Lionhead Studios: Used game sales on consoles a bigger problem than piracy for the PC

[KaOTiK]

No, Ross is correct. You can not assume that someone willing to buy a game for $25 is going to buy it for $60 as well. Price is a major factor in many people's decision to buy. Maybe the lesson console game publishers should take away from it is that if they put their games on sale more often and/or reduce the price over time, they'll get more new sales.

The problem is used games are priced $5, maybe $10 below new cost. People just buy the used to save a few bucks, but that amount isn't going to really sway many people that are going in to buy the game already.

That being said. There is one big big big plus for the used game market. Being able to find older games that you can't find new anymore. There are a lot of games that you miss or had no interest in at the time and years later want to play. If there was no used game market then it would be next to impossible to go back and play them unless they are rereleased.

 

[Macamus Prime]

Used car sales. Used book sales. Used movie sales.

None of these industry publishers, makers and IP owners seem to be complaining. How and why are video game makers bitching?

Oh yeah,.. Gamespot/EBGames is evil and making more money than God. We can't allow that, can we?

 

[Childs]

You have too much faith in the ability of adults to restrain themselves from buying new games and too little faith in the ability of children to pester their non-game playing parents into purchasing a new shiny for them. To get a new game at $35 you have to wait. Not a problem for me to wait for $20 or less, but I'm a minority and I know it.

hahaha I dont think its faith, its just an assumption. Could be wrong, as there are always variables that are unaccounted for. I dont work in this industry, but work for a company that makes products, and my job exists because people buy those products. New.

 

[ImpulsE69]

I really tire of companies greed these days. AAA titles are making more money than movie releases these days. Indie titles are on the rise. If the companies that don't think they are selling as much as they want, thenb they need to improve what they are offering.

Seriously, what ever happened to if you fail, it's your own fault?

The used market is by no means a threat to anyone, it's been around for as long as they've been making them. It's greed plain and simple.

 

[Childs]

Used car sales. Used book sales. Used movie sales.

None of these industry publishers, makers and IP owners seem to be complaining. How and why are video game makers bitching?

Oh yeah,.. Gamespot/EBGames is evil and making more money than God. We can't allow that, can we?

When Gamespot makes more money from used sales than used sales I would think a publisher would think there is a problem.

If asked, I'm sure book publishers and movie distributors would like to do something about it as well. I would think both of those markets are relatively small compared to new, as the cost of a book or movie is lower. Used car sales are different and dont really apply.

 

[Macamus Prime]

This also reminds me of the time when WoW was considered harmful to the video game industry.

Instead, you have hundreds of WoW knock offs and publishers/developers moving into the micro transaction model for their MMOs. WoW raised the bar and had people think differently on how to market their MMO.

Also, tons of people threw their hat into the ring to try and capture an audience no other MMO could - so, a shit load of jobs were created.

How and why was/is WoW bad for the industry again? Truth is, it isn't. It's just jealous self absorbed pre-Madonnas getting prissy over someone else being more popular.

 

[Macamus Prime]

When Gamespot makes more money from used sales than used sales I would think a publisher would think there is a problem.

If asked, I'm sure book publishers and movie distributors would like to do something about it as well. I would think both of those markets are relatively small compared to new, as the cost of a book or movie is lower. Used car sales are different and dont really apply.

The market wants used games. And they are willing to pay $5 to $10 less than the new game price to play them. How is, what the market wants, a bad thing? And, since you state it is, how do you propose to "fix" that? Punish the consumer with some sort of ham fisted daraconian DRM mechanics?

Also, what about the thousands of employees Gamestop/EBGames hires, since there is an explosion of video game sales (both new and old)? Is it OK to lock down 1 purchase to 1 customer, thus killing used sales and firing all those employed by Gamestop/EBGames acceptable?

 

[crownjules]

When Gamespot makes more money from used sales than used sales I would think a publisher would think there is a problem.

This is more a symptom of people allowing GS to rip them off for convenience. You could in fact resell your game independently and get $40-45 if it's a newer release. But it seems lots of gamers would rather go to the nearest GS and get half that value in store credit. That's why GS makes as much as it does. If more people had a problem with it and refused to sell to GS then they'd have to offer more and that would cut into their margin.

 

[Ross Ridge]

The problem is used games are priced $5, maybe $10 below new cost. People just buy the used to save a few bucks, but that amount isn't going to really sway many people that are going in to buy the game already.

