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Pre-Owned Debate: Quantic Dream Respond

Codemasters also comment.

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).

Gamestop recently reported used-game sales jumping over 12% on last year and the most recent financial report from GAME show pre-owned revenues of £387 million with a profit margin of nearly 40%.

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.

Source: GamesIndustry.Biz

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80 Comments
  1. posem
    Member
    Since: Nov 2009

    best sensible argument i’ve seen on the matter of pre-owned gaming yet..

    Comment posted on 14/09/2011 at 12:36.
    • Klart
      Member
      Since: Jun 2010

      “It’s not far from theft” is not a sensible expression in my book.

      Comment posted on 14/09/2011 at 12:57.
      • Serebii.Net
        Member
        Since: Apr 2010

        Theft on the retailer’s behalf, not the consumer’s.

        Comment posted on 14/09/2011 at 13:48.
      • scavenga
        Member
        Since: Jul 2009

        It’s as far from theft as it can be.

        Comment posted on 14/09/2011 at 15:44.
      • rogue66
        Member
        Since: Sep 2011

        You have no right to profit from the sale of a game you bought. You don’t have a licence to sell it on.

        Comment posted on 14/09/2011 at 16:20.
    • Rad4Life
      Member
      Since: Dec 2009

      Both sides have a valid point. I think the best choice will be the “game passes” we have been seeing and hearing about. This ensures that if you want the full experience, you must buy new. Many games that I play have multiplayer. I never bother to give them a look. If that game had a pass for online, it wouldn’t affect my decision. I usually buy used to get a game I wasn’t sure about at a price that is worth the risk. The online function of most games is dead within 6 months of release. I never count on online play when I buy used or rent for that matter. I say bring on the “game passes” because it is probably the best/fairest solution.

      Comment posted on 14/09/2011 at 22:25.
  2. Deathbrin
    Member
    Since: Aug 2009

    Make games that are not worth trading in?

    Comment posted on 14/09/2011 at 12:38.
    • KeRaSh
      Member
      Since: Nov 2009

      Make games that are so good that you never want to trade them in? ;)

      Comment posted on 14/09/2011 at 12:41.
      • bacon_nuts
        Member
        Since: Mar 2011

        I agree, but the only companies that do that for me are Valve and Team Ico, and if everyone worked on their time scales, we’d have a lot less games..

        Comment posted on 14/09/2011 at 16:56.
    • Kennykazey
      Member
      Since: Mar 2010

      Make games “soulbound”?

      Comment posted on 14/09/2011 at 14:30.
  3. KeRaSh
    Member
    Since: Nov 2009

    I agree with Diogo Neves as long as the new business model benefits both the devs and the consumer without harming either one.

    Comment posted on 14/09/2011 at 12:40.
    • KeRaSh
      Member
      Since: Nov 2009

      P.S.: Maybe the retailers should be held more responsible for second hand gaming harming devs. They should sell new games as a priority. Make them pay some pre-owned tax that goes to the dev. I don’t know. I’m talking out of my ass… :D

      Comment posted on 14/09/2011 at 12:43.
      • heedbaw
        Member
        Since: Nov 2009

        Not really, isn’t there some sort of system like that in Japan?
        I do remember that shops had to sell 2nd hand games for a while as new ‘bargain basement’ stuff as the publishers had gotten some sort of legislation put in place to get retailers fined for taking part in the 2nd hand game market.
        Must go investigate as memory is a bit hazy, but it also happened with white goods and cars. That’s why at one point there were tons of grey imports from Japan, as people couldn’t sell on their stuff at home so they were getting shipped abroad.

        Comment posted on 14/09/2011 at 13:46.
      • heedbaw
        Member
        Since: Nov 2009

        hmm, there we go. The publishers did go to court in Japan to get legislation against the 2nd hand market but it got thrown out of court as no-one was doing anything wrong apart.
        But the white goods thing is mental, it stated that any repairs had to be carried out using the manufacturers original parts. So once something was broken it was generally cheaper to go out and buy a replacement than spend silly money on the required OEM parts.
        A quick example I remember was the Honda Fireblade. Something like £9,999 new, but if you bought all the parts individually to build it yourself it would cost well over £40,000.

