to $50, then $30ish, then end up in a "value" version for $15-20, then the value version drops to as low as $10 or so. You can see this in both physical releases and electronically distributed versions.

They don't depreciate in the sense that a particular copy doesn't rust or get "mileage" like a car, but their value is linked almost entirely to their novelty, so they actually depreciate more predictably than a car.

Re:Every single industry that sells tangible produ

[RazorSharp]

First sale. It's not just a good idea, it's the law.

Unless the product has the technological capability to force you to agree that you didn't actually buy it before you can use it.

"By turning to page two you are under contratual obligation, per the terms of usage for this book which you've agreed to upon its purchase, to burn it upon completion. Failure to do so can result in prosecution under federal law and/or a fine up to $100,000. Any reselling, copying, summarization, or dissection of its contents without the express consent of Harper Collins is strictly prohibited. Please turn to page two to begin enjoying Tom Sawyer."

Do you even read your own drivel

[SmallFurryCreature]

Gamestop is the equivalent to the Used Car Dealer. How many Used Car Dealers put the New and the Used cars right next to each other with the used cars in the exact same minty perfect new condition with zero difference except a tiny reduction in price?

Re:Do you even read your own drivel

[kyrio]

Ignoring that a 3-6 year old car can easily look like it's brand new, I'm not sure where you're getting your used games that are in mint condition. Last I checked, people don't care about taking care of their belongings any longer - if it breaks, throw it away and get a new one.

Re:Agreed

[hairyfeet]

Uhhh.....never heard of TPB? Or Gamecopyworld? they have Steam cracks ya know, no different than cracks for any other retail games. I've never understood this argument as it wouldn't take me one minute more to crack any Steam game i have than it would any retail game except i wouldn't also be cleaning out a Starfuck or SecuROM infection along with it

While GOG is fine if all you want is old (the vast majority of their catalog is over a decade old, hence the old in good old games) there are plenty of us that like to play much newer games, like Deus Ex HR, Batman AC, Saints Row The Third, etc and with Steam we can get those games cheaply and without hassle and often without Starfucking.

So I don't see what the problem with Steam is. if Ubisoft pulls the plug you'll need to crack, same with EA, same with Steam, same with every major publisher. A crack is a crack is a crack friend.

Steam etc

[phorm]

Well, in the case of Steam etc, there's value there that does contradict this. In fact, most people I know haven't bought a PC "disc" in a long time (consoles exempt).

No disc to lose or get scratched. No CD-key on the jewel-case/manual to misplace or wreck. Reinstall on any of your PC's anytime. The downside being you can only play one game (online) for a given account at a time.

Re:Agreed

[humanrev]

Should I really be required to go to the trouble of cracking games I bought legitimately in order to play them should Steam disappear? Are you 100% certain that every single game, no matter how obscure, has a crack? Are you certain cracks exist for the latest version of a game available on Steam and not some older version that no longer exists? Are you certain cracks will exist for games should Steam on Linux become a success?

As for old games, old seems to be a dirty word for some reason. Stick to GOG for example and you've have way more games than time available, just like Steam. If you've having fun either way, so what? New doesn't automatically equal better. Maybe I just got jaded with modern developers/publishers, but it makes things easier for me I guess.

Re:Agreed

[hairyfeet]

I hate to break the news to ya sparky, but if you are on modern equipment that runs X86 and buy some game off Amazon from 2005 in a box you damned well better be ready to crack, as the older Starfuck will try to jam 32bit kernel hooks into a 64bit OS and royally fuck your system up. And the uninstaller on their site DOES NOT WORK ON X64 when it comes to older versions so you are fucked.

As for if there is a crack? yep, not a problem. Go to Gamecopyworld and see for yourself, cracks up the ass, even for the betas. Cracks upon cracks upon cracks, and any they get a C&D for they just link to megagame which is in .ru so they can host what GCW can't no problemo.

Finally most old games? they suuuuuck big sweaty chocolate balls. The graphics are ass, sound weak, AI crud, for every decent game on GOG there are 20 that suck big piles of shit. and old games that sucked in 2003? Suck in 2012.

Re:Agreed

[humanrev]

Then I don't buy games with Starforce, easy. We have a glutton of PC gamers out there that one CAN be fussy about sifting through the DRM bullshit in a legal fashion and still have fun with more games than they'll ever have time to play/finish. As for the older games, graphics don't make the game and you know this surely. If it did, no-one would play classics like the original Deus Ex or even Unreal Tournament 2004 in this day and age. Graphics can help a game yes, but they aren't enough to detract if the game is still great fun.

I thought you were smarter than this. I like you hairyfeet because you do seem to post genuinely insightful posts at time, but you seem to be going out of your way to denigrate anyone who chooses not to deal with DRM and who refuses to join the circlejerk that is Valve and Steam.

Re:Agreed

[hairyfeet]

Dude i buy from GOG okay? But lets not kid ourselves, they have MAYBE 20% good games and the rest? Deep fried tampons. Yes graphics don't make the game, got the original Deus Ex along with the sequels and all the DLC for $15 on the Steam sale so i know its good.

But you could buy every decent game GOG has and still have change left of $1k dude. Just because something is old don't make it good, a shitty game is a shitty game. And whether you want to accept it or not games have gotten a LOT better since Deus Ex and if you refuse to buy anything but DRM free frankly you might as well stick with Plants VS Zombies and other "casual" games because all the good shit? you ain't getting it. Bioshock? Excellent (GFWL), HL series? Excellent (Steam), Saints Row series? Incredibly fun (Steam), Just Cause II one of the best sandboxes EVAR, FEAR 1&2 (the third is gears of Fear wallkisser edition but since I paid $8 on steam who cares) the Max Paynes...

Hell I could go on all day, but why bother. If you want to be a zealot about something? Be a zealot, knock yourself out dude. You're not hurting me, who has more games than I could ever play and can jump into a game with my kids just by popping up a Steam chat, you're sure as hell aren't hurting the game publishers a damned bit, who are counting their ever larger piles of money, and old Gabe at Valve isn't gonna shed any tears if you don't want to play anything but a handful of good games and a bunch of old crap.

Hell if it makes you feel better, why not look at it as a fucking rental, huh? At the insanely dirt cheap prices you get on Steam frankly you couldn't rent the games on the X360 and you can play them as long as you want. I have not paid more than $20 for a game in the 4 years I've been on Steam, AAMOF the most I paid for a single game was $12 for Just Cause II and that was only because it came with all the DLC. At those prices if Valve goes tits up (highly unlikely) I think I can afford the 20 minutes it'd take to download the fricking cracks, don't you?

And until the day that doom scenario that will never happen happens i get games cheaper than Amazon, bundles, free chat and matchmaking, no MP bullshit, i can gift a prezzie to my kids in less than 5 minutes, I'm getting a hell of a lot more from Valve than what Valve is taking from me, by a pretty large amount.

If you want to deny yourself fine dude, me i got a kick ass lotsa meat pizza, some ice cold tea to wash it down with, and over a dozen games i paid less than $30 for on the Steam sale i haven't even gotten around to playing yet and since I'm taking the day off tomorrow I'm gonna get some shuteye and spend Thursday racking me up some kills. Hell I may even fire up some TF Classic or TF2 and see if my youngest, who won $50 in a TF2 competition BTW, hell of a sniper, can teach this old dog some new tricks...peace.