You're assuming most used games sales happen at GameStop, and you're not factoring that the person also gets money back (or store credit) when they resell the game. That can easily add up to a $20 or more effective discount, even at GameStop.

That being said. There is one big big big plus for the used game market. Being able to find older games that you can't find new anymore. There are a lot of games that you miss or had no interest in at the time and years later want to play. If there was no used game market then it would be next to impossible to go back and play them unless they are rereleased.

Yah, although this never works for me. I've only ever bought one used game, and I had to pay the same as it cost new. GameStop has a million old copies of NHL games, but I never see any of the console RPGs I missed. I have better luck finding new copies of old RPGs.

It's not a good sign that GameStop is currently offering $25 for a number of current generation RPGs that I'm interested in.

 

[SMOGZINN]

For the most part I understand what you are saying, I just dont quite agree.

I'm glad you underststood what I was saying. I don't mind people disagreeing with me, there is pleanty of room for diffrence of oppionoins, I just want to be sure that I am clear in what I am trying to say.

I dont really follow you here. Used sales are not your sales. They didn't buy your product, so your market is the same, if somewhat strained from unaccounted usage. There is no need to spend more , because your market did not change. If anything you'll spend less the next time around. The problem is when you base a project around 1 million sales, and you only sell 500K. New + Used would have been 1 million. Probably more like 2 million. But anyways, so now you are short, and for your next project you may have to cut marketing, staff, dev time, etc, because you need an operation that can cover a 500K product, not 1 million. Cause you only have 500K product revenue to spend. So you put out less products, take less chances, retread the same idea over and over so you can get your 500K. Thats not good for anyone except Gamestop and the like.

Okay, let’s see if I can find a better way to explain what I'm trying to say.
My base assumption is that is you remove the used game market you will reduce the amount of money out there at any one time for new game sales, therefore to get gamers to buy your game you will have to work harder to convince them that they should spend their more limited game budget on your product.
I feel that the used game market acts like a churn keeping money available for new game purchases. With out the used game market gamers would have to tie up their money in longer term purchases.
Right now when a gamer buys a new game they don’t like to much, or can be finished fast, they make use of the the used game market to recoup some of their investment and use that to buy the next big game. Take that away and they will become more discriminating buyers and tend to spend more time with each game.

Without a used market, sales might drop initially during release, but without a used market I would bet the number of sales over the lifetime of shelf life would be about the same or more because of price reductions. Thats something that can be controlled. Its no secret that people who dont buy products at retail prices buy them when the price is reduced. You would even get that guy who doesn't buy new because he can't trade it in. You would just get him at $35 instead of $60. You would potentially get him, and all the people that would have bought his used copy at $35. If thats only him and one other used buyer at $35 each, thats more than he got alone at retail price if he could trade it in.

You are not taking into account the limited availability of shelf space. If you could keep your game on the shelves long enough that might be true, but realistically another company is going to come out with a new game and push you out of prime shelf space, and then off the shelf altogether.
Basically I agree that if game companies are upset with the used game industry then they need to compete with them on price. But in the current climate it does not seem that the publishers are willing to do that, they would rather use technological methods to attempt to lock out the used game market, and ultimately I think that is going to fail in a big way.

 

[Terzo]

My response is the same thing I'm told when I complain about a product or service: if you don't like it, don't buy/utilize it.

If game producers don't like the used game market, then stop making games. Although I doubt they well, because despite all their complaints about piracy, used games, and whatever else, they still make games. Clearly games are profitable or there wouldn't be this entire industry, so as far as I'm concerned they can quit their bellyaching.

Of course, I'm not saying they couldn't instead try and fight the game market. If they think that will bring them more money then that's their choice. But if I can't resell a game, I will spend considerably less (or skip it altogether) on it. As an example, I generally don't buy games on Steam, and will only make an exception if it's a game I"m really interested in (Shogun 2, Portal 2) at a low price (I'd say $10 max, preferably $5). I'm probably in the minority though.

As an aside, I don't think I've actually sold one of my games. Probably because I generally buy games at lower prices ($20) after they've been out a while, and so reselling them won't recoup a significant amount of my costs. As someone early mentioned, lowering prices would probably help combat used games without directly attacking them.
I've also found that I don't often buy used games, once again because by the time I get around to buying a game the new game is only a few dollars more (sometimes they're actually cheaper) than a used copy. The only exceptions I can remember are PS3 games released as Greatest Hits; I bought LittleBigPlanet, Ratchet & Clank, and Heavy Rain used because I didn't want one of the red bordered cases (aesthetic reasons). Oh, and I also bought some old ps1/ps2 games used.