        Comment posted on 14/09/2011 at 16:44.
  4. ron_mcphatty
    Member
    Since: Sep 2008

    ‘when you buy it you’re not paying for the disc or the box, you’re paying for the rights to play that game’.

    Rubbish, if this were the case on consoles we would sutely have to agree to a EULA before playing. If developers truly believe this they should turn to digital distribution only and stop pushing this type of crap on the customer. It’s as if we should feel guilty for buying used LEGALLY!

    Comment posted on 14/09/2011 at 12:43.
    • anthro
      Member
      Since: Apr 2011

      I don’t think the developers are blaming the consumer for buying pre-owned, and I don’t think we’re meant to feel guilty. They are stating their dissatisfaction with the current model of game trading; in its current form it does cost developers money, and results in massive corporations such as GAME mking their living off the back of the devs. This is manifestly unfair, and the devs are trying to make their side of the story heard. I think it’s fair enough really.

      NB: You frequently do agree to a EULA on console games, usually those with an online component. They’re just not generally very visible; they appear once, you agree it, then it never reappears.

      Comment posted on 14/09/2011 at 12:50.
    • Tuffcub
      On the naughty step.
      Since: Dec 2008

      You do. Read the samll print in the back of any manual, by playing the game you are agreeing to all that small print – and that small prints says you are licensing the game, not owning it.

      Comment posted on 14/09/2011 at 12:51.
      • heedbaw
        Member
        Since: Nov 2009

        yeah with TC, though according to all the ones I had a look at a while ago they all fall under English jurisdiction. Apart from the fact that, arguably, they’re not legally binding that if they were then it would only be in England and not Scotland, Wales or Ireland.

        Comment posted on 14/09/2011 at 13:53.
  5. Danlisa
    Member
    Since: Jul 2009

    “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.”

    ^ So what are you ‘developers and publishers’ doing about that? Oh, that’s right, penalising the gamer with network passes and now ID’s new single player pass.

    Gamers are always getting the rough end of the stick, why don’t you attempt to strike deals with retailers to combat second hand sales? Put some effort into ensuring the future of your industry and stop taking the easy way out by slapping those who pay to play your content and keep you in business in the first place.

    But hey, I suppose we’re the ‘easy’ targets.

    Comment posted on 14/09/2011 at 12:44.
    • heedbaw
      Member
      Since: Nov 2009

      I’m with you on that. Targeting the retailers would harm the publishers a lot more than it does targeting customers. Not only could a retailer afford to fight it in court but there’s also the buying power they have over the publisher.

      Comment posted on 14/09/2011 at 13:16.
  6. R4U Eldave0
    andUandU
    Since: Aug 2008

    A much more structured arguement this time, rather than him just throwing his toys out of the pram on Monday. Still don’t agree with him one bit though. If I buy a copy of HR second hand it means they already got their sale from the person who owned it previously. Despite the grreat list of games coming out soon, overall the games industry gets on my nerves these days.

    Comment posted on 14/09/2011 at 12:45.
    • bacon_nuts
      Member
      Since: Mar 2011

      I don’t know, if I’d made a quick time event that long, Id be as angry as he is..

      Comment posted on 14/09/2011 at 17:02.
      • jikomanzoku
        Member
        Since: Jan 2010

        nice :D

        Comment posted on 15/09/2011 at 09:34.
  7. Smallville2106
    Member
    Since: Feb 2011

    Whenever I am in town I pop into GAME. There is always stacks and stacks of pre-owned stock but the ‘New’ stock is very bare bones and the shelves for the new stock are always pretty much empty.
    I have asked a few times regarding certain games and I get the same answer: ‘We haven’t got it new, not sure if we will get it in but we have it pre-owned.’

