Used game sales to take a hit...

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taintedzodiac replied on 02-16-2010 7:39 PM

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youngmimesofharlem:

seareever:

 

ALSO, when the game sells new the proceeds go almost entirely to the developer/publisher which means? DING DING DING more games for you later.

I don't understand why this argument is continually trotted out. It's never applied to anything else; you don't buy a new car because if you don't Ford will stop making you cars in the future.

If Assassin's Creed 2 is $60 new, or $40 on craigslist, i would have to be mentally defective to pay 33% more for it just to unwrap some plastic film.

It's mostly a long-planned marketing ploy by the gaming companies. Their business model doesn't encourage used game sales, so they blame the people taking advantage of it instead of trying to adapt their model to incorporate it.

Car dealers with a new vehicle franchise take and resell trades themselves because it's profitable. Real estate companies do the same. If a company in any industry can profitably produce a product, sell it to a consumer, buy it back from the consumer, and resell it to another consumer, they will.

Gaming companies, however, do not control the retail outlets like most manufacturers of durable (in this case, I use durable to mean that the product itself outlasts the average first owner's need or desire for it) consumer goods do. That's because the industry itself was never large enough to make it profitable. Now, digital distribution makes that business model obsolete as far as games are concerned, so the manufacturers want to adapt to controlling the retail side via that. It's an added bonus for them that it also eliminates used titles.

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DrJ079 replied on 02-16-2010 8:04 PM

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taintedzodiac:

youngmimesofharlem:

seareever:

 

ALSO, when the game sells new the proceeds go almost entirely to the developer/publisher which means? DING DING DING more games for you later.

I don't understand why this argument is continually trotted out. It's never applied to anything else; you don't buy a new car because if you don't Ford will stop making you cars in the future.

If Assassin's Creed 2 is $60 new, or $40 on craigslist, i would have to be mentally defective to pay 33% more for it just to unwrap some plastic film.

It's mostly a long-planned marketing ploy by the gaming companies. Their business model doesn't encourage used game sales, so they blame the people taking advantage of it instead of trying to adapt their model to incorporate it.

Car dealers with a new vehicle franchise take and resell trades themselves because it's profitable. Real estate companies do the same. If a company in any industry can profitably produce a product, sell it to a consumer, buy it back from the consumer, and resell it to another consumer, they will.

Gaming companies, however, do not control the retail outlets like most manufacturers of durable (in this case, I use durable to mean that the product itself outlasts the average first owner's need or desire for it) consumer goods do. That's because the industry itself was never large enough to make it profitable. Now, digital distribution makes that business model obsolete as far as games are concerned, so the manufacturers want to adapt to controlling the retail side via that. It's an added bonus for them that it also eliminates used titles.

Their business models have had to incorporate this for some time.  This isn't a new phenomenon.  Game trading has been going on since at least the early 90's.  Most businesses have to deal with the fact that people will sell their products after the initial consumer no longer has a use for it even though they may not control the retail channels for them.   The market for any product would be more limited if the product had 0 residual value once the person bought it.  But because of development trends, the life cycle for games is ever decreasing.   

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taintedzodiac replied on 02-16-2010 8:07 PM

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DrJ079:

Their business models have had to incorporate this for some time.  This isn't a new phenomenon.  Game trading has been going on since at least the early 90's.  Most businesses have to deal with the fact that people will sell their products after the initial consumer no longer has a use for it even though they may not control the retail channels for them.   But because of development trends, the life cycle for games is ever decreasing.  

I'm not sure if you misread my post or are just agreeing with me, heh.

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DrJ079 replied on 02-16-2010 8:17 PM

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taintedzodiac:

DrJ079:

Their business models have had to incorporate this for some time.  This isn't a new phenomenon.  Game trading has been going on since at least the early 90's.  Most businesses have to deal with the fact that people will sell their products after the initial consumer no longer has a use for it even though they may not control the retail channels for them.   But because of development trends, the life cycle for games is ever decreasing.  

I'm not sure if you misread my post or are just agreeing with me, heh.

Mostly I'm disagreeing that they are refusing to adjust their business models to account for used game sales.    The models have always accounted for used game sales. 

And trying to eliminate them with digital downloads doesn't seem like it's the answer.   How are PC game sales doing again?   Telling a consumer that they're going to have to pay $60 for a product that has no residual value whatsoever and if it completely sucks you're stuck with it anyways isn't going to do a lot to promote sales IMO.   Doesn't seem like you're going to "sell a lot of games to non gamers" and rapidly increase your market share with possibly the worst customer service approach in the history of ever.  Seems like you'd like used game sales and rentals if you're trying to make your product visible to the widest audience possible.   We'll see.  

