Secondhand Games Stifle Innovation?

Via GameSetWatch, an article at the Guardian relaying a message from publishers. They say that, though you may be enjoying those second-hand games, they may be forcing you to choke down the sequels that plague the industry. From the article: "'We recognise the secondhand games market is part of the revenue mix, for retailers at least,' said a spokesman. 'However, if it continues to grow, it could potentially starve us of the funds necessary for research and development, and therefore, developers will be less willing to take a risk on new and genre-diversifying titles. It's this creative diversity that makes the games industry so popular, and without sustained funding from new software sales, this could be at risk.'"

First Rant!

The symptoms:
        People are buying piles of second hand games.
        It's cutting into your profits.

The problem:
        You've set your price-point too high for the duration that your games are enjoyable.

The solutions:
        Lower your price or
        Make games that people will want to retain longer.

Bitching that your retailers are against you because they can't make money selling first-hand games is stupid. Retailers adapt to what makes money. If you lower you prices so they can run thicker margins on the new product, they will push your products accordingly.

This is not rocket science. Open to the pages of your marketing book where they show that setting a jukebox to play a song for a quarter will earn twice the money as one requiring one dollar but playing four songs.

Read, think, repeat until clued.

2nd hand games have no devaluation?

The interesting issue that I don't see brought up often is the fact that assuming the media remains in tact a video game's quality never reduces over time. Sure the box and manual can get damaged, but let's just assume we are talking about the game itself. Used games will only go down in price because of lack of demand, never because the actually quality of the game changes like most items in the "pre-owned" market does.

Re:2nd hand games have no devaluation?

In a way, that's true - that's one way to look at it.

Another is that a game's quality degrades because:
- it gradually becomes more and more of a hassle to run it (DOS games? floppies? etc.)
- the graphics "degrade" - not really, but old games used to engage us with no problems, and the graphics were still amazing every new generation of games... go back a few generations and the graphics just plain look "bad", even though they haven't actually changed
- gameplay becomes simplistic - yes, it was great at the time, and some games were pioneers and are true classics. Compare the gameplay of Dune II to, say, Starcraft, though... or Wolfenstein to Halflife... plenty of counter-examples, of course, but I'm only comparing equivalent games - "today"'s best games to "yesterday"'s best games in the same genre.

So in a way I agree that the quality never degrades, but (some) new games are such huge leaps forward that the net effect is the same.

I'd agree much more with that point of view if it was about music :p

Just like secondhand CDs, secondhand books...

So the argument wasn't ridiculous enough when the RIAA railed against stores selling used CDs, or when book publishers railed against used book stores? Somehow, because they're games instead of books, it magically makes sense now?

I imagine thrift shops are preventing the clothing industry from innovating, too?

Re:Just like secondhand CDs, secondhand books...

Somehow, because they're games instead of books, it magically makes sense now?

In fact, it makes even less sense to me...

Aren't we buying used games in the first place because somebody who owned the game decided it no longer had value for him, and somebody else decided that the value of the game was lower than the cost of buying it new?

Now, assuming a company puts out an all-new game based on an innovative premise and with gameplay we hadn't seen before... wouldn't that a) force those who want that experience to buy it new, and b) provide enough value to otherwise second-hand buyers of valueless games that they would now buy a new one?

In other words, it seems to me that sequelitis is directly responsible for the surge in the used market, and the only way out of it is to produce new and innovative games. It's not the other way around. Developers need to give people a reason why they should buy a new game. Pumping out sequels is just going to do the opposite. (It also has the effect of just dumping a whole bunch of previous series editions into the used marketplace. Why keep Madden 05 when Madden 06 is now out?)

Just look at the Nintendo DS if you need an example of this. The only solution is to make games that are as fun and unique as possible, and that aren't "updated" on a yearly basis.

Re:Just like secondhand CDs, secondhand books...

There isn't any context, attribution, or even a direct quote - so it is hard to guess exactly what was really said and under what circumstances. What I gather is that some publishers are upset about the fact that retailers are selling second hand copies right next to the new copies. If that is the case I can see their point - who is gonna pay $60 for generic sports game 2006 when a used copy is available for $30 right next to it, but that is an issue they need to take up with retailers and hardly the responsibility of consumers.

Enter the first sale bypass...

It's this creative diversity that makes the games industry so popular, and without sustained funding from new software sales, this could be at risk.