    I personally only buy new games but I don’t see the second hand market as a problem until the retailers are purposely ruining the Brand New market. Which imo, is what GAME are starting to do. Well, at least the GAME where I live.
    They push far too hard to get you to purchase pre owned. I have walked out a couple of times due to the cashier not taking my first ‘no thanks’ as a no.
    I have also seen some customers almost bullied into buying a pre-owned copy of a game. This is where I see the second hand market as damaging.

    Comment posted on 14/09/2011 at 12:46.
    • Danlisa
      Member
      Since: Jul 2009

      Hmm, do yo know why GAME don’t have ‘new stock’?

      Ans: The percentage they get from 1st hand sales is actually less than what they make on 2nd hand sales (where they get 100% of the sale price). ;) It’s (in their eyes) a better business model to ensure there’s more 2nd hand sales passing through their stores.

      Comment posted on 14/09/2011 at 12:49.
      • Smallville2106
        Member
        Since: Feb 2011

        I know that. Like I said pre-owned games are fine im my eyes. The way GAME etc pushes them so hard to the point where they make it very difficult not to buy pre-owned IS wrong.

        Comment posted on 15/09/2011 at 00:58.
  8. gggames.se
    Member
    Since: Jan 2010

    Answer me this: What about people who let their friends and family play/borrow their copies of games? If devs and publishers feel good about counting that as lost revenue, then I really can’t be bothered by their logic…

    Comment posted on 14/09/2011 at 12:47.
    • eye8have9you3
      Member
      Since: Aug 2009

      plenty of people borrow games, yes, but mostly they borrow games that they wouldn’t otherwise buy. For example I had no interest in playing resistance 2, but when a friend offered it to me, I did. However the majority of the people who buy pre-owned, buy the games because they want to play them, so If they couldn’t get them pre-owned, they’d buy new. That’s lost revenue, the people who borrow games they wouldn’t buy or couldn’t afford, they were never customers to begin with and there isn’t any lost revenue there.

      Comment posted on 14/09/2011 at 13:15.
      • rogue66
        Member
        Since: Sep 2011

        If you can’t use the “I wouldn’t have bought it new anyway” argument to justify piracy then you can’t use it to justify “borrowing” or buying pre-owned.

        The end result is the same – you get to play it without the publisher or creative team getting a cent.

        Comment posted on 14/09/2011 at 15:59.
    • jimmy-google
      Member
      Since: Feb 2009

      I don’t think their issue is people buying second hand games but more than retailers are making huge profits from it which developers/publishers don’t see.

      Things like PSN pass are there to devalue a second hand game and allow the developer to take part of the money someone would spend on a second hand game.

      Comment posted on 14/09/2011 at 13:44.
  9. Youles
    Member
    Since: Feb 2011

    Bit rich coming from Codies. If this is such a problem since Next Gen consoles, they don’t seem to complain about the extra money they make from DLC (with no production cost), which was never available on previous consoles. Also, any DLC may have been purchased by the person who bought the game new, AND the person who borrowed the game, AND the person who bought the game second hand. This will also apply to online passes – if the game is passed around enough they have the potential to make more than if another new copy was purchased. Given the amount of bloody DLC with DiRT 3, people who bought second hand may have saved enough money to buy all the DLC. I bought new and refuse to buy the DLC. Swings and roundabouts.

    Comment posted on 14/09/2011 at 12:57.
    • Youles
      Member
      Since: Feb 2011

      Also, that chaps says “Software doesn’t degrade” comparing games to the car industry. With the car trade you have other models in the same class that drives (no pun intended) the cost down, or a few months later a newer car is released with better technology/spec, lowering the value of your car slightly – same with games. Bodycount is not going to be £39.99 when BF3 comes out, so software does degrade as it is bettered.

      Comment posted on 14/09/2011 at 13:05.
      • eye8have9you3
        Member
        Since: Aug 2009

        When a game is bettered, they drop the new price, that was his point with the mid-level pricing, but that should only happen when it is “bettered”. The pre-owned market for a game opens up instantly after launch, where’s the “degradation” a week after a game comes out?

