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

[lupi]

It's inevitable really.

On the PC side you've got Steam, D2D, Impulse, and more online stores which really limit the ability for users to sell their games after purchase. Personally I am a little surprised the greedy console companies haven't already implemented some form of registering games to people's accounts permanently.

You don't read other replies do you.

 

[Red Storm]

You don't read other replies do you.

Would you prefer I just say "agreed"?

Who needs a forum? All we need are Yes, No, and Maybe buttons.

 

[paperfist]

A book is $10-12 and lasts longer than most SP games these days.

Also, game companies could seriously reduce the cost of hosting those services by using an older model:

- Let players host their own (even dedicated) servers.
- Ditch always-connected DRM and use CD-key check for multiplayer.
- Embrace P2P as a data distribution method.

All the provider has to host in this case is a server list, authentication server and torrent tracker.

Just like a PC game it last as long as the quality is there. Unlike a PC they wear out and in general are subject to damage.

For consoles to let users have their own servers would require a bit of infrastructure that isn't in place. Plus it requires more support on their end, longer dev times, etc.

CD-key checks at least on the PC is the easiest to defeat method around.
P2P isn't going to cut down on the used game market.

Personally to me they made $60 a title, if they want to support that price then they need to take trade ins or stop releasing games that are nothing more then $60 updates.

 

[SMOGZINN]

I always thought used game sales helped console games. Realistically speaking, I figured there's a hardcore segment of the market that will buy the newest play through it, then resale it to recoup their costs. They then take the recoup cost and purchase the next latest and greatest game. I guess this helps out the people doing this, but doesn't really help out publishers.

They do help console games. The publishers are blind not to see it. Right now a gamer buys a $60 game and plays it then trades it in for $30-40 and buys a different game. If he could not trade it in he would have to wait maybe twice as long to buy that next game, meaning he would end up skipping more games and becoming a more discriminate consumer.
Second hand sales are not lost sales, they are fueling the primary first hand buyers. That is something the book industry has known for a long time. Kill that second hand market and you do equal damage to your first hand sales market.

We buy games to play them but games generally do not hold long term replay value. That's why people resell them when they're still hot to get the maximum resale value while it's still popular.

The video game industry has followed in the footsteps of Hollywood and made their product more about hype then actual utility (utility meaning enjoyment per dollar spent). They are selling marketing.
Hollywood had done relatively well with this method because they have a huge market audience, and the buy in point is low enough that most people don’t mind highly hyped movie being merely okay, or even terrible. Hollywood mostly works off of an opening weekend take, with auxiliary sales helping to fund other movies when a hit comes along.
But I think the game industry is starting to feel the pinch of failed games. Fewer people are willing to put out the money for the ‘opening weekend’ rush and more people are waiting to see the real reviews (as opposed to the syphophant reviews we see weeks ahead of time) or hear from other games how good a game is before buying. That means that the hype machine is becoming less and less effective. It seems that game producers are noticing this and instead of changing their business model they want to try to change the world so their hype works again. It is a fool’s game. In the end they will lose.

 

[SMOGZINN]

CD-key checks at least on the PC is the easiest to defeat method around.

DRM does not stop pirated games from being put out there, even on day one. So who cares how hard it is to crack? It is a legal protection more then anything else. Game companies need to learn that.

 

[Childs]

They do help console games. The publishers are blind not to see it. Right now a gamer buys a $60 game and plays it then trades it in for $30-40 and buys a different game. If he could not trade it in he would have to wait maybe twice as long to buy that next game, meaning he would end up skipping more games and becoming a more discriminate consumer.
Second hand sales are not lost sales, they are fueling the primary first hand buyers. That is something the book industry has known for a long time. Kill that second hand market and you do equal damage to your first hand sales market.

This assumes that the gamer will buy new next time around. It also doesnt help the publisher if the gamer buys another publisher's title. I would think that a person who trades in games also tends to buy used, not new. If I was a publisher I wouldnt care about that customer. They shouldnt really even think of them as customers. You (publisher) will never see a dime from them, so who cares if the used market goes away. It would also adjust your customer base and improve logistics, support, and overall expectations of budgets, sales, etc.

Theres the thought that maybe people who buy used will graduate to buying new, but more than likely once you were raised buying used you will continue to do so. The used market really only benefits the console makers (hardware wise), used games resellers and their customers. With more and more major retailers turning into used games resellers, the amount of money developers and publishers will be less and less, shrinking new game production, till the market collapses on itself! Maybe. Maybe not. The point is the games business is not the march of dimes. You wanna play you pay.

 

[SMOGZINN]

This assumes that the gamer will buy new next time around. It also doesnt help the publisher if the gamer buys another publisher's title. I would think that a person who trades in games also tends to buy used, not new. If I was a publisher I wouldnt care about that customer. They shouldnt really even think of them as customers. You (publisher) will never see a dime from them, so who cares if the used market goes away. It would also adjust your customer base and improve logistics, support, and overall expectations of budgets, sales, etc.