Here is how we will see the proliferation of "activation servers" and the like systems where purchasing a "used" copy of a game simply buys you a coaster. Copyrighted materials (in the US at least, and from the article the EC) are covered under the doctrine of first sale: once a work in "fixed form" is sold, that fixed form is transferable to anyone else by any method desired. The used book, CD and game industries survive only because of this doctrine.

Activation servers add an additional wrinkle to the mix: you can still legally sell the bits, but the activation code isn't going to work when you take it home. When you complain to the company, they will (correctly) tell you that the code has already been used. Thus, the idea of used games will be a thing of the past. Of course, so will be the idea of tossing an old CD into your machine and expecting it to do anything but say "activation server could not be reached".

All this will be couched in terms of "the benefit of the consumer" while in reality kicking them in the teeth.

Re:Enter the first sale bypass...

It's this creative diversity that makes the games industry so popular, and without sustained funding from new software sales, this could be at risk.

Here is how we will see the proliferation of "activation servers" and the like systems where purchasing a "used" copy of a game simply buys you a coaster. Copyrighted materials (in the US at least, and from the article the EC) are covered under the doctrine of first sale: once a work in "fixed form" is sold, that fixed form is transferable to anyone else by any method desired. The used book, CD and game industries survive only because of this doctrine.

Activation servers add an additional wrinkle to the mix: you can still legally sell the bits, but the activation code isn't going to work when you take it home. When you complain to the company, they will (correctly) tell you that the code has already been used. Thus, the idea of used games will be a thing of the past. Of course, so will be the idea of tossing an old CD into your machine and expecting it to do anything but say "activation server could not be reached".

All this will be couched in terms of "the benefit of the consumer" while in reality kicking them in the teeth.


That's where we consumers come along. We don't buy the software that requires activation. That's it.

No.

If the games were that good to begin with, people wouldn't have waited til they have become second hand and bought them when they were new. Secondly, if they were really that good of a game then chances are people would be less willing to part awith them for cash, making them harder to buy second hand.

This is just an exscuse for greed and lack of effort by developers... Truth be told, I bet uninnovative sequels perpetuate second hand retail industry.

They could always go Hollywood...

... and pay the Senate to make used game sales illegal.

What bothers me is this:

"However, if it continues to grow, it could potentially starve us of the funds necessary for research and development, and therefore, developers will be less willing to take a risk on new and genre-diversifying titles."

This isn't a chicken-or-egg problem, we know new games came before used games. Therefore, this entire cycle was started with new games that had a high degree of suckage, and these high-suckage games were published before the used game industry took off (because, again, new games came first).

The solution seems obvious: publish good games. The better the game, the less likely the owner will sell it back to the store. And if it's really good, they'll buy the same game two or three times (witness Nintendo's business model on the GBA). But making the "We need to make crap games to pay for good games" argument that Hollywood has been touting for the past 50 years or so is simply going to land them in the same place Hollywood is now.

Oh please

To: Game Industry From: Me Please don't try to offload responsibility for your own inadequacies on me. Thanks, Me

Call The Waaaaaahmbulance!

Oh, puh-leeze. The publishers are 'warning us' 'for our own good' than secondhand game sales are 'hurting development'.

Note: it's not crappy ass games that are hurting you, it's not mindless sequelitis, it's not buggy games that need 15 patches before they arrive in stores, and it's not the fact that Blizzard is eating all your lunches, no, it's those awful secondhand games.

Suuuuuuuuuuure.

I buy a lot of used games, since I like not spending huge amounts of cash on new titles. And you know what? I can buy 15 copies of trashy games I know I don't want, but it's often a pain in the ass to find a good used copy of something I actually care about playing, because people don't often sell good games. The secondary market is flooded with older versions of sports games, obsoleted by the industry's own revenue model for sports games, and crap. Cry me a river, EA.

(Seriously, now) Cry me a river, boys...

So, publishers are bent out of shape that games last for years, and we all trade them back and forth in the same way used CDs, tapes, and records have been for decades? They're afraid we're going to stop buying new games because we're buying used ones? They want more money (that goes without saying)?

Yeah. Cry me a river. Here are my thoughts:

1. The game industry is making money hand over fist. They may WANT a license to print money, they may feel that all of us gamers should spend all our income on their brand new stuff and never look for a bargain, but tough luck -- the world doesn't work that way. If we all got whatever we wanted, whenever I got lonely or horny I'd clap my hands, yell "Doughnut!" and a gorgeous hottie with an oral fixation would appear. See -- I just clapped. NOTHING! So why should they get whatever fool thing THEY want?