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taintedzodiac replied on 02-16-2010 8:24 PM

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DrJ079:

taintedzodiac:

DrJ079:

Their business models have had to incorporate this for some time.  This isn't a new phenomenon.  Game trading has been going on since at least the early 90's.  Most businesses have to deal with the fact that people will sell their products after the initial consumer no longer has a use for it even though they may not control the retail channels for them.   But because of development trends, the life cycle for games is ever decreasing.  

I'm not sure if you misread my post or are just agreeing with me, heh.

Mostly I'm disagreeing that they are refusing to adjust their business models to account for used game sales.    The models have always accounted for used game sales. 

And trying to eliminate them with digital downloads doesn't seem like it's the answer.   How are PC game sales doing again?   Telling a consumer that they're going to have to pay $60 for a product that has no residual value whatsoever and if it completely sucks you're stuck with it anyways isn't going to do a lot to promote sales IMO.   Doesn't seem like you're going to "sell a lot of games to non gamers" and rapidly increase your market share with possibly the worst customer service approach in the history of ever.   We'll see.  

Actually you're agreeing with me, you just misinterpreted what I said. I said their business models don't incorporate used game sales, as in they do not make used games sales their business. I wasn't referring to the fact that they account for used game sales, which is what you're pointing out.

As far as adjusting their business model, same thing, they have not adjusted their business model to incorporate used game sales. They'd prefer to eliminate used game sales via DLC. I'm not saying it will be more profitable, just that they'd love to do it and make it more profitable if they can.

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zoro69 replied on 02-16-2010 8:46 PM

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Cars etc aren't comparable. A new car is a very different product then a used car.  Buy used...and you know it will cost more in maintenance and repairs as the product degrades with age.  A game is the same experience for each buyer, regardless of how much its been used.   There is no incentive for the buyer to pay a premium for new of they can buy used for less. 

youngmimesofharlem:

seareever:

 

ALSO, when the game sells new the proceeds go almost entirely to the developer/publisher which means? DING DING DING more games for you later.

I don't understand why this argument is continually trotted out. It's never applied to anything else; you don't buy a new car because if you don't Ford will stop making you cars in the future.

If Assassin's Creed 2 is $60 new, or $40 on craigslist, i would have to be mentally defective to pay 33% more for it just to unwrap some plastic film.

 

 

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FLAMINGPINECONE replied on 02-17-2010 12:28 AM

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Least this isn't the utter move Epic Games pulled on Gears of War II. Second hand buyers have to buy access to finish the last boss. DLC I can take or leave, I buy games on here assuming I may be locked out of some stuff thanks to a used code. 

Still a bad trend thats going to run Gamestop out of business. They should also keep in mind many major titles are sequels and as such, if I pick up Mass Effect used and I like it, I might have wanted to pre-order 2. I bought Bioshock for 5 bux on Steam, I paid 44.99 for 2. 

Bad business IMO.

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stoudman replied on 02-17-2010 3:59 AM

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I think it would be agreeable to make DLC that costs $10 initially at the date of release of the game, but after 1-2 years the DLC becomes free. It makes sense for a video game company to make a royalty off of used game sales when the game is still new, but when it's used and older why should people have to pay so much money to play it? I'm pretty burnt out from school right now, so these are nowhere near my "greatest" thoughts. I also understand this is not what is happening and it may not be what happens in the future, but I think it would be a smart move for a company like EA.

I mean, there seems to be a common consensus here that this $10 fee could have an inordinate effect on the used games market, in a worst case scenario making used games worthless. Somehow I doubt they would be worthless, but they would definitely drop more in price.

Part of me wants to see it happen because of how much I despise Gamestop. What a crappy company, they hire people who know nothing about games and don't care about games, making the few who do actually care about what they are selling feel like crap for working there because they have to work with mindless peons who think they are working in a toy store. I have nothing but pity for these poor souls. Oh, and don't get me started on company policy, and the general treatment of women -- I have seen first hand sexual harrassment taking place at Gamestop. Everything goes unchecked at that damn store, customers walk in and threaten to beat the crap out of the workers if they don't get their madden. They pay the general people there pretty much minimum wage, and their bosses barely make more than that -- to say that the execs of Gamestop are "skimming off the top" is a gross understatement. They are making a TREMENDOUS profit, and they could stand to see game companies take back what is rightfully theirs.