Unfortunately, I do see a move to cloud based gaming in the future. By tying games to accounts publishers can practically eliminate game resales and piracy. Fortunately, when that day comes I'm sure there will be enough old games I haven't played (e.g. the entire Nintendo catalog) that I wouldn't have to buy a new game for the rest of my life.

 

[Xellos2099]

I honest don't think cloud will not happen in a LONG time, specially with the recent cap on dsl service... 150 gig is NOTHING if u are like downloading infamous or little big planet from psn store.

 

[Raduque]

For the most part I understand what you are saying, I just dont quite agree.

1 new sale can translate to 1+ used sales, which could have been 1+ new sales. Publisher could simply miss out on one sale, or 10. And those are real sales, not theoretical potential sales like piracy.

Let me just say that I buy used games that I would not pay full prices for "new". I just bought Red Dead Redemption and Uncharted 2 for about $12 yesterday after trade-in credits. RDR is $40 new and U2 is $30 new. I would not have otherwise bought these games had I not been able to buy them used. Therefore, these were not "real potential sales".

However, unlike piracy, this is legal, and I have genuine legitimate disks that don't require mods to my consoles to play. Win for me.

I would agree with this, but if I was a publisher I would rather have that person not buy then trade, as that opens up a used sale to someone that would buy new a $5 less. You can't just lower the price on games, because the used market will always offer the same product for $5 less.

Incorrect. Call of Duty: Black Ops is 59.99 new... and 54.99 used. I won't pay EITHER of those prices. It's not worth $60 new/$55 used. If it were a choice between a $30 used and $40 new, I'd probably buy new. But both those prices are outrageous. I don't buy any "new" game unless they're $40 or less, preferably $30.

 

[OrionAntares]

The market wants used games. And they are willing to pay $5 to $10 less than the new game price to play them. How is, what the market wants, a bad thing? And, since you state it is, how do you propose to "fix" that? Punish the consumer with some sort of ham fisted daraconian DRM mechanics?

Also, what about the thousands of employees Gamestop/EBGames hires, since there is an explosion of video game sales (both new and old)? Is it OK to lock down 1 purchase to 1 customer, thus killing used sales and firing all those employed by Gamestop/EBGames acceptable?

I think the best way to fix that is with DLC. Not the DLC schemes that some companies have come up with to gouge new owners but rather a DLC scheme that makes the used owners need to purchase DLC. Include one-time use codes within the game that give a new buyer access to the DLC and that DLC is then linked to that user's account.

I'd like them to do this because right now it seems like the whole point of DLC is to gouge new owners to make up for used sales. I'd rather they make up the used sales from the people actually buying used games rather than from the people buying them new.

 

[paperfist]

Used car sales. Used book sales. Used movie sales.

None of these industry publishers, makers and IP owners seem to be complaining. How and why are video game makers bitching?

Oh yeah,.. Gamespot/EBGames is evil and making more money than God. We can't allow that, can we?

Since when did Gamespot start selling games?

 

[Pr0d1gy]

I love how this is a problem for developers that lie to the consumer and ship out a Zelda clone instead of the open world massive RPG they were touting when Fable was announced and covered pre-release, but you never hear Bungie crying about this issue do you?

If you make a good enough product then you don't have to worry about used game sales. Just ask the guys who made Portal 2.

As has been stated before any tangible good has a used market, as it should. It is not stealing, it is merely recycling and it's sick that the industry is turning on one of it's own (GameStop) to try and increase profits in another sector of the same industry. The more I read this crap the more I think this might be the last console generation that my family participates in. This industry needs to learn a lesson and Peter Molyneaux needs to learn to quit lying to people to try and raise profits.

 

[skace]

First off, thread of a thousand bad analogies. How do you compare a video game that took a team of hundreds to make to a book that was written by a single person? Certainly a game compares more to a movie, however games don't have the benefit that movies do with movie theaters (which can guarantee a certain income before going to DVD). And really, comparing a game to a used car? You must be posting drunk.

I'm going to step past the analogies for a second though and look at what I see as a common trend. Everyone likes to bitch about Steam right now, yet I see more people than ever buying more games than they can even play because of ridiculous sales. I see people benefitting. They don't have to buy all these games (and could save even more) but they do. However, people are terrible at correlating. They don't sit down and say "Hey, maybe the reason I'm able to buy these games cheaper is because it is easier for the publisher to distribute games on Steam, maybe the lack of 3rd party sales means it is possible to make more profit at $30 than it is at $60, maybe Steam allows these games to have a longer shelf life than they would at Best Buy, where only first - 3rd week sales are even worth a damn".