2. Used games COME FROM SOMEWHERE. They don't just suddenly appear, the Used Game Fairy doesn't bring them around in her "naughty nurse" uniform, and they're not gifts from aliens. Every used game was purchased by someone, brand new, at some point. So, the game publishers DID get paid for them! Their problem is, they're not getting paid for them ANY MORE. Again, too fucking bad. That's life. I'd love it if my ex girlfriend had to come over three times a week and do me, but she doesn't (too damn stubborn).

3. A PURCHASE IS A PURCHASE. Once we buy our games fair and square, we can sell them to anybody we want to. We can trade them for cigarettes and beer if we feel like it. We can give them to homeless people to use as ninja stars when fratboys annoy them. We can do whatever we like with them. BECAUSE WE BOUGHT THEM, for much more than they're conceivably worth, by the way. All the pissing and moaning in the world won't convince me that once I buy a game, I shouldn't sell it or trade it in for a new one. It's mine, I'll do whatever I want with it.

4. FINALLY, seriously now, isn't it ridiculous that they're now trying to pretend that it's the used game market that causes game companies to put out derivative dreck? YEAH, I see how that works. It's not that game companies are pushing their developers to exhaustion, outsourcing a lot of their activities, making UNBELIEVABLY shitty movie tie-in games (if you can call them games), and in general, treating the public like they'll buy anything if they put the right face on the package. Oh, no, if sales slow down it must be because all the customers are EVIL! Yeah, we're all just penny-pinching Meanies. I see...

Well, that's my rant for now. I'll leave you with this thought:

Do I buy a lot of used games? Yes, I do.

Do I buy a lot of new games? Well, actually, yes on that one also.

Am I a freeloader? NO. I spend more money on this crap than most people.

Do I feel like anyone appreciates my business? NO.

You know, this stuff isn't that complicated. It's about treating me like a customer, appreciating my business, and giving me good value. If you can't do that, there's nothing you can sell me.

Simple choice.

If you make your games infinitely replayable, will we really want to buy the new games you produce?

If you make your games play-once, there may be a secondary market, yes, but how long does it take before everyone's played the game, is done with it, and is ready for new stuff?

The current trend is your best bet, given the options that don't involve legislators.

Its that usual music industry line

Has the Games industry been having chats with the music industry or something?

Its sounds to me like exactly the same sort of "I know our products suck at the moment but if you guys gave us more money we'd make better products, honest" line.

Boo f'ing hoo

"...if it continues to grow, it could potentially starve us of the funds necessary for research and development"

To this I say: Welcome to the free market, adapt or die. Don't whinge about how consumers are hurting you by exercising their rights, don't beg for people to buy the new copy to "support the developer". I don't care about you, I don't care if you can put food on your child's table. Make a product that's worth buying at a price that seems fair, and I will buy it.

Part of the rise in used sales has to be due to the rising price of new games. I am not willing to spend $50 or more on a game unless I know, ahead of time, that it's one of the best games ever made. And it had also better have more than 10 hours of gameplay in it. Otherwise, I'll wait till the price drops or I see a used copy.

There's a huge difference in terms of impulse spending between $30 and $50. If I have the choice between a $25 used copy and a $30 new copy, I'll buy new. Over $30 and I'll try to find it cheaper somehow. If you think you can't sell your game for $30 and make a profit, then you need to think about what you can offer as a value add, either as something you can't get with the used copy or something that will encourage people to not sell theirs in the first place. If you want to compete and be successful in the marketplace, innovate. Don't bitch at your customers for not giving you enough money. Capitalism is not charity. If your game isn't selling it's because you didn't make something worth buying new.

You could always try R&D...

...instead of the latest rehash of Madden NFL.

There are two games that I've even considered purchasing in the last couple years: Quake 4 and Battlefield 2.

Sick of consumers not buying the latest game? Try focusing on gameplay over eye-candy.

I'm Sorry

I'm sorry, but it's NOT MY PROBLEM. If the game industry can't get its act together and put some games on the shelves that are actually FUN, then I'll stick to older games that ARE.

Consumers don't owe the industry any favors, especially after years of being treated like:
- criminals via abusive copy protection mechanisms and unfair return policies
- sheep via releasing non-innovative games over and over again, with poor support and quality control

Also, explain this:
- If the innovative games aren't out there, then how the HELL is buying the CRAP that *IS* on the shelves going to help any?

