Game Designer Defends Used Game Sales

[mindcycle]

At the outset, Johnson concedes that he agrees with the main argument against the used game trade: "the less money developers get from sales of their games, the harder it is for them to take risks further down the road, let alone stay in business."

Nevertheless, his first claim in defense of used games is that GameStop is integral to the games industry and should not be seen as separate from the industry's publishers and developers. "One has a hard time imagining how the overall games market would be healthier without a strong retail chain dedicated purely to gaming," argues Johnson.

Johnson's claims that used games are part of "market segmentation" found in more mature industries. "Consider the movie industry, which segments the market into full-price tickets, matinee tickets, pay-per-view, DVD rentals, and broadcast rights, each with a progressively lower price point per session. Used game sales are the primary method by which the retail games market is segmented."

"Keeping these price-sensitive consumers [such as youths]--who will often be tomorrow's full-price customers--in the retail system and away from piracy is a good thing all around," argues the designer.

Johnson, in closing his essay, touches on digital distribution, which is widely seen as the antidote to the used game trade. But, in his mind, it has one vital flaw that's easily fixed. "Game publishers need to take an important step for digital distribution to finally matter. Games purchased digitally need to cost less than their boxed, retail counterparts." Johnson says this price difference is vital precisely because users cannot resell games they've bought digitally.

Finally someone who gets it!

As publishers become more and more greedy, they start focusing solely on maximizing profits and often overlook the reality of things. Killing the used market will only provide more profit in theory. The reality may very well be a large blow to the industry as a whole. Without used games lots of people may drop gaming altogether or resort to piracy.

Read the whole article. http://www.shacknews.com/onearticle.x/55959

For those of you who didn't realize this was such an issue for publishers now, take a look at some of these articles.

http://www.shacknews.com/tag.x/used+games

 

[coloumb]

Originally posted by: mindcycle

Johnson, in closing his essay, touches on digital distribution, which is widely seen as the antidote to the used game trade. But, in his mind, it has one vital flaw that's easily fixed. "Game publishers need to take an important step for digital distribution to finally matter. Games purchased digitally need to cost less than their boxed, retail counterparts." Johnson says this price difference is vital precisely because users cannot resell games they've bought digitally.

Exactamundo!!! This [and the fact I can't resell the game] is why I won't buy games from STEAM - why should I pay the same price for the retail boxed version?

 

[ShawnD1]

Originally posted by: coloumb

Originally posted by: mindcycle

Johnson, in closing his essay, touches on digital distribution, which is widely seen as the antidote to the used game trade. But, in his mind, it has one vital flaw that's easily fixed. "Game publishers need to take an important step for digital distribution to finally matter. Games purchased digitally need to cost less than their boxed, retail counterparts." Johnson says this price difference is vital precisely because users cannot resell games they've bought digitally.

Exactamundo!!! This [and the fact I can't resell the game] is why I won't buy games from STEAM - why should I pay the same price for the retail boxed version?

Quite often the digital copy is more expensive than the box copy simply because digital copies never seem to go on sale. Places like Staples will put things on sale just to get rid of it if it hasn't been sold after a certain amount of time. Example: I bought Painkiller "triple dose" from Best Buy for $20. This box includes the original game, Battle out of Hell expansion, and Overdose expansion. If you try buying it on Steam, it's $10 for the first two then $20 for Overdose for a total of $30. The price on Amazon.ca is $19.

If you're down for buying old games, you can get killer deals on old stock. I saw some 2006 NBA game in Best Buy for $2. I'm not joking.

 

[lozina]

Game makers should also spend less resources on anti piracy measures and more time on a game even worth stealing. Pretty soon they are going to end up with games akin to massive indestructible vaults- which used 100% of the game's budget and so is left completely empty

 

[BD2003]

Something these companies seem to rarely consider, is that the trading in of used games contributes to the sale of new games.

