Sony’s announcement of the PSN Pass comes at a time when not having some sort of insurance scheme against preowned sales would be peculiar. All the big publishers have noticed that, not only does a one-use code in the box with new copies compensate them for preowned sales, it can boost profits. But are they missing the subtle way it potentially changes the landscape of gaming?
For all their talk of adding value, ensuring online services and providing for developers, the online pass is about one thing: making money for the publishers. I don’t make that accusation with any particular amount of negativity. We all like to make a little money. The only issue I have with that particular aspect is the general dishonesty that surrounds it (as outlined so eloquently by Ben Parfitt of MCV this morning).
I’m not stupid. I know that publishers are in the business of making money. I’ve often defended their right to do so in the face of the current fashion for ranting about publishers with business models. I also tend to agree that the preowned market is, probably, generally a negative thing for developers. Oh, it’s fantastic for retailers who can double down their profits easily and not have to worry about paying the publisher’s cut. Perhaps that’s why there’s a GAME store on every street corner near me while the developers at Black Rock Studios, the people who made the best arcade racer since Project Gotham, are job-hunting? Actually, so are the people who made Project Gotham, aren’t they?
[drop]Is the growing trend for studio closures and workforce reductions by big name publishers something that can be blamed entirely on the preowned market? No, certainly not. Publishers seem happy to see consumers take the blame for failures that rightly belongs at the feet of their own marketing departments or development studios.So, what impact will online passes have on the preowned market? Retailers will not stop selling games preowned, they’ll just promote Microsoft Points and PlayStation Network cards at the point of sale. They’ll remind you when you get to the register than in order to get the full functionality out of this game, you also need to buy credit for the respective stores. What that might do is reduce the price of the actual preowned game slightly but only so much that it remains under the price of a brand new copy after the additional purchase of online store credit.
Retailers will work the online pass as a method of selling points and credit for the PSN or XBLA. Publishers are benefitting from the online pass because it means two separate people (or more) have now paid for one place in their online infrastructure and they effectively get a little slice of the preowned profit. Developers are probably getting a tiny slice of the profit from that too, although I’d guess that it’s much less than we’d like to pretend. And don’t forget that platform holders, too, make a bit of cash on everything bought from their stores.
With all of these people making a bit extra on online passes (and the preowned market that necessitates them), where does that come from? Who is losing on the deal? Well, you are.
Firstly, if you buy new games you get a code in the box. So new game buyers only suffer the inconvenience of having to decipher and input those code strings and download the unlock key to get access to everything their game has to offer. That’s not a huge inconvenience for those that only ever buy new games and never trade them in.
If you’re the sort that likes to trade in the games you’ve finished with, most likely to help fund the purchase of a new game, you’ll likely see less value offered by the retailer. They’ll tell you it’s because the code is used and they can’t sell the preowned copy for as much. That’s technically true, although slightly disingenuous as they’ll also be pushing hard to sell online store credit at point of sale. Retailers will do all they can to ensure they don’t lose money in the deal, you can be sure of that.
So if you trade in to buy new, you’ll likely lose a little on each title. New games, of course, aren’t getting any cheaper so it could be argued that giving you less trade in value means you’re less able to fund that new purchase. Margins are unlikely to be that wide though, you’ll probably stretch your funds a little bit and make up the difference.
[drop2]If you buy preowned games as a way of stretching your budget that little bit then you’ll likely be saving slightly as they’ll be cheaper in order to leave room for that online store credit. So, if you buy preowned games and have no interest in online services, there’s every chance you’ll get a better deal. That is, until it’s time to trade in again and fund your next purchase. In reality that better deal you got, buying preowned with no interest in online services, is negated when you try to trade your copy back in with the retailer who won’t offer you as much because the online services are missing. So you’re probably just about breaking even in the long run.If you buy preowned and still want to play online, though, you’ll probably end up paying slightly more for the product. You’ll get the preowned disc a little bit cheaper but have to top that cost up yourself with a purchase of store credit to download the online pass. This will, most likely, end up costing your slightly more than the preowned games would if they had all features available without an online pass. And then, when you come to trade it in again, you lose all the value of the store credit you bought to fund the online pass.
Perhaps unsurprisingly, it’s the consumers who are being worked in this system. On top of the small increases in cost and the decreases in trade in value, they will lose out on experiences. The kids who can only afford a preowned copy of FIFA, several months after release, won’t experience the online side of that game. Casual players will no longer dip in to the deathmatches and capture the flag to-and-fro of first person shooters, just to see what it’s like. Online experiences, very soon after release, become something that’s only for the hardcore, making them even less welcoming to newcomers.
Online passes aren’t simply about taking money out of your pocket, although I’d guess that’s the only side that the money men at publishers and retailers are looking at. Online passes represent a change in the way we experience games. Yes, that experience is built on a system of buying and selling that isn’t entirely beneficial to publishers but it’s one which has encouraged gamers to try new things, get the benefit of different ways of playing and expand their enjoyment of their pricey pastime. Online passes put a fence around that freedom and charge us at the gate. Sure, that’ll make money but at what cost?
Bilbo_bobbins
I buy new at the moment, but with a baby on the way, that will probably become less and pre owned is the future. WIth the fact of possibly having two different ID’s playing on the same system, this means its going to possibly cost me more than buying new, just to purchase two passes. Stupid idea.