They would hardly be put out of business by it, but knowing the greedy capitalist corporate a-holes of America, they would just put even greater pressure on their workers, paying them even less and giving them even less training, as if that were even possible.

You want to know who's going to suffer the most from this? The Gamestop employees. True, most of us want to see some of these lackeys suffer. However, what of the people who have already suffered? Like I said, they have my pity. If I felt like I could tell someone taking such a menial job to "get out while you can", I would, but in this economy it just makes the truth of the matter much more tragic.

To remove the extra price tag after the initial release of the game would slow the descent of the price of the game, keeping things at a nice equilibrium, which would allow Gamestop to continue their business and Video Game companies to keep making that initial profit off of newer games. I think the real problem for me stems from the immortality of the issue -- if you just have to keep paying $10, eventually the value of the disc game itself will become so low that nobody will want to buy it anymore, and as I said eventually that process would speed up, and developers would lose that grace period to make money off of new games, thus hurting their sales. It seems like a good idea at first, but to me its true flaw is that it has no end. Without an end the prices will drop, initially to $40, then $30, and within a few months $20. This is true of many games already, but it would then also become true of popular games as well if that is the target they really intend this for.

To a broke guy like me, if a game is more than $20, generally speaking I can't just make a blind judgement and purchase it out of blind desire. In other words, if I see a game disc for $20, but I know there's an extra $10 attached to the price tag, I'm not going to buy it -- I can't afford it. I'm not going to assume everyone is like me, but it seems to me the $20 bill is like the signifier between the expensive and the inexpensive for the lower to middle class, of which many gamers find themselves in. Based on that model, which admittedly could be and probably is flawed, I would have to assume that prices for games would have to drop even faster.

Right now a game will drop to about the $20 range and sit there for a while, which lends significance to my assumptions because why would the used games market choose that specific price point for most games to fall into for between 1 and 2 years after their initial release?

I guess my question is, what happens when Gamestop refuses to lower their prices?

That's all it would take, isn't it?

If they don't lower their prices, nobody will buy used, and the people who don't want to pay new prices won't buy it either way, and in the end these customers won't be mad at Gamestop -- they'll be mad at the developers.

I don't know, like I said, it seems like a great idea at first...but at second glance, Gamestop has more control than you would think. As it has been stated already, the games better be pretty damn good if they expect people to shell out for them, either through used sales or new.

In the end, who really knows what is going to happen? We've been discussing a lot of different possible routes that this action could take, but the free market is funny like that -- you never really know what exactly is going to happen until it actually happens.

Either way, I don't see why this would affect Goozex -- At this site we trade games and movies for a substitute of money, taking money almost entirely out of the equation. The only real money we have to pay is the $1 per trade. In essence, it is a barter system that completely circumvents the market, and allows people to trade one thing for another. Even with a $10 DL fee, it's a lot easier to trade a game to someone, get a game back in return for $1, and have to pay $10 for DLC than it is to have to pay $40-$50 for a used game and then pay for the DLC ontop of it. As such, it would seem that Goozex is a haven for avoiding these types of issues, because it doesn't deal in money -- it deals in points.

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taintedzodiac replied on 02-17-2010 6:07 AM

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zoro69:

Cars etc aren't comparable. A new car is a very different product then a used car.  Buy used...and you know it will cost more in maintenance and repairs as the product degrades with age.  A game is the same experience for each buyer, regardless of how much its been used.   There is no incentive for the buyer to pay a premium for new of they can buy used for less. 

An excellent point, of course. This used to apply to cartridge-based games and especially ones with battery packs, but disc-based games (so long as you can inspect them beforehand) are pretty much 100% the same as new. With cars/houses you have to balance the used one's condition and mileage discounts against the new one's warranty (plus rebates, offers, etc.).

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taintedzodiac replied on 02-17-2010 6:09 AM

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FLAMINGPINECONE:

Least this isn't the utter move Epic Games pulled on Gears of War II. Second hand buyers have to buy access to finish the last boss. DLC I can take or leave, I buy games on here assuming I may be locked out of some stuff thanks to a used code. 

Not quite sure what you mean here. I bought Gears 2 used and the final boss, while underwhelming, was in the game. Was there some type of optional boss in DLC?