Without the ability to resell the game, a lot of new games may not sell as well, since gamers would be less likely to take a chance or buy something with little replay value that they can't get back some of their money for.

Also, when a gamer trades in their game to gamestop, they get store credit, which often goes right into new games. So the sale of those used games are subsidizing the sale of new games, which might otherwise not be bought.

I've bought plenty of new games, and plenty of used games. The games I bought new I HAD to have, day one. The games I bought used I could wait for, and didnt care to spend $60 on them. If they weren't $15-30, I would *never* have bought them, I'd probably just play more COD4.

I might spend $20-40 on a digital copy of most retail games, but there's no way in hell I'm dropping $60 on a digital game. Absolutely no f-ing way. Gonna need something physical at that price.

 

[Newbian]

Originally posted by: ShawnD1

Originally posted by: coloumb

Originally posted by: mindcycle

Johnson, in closing his essay, touches on digital distribution, which is widely seen as the antidote to the used game trade. But, in his mind, it has one vital flaw that's easily fixed. "Game publishers need to take an important step for digital distribution to finally matter. Games purchased digitally need to cost less than their boxed, retail counterparts." Johnson says this price difference is vital precisely because users cannot resell games they've bought digitally.

Exactamundo!!! This [and the fact I can't resell the game] is why I won't buy games from STEAM - why should I pay the same price for the retail boxed version?

Quite often the digital copy is more expensive than the box copy simply because digital copies never seem to go on sale. Places like Staples will put things on sale just to get rid of it if it hasn't been sold after a certain amount of time. Example: I bought Painkiller "triple dose" from Best Buy for $20. This box includes the original game, Battle out of Hell expansion, and Overdose expansion. If you try buying it on Steam, it's $10 for the first two then $20 for Overdose for a total of $30. The price on Amazon.ca is $19.

If you're down for buying old games, you can get killer deals on old stock. I saw some 2006 NBA game in Best Buy for $2. I'm not joking.

I understand the sale part but when a game is released the digital version should be a bit cheaper then a box one since it's cheaper being online versus making the extra packaging and shipping.

 

[skace]

I'd rather have "piracy + full price" then "used + full price". In both scenarios, there is a group of buyers that the developer/producer gets absolutely nothing for. However, in 1 example the consumer still pays a shit ton (nearly full price) and in the other they pay nothing. I could argue a case for responsible piracy there but people would think I'd be batshit insane.

I will say this, I used to pirate a lot of stuff, now I pay for a lot. So if the argument is that people who pirate never "change sides" then it is completely false.

I believe Steam prices are priced similarly to retail products due to contractual agreements. If the developer wants to a producer to put their product on a shelf then they have to contractually agree it price it similarly on Steam otherwise they are wasting that producers money. Something like that. The point is for products that release only to Steam they can price them whatever the hell they want. There are a lot of small developers making money off of 10 and 20 dollar games right now.

 

[palad]

Lately I have become more convinced than ever that PC software DRM is being used primarily to kill off the second-hand games market, rather than its stated purpose of combating piracy. I think game publishers are smart enough to recognize that restrictive DRM is not affecting overall piracy rates, and yet they still persist in implementing it. The most obvious reason is that it keeps people like me from purchasing used PC games on Ebay or at local second-hand stores, by making the original distributor the only place to buy a working copy. It seems like it is their way of making an end-run around first-sale rights - they don't refuse to let the original purchaser resell the game, they just make it worthless to do so.

 

[mindcycle]

Originally posted by: skace
I believe Steam prices are priced similarly to retail products due to contractual agreements. If the developer wants to a producer to put their product on a shelf then they have to contractually agree it price it similarly on Steam otherwise they are wasting that producers money. Something like that. The point is for products that release only to Steam they can price them whatever the hell they want. There are a lot of small developers making money off of 10 and 20 dollar games right now.