Answer: IT WON'T.

- How will buying the CRAP that IS on the shelves going to encourage publishers to market games that aren't CRAP?

Answer: IT WON'T.

Retailers charge too much for older unused games

Go to any game retailer in town and look at the prices for games. I've seen tons of games that are over a year old still going for $40 or even $50, when the same games go for about $10 on eBay. Microsoft has a good idea with their "Platinum Hits" Xbox games - some old games that once were very popular sell for $20 new - but that concept needs to extend to all games.

BS, anyone?

They say that, though you may be enjoying those second-hand games, they may be forcing you to choke down the sequels that plague the industry.

I don't know how you could hear somebody say that and think there's a lack of creativity in the video game industry...

Look basically...

We could be making more money if you pesky customers didnt sell your games to each other!

Quoth the book publishers association:

"We recognise the secondhand book market is part of the revenue mix, for retailers at least," said a spokesman. "However, if it continues to grow, it could potentially starve us of the funds necessary for research and development, and therefore, authors will be less willing to take a risk on new and genre-diversifying titles. It's this creative diversity that makes the book industry so popular, and without sustained funding from new book sales, this could be at risk."

Stop buying used games you say?

Fine. Please direct me to the nearest place I can purchase a new-in-box copy of, say, Chrono Trigger for Super Nintendo, not for PSX with craptastic load times. Or how about a copy of Earthbound. What about the original Teenage Mutant Ninja Turtles games for NES. I would buy those new if I could without paying an insane price on eBay for the priviledge. Not like you see any profit from those sales anyways. Unfortunately, that is nearly impossible. So I get these games from Game Crazy, or eBay. I get most of my games on current-gen systems new, but older systems are out of the question.

Less money means MORE risk taking

If the games industry were to start starving, they would actually start taking more risks in an attempt to capture more sales. When you are backed into a corner do you take more or less risks to get out? The industry must be doing very well to be making the same games over and over. If you didn't notice, the people who have the least money innovate the most. So it sounds to me that the effect of used games is to help increase the quality of new titles. Buy more Used games!! Its good for the Industry!

Replay value?

Let's say that I'm a games publisher. I sell you a game that offers, say, 100 hours of interesting play. After the purchase you have three options:

1) Sell it after a short while. OK, it wasn't to your taste. Sorry. If it's a good game, there won't be too many people in your situation.

2) Sell it after a longer while. I'm glad you enjoyed it. Most people into this sort of thing will have bought it new by now. And whoever picked it up second-hand will hopefully buy my next game new, once they've enjoyed this one.

3) Keep it. Groovy.

Oh, what's that? You've made a game with 10 hours of play? Well, sucks to be you. Let's hope that if it's a truly fucking awesome 10 hours the media will have pushed it to the point that your first-weekend sales will be through the roof. If you've crapped out ten hours of digital tedium you're probably screwed, and a good thing too.

Bottom line: make a good game with a decent replay value and you won't haemorrhage money through second-hand sales.

R.I.P.

I miss the days when a business that no longer provided quality products to their customers slowly faded away and went out of business. These days, we have the RIAA, MPAA, and now the game industry trying to point the finger for their lackluster sales at everyone but themselves. Not only that, they sue their own customers (and brag about it in the news!) and if that wasn't enough, they line of the pockets of politicians everywhere to pass laws basically designed to keep them in business.

Apple on the other hand seems to be actively listening to their customers and gives them what they want, rather than what the aforementioned companies do, which is try to tell us (the consumers) what we should want, and after they have watched another failure, sue us for not liking their products.

/rant off

self-balancing system

Here's my take: The "problem", as TFA said, will only be a "problem" if it continues to a point. Now, for a game to be used, someone has to buy it first hand first. In order for second hand demand to be met, then people will have to buy if new first (and then trade it in). If second hand demand is not met, they will be forced to by new (or just not by). It's a self-balancing system in my view. There can be no second hand market without a sizable new market.

So games are better than other industries?

No other industry has this problem because they try to create SUPERIOR product that people keep, or trade for a newer version of the SUPERIOR product. However, gaming is based on sales, and not accountability. They use a model based on yearly upgrades for the features. They need to create good games out of the box. If it is good I will keep it. If it sucks I will trade it. The same goes for a movie, and they charge 2 or 3 times less.

