If You Resell Your Used Games, The Terrorists Win

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News Posted: Wed, Apr 18 2012 6:22 PM
Game designer Richard Browne has come out swinging in favor of the rumored antipiracy features in the next-gen PlayStation Orbis and Xbox Durango. "The real cost of used games is the damage that is being wrought on the creativity and variety of games available to the consumer," Browne writes. "The real cost of used games is the death of single player gaming."

Browne's comments echo those of influential programmer and Raspberry Pi developer David Braben, who wrote last month that "pre-owned has really killed core games... It's killing single player games in particular, because they will get pre-owned, and it means your day one sales are it, making them super high risk. I mean, the idea of a game selling out used to be a good thing, but nowadays, those people who buy it on day one may well finish it and return it."

According to both men, studios implement things like DLC, DRM, and multiplayer in an attempt to reduce game churn. This reduces the resources available to the single-player teams, while spiraling costs drive midrange developers out of business. It's at this point that Browne's Crazy Pill really kicks into overdrive. He writes: "If used game trading fueled new game sales then when used game trade-ins became the new standard a few years ago new games sales should have spiked. Of course they didn't; in fact game sales have stayed mostly flat or actually declined."

Here's total software sales for the Xbox 360, PS3, Wii, DS, 3DS, PSP, and PC, as measured by VGChartz.



The 3% decline in retail sales from 2010 to 2011 was Nintendo's fault. Demand for Wii and DS titles fell 26 and 33% respectively; PS3 and Xbox 360 sales increased by 13% and 16% over the same period. The idea that game sales have "stayed flat or actually declined" since the beginning of this console generation is absolutely ludicrous. The downturn in sales thus far in 2012 reflects the Wii's dwindling popularity and the relative age of the Xbox 360 and PS3, as well as the fact that 2011 sales were quite strong during the same period.

Both Browne and Braben conflate hating GameStop (a thoroughly reasonable life choice) with the supposed evils of the used games market. Braben goes so far as to claim that used games are actually responsible for high game prices and that "prices would have come down long ago if the industry was getting a share of the resells." Amazingly, no game publishers have stepped forward to publicly pledge themselves to lower game prices in exchange for a cut of used game sales.



Publishers are hammering Gamestop (and recruiting developers to do the same) because it's easier than admitting that the current system is fundamentally broken. As things stood in 2010, nearly 50% of a title's $60 MSRP went to publishers and for console royalties. Meanwhile, developers like Browne complain that spiraling development costs make it nearly impossible for games to get made -- neatly ignoring the fact that a tiny fraction of titles are responsible for carrying the costs of developing expensive failures.

It's easier to blame Gamestop than to admit that the mythical man month doesn't work, that pushing employees to work weeks of overtime is directly counterproductive, or that an awful lot of video games should never be made in the first place. The game developers calling for a share of used market profits are advocating the death of First Sale doctrine in the name of perpetuating a doomed business model.



If that cost curve holds true for 8th generation titles, no squabbling over used game sales is going to patch the problem. To put the issue in perspective, consider Gamespot's 2010 financial information.


Original breakdown / graph published here.

In 2010, Gamestop did $2.46B in "used video game sales and other products." Let's call that $2.5B and further assume that every single used sale can be translated into a full-priced revenue sale for the publisher. Total game sales in the US for 2010 was $10B according to NPD--which means that even if GameStop gave all $2.5B right back to publishers, it's not enough to matter long term.

Don't let even a thoroughly rational dislike for bottom-feeders like Gamestop blind you to the bigger issue on this one. Killing the used game market wouldn't bring down prices. It wouldn't solve the problem of too few good games carrying the responsibility of paying for an ocean of crap -- and it would require consumers to give up their right to sell property they previously purchased or agree to digital-only distribution systems with draconian lockdown methods. We respect folks like David Braben, who have worked both as game developers and in the production of the Raspberry Pi, but in this case, the blame is landing on the wrong people.
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Corporate greed won't lower prices of new games even if they get a cut of used game sales.

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realneil replied on Wed, Apr 18 2012 10:47 PM

We have to practice tough love here. DRM infused games just don't get the love.

If they don't like that,....tough. Big Smile

Dogs are great judges of character, and if your dog doesn't like somebody being around, you shouldn't trust them.

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CRay replied on Thu, Apr 19 2012 3:11 AM

Professor Chaos!

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Wendyyy replied on Thu, Apr 19 2012 12:17 PM

I * wish you good luck.