I don't think you understand what I'm saying.
Every time a game is sold used it came from someone that bought the game new and sold it.
The person that bought the game new sold it and therefore had more money to buy another new game (because we know that that person is likely to buy new games.) The person buying it used in essence subsidized the new sell. With out that subsidy the person buying new games would have to buy fewer new games, and that would hurt the industry as a whole. Therefore it is in the interest of the publisher to care about that used game buyer, he is helping fund your new game buyer.

Maybe our new game buyer won’t buy your new game this time around, but that is the same case as any sale. The fact is he is buying new games, which make him a customer. It is marketing’s job to get him to buy YOUR new game.

Doing away with the used game market might mean that you improve logistics of things like servers and customer support, but it also means that you have increased competition for the smaller pool of new game dollars out there. That means you need to spend more on marketing and development, only to expect a smaller return.

The used market really only benefits the console makers (hardware wise), used games resellers and their customers. With more and more major retailers turning into used games resellers, the amount of money developers and publishers will be less and less, shrinking new game production, till the market collapses on itself! Maybe. Maybe not. The point is the games business is not the march of dimes. You wanna play you pay.

You can only sale used games if someone bought the game new. The market is stable by it's nature. I've already pointed out how used game buyers support the game industry. It is the game industry that is short sighted not to see past first order effects.

 

[KaOTiK]

The only problem with the whole used game was bought new is, that used game will probably pass through quite a few peoples hands. When I worked at a game store years ago. We had plenty of people who only bought used then would beat the game trade it in and keep doing so. There were some games that had stickers on the discs and such and I swear it was almost a freaking joke how many times it was traded in and resold, we started naming the discs that had specific stuff on them.

In the end though I'm confident from my experiences (from above and from actually being a dev for a little while) that, way way way more people play a game then copies sold. Personally, I don't care anymore, I left the industry cause it is garbage, but I feel bad for my friends still in it (those that are left are in the process of trying to leave it). The worst thing that has happened to the game industry is it becoming main stream. I miss the days where most gamers hide the fact they are a gamer to most people.

 

[Childs]

I don't think you understand what I'm saying.

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. The problem isn't people who buy new games, but the people that trade the game in. Those people prevent X number of sales that would have went to the publisher/developers. I would rather that person who buys new then trades to buy fewer new games and not trade anything. Heck, publishers would be better off selling new games at %70 off after 1 month of release then the dealing with the used market, because they get none of that. Used game buyer does nothing but make Gamestop $5-$10 each time they buy and trade.

A smaller pool is better. To use a "pool" analogy. Maybe you have the resources to maintain a pool with a capacity of 10 people. You have 15 customers, but thats OK because not all will swim at the same time. Some in the morning, some evening. Some swim once and never again. Say, after 6 months, there maybe 3 customers who use it regularly. You can reallocate staff, cleaning schedules, etc to accommodate the real usage over time, and plan for a new pool, or a grand reopening of the existing pool. Whatever. Used sales are like always having 15 customers, even after 6 months, but no new revenue to maintain your pool.

Doing away with the used game market might mean that you improve logistics of things like servers and customer support, but it also means that you have increased competition for the smaller pool of new game dollars out there. That means you need to spend more on marketing and development, only to expect a smaller return.

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.

You can only sale used games if someone bought the game new. The market is stable by it's nature. I've already pointed out how used game buyers support the game industry. It is the game industry that is short sighted not to see past first order effects.

Not really stable at all. You may have a true user base of say 1 million gamers. You put out a game for that 1 million, but you only get 300-500K of that. You still have 1 million gamers, but most of that came from used sales, which you dont see a penny of. So you support 1 million gamers on 300-500K of sales. You see the stats, try to capture the used sales next time around with new features, free dlc, etc, and maybe its less. Maybe this time 300K is 300K, not 700K. Maybe its more, so now 1 million is 3 million.

I'm not sure there is a business out that thinks its OK to leave REAL money on the table. Even a non profit will try to increase revenue so they can do more of what they are trying to do. IMO, devs and publishers have a legitimate grip with used sales unlike "piracy".

 

[Childs]

...

If I would have seen this sooner I could have spared everyone the long winded explanation that you summed up with your post!

 

[paperfist]

DRM does not stop pirated games from being put out there, even on day one. So who cares how hard it is to crack? It is a legal protection more then anything else. Game companies need to learn that.

If I'm understanding you correctly then I don't think every game buying person is so connected that they know how to get a cracked game on day one. So in that respect DRM does serve a purpose.

And games that are cracked that early tend to have been leaked which means game companies need to do a better job of protecting their wares from slippery hands.

 

[Ross Ridge]

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.

No. They're only real sales when they actually happen. The used games sales are just theoretical potentional new game sales to the publisher. Even the original new game purchase becomes the theoretical if you're talking about what woud've happened if games couldn't be resold.

You can't assume everyone who was willing to buy the game at an effective discount either by buying it used and/or reselling it would be willing to pay full price for the game if this were their only option.