They aren't wasting money by using steam, they are saving money by not having to ship game boxes to retailers or spend money on DVD production. They charge the same price because they can and people will still buy it. It's all about maximizing profits, nothing else. If they lower the price they might sell more digital copies, but it may take awhile to catch on. Until publishers stop being so greedy and actually do what's best for their customers and the industry as a whole, nothing is going to change.

 

[mindcycle]

Originally posted by: palad
Lately I have become more convinced than ever that PC software DRM is being used primarily to kill off the second-hand games market, rather than its stated purpose of combating piracy. I think game publishers are smart enough to recognize that restrictive DRM is not affecting overall piracy rates, and yet they still persist in implementing it. The most obvious reason is that it keeps people like me from purchasing used PC games on Ebay or at local second-hand stores, by making the original distributor the only place to buy a working copy. It seems like it is their way of making an end-run around first-sale rights - they don't refuse to let the original purchaser resell the game, they just make it worthless to do so.

Yes, exactly. Restrictive DRM does nothing to stop piracy, it's meant to stop the buyer from selling the game. Piracy is used as a scapegoat by publishers to justify using SecuROM and whatever other crap they end up putting on the disc. "Cause we have to protect our selves against the pirates.." yeah right.

Same thing with Steam. You pay full price for what's essentially a rental. I do like Steam as a concept, but until the prices reflect what you're actually paying for I refuse to buy anything there.

 

[BD2003]

Originally posted by: mindcycle

Originally posted by: skace
I believe Steam prices are priced similarly to retail products due to contractual agreements. If the developer wants to a producer to put their product on a shelf then they have to contractually agree it price it similarly on Steam otherwise they are wasting that producers money. Something like that. The point is for products that release only to Steam they can price them whatever the hell they want. There are a lot of small developers making money off of 10 and 20 dollar games right now.

They aren't wasting money by using steam, they are saving money by not having to ship game boxes to retailers or spend money on DVD production. They charge the same price because they can and people will still buy it. It's all about maximizing profits, nothing else. If they lower the price they might sell more digital copies, but it may take awhile to catch on. Until publishers stop being so greedy and actually do what's best for their customers and the industry as a whole, nothing is going to change.

Everything I've heard points to them wanting to charge less so they can make more sales, but gamestop and other large retailers blocking it. Shelf space is still more valuable than anything, and they put it very simply - price it the same or it doesnt go on our shelves. And publishers have far more to lose from retail than they have to gain from digital right now.

Its a very uneasy relationship between retailers and publishers, especially the resellers.

 

[Bateluer]

Originally posted by: BD2003

Originally posted by: mindcycle

Originally posted by: skace
I believe Steam prices are priced similarly to retail products due to contractual agreements. If the developer wants to a producer to put their product on a shelf then they have to contractually agree it price it similarly on Steam otherwise they are wasting that producers money. Something like that. The point is for products that release only to Steam they can price them whatever the hell they want. There are a lot of small developers making money off of 10 and 20 dollar games right now.

They aren't wasting money by using steam, they are saving money by not having to ship game boxes to retailers or spend money on DVD production. They charge the same price because they can and people will still buy it. It's all about maximizing profits, nothing else. If they lower the price they might sell more digital copies, but it may take awhile to catch on. Until publishers stop being so greedy and actually do what's best for their customers and the industry as a whole, nothing is going to change.

Everything I've heard points to them wanting to charge less so they can make more sales, but gamestop and other large retailers blocking it. Shelf space is still more valuable than anything, and they put it very simply - price it the same or it doesnt go on our shelves. And publishers have far more to lose from retail than they have to gain from digital right now.

Its a very uneasy relationship between retailers and publishers, especially the resellers.

This mentality will eventually be their own death, by slow starvation. More and more developers and publishers will move to digital distribution methods, even with US broad band sucking like it does. By forcing publishers to adhere to their rules, B&M stores will drive more and more clientele to the Internet.

And if it hasn't already been discussed, this applies to consoles as well. The Xbox, the PS, and the Ninentendo products all have ethernet connections and online stores. The Xbox and PS3 have internal hard drives. Both MS and Sony want to ditch the optical drive in their next gen consoles. Where do you think console game sales will be migrating over the next decade?