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bonham2 replied on 02-17-2010 7:36 AM

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This is a big fear of mine, but we as consumers need to stand up to this kind of bullying.  Part of the reason I buy physical media instead of digital is because it has a resale value.  This includes DVDs, blu-rays, CDs, video games, etc.  I buy and play many more games because I know I can either sell or trade the game without losing too much money.  Most games are not worth $60 to me, but if I know I can sell it for $40, then it's only costing me $20 - now it's worth it, and guess what...The developers got a sale out of me.  When it comes to digital downloads, I am VERY selective because I know I can't resell it.  I'll wait for it to go on sale or wait until point cards go on sale and I try to always play the demo first.  If developers do what zoro69 suggested, I will have to be even more selective with my purchases.

I spend hundreds, if not thousands, of dollars a year on video games.  If developers start including unique codes just to play the game, I may need to find another hobby.

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XxSpiderxX replied on 02-17-2010 9:59 AM

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I agree with what you've stated completely. Adding that digital downloads are a purchase resting upon the back of technology that can and will fail, and in many cases, your purchase becomes lost. Examples being hardware failure (console or hard-drive), upgrading (to the newest console or purchasing a new PC) or O/S reinstallation due to a virus or other problems.

I do and have enjoyed video games for some time, but if these type of practices become the norm for the industry, I'll just move on to something else. I'll miss it, but not enough to support what I feel is a serious imbalance between a providing industry and their consumer base.

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Atheist replied on 02-17-2010 10:45 AM

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You're also forgetting to mention that game companies don't get the full 60$ on most purchases. When they sell games to big corporate giants like Walmart/Best Buy, they probably take a 14$ hit per unit or so.

The reason second hand game sales are different, is the very reason the initial quote says. The Blu-ray disc only costs 50 cents, it's the intellectual property on the disc that is worth millions of dollars, divided by the number of people that purchase the game. Unfortunately game companies don't sell their games in such a manner, the simply put a 60$ sticker on it. (I'm looking at games like MW2/Sims that pull in massive net profit.

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youngmimesofharlem replied on 02-17-2010 11:08 AM

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taintedzodiac:

zoro69:

Cars etc aren't comparable. A new car is a very different product then a used car.  Buy used...and you know it will cost more in maintenance and repairs as the product degrades with age.  A game is the same experience for each buyer, regardless of how much its been used.   There is no incentive for the buyer to pay a premium for new of they can buy used for less. 

An excellent point, of course. This used to apply to cartridge-based games and especially ones with battery packs, but disc-based games (so long as you can inspect them beforehand) are pretty much 100% the same as new. With cars/houses you have to balance the used one's condition and mileage discounts against the new one's warranty (plus rebates, offers, etc.).

I think you guys have missed my point. I wasn't asking for a breakdown as to why Games are different to Cars. I was asking why people put out the argument that we owe it to developers to buy new so that they can make more money and make more games.

The developers need to stop blaming their pesky customers for having the temerity to sell games they have bought and start thinking how to make their games more replayable and therefore off the 2nd hand market. An example for me is Modern Warfare 2; for $60 bucks you can get weeks and weeks of online play, representing excellent value for money and low likelihood of the game being sold on. Similarly Arkham Asylum can be beat inside 12 hours and then nothing, meaning copies of the game flood craigslist, ebay and the like.

If you can beat a game in 12 hours that works out at $5 an hour. If you play one for 120 hours it works out $0.5 an hour. Suddenly buying that new game looks a lot more attractive huh?

That said something has to give somewhere, I pick up games from craigslist and sell them back on ebay once completed sometimes for a net cost of $0. I'm effectively playing the games for free.

When the day comes the developers and publishers put an end to my wheeler dealing I agree with most of the posters above, I'll probably just stop gaming. I only use it to get me through the 'Winter Hibernation Period' anyway..

But they will figure out a way to put a stop to it. I've had ten games for the PS3, only one was bought new.

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Hexpane replied on 02-17-2010 11:17 AM

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DrJ079:

Maybe video game companies should do a better job of lobbying so when they make a bunch of crappy games and no one buys them, Obama cuts them a big fat check to keep producing their crap.

It's a great idea, but it's interesting how people conveniently forget it was BUSH who did the bailout first.  That was the "oh no" moment, when Bush, McAin and Obama all agreed on bailing out giant illegal cartels.   Hard evidence that the 2 party system is really just warring lobby groups.

But short term memory in america, the Bush years are like some foggy haze of a bad party that people can't remember exactly what happened anymore.

The truth is Art has been government funded for thousands of years, they did it in Rome, they did it in medieval england, it's actually a time tested and proven idea.   Not everything has to be a commodity.