Now, certainly Steam isn't perfect, but there are pros and cons to every model and that is what people need to understand. Once we move away from the used market model we can start seeing games sold cheaper than they would be while the publisher actually makes MORE profit.

However, I also believe in checks and balances, and what happens when everyone moves to a digital distribution model and there aren't any used sales anymore. Will publishers then justify jacking the price to 80 a title across the board that everyone is forced to pay? It's certainly a concern, however I'd like to think they are smarter than that and realize that there are sweet spots where they get more money through a larger 'install base'.

I also realize that not everybody will be happy about a change like this. Some people game very, very cheaply. I mean certainly we have a percentage that steals nearly everything but the console - that group has always been paying very little. Then we have a group that both buys and sells used games, this group pays only a little more than piracy since they will most likely be buying a game near to a point that they can sell it back at. Both of these groups will never be happy with a change in the system, because their current process is so incredibly affordable by comparison.

 

[SMOGZINN]

First off, thread of a thousand bad analogies. How do you compare a video game that took a team of hundreds to make to a book that was written by a single person? Certainly a game compares more to a movie, however games don't have the benefit that movies do with movie theaters (which can guarantee a certain income before going to DVD). And really, comparing a game to a used car? You must be posting drunk.

It is called an analogy because it is not perfect. In a lot of ways used video game market is very analogous to the used book market. They both use the same basic business model, and have the same results, only the new book market uses it as advertising while the video game market wants to try to kill it. So, I don’t think it is terribly off base to compare the two.

They don't sit down and say "Hey, maybe the reason I'm able to buy these games cheaper is because it is easier for the publisher to distribute games on Steam, maybe the lack of 3rd party sales means it is possible to make more profit at $30 than it is at $60, maybe Steam allows these games to have a longer shelf life than they would at Best Buy, where only first - 3rd week sales are even worth a damn".

This I agree with, Steam is a good model for the video game industry. It allows them to charge a premium for their product when it is still in high demand, and reduce the cost to capture other price points as the demand fluxuates over time. I think it brings up some serious questions about the nature of digital property, but I don’t think we have hit a large enough market for those questions to be major issues yet.

Now, certainly Steam isn't perfect, but there are pros and cons to every model and that is what people need to understand. Once we move away from the used market model we can start seeing games sold cheaper than they would be while the publisher actually makes MORE profit.

There might be a price hike for opening weekend, because they will charge the very maximum the market will take, then keep lowering the price while blasting you with advertising until they have captured every dollar that can be squeezed out of their customers. It is practically the perfect sales model. One of the big questions is can it be sustained?

 

[Via]

I was thinking...

with all of these ridiculous steam sales constantly being thrown at us, is it even worth pirating stuff anymore?

You can usually find great games for a couple of bucks, and if you buy only what's cheapest you'll have a jam packed steam account in a few months for almost nothing.

Are these steam sales meant to reduce piracy?

 

[NeoV]

in my opinion - when you try to defend PC - game piracy - you end up sounding like a jack-ass

The Steam model is the future for PC games

The whole 'used game' issue - stop selling games in a format that can easily be re-sold

should be very interesting to see the next medium for games when the next set of consoles come around

 

[paperfist]

I was thinking...

with all of these ridiculous steam sales constantly being thrown at us, is it even worth pirating stuff anymore?

You can usually find great games for a couple of bucks, and if you buy only what's cheapest you'll have a jam packed steam account in a few months for almost nothing.

Are these steam sales meant to reduce piracy?

Nope, not worth the time.

 

[shortylickens]

Funny how in the 80's Nintendo and Sega never had this problem.
Are Sony and Microsoft really that freakin greedy? Maybe their business model should not be set up under the assumption every game will sell 20 million copies.

On the other issue:
I despise disc based copy protection so I'll support any system that moves us away from that, even if it means subscription or rental over the cloud or whatever.

I once installed the perfect combination of securom games to fuck up my system. Completely lost access to my DVD drive. Even after uninstalling all the games and running a securom cleaner it still didnt work. Had to reinstall Windows.

 

[Ancalagon44]

It would correctly realign the market. Think of it this way. You are a publisher. You dont see a dime of the used sales, but you do know that those used sales came from people who obviously wanted to buy your product and did, but bought it in a way that you get none of it. Wouldn't you try to get that money?