 

[BD2003]

Well, its their death either way. Its going digital whether they like it or not, but theyre trying to slow it down. Still, I'd wager there will be optical drives in the next console - its still too difficult for moms to gift digital games, and not everyone has broadband.

 

[TBSN]

I would buy used games, but all game stores now are really console game stores, with a tiny shelf of older PC games selling at full price. Therefore I buy things via steam, but I'm realizing that it isn't worth it. A lot of times there are games that aren't worth keeping, so I'd rather trade it in. Thats what I used to do with PS2 games. But where can you do that with PC games anymore?

 

[skace]

BD2003 summed it up and mindcycle misread what I said. However, even if digital distribution is locked in a battle with B&M stores right now, that doesn't mean digital distribution isn't a massive benefit. The largest benefit right now is that there are developers who cannot afford to utilize B&M stores that are able to release their stuff on Steam. Some people don't realize these 10/20 dollar games and the benefit they provide, but I think you are completely missing out. Steam will continue being a bastion for startup developers and small experimental games and I love it for that alone.

For major games, I'll buy it on Steam if it doesn't have any special packaging, but on collectors editions I'll buy the boxed version instead.

 

[mindcycle]

Originally posted by: skace
BD2003 summed it up and mindcycle misread what I said. However, even if digital distribution is locked in a battle with B&M stores right now, that doesn't mean digital distribution isn't a massive benefit. The largest benefit right now is that there are developers who cannot afford to utilize B&M stores that are able to release their stuff on Steam. Some people don't realize these 10/20 dollar games and the benefit they provide, but I think you are completely missing out. Steam will continue being a bastion for startup developers and small experimental games and I love it for that alone.

For major games, I'll buy it on Steam if it doesn't have any special packaging, but on collectors editions I'll buy the boxed version instead.

I think I did misread what you said. My apologies. It makes sense if they are under a contractual agreement with B&M stores, but that does need to change in order for digital downloads to become more standard and relevant. There is an advantage to buying from a B&M store, you get a box and a manual and other stuff if it's a collectors edition. So what they need to do is charge $50 for the boxed version and include all the "collectors" junk in that price. Then charge at least 20 or 30% less for the digital download version.. at least. That way you get a benefit for buying either way. These $70 and $80 collectors editions are ridiculous IMO. Plus, the cons of a digital download totally outweigh the pros because you can't sell the game. If I drop $50 in a store I might make half or a little less back if I decide to sell the game, but with a download I don't have that option at all. So why are they the same price?

 

[skace]

The developer/producer cannot factor in how much you can sell the game for, it's irrelevant to them. Let's say you buy the game for $50 and sell it for $40, that doesn't mean the game is only worth $10. The developer still needs to sell it at some price point to even make money and if they don't make money, it's not worth making the game. At digital distribution, the only money they can stand to save is the cost of putting that product on the shelf, whatever that cost is.

I do agree though, Valve needs to do boxed copy warehousing and have an option when you purchase the game to also get a boxed copy. I think that would be a benefit to a lot of people. If I could buy both boxed and digital-only products through Steam, they would basically take all my business.

 

[BD2003]

Originally posted by: skace
The developer/producer cannot factor in how much you can sell the game for, it's irrelevant to them. Let's say you buy the game for $50 and sell it for $40, that doesn't mean the game is only worth $10. The developer still needs to sell it at some price point to even make money and if they don't make money, it's not worth making the game. At digital distribution, the only money they can stand to save is the cost of putting that product on the shelf, whatever that cost is.

No, they cannot directly factor it in, but they ignore the resale value of their games at their peril.

If reselling were to go away, or digital distribution were to stay at artificially high prices, I believe there would be a massive consolidation in the gaming industry. A huge number of developers/publishers would go under, because the same overall volume of games are not going to be purchased.