Poor Games Industry

From the fine article:

EA's boss Keith Ramsdale commented that "new product is being made to look almost worthless and some retail outlets are starting to look more like libraries".

No. They're demonstrating their actual worth to game players. You might like every game to be worth $50, but if the marketplace (ie supply and demand) says $20, then your business plan's sales forecasts were unrealistically inflated by 150%. No amount of wrangling or lobbying is going to protect you from market forces. Deal with it.

If the retail outlets are starting to look like libraries, that's because your predecessors in the industry created some fabulous games with real staying power. They only reason the 'library' of games isn't vastly larger is that the hardware required to play great games from a while back is no longer readily available.

That you have to compete, not only with other game studios, but with your past success is simply a reality of the industry. Any efforts to curtail the 2nd-hand market, such as requiring electronic registration without providing a transfer mechanism when a user wishes to sell, is a sign that you have not embraced reality and it means that at some point in the future, you will suffer accordingly... perhaps that is already happening.

Easy solution

To compete with the used game channel for older titles, why not just make their back catalogues available for cheaper prices? If a title is selling for $20 used, drop the new price to $20-$25. The negligible price difference will probably prompt all but the most frugal (cheap?) customers to buy the new copy instead of the used one.

Besides that, the paltry cost of producing a box, disc, and manual is nothing compared to the $x that they could make from selling another new (reduced-price) copy. Yes, they spent a lot of money on development, and they need to earn it back somehow. So do they choose to not compete with used copies -- and earn $0 in the process -- or instead choose to make money by giving people an incentive to buy a new copy?

Nintendo, Sony, and MS already do this for a lot of their older titles. Any publisher that doesn't is either stupid, stubborn, or both.

--Jeremy

Kill The Secondary Market

If the secondary market is killing you, kill the secondary market in a way that is good for consumers.

You have two options. First is requiring activation, thus making the secondary copy useless. Other posters have pointed this out. This is terrible.

Or you could take another route. Nintendo is doing this in some ways. Sell the games to people cheaper than used. Sell electronic copies. Make it in my interest to go buy a game for $30 from you, instead of $25 from the game retailer. Most games, after an initial period, sell next to nothing. So why leave the game on the shelves at $50 and let retails sell 'em used for $25 when you could sell them on-demand for $25. Basically, Live Arcade for more recent (and bigger) games. This is where the future is. We all know it. It is just a question of when we get there.

Quite the opposite

If used-game sales indeed reduce the amount of money to be made in the industry, innovation will increase. A lot. If first-person shooters sell well and make bundles of money, everyone makes first person shooters and there is zero innovation. Why fix something that is not broken? This is pretty much what is happening right now -- in the last couple of years, there were only a handful of innovative games and a metric shit-ton of mediocre crap.

If, on the other hand, making a successful game was difficult and risky, there would be a lot more innovation and probably higher overall quality. A game company's goal should be to make great games, not simply to maximize shareholder value.

I call bullshit

I hate to be so gruff about it, but bullshit. If you can get Madden 2006 for 60 dollars right next to a bin with Madden 2005 for 10, you're going to buy Madden 2005. EA isn't going to get any money and the developers aren't going to get any money. And neither of them, honestly, will deserve the money, because they didn't release anything compellingly better.

Now, if you're looking at a copy of God of War for 50 or Shadow of the Colossus for 40 or Madden 2004 for 10, you're far more likely to go with the awesome original title. The developers will have provided an amazing, original experience, will deserve the cash and will get it.

Franchises are good within reason, but milking them is bad for business. The publishers that don't realize that rehash mania is bad for everyone will die off, like Williams. The ones that are more disciplined in their approach and continually release new experiences will thrive, as they should.

Even James Bond movies only come out once every two years.

Obvious

"... it could potentially starve us of the funds necessary for research and development, and therefore, developers will be less willing to take a risk on new and genre-diversifying titles."

Since when did publishing basic business strategy become news? Mark me for a Troll if you like, but I really am tired of these "analysts" telling us the obvious. If you can't make these connections for yourself, do yourself a favour and don't start a business on your own.

It also makes me laugh to read that "developers will be less willing to take a risk on new and genre-diversifying titles." I didn't realise more than a hand full were doing this? (How good is Psychonauts [wikipedia.org] anyone?) The rest are like Hollywood producers: there is no art, just business.

Buh?

