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
hazelam
and if a car owner looks after their car they could sell it in a nearly new condition.
i hardly ever use the car analogy myself, i prefer to compare it to every other media that comes on a hard copy.
be it books or music or film.
and as for this
“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.”
that’s the biggest pile of steaming horseshit i’ve ever had the misfortune to read.
you own the ip but you don’t own the disc, you own the rights to the game, but you don’t own the copy on that disc.
you gave up that right when you sold the game the first time.
it belongs to the person who bought it.
so long as they respect the copyright and not reproduce it the publisher has fuck all to do with the game after it’s sold.
if we’re not gonna own the games we buy, why the hell should we give them any money?
the greedy dickhole’s making a pretty good argument for piracy it seems to me.
and no, books don’t have the same preowned percentage, but then there aren’t as many preowned book stores.
but then they always forget that gaming got to be where it is with the preowned market running parallel in almost every games shop since the very beginning.
you ever read something online and want to hit the person that wrote it?
you have?
then you know how i feel right now.
jikomanzoku
Here, here. well said Hazelam.
If I buy something, it’s mine to sell on – and I will happily treat anyone, or any law who tells me otherwise, with the dismissive contempt they deserve.
I only ever buy preowned games that otherwise I wouldn’t have bought – so from my point at least those preowned sales aren’t impacting on sales. If your game is good enough I’ll be queing at midnight and picking it up on day one/preordering it etc.
I’ve illustrated before that devco’s have benefited from this in my case, in that I have played games preowned (that I wouldn’t otherwise have bought) and gone on to spend in some cases thirty quid or so on DLC (Mass Effect 2) etc and buy sequels or other games from the responsible studio on day one (Dante’s Inferno/Dead Space 2)
If it’s a single player game – tough shit devco – your product (in this case) is no different from a film, or a CD and is just information on a disc. It has no upkeep for you so why should you benefit when someone gets bored and sells it on? If you want more revenue release some extra DLC, but if you wanna talk theft lets talk about “On disc” and to a lesser extent “Month one” DLC shall we, Devcos?
To use a car analogy (just for a giggle) that nonsense is like buying a car and finding out you aren’t allowed to sit on the passenger seat until you stump up another 10%.
GTRsannin
Well i think that used cars and used games are not the same thing. When you buy a used car especially with newer cars you have to take it to a specific garage to get it fixed cause they usually need special tools that the car manufacturers sell and those specific garages usually use the cars own parts at witch point the manufacturer gets money again and besides new cars are so expensive that manufacturers get a lot of money from that alone but like somebody said on Mondays post (i think) games are still the same prized as they were in PS1 era but making them has gotten more expensive. I think this kind of an argument is pointless people who buy games pre-owned think they are doing the right thing and people who only buy new think they are doing the right thing. I only buy new cause i like to know that the package has everything it’s supposed to
heedbaw
It is hard to compare with any other industry really. The point I was trying to make is that it’s only games, or software, that seems to have this nonsense attached when it comes to 2nd hand. And that the degradation issue is just bull. Everything degrades, you can’t escape entropy. Discs may have a 30 year or more lifespan but they will eventually be unreadable at some point in the future.
heedbaw
dang, that was meant to be a reply to jimmygoogle
rogue66
The music and movie industries are in the same boat. Again you’re not buying the medium it comes on (DVD, BLURAY, CD) etc. You’re just buying the license to consume it.
heedbaw
lol, see below. It is generally regarded that those licences are worthless now due to the amount of people that completely disregard them or don’t even know that there was a licence.
rogue66
It could be an interesting argument in court if you got caught stealing a pre-owned game from a shop. If the disc never belongs to anyone but the publisher (the shop didn’t own it) and the license has already been used (by the guy who bought it new) then what have you really stolen?
heedbaw
haha, just need the money to pay for the suit if we do go ahead with that experiment.