Cause the truth is that publishers don't want to prevent reselling of ALL games, just *their games*. Everyone else's games being resold can actually benefit them.

If gamestop and ebay go down, EA is going to rule the industry.

 

[skace]

Games on PC are already cheaper than on the consoles. So I disagree with that. Plus there are tons of games on Steam in the 10-30 range. I do not see a big triple A title selling for 30 on Steam just because you can't resell it though. That's a pipe dream.

 

[BD2003]

Originally posted by: skace
Games on PC are already cheaper than on the consoles. So I disagree with that. Plus there are tons of games on Steam in the 10-30 range. I do not see a big triple A title selling for 30 on Steam just because you can't resell it though. That's a pipe dream.

Well, I'd think its far more of a pipe dream for pubs to imagine they can sell their games indefinitely for $50 digitally. That might fly for a short period of time on a hotly anticipated game, but market realities are going to kick in and if their game is $50 2 months later, no one is going to care, and it'll most likely be buried deep in the depths of the digital abyss.

The iPhone app store is a pretty impressive demonstration of what happens when digital distribution goes full scale - apps that would have been sold for $20+ dollars on windows mobile or palm are down to $1-2, and theyre seeing really heavy competition from free alternatives. Even games that debuted at a "high" price of $10 have slowly found their way down to $2.

If and when retail and their influence disappear, digital games are going to drop like a rock in price.

So I'm positive there always will be cheap games, and even AAA games will go down in price over time and probably start lower - the real question is who is going to be making the lions share of the money for cheap games, EA or Gamestop?

 

[SMOGZINN]

Originally posted by: BD2003
Well, I'd think its far more of a pipe dream for pubs to imagine they can sell their games indefinitely for $50 digitally. That might fly for a short period of time on a hotly anticipated game, but market realities are going to kick in and if their game is $50 2 months later, no one is going to care, and it'll most likely be buried deep in the depths of the digital abyss.

I think we are going to see a lot of changes in the videogame market in the next decade (which is the time frame we are talking about for market forces to affect things.)
I think that hardware technology is finally going to outpace videogame development. For the last decade we have seen videogames that always push the envelope of technology but we are hitting the edge of that, it is getting much harder to improve graphics on videogames but hardware is still increasing at a steady pace. I think in a few more years we will have stopped increasing resolution and rendered graphics will be getting better in very small jumps, physics engines and AI are much harder to improve, so we will see even lower end computers able to handle the newest games at pretty much max settings. This will open up the videogame market considerably allowing for larger audiences for PC games, which in turn will make it more profitable to sell those games at lower prices.
As for digital vs. B&M prices, I don?t think that we will see the B&M retail stranglehold on prices broken anytime in the next decade. Ya?ll have been talking about EB and Gamestop when who you should talk about is Wal-Mart. The exposure a game gets from Wal-Mart is critical to the success of a game from a business standpoint. The amount of advertising Wal-Mart does is monumental compared to what even large publishers like EA can afford. If you can?t get your game on Wal-Mart?s shelves you are already a failure. I have no numbers to back this up, but I would bet that Wal-Mart sells more copies of any given popular game (that is on their shelves) then EB, Gamestop, and Steam combined. That means that if economic pressures prevent selling digital copies of games on Steam for the same price as in Wal-Mart, they will stop selling digital copies, not lower the price and jeopardize their standing with Wal-Mart. I think it is far more likely that when that happens Wal-Mart will set up a Steam like service and sell the digital copies at a small discount themselves.