Without a used market, sales might drop initially during release, but without a used market I would bet the number of sales over the lifetime of shelf life would be about the same or more because of price reductions. Thats something that can be controlled. Its no secret that people who dont buy products at retail prices buy them when the price is reduced. You would even get that guy who doesn't buy new because he can't trade it in. You would just get him at $35 instead of $60. You would potentially get him, and all the people that would have bought his used copy at $35. If thats only him and one other used buyer at $35 each, thats more than he got alone at retail price if he could trade it in.

What impetus would publishers have to reduce the price of new games if price pressure from used games was removed?

Besides which, I have no sympathy for the publishers in this. They want us to fit into their business model, instead of them fitting into our lives. They want us to pay higher prices for games, and control who we can buy them from, so that it benefits them. Why? Why do they deserve it?

Because games are expensive to make? I dont see how this is my problem. Maybe if they got rid of some of their overpaid execs they wouldnt be so expensive to make. The industry is currently founded on this business model that requires large amounts of money to be spent on games in order to make them look as good as possible, instead play as well as possible, but clearly this isnt maintainable. It just isnt working. Instead of trying to adapt, they just stick to their guns and expect us to adapt to them. Not going to work. We have much greater choice in games thanks to the Internet, including GOG and Steam, as well as indie games. Why should we give up our rights to give and sell games we OWN, just to keep their aging business model afloat?

 

[shortylickens]

What impetus would publishers have to reduce the price of new games if price pressure from used games was removed?

Besides which, I have no sympathy for the publishers in this. They want us to fit into their business model, instead of them fitting into our lives. They want us to pay higher prices for games, and control who we can buy them from, so that it benefits them. Why? Why do they deserve it?

Because games are expensive to make? I dont see how this is my problem. Maybe if they got rid of some of their overpaid execs they wouldnt be so expensive to make. The industry is currently founded on this business model that requires large amounts of money to be spent on games in order to make them look as good as possible, instead play as well as possible, but clearly this isnt maintainable. It just isnt working. Instead of trying to adapt, they just stick to their guns and expect us to adapt to them. Not going to work. We have much greater choice in games thanks to the Internet, including GOG and Steam, as well as indie games. Why should we give up our rights to give and sell games we OWN, just to keep their aging business model afloat?

He's arguing that a lot of people might not buy games at all if they have to pay full retail. That will lead to an aggregate demand drop and eventually prices will have to go down to meet equilibrium.

The theory is sound but I dont know if we yet have evidence to support it.
Seems to me piracy has screwed up the typical demand curve because we are talking about a luxury good that can be had for free on a whim, as opposed to a consumable necessity that requires raw materials.

 

[Ancalagon44]

He's arguing that a lot of people might not buy games at all if they have to pay full retail. That will lead to an aggregate demand drop and eventually prices will have to go down to meet equilibrium.

The theory is sound but I dont know if we yet have evidence to support it.
Seems to me piracy has screwed up the typical demand curve because we are talking about a luxury good that can be had for free on a whim, as opposed to a consumable necessity that requires raw materials.

Lets ignore piracy for a second, thats a totally separate issue.

Why would removing used game sales lower prices? If anything, it removes competition. Now, if you want a game, you have to pay the price that the publisher sets. No arguments anymore. Since when have corporations dropped the price of goods to reach a wider audience?

Two factors make me especially doubt the theory that prices will drop.

One, publishers are under enormous pressure to make enough money from their games as it is. To lower prices to include a segment of the market that is unknown in size at present, but possibly small, results in revenue per sale decreasing - even among those who were happy with paying full price in the first place. They would be shooting themselves in the foot with no way of knowing whether the drop in price would entice enough people for it to be worth it.

Two, price increases for games have typically been less than inflation for the past two decades. Look at prices of video games in days of yore, if anything, games are inexpensive. However, development costs have never been anywhere near as high. So, we have already low prices and extremely high development costs. And lowering the price further is going to help? No, it wont. It actually increases the risk, since now if a game bombs, it bombs bad and you are even less likely to recover your investment on it.

What would be great as far as the corporations are concerned is raising the price of games to about $70, including PC games (no discount for PC anymore), and getting Congress to pass a law banning used game sales. That would be Christmas for them. For us, not so much. So, getting rid of used game sales if half the battle won, the question is will this ultimately benefit us, my answer to that is a rhetorical question - when has a corporation ever wanted to make such an industry wide change that would benefit its customers as much or more than itself?