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?
TSBonyman
I generally buy new to support the game developers, even though i rarely play online.
It does look like in the future, second hand games will be much cheaper and tempting for people like me.
hazelam
i recently bought red dead redemption preowned, at a car boot sale, not a store, cost me about 8 quid.
and in the dlc sale at the end of last month i bought the dlc pack for it, i doubt i would have done so if the game had any kind of online pass.
i would have loved to have bought the game new when it came out, but i just couldn’t afford it.
so my purchase of a preowned copy can hardly be considered a lost sale.
and rockstar got a sale of a set of dlc out of me, thanks to my purchase of a preowned copy
now that is a definite benefit for the publisher, and i doubt my situation is all that unique.
my question is, why do they think they deserve a slice of any money from preowned sales?
i absolutely agree that they should get paid for their work, i’d never dispute that they deserve to be paid.
but the fact is, before any game becomes preowned, they already got paid for it.
they got their fair share.
why does gaming deserve what almost no other industry in the world has the right to?
and wanting more than their fair share is what these online passes are all about.
they know console gamers will not accept steam style drm, so they’re going to sneak it in, eroding what we can do with our property bit by bit until we have no rights over the products we’ve spent our money on.
yes, you could argue that they’re providing an ongoing service, and i can see that point, but there is also the counterpoint that that copy’s access to that service has already been paid for.
people say it’s because the stores are making too much money.
if that is in fact the problem, how can they justify penalising private sellers?
Forrest_01
That was exactly my initial point – That they should be targeting the stores that sell pre-owned & re-coup costs from them rather than the individual. But then (as in your 1st sentence) there are people that buy direct from others, which doesn’t involve the stores at all & that is probably why they are trying to do a ‘catch-all’ solution.
Don’t get me wrong, I am completely with you & I don’t like it one bit either if I am honest, but I can understand why they are doing it. I just wish they could find a better option than the online pass which IMO isn’t doing anything to help the industry.
hazelam
to be honest, it’s not the pass in itself that i object to, it’s the whole war on preowned sales i take issue with.
i know i seem rabidly against the pass but i do understand why they’re doing it, and if i was given a 100% guarantee that they would never use steam style drm in their titles, that the pass wasn’t just a stepping stone to that, then i would have no objection.
but i’ll never get that guarantee will i?
Forrest_01
Fraid not – In fact, the only thing that probably IS guaranteed is that they probably will end up down that route.
I of course hope not, but i fear so. :(
Can’t say i am a fan of the pass though as it doesn’t only affect preowned – A friend of mine has two sons who generally like to play the same games. Even if she buys a game new, she still has to buy another online pass just so the other son can play on his profile.
That can’t be right can it?
Roynaldo
Im far too tired to say all of what I think but il keep it as short and sweet as i often do.
I am a gamer that does not play online too much, so this does not affect me greatly. However I do like to trade and purchase new in return. Now my games will lose value because I at least try the online to see if its one of those few I love.
Maybe now im not allowed to try the online in an attempt to keep the value high, then I will not tell my buddies to purchase the game and redeem his/her code to come along and enjoy the ride.
The only way to avoid this predicament for me is to allow online access for a limited period (4 hours gameplay or more).
Slimeh
Pie is not infinate :)
Foxhound
I buy new so…
Slimeh
Instead of using online passes which affect the number of machines you can play your disk on or a second hand owner maybe not realising they have to pay for online , because I bet not every place selling second hand will always tell the new owner about online passes.
Maybe publishers should say to a retailer we’ll sell you our product for less but you give us a percentage profits from second hand sales back or is that too simplistic ?
Forrest_01
Not quite sure if your first statement is in response to someone else, but the thing i picked up from it was;
“because I bet not every place selling second hand will always tell the new owner about online passes.”
Unfortunately, this is true – I enquired about whether crysis 2 had an online pass (being an EA released game) in Game the other day…They didn’t have a clue.
Not even sure the girl (who seemed quite ‘senior’ in the store) knew what i was talking about. I had to google the damn thing myself on my phone in the store!
I highly doubt that store staff are going to start telling people any time soon. They will just continue to push pre-owned as they have always done, as a customer is very unlikely to complain once they are at home with their product.
hazelam
but the thing is, the publisher has no legal right to any profits from preowned sales.
the game is no longer their property at that point so they no longer have any claim.
that’s the way just about every other industry on the planet works.
i don’t get why people think the games industry is any different.
but then reading your suggestion properly, i tend to skim ^_^ i see you seem to be advocating they give something back in exchange for a cut of the preowned profits, not that they automatically deserve a cut.
heedbaw
I just want to reiterate the EA example I used in the PSN Pass article. As I’m guessing that it won’t be that much different from other publishers.
In their 2011 filling they had an income of $3.6billion, and the cost of the goods they sold was $1.5billion. They did make a loss of around $322million due to other outgoings .e.g. mergers, acquisitions, investments, and restructuring
To me that says they’re just grabbing some more money because they can. They’re not losing the money from the developement of games if it cost them $1.5billion to make $2.1billion
Slimeh
As we are so often reminded they are companies out to make a buck so of course they are going to grab the money because they can.
Whats a few hundred million in the longterm ..its nothing unless the losses keep building up.
Then again I do get a bit fed up with EA with there release every year tactic and not fixing stuff or very little, Tiger Woods for example (only EA games I usually buy btw) :)
But if it works for them the so be it.
The company that will always get my money and respect is BLIZZARD though and thats only after playing diablo 2 and WoW, Even though I don’t play WoW now becuase I hated raiding just wish the money didnt go to activision ;)
InternationalGamer
Online passes arn’t that bad compared to what Capcom will do to their games on the 3DS. Because of the fact that how 3DS games work, you can only create 1 save, so no new saves can be created on another 3DS console.
Slimeh
I thought they where only doing that to the re:Mercenaries game?
I have felt for a while though that capcom seems to have joined the list of companies that seems to be saying to themselves hey why dont we just get as much cash in, in the least amount of time as possible , might just be me ?