 

[mindcycle]

Originally posted by: SMOGZINN

I think we are going to see a lot of changes in the videogame market in the next decade (which is the time frame we are talking about for market forces to affect things.)
I think that hardware technology is finally going to outpace videogame development. For the last decade we have seen videogames that always push the envelope of technology but we are hitting the edge of that, it is getting much harder to improve graphics on videogames but hardware is still increasing at a steady pace. I think in a few more years we will have stopped increasing resolution and rendered graphics will be getting better in very small jumps, physics engines and AI are much harder to improve, so we will see even lower end computers able to handle the newest games at pretty much max settings. This will open up the videogame market considerably allowing for larger audiences for PC games, which in turn will make it more profitable to sell those games at lower prices.
As for digital vs. B&M prices, I don?t think that we will see the B&M retail stranglehold on prices broken anytime in the next decade. Ya?ll have been talking about EB and Gamestop when who you should talk about is Wal-Mart. The exposure a game gets from Wal-Mart is critical to the success of a game from a business standpoint. The amount of advertising Wal-Mart does is monumental compared to what even large publishers like EA can afford. If you can?t get your game on Wal-Mart?s shelves you are already a failure. I have no numbers to back this up, but I would bet that Wal-Mart sells more copies of any given popular game (that is on their shelves) then EB, Gamestop, and Steam combined. That means that if economic pressures prevent selling digital copies of games on Steam for the same price as in Wal-Mart, they will stop selling digital copies, not lower the price and jeopardize their standing with Wal-Mart. I think it is far more likely that when that happens Wal-Mart will set up a Steam like service and sell the digital copies at a small discount themselves.

That's a good point man. Even if you don't have a Gamestop or EB in your town, you almost definitely have a Walmart. I wonder what percentage of sales come from Walmart alone on any given release. For the bigger ones at least.

 

[BD2003]

Originally posted by: mindcycle

Originally posted by: SMOGZINN

I think we are going to see a lot of changes in the videogame market in the next decade (which is the time frame we are talking about for market forces to affect things.)
I think that hardware technology is finally going to outpace videogame development. For the last decade we have seen videogames that always push the envelope of technology but we are hitting the edge of that, it is getting much harder to improve graphics on videogames but hardware is still increasing at a steady pace. I think in a few more years we will have stopped increasing resolution and rendered graphics will be getting better in very small jumps, physics engines and AI are much harder to improve, so we will see even lower end computers able to handle the newest games at pretty much max settings. This will open up the videogame market considerably allowing for larger audiences for PC games, which in turn will make it more profitable to sell those games at lower prices.
As for digital vs. B&M prices, I don?t think that we will see the B&M retail stranglehold on prices broken anytime in the next decade. Ya?ll have been talking about EB and Gamestop when who you should talk about is Wal-Mart. The exposure a game gets from Wal-Mart is critical to the success of a game from a business standpoint. The amount of advertising Wal-Mart does is monumental compared to what even large publishers like EA can afford. If you can?t get your game on Wal-Mart?s shelves you are already a failure. I have no numbers to back this up, but I would bet that Wal-Mart sells more copies of any given popular game (that is on their shelves) then EB, Gamestop, and Steam combined. That means that if economic pressures prevent selling digital copies of games on Steam for the same price as in Wal-Mart, they will stop selling digital copies, not lower the price and jeopardize their standing with Wal-Mart. I think it is far more likely that when that happens Wal-Mart will set up a Steam like service and sell the digital copies at a small discount themselves.

That's a good point man. Even if you don't have a Gamestop or EB in your town, you almost definitely have a Walmart. I wonder what percentage of sales come from Walmart alone on any given release. For the bigger ones at least.

Last I heard, wal-mart is indeed a bigger seller of new games than gamestop or anywhere else, but wal-mart doesnt sell used games at all.

Right now, retail has all the sway, and they call the shots. There isnt a proper infrastructure out there to support full digital distribution of all games. I suspect that will change with the next round of consoles. When that happens, they dont necessarily get to call the shots anymore, whether its gamestop or walmart.

And walmart or gamestop couldnt set up a steam-like store even if they wanted to without the explicit permission of sony, MS and/or nintendo, since they'll essentially hold the keys to the fort.

Whats clear above all is that there is going to be a *lot* of competition for our dollars, and whenever that happens, things tend to turn out pretty well for the consumer.