One thing to look at is GeoHotz vs Sony. I’ve got the feeling that Sony settled out of court because they didn’t have a leg to stand on, which would have set a precedent as far as EULAs go. And I’d say that because it’s unlikely that GeoHotz gave them a ton of money to go away and stop bothering them, more the other way round. And they also slapped a gagging order on him too, so there’s no way we’ll ever know what went down.
rogue66
The best solution I can see for the devs and publishers is to essentially put a demo on the disc. In the manual there would be a unique code that ties your licence to your PSN or XBOX account and then when you first run the game it downloads the rest of the game to your console.
rogue66
Or the government could intervene and slap a 100% sales tax on pre-owned games and share it out to the devs.
jikomanzoku
So, for which publisher do you work then eh? ;p
That’s not a solution it’s protectionism.
rogue66
I don’t work in the game industry and as I said above thats only the best solution for the devs/publishers.
For the consumer the best thing we can do is not buy any games until they get the message that we’re not happy about being the ones who get fucked here. You could:
a) Pirate games – people don’t like that because its stopping money going to the developers.
b) Buy second hand – less people mind that because so long as they paid someone for the game and got a good deal then their conscience is clean.
c) Borrow games – even less people mind this as they got to play the game for free but its not piracy as you didn’t copy it to play later
d) Rent games – the devs at least get something but then they’ll only make games for the rental market because no-one plays anything for more than a week anymore.
Faulker
Won’t work until every country has a PS Store or X Marketplace. Fuck creating fake account.
heedbaw
‘The IP is owned by the publisher and developers and retailers are effectively selling something that’s not theirs’
I do like that he said retailers when in fact it should be the buyer who is selling to the retailer something that is ‘not theirs’ in the first place. But the IP thing is a bit crazy.
As the film and music industries have learned over time, very slowly, that once somthing is out of their hands it is effectively not theirs anymore. It is still illegal to copy or broadcast any film or music that you own, and to copy any that is broadcast. But they gave up on chasing that as so many people were recording stuff from radio and TV that it just became more of a hassle to chase them than it was to forget about it and look at other ways of increasing revenues. Once so many people are doing something it becomes common law wether they like it or not.
The way I see it is that they’re basically pissed off because they have fell into the same trap that film and music did all those years ago, and now it’s too late for them to do anything about it after years of a burgeoning 2nd hand market but moan, make tons of silly DLC, and add an online pass.
I’m no copyright or IP lawyer but to me if someone is using something you created to make themselves money then the creator has every right to go after them. But are the reatilers or consumers using that IP to make money, not as far as I can tell. They are selling a product not the IP itself.
And then you can go into all of the ‘Orphaned Works’ bull that companies are trying to get implemented so taht they can use an individuals IP or copyrighted material found online without having to even get aknowledgement or pay out any money to them. So it’s one rule for the companies but another for the individuals, which is why I find them pushing all this stuff to kill or shrink the 2nd hand market laughable and totally hypocritical.
enroene
Sure devs hate SHM but they should work with the retailers because some people don’t always have money to purchase games brand new so they should formulate a way they earn some money from SHM otherwise shut up.
rogue66
Its simple. Sell the software cheaper. Follow the music industry.
Music CDs are about half the price they used be, even new. The reason you don’t see pre-owned music stores is because albums are too cheap to be worth trading in. You might as well buy a new one for all the difference it makes. Thats for the people who even still buy music on physical media.
The games industry has to get over themselves and realise that like music & movies their product just isn’t worth what they think it is to most people.
Books will shortly go the same way.
Hoopiness
It comes down to them bumping their gums about what they perceive to be lost money. Often though, people wouldn’t pay higher prices for what they are buying 2nd hand, ie average games that people are only tempted by due to lower prices. At full price, no ta.
Also, re this comment:
“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.”
What about if on “old” pricing models, people buy a game on the cheap a year or two after release once the price finally drops… only to find online services for that game being decommissioned, toned down, no longer supported, bugs not being addressed, and whatever else.
Software doesn’t degrade, but you aren’t only buying the software…you want all the trimmings. Muppets.
Faulker
First of all, don’t tell me that in 1999 there weren’t second hand copies available after day one.
Second, while he is right that you get a car that’s in worse condition then if you would have bought new, but this point is made moot by DLC. You buy the game and then a bazillion number of DLC is released which you have to buy seperately or wait for the inevitable super ultimate edition or GOTY. Bloody hypocrits too, because Dirt 3 has like 7 DLC packs already released.
Also fuck DLC and fuck online passess.
Faulker
*available ON day one. (fixed)