Never before has this been done, and I personally think it will be a big problem for the industry in the long term.
beeje13
If the passes do reduce the value of games, then it ‘might’ be a good thing – a few more people (not all can afford to buy several new titles a year) will buy the game new, which benefits the Pub, and ultimately (but not much, as Peter has pointed out) the dev.
But for the people who really only buy pre-owned for the single-player, such as me, we get games at a lower price.
If i am interested in the multiplayer (or dlc, like mass effect) I will buy new.
One could argue that there are too many middlemen, this is where PC excels, steam for example is a best case scenario for everyone (except retailers) as it is digital: No money going to wholesalers, no platform holder royalties, straight to the pub/dev, with a small cut to Valve for providing the service.
hazelam
steam is great for downloadable titles.
but i despise the way it infests, and i choose that word deliberately, disc games.
steam on a disc clearly violates our rights.
beeje13
Interesting point of view, but now i try to buy steampowered disc games, as it’s easy to keep track of all my games in one place.
hazelam
but you realise, you can never sell those games.
if the possibility of reselling your games doesn’t concern you, maybe you’d be better buying the games direct from steam, they’re sure to be cheaper, and from what i gather they’re portable as you can download them on a new pc, or even the same one if you need to.
Youles
I think this will just encourage retailers to increase the price of new games as there is less value in second hand games (since you have to buy a Pass too).
Lymmusic
We have seen recently a very serious change in the industry. One of the main symptoms has been the disappearance of developers responsible for games that fall outside of the AAA game, or outside of the casual app categories. Obviously the world economy is playing a major part in this, but so too is the management decisions of publishers and platform holders.
It is a common fact that this generation of games requires considerably higher budget to be seen as AAA. Games that have had lower budgets, either for development, marketing, or just creative direction have not made the grade, and the consequences have been rash. This generation cannot support critical success where it is not backed up with commercial success. Team Ico would have been fired if they had started making games in this generation.
Even the great franchises of our time have struggled, final fantasy is a perfect example. Poor management, lack of direction, mismanaged budget, and consumer indifference and high expectations can all be attributed to causing damage to both recent releases. Although sales were good, the RRP was slashed within weeks, preowned copies were everywhere, and what could have been the biggest success story in gaming history was a disappointment similar to that of being desparate for a dump for an hour while someone else uses the bathroom, only to find when you finally sit down on the throne all you are rewarded with is a wet fart.
The industry has changed, and the polarised core and casual gaming we now have demands the middle ground games either sort themselves out by either being better managed to be profitable from the outset, or canned early.
uber-BARBIE
having to pay for an online pass brings the ps3 into the same catergory xbox has been doin since the get go. basically paying to go online. this must be stopped. either that or people will jump ship to xbox where they pay per year which will be cheaper to people with tones of 2nd hand games.
colmshan1990
Except xbox games have online passes too, I believe.
stonyk
This could be a deal breaker for me. Pretty much play all my games from Lovefilm – then I’ll buy 2nd hand if they prove good enough.
I will never buy a game for £40 ever. Just not worth it in my opinion (I have too many bills to pay first). Therefore if this is the future of Sony I will not buy a PS4. Should M$ decide to not implement this I would certainly purchase the Xbox 3 instead. If all publishers do it then I will be sticking with 59p games on Iphone and the odd few games that are single player only.
Sad day for me :-(
djhsecondnature
Please don’t use “M$” it’s childish and fanboyish and not welcome here. Additionally, all publisher will use this, it’s just a matter of time.
carson321
Great article.
What does it all mean for game rentals?! how do the online passes work for these?
Also, its always going to be the consumer that looses out in the gaming industry because the average gaming consumer doesn’t have enough power in the market to sway the way business is done
stonyk
I always use M$ as I find it childishly amusing – don’t let it upset you – it’ll make you the better man :-)
Anyway – it sounds like its definitely a sad day for me then.
Does anyone think this will play in the hands of the big publishers? Example I bought Battlefield 2 last week for £5 2nd hand. I always bought COD (MW2 new @£25 was the main reason) and like it. But everyone nagging that BF2 is better I bought it 2nd hand as I saw it for £5 (Thats value!). Thats my entry to the Battlefield series – which would just never happen if all games were £40.
Anyone see new IP’s struggling with this news?
djhsecondnature
I assume that was meant as a reply for me. Anyway, it’s not about my personal preference. It’s not welcome here so please stop using it.
stonyk
I use M$ because it is distinctive and obviously Microsoft and not a typo. Also I assumed it was written in jest as they hav so much money. I’m not sure who it offends to be honest. Microsoft fan boys because I am misspelling it or Sony fans because I’m saying they have loads of money. Knowing it upsets people so much seems strange. I will endeavour to use MS in future then.
BrendanCalls
Correct me if I am wrong but I think that just now leaves Activision as the last remaining big player in the Publishing game to not have implement some sort of “online pass”.
Maybe Activision should start shouting about this and let gamers know that, “you can purchase any of their games 2nd hand and not lose any of the original value, however if you want to you can purchase additional online content that will enhance your experience without destroying other gamer’s enjoyment”
Oi, Kotick, gimme a job ;-)
djhsecondnature
That is the case, but they also have the highest RRP out of the publishers and CoD never seems to drop in price :-p
BrendanCalls
I’d imagine its even less likely to drop in price if it remains the last bastion of 2nd hand online play without having to purchase an online pass
Roynaldo
Not to mention crazy DLC prices….that also do not drop.
Kevatron400
I consider myself both lucky and stupid to fall into the category of “only buy new, never trade in” so these passes will have little practical effect on me.