        The point is, whether you buy a game on day 1 or pre-owned a year later, your experience of that game will be exactly the same. With a car, a new model will be made once every 3-4 years for a good consumer car. It is a simple fact that a 3 year old car that’s done 60 000 miles will not be as nice inside, as good to run or have the same price of upkeep as a new identical model. The second hand price will be determined by the quality of each individual car.

        Also, first hand car prices don’t drop. They just stop making them when the new model comes out. Would BMW lower the price of a 3 series because a new audi was better than it? no because people don’t just buy new cars whenever they want. They want a car that will last them for years, so will get one that will suit them, maybe not the best or the newest or the cheapest but the right one for them. When does that sort of thought go into buying a game?

        Comment posted on 14/09/2011 at 13:36.
      • Youles
        Member
        Since: Feb 2011

        Fair point. In that case, the value of the software degrades, not the experience. A game becomes less valuable when a better one, in the same genre is released. Not in every case but assuming it’s better.

        Regarding your last 2 sentances, I think the same is applied to buying games. For example Heavy Rain – people would have borrowed this, rented it or played it second hand (hence de Fondaumiere’s original gripe), rather than buying new, as they know it’s a short game and the replay value isn’t that big. Therefore they might buy another game such as MW2 due to the campaign, DLC, long multiplayer, as it represents better value for money.

        Comment posted on 14/09/2011 at 13:58.
      • Youles
        Member
        Since: Feb 2011

        Grabacr makes an interesting point on page 2:

        “The physical condition dosen’t even come into it. The comparison gamers were making was how when you buy a second hand car, the manufacturer gets 0% of the money, exactly like when GAME etc sell games 2nd hand, and how car companies don’t moan at people for buying and selling their products used.”

        It’s difficult, I see it as a product that I own, and whether I’m right or wrong, Dave Herod sees it as I’m playing his IP that he owns. Since it’s not illegal to buy second hand, it is not theft!

        Comment posted on 14/09/2011 at 14:08.
      • jimmy-google
        Member
        Since: Feb 2009

        But how much do you have to pay to a garage each year to keep a second hand car running?

        Developers could make discs that degrade over time so every year you have to pay to have your disc fixed. Think of it as an MOT for games.

        I bought a second hand 06 car last year for £4,500 from Ford. This year the car has so many issues Ford want to charge me another £4,500 for the repairs and to replace the engine and the damage was caused by a fault in the car.

        Comment posted on 14/09/2011 at 14:20.
  10. TSBonyman
    Member
    Since: Dec 2009

    Saying the car analogy is wrong, is wrong imo – when you a buy a game second hand you aren’t getting the same value, online now costs extra for instance, cover art/manuals might be missing, there’s these ugly un-removable stickers sometimes..

    Comment posted on 14/09/2011 at 13:03.
    • Youles
      Member
      Since: Feb 2011

      …and no “preorder DLC”.

      Comment posted on 14/09/2011 at 13:06.
    • gggames.se
      Member
      Since: Jan 2010

      Agree. Don’t forget scratched or otherwise molested discs… Who knows that the game even works all the way through if the disc has scratches?

      Comment posted on 14/09/2011 at 13:07.
    • heedbaw
      Member
      Since: Nov 2009

      I do think that he has a point as people always seem to compare the 2nd hand games market with cars for some reason. But saying that it’s any differetn due to software not degrading is strange. What about a 2nd hand DVD, or chest of drawers, or book, etc. None of tose things really really degrade any worse than a game. It might take some time but that shiny disc will stop working one day, if your console doesn’tdie first that is.

      Comment posted on 14/09/2011 at 13:14.
      • jimmy-google
        Member
        Since: Feb 2009

        The difference will a film is that studios bring is massive revenues through cinema releases first. The price of a ticket is about the price of a DVD but without the replayabilty.

        A chest of draws is a very different product which makes it hard to compare.

        Books are similar but the cost to make a book is tiny in comparison. They also charge a premium for the early releases (in hardback) and the reduce the price with a paperback some time later. Books are also heading down the digital route with things like Kindle so you can’t trade them in. A second hand book is normally clearly second hand, its not normally that easy to tell with games.

        Comment posted on 14/09/2011 at 13:38.

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