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mhenriday replied on Thu, Apr 19 2012 1:52 PM

This all makes sense if one remembers that the term «terrorist» is here to be understood as anyone who does anything of which the MPAA, the RIAA, assorted patent lawyers, and in this particular case, a subset of game developers happen to disapprove. I just hope the above named, who seem to have no conception of the intellectual commons or prior art, are paying the proper royalties to the descendents of the Chinese inventors of toalet paper som 1900-odd years ago every time they wipe htemselves....

Henri

replied on Thu, Apr 19 2012 7:10 PM

GJ in this work

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LBarn replied on Thu, Apr 19 2012 8:11 PM

Do not worry you can always sell your used games on www.ListingBarn.com

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JDonahue replied on Thu, Apr 19 2012 11:18 PM

OK, to the publishers:

If you buy a new game from the big publishers, the terrorists win!

That, according to the "pie" in which publishers get the full profit, while the developers get little or nothing.

Wow! Why don't the publishers start selling used games themselves? Problem solved.

To not support the terrorists: Only buy games from the indies.  Otherwise, I will just go back to my PS1.

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NBarnes replied on Fri, Apr 20 2012 12:52 AM

It's important to remember in all this that we actually live in a Golden Age of single-player gaming. I doubt Browne can see it, but between the coming of age of indie game development, Steam and other digitial distribution services, and a massive back catalog of top-notch game experiences, it's a great time to be a PC gamer. It's a lousy time to be EA, Activision, or one of their overpaid and overrated development studios (not a description that applies to all of them, but to far too many), but that's not a problem for the game consumer.

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They always said intellectual property is like any other. You can't steal it, and you CAN resell it.

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OmniDeus replied on Fri, Apr 20 2012 12:42 PM

I understand their woes, and I actually agree with them on the fact that used games ARE killing single player games. However, I think the fault is theirs. If they made a game that was actually fun, original, and had high replayability then nobody would return the game. Example; KOTR 1, that game was freaking amazing! You could play the game over and over again and still have a different experience each time. I had my copy stolen because the game was just THAT good. Another Example; Fable 3, It was meh the game-play was similar if not the same as the last one. The story was stagnant and they wanted to make another one. I beat it in two days, tons of people had complaints about it because of similar reasons.

TLDR -- good games not only make good sales, they make good customers.

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FPiringer replied on Fri, Apr 20 2012 9:10 PM

I don't remember buying Minecraft at Gamestop. Or any of the games from the Indie Humble Bundle. Or Fez, for that matter.

The simple answer is - stop buying games at retail stores, overproduced crap from publishers that don't care about you, or creativity, or the meaning of "fun". Stop buying games on the first day they're released, overhyped and over priced.

Pick a Kickstarter campaign that interests you, or an indie developer asking for a few bucks on their website, or wait until a Digital Distribution service has offers the games you want at the price you're willing to pay. That's the real free market, there.

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RickF replied on Sun, Apr 22 2012 6:14 PM

(PC man only but still...)

Missing from the articles nice pro-business pie charts are;

1) How many titles produced in each years (2007 to 2011)?

2) How many of those in each year garnered the 'turkey' label?

3) How many 're-sales' per year?

4) How many of those 're-sales' accounted for buying new titles?

I guess my point is that the market has a quality threshold below which it is less inclined to buy a 'new' title but it might try that same game at the lower 're-sold' price.

RickF

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IKennedy replied on Mon, Apr 23 2012 2:28 AM

LOL. "corporate greed."

It's not a charity. They'll keep selling at $60 as long as people keep buying.

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Joel H replied on Mon, Apr 23 2012 10:25 PM

Rick, did you read the article, or are you commenting based on a quick impression? My "pro-business" charts are used to demonstrate the following:

1) Despite the comments of developers who hate the used game market, game sales have grown steadily.

2) Returning *all* of Gamestop's revenue from used titles and equipment directly to the publishers would not be sufficient to blunt the impact of spiraling development costs.

3) Publishers already take nearly 50% of the $60 a game sells for new. Between publishers and royalties, 56% of a game's price goes out the door.

4) Despite emphatically disliking Gamestop, blaming them for the current situation (or claiming they don't have a right to sell used products) is detrimental to both consumers and the market as a whole. It destroys what's traditionally been protected as a consumer right -- the right of first sale.

I am pro consumer rights. It so happens that in this case, that makes me pro-Gamestop. Politics, as they say, makes for strange bedfellows.

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