I buy secondhand because I'm not paying $70 for a derivative first person shooter. If you put out an original game, I'll buy it at full market price. I purchased Civ 4, Deus Ex, and System Shock 2 at full market price. I purchased Deus Ex 2 for $10 secondhand from a seedy retailer.

Produce something I want to actually buy and then we can argue the economics of me buying it new. The chicken/egg argument isn't appropriate right now until these original games are actually getting killed by the secondhand market.

Here is a clue, you shouldn't spend more than...

you earn.

You aren't dealing with nice little publishers anymore. In a lot of cases you aren't even dealing with nice little development houses.

They'll give you money and when you blow it their lawyers will tie you to a soul sucking franchise (Sports games, driving game sequels, etc [no creativity though they may be fun])... If you think people are playing a game of russian roulette where they are spending big in the hopes of making it big don't play, release smaller budget games... if that doesn't work wait for them to hit the wrong chamber...

Then go lick up the tasty tasty publisher blood.

He has it totally backwards.

He's forgetting that the option to sell a game once the consumer has finished it or if he doesn't like it effectively lowers the cost of buying the game new.

For example, if I'd heard that Outlaw was fun, but only 10 hours long, I probably wouldn't pay $50 for it. If, on the other hand, I knew I could sell the game back for $35 in a week, the actual cost of Outlaw to me was only $15.

So, in reality a healthy secondary market for games should encourage developers to take risks, since consumers will be more likely to take a chance on titles in turn. On the other hand, as other posters have pointed out, serial games (like the yearly Madden & NBA releases) have the least resale value since a slightly better version will be out in short order. So the effective cost of buying new the latest sports game or Dead or Alive edition will be higher than for an original game with more staying power.

Piracy?

So I take it piracy isn't as bad as they make it out to seem?

it's those rat bastard sons of bitches buying a used copy of a game that cannot be found in print anywheres cause the company stoped publishing it?

if it wasn't for Game Quest Direct [gamequestdirect.com] taking a chance and re-printing these games people wouldn't have to spend $100 for a copy of Gitaroo Man or $150 for Rez simply because the original publisher "Wasn't making money off the game New" well do special orders, if someone wants a copy of the game print up an extra one while you are printing "Sameshit you bought last year with a new number on it!" so that person only has to pay $60 for the game (since they are getting a speical order) and you don't lose out on the "Second hand sale for a game you refuse to re-print even though people obviously want it"

but thank god, the pirates can breath a collective sigh of relief now knowing that what they do isn't what is hurting the industry and costing them money.

atleast, that's what I get when I read this whining.

The only games I buy new are...

...games that fall into one of these four categories.

1. Are $20 or lower. (rarely)
2. Are so good no one has returned them, so I can't find them used. (this is the most frequent)
3. Are designed so having a used copy is impossible (CD-keys basically make used PC games quite untrustworthy...consequently I buy very few PC games anymore...new or otherwise)

I've bought 6 new games in the last year. I've bought over 50 preowned and bargain-binned games in the last year, most under $20. I imagine that ratio will only get more lopsided this year.

What about cars

So by the same logic, I shouldn't be buying a used car because it cuts the manufacturer out. Everyone should have to buy a new car to ensure product innovation. Sorry I don't buy it, if the game was good enough (worth my money) in the first place I would have bought it new. Aside from the outrage of the gamers, how would they enforce it? The idea of activation means no one will buy it if they can only activate it once. And banning stores from selling won't stop private sale.

Planned obselescence

'nuff said.

More anti-free market bs

Typical rant from someone who hates free markets and capitalism. Go regulate your planned economy somewhere else, asshole.

Basic economics will sort this out

Too many people are caught up in the non-issue of whether the quality of available games creates a second-hand market or not. That argument is about as relevant as the game publisher's arguing that they are being starved of revenue by the second-hand market.

But if you combine both arguments, you get a more accurate prediction of the future. If you just play out the game publisher's argument, you will see that they may be right. It does starve them of revenue. And that may, in turn, make them reluctant to spend money on risky titles or innovate. Now add in the "bad games" affect that this could create in the marketplace. What happens? Existing publishers lose money and, if they continue their approach, eventually either stagnate and get by with low growth or even go out of business.

But if you focus on the marketplace instead of on the existing stakeholders, you see that the situation will address itself somehow. Obviously even the "bad" games have some market value if people are willing to buy them at a lower price point. So existing publishers could simply adjust their prices to compete with the second-hand market. Just because they made the