 

[motsm]

With more and more major retailers turning into used games resellers, the amount of money developers and publishers will be less and less, shrinking new game production, till the market collapses on itself! Maybe. Maybe not.

Would be a good thing IMO, rein in the ridiculously bloated budgets that have been the cause of so much shovelware. Not that I think that is going to happen because of the used market, it's not some mystery, so Publishers should already know their sales expectations.

 

[styrafoam]

The sense of entitlement coming from the entertainment industry these days is getting so bad its sickening.

I am personally excited for the time when denim companies develops "thread and rivet drm". I'm going straight to Dillards, buying a few pairs of whatever is the trendy girls jeans, and then taking them straight to the consignment store. Gilrls are gonna walk out and *poof* go their new jeans into a shredded pile of blue cotton on the sidewalk. Maybe its a long way to go for a thrill, but I'm a loser. Me and lionhead both.

 

[Ancalagon44]

We really need another video games crash. We need one big enough to sink at least 5 of the biggest publishers, and cause indie gaming to rise up. Statements like this are exactly why.

They say that used game sales cause them to lose money - how is it lost? Does more than one person own the game at one time? No, of course not. Two people got to experience it, and the publisher got money from only one of them. Thats life. Same with cars and books, yet I dont see publishers encrypting their books for one set of eyes only (or at least not yet, folks dont ever let printed books die out!).

These bastards, these criminals, who are destroying the PC gaming industry with their shovelware titles and DRM, now claim that the sale of used games is detrimental to their profits, and is therefore Bad. I get that it hurts profits, what I dont get is why you should be allowed to restrict my right to resell my property and buy other used property.

Hey you know what would help if your costs are running too high and its becoming difficult to make a return on investment? How about whatever you want, I dont care! Point is, dont make your problems mine. If you cant manage your studio so as to turn a profit, dont come crying to me and say I shouldnt have the right to resell my property. Thats my game disc, not yours. Fuck off!

 

[Lonbjerg]

Book companies seem to manage just fine without stomping on their customers rights.

Yeah becuase they have the same amount of people working on a book..oh wait :thumbsdown:

 

[Ancalagon44]

Not really stable at all. You may have a true user base of say 1 million gamers. You put out a game for that 1 million, but you only get 300-500K of that. You still have 1 million gamers, but most of that came from used sales, which you dont see a penny of. So you support 1 million gamers on 300-500K of sales. You see the stats, try to capture the used sales next time around with new features, free dlc, etc, and maybe its less. Maybe this time 300K is 300K, not 700K. Maybe its more, so now 1 million is 3 million.

Take used game sales away and I GUARANTEE you that new game sales will drop. Why do you think gamers buy more console games than PC games? A large part of the reason is the ease with which console games can be resold, freeing up cash for new games.

If you take away used games, you take away funds that people used to buy new games. Hence new game sales will drop.

 

[Childs]

No. They're only real sales when they actually happen. The used games sales are just theoretical potentional new game sales to the publisher.
You can't assume everyone who was willing to buy the game at an effective discount either by buying it used and/or reselling it would be willing to pay full price for the game if this were their only option.

They are real sales really. If the price was $5 cheaper the person would have bought new. They did buy the product, just went with the cheapest route, which means the publisher gets none of that.

Even the original new game purchase becomes the theoretical if you're talking about what woud've happened if games couldn't be resold.

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. Trading 1 sale for 0-10 used sales leaves two much on the table. You can't just lower the price on games, because the used market will always offer the same product for $5 less.

 

[Golgatha]

Book companies seem to manage just fine without stomping on their customers rights.

You did see that Kindle sales outstripped book sales recently didn't you? Try reselling a DRM laden eBook sometime and see how far you get.

 

[lupi]

Take used game sales away and I GUARANTEE you that new game sales will drop. Why do you think gamers buy more console games than PC games? A large part of the reason is the ease with which console games can be resold, freeing up cash for new games.

If you take away used games, you take away funds that people used to buy new games. Hence new game sales will drop.

Yep

 

[crownjules]

They are real sales really. If the price was $5 cheaper the person would have bought new. They did buy the product, just went with the cheapest route, which means the publisher gets none of that.

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.

 

[Childs]

Take used game sales away and I GUARANTEE you that new game sales will drop. Why do you think gamers buy more console games than PC games? A large part of the reason is the ease with which console games can be resold, freeing up cash for new games.

If you take away used games, you take away funds that people used to buy new games. Hence new game sales will drop.

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.

 

[Golgatha]

Here's a prediction for the PS4 in regards to used game sales. The distribution method can be disc or digital download, but the game will have a key and be tied forever to your PSN Steam account. Just like it is on the PC. Console games will get a big time price adjustment if they want to continue to sell product when this happens. I personally don't buy any Steam games over $20, and I know I can't be alone.

 

[Childs]

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.

Ummm, I'll respond to this with my previous post. I think the forums need a tweet like function on the side you can account for incoming posts while replying!

EDIT: There might be a psychological component to buying and trading, regardless of the price. Lets put a pin in that for now...

 

[Golgatha]

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.

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.