On Monday we posted a news story about how Quantic Dream had ‘lost’ an estimated €5 to €10 million, thanks to the sale of pre-owned games.
A lot of you commented on the news and a similar amount of comments were posted by industry professionals on GamesIndustry.Biz. These have caught the attention of Guillaume de Fondaumiere and on Tuesday he has posted a response, explaining how the almost instant discounting of titles hurts the industry.
There was a time when publishers and retailers together decided when it was the right time to drop a game’s price. We had full price, mid-price and budget games and the whole value chain benefitted from this.
Decisions to drop the price were based on consumer demand and levels of stock. Most importantly, price drops happened in a timely fashion.
Gamers who couldn’t wait bought full price, those who weren’t sure waited some time, usually 3 to 6 months for the first price drop, and then again some time for the next.
Today, second hand gaming (SHG) happens almost same day and date with the full price release. From far away, this may seem to be to the benefit of all in the chain, but actually it isn’t.
Guillaume has dismissed any comparisons between games other second hand markets such as cars as ‘irrelevant’. This is backed up by Dave Herod, Senior programmer at Codemasters who posted this message
It’s annoying how people always compare used software to the sale of used cars. It’s NOT the same, if you buy a second hand car you’re buying an inferior item, it’s more worn out, the warranty has either gone or there’s less time remaining on it, and it degrades over time.
Software doesn’t degrade, and when you buy it you’re not paying for the disc or the box, you’re paying for the rights to play that game.
The IP is owned by the publisher and developers and retailers are effectively selling something that’s not theirs. It’s not far from theft in my view.
Guillaume has posted another response in which he clearly states he “never said we should ban second hand gaming” but points to the huge profits generated by second hand games which have been reported by retailers.
You only need to look at the annual reports of certain retail giants to find out that between 30 and 40 % of total games software turnover comes from second hand sales today (incomparable to books for instance).
The last word must go to Diogo Neves, Programmer for Sony Europe, who has posted:
It’s a legal market and as such, we just have to move on and find better ways to make this practice more profitable for game studios. Maybe it’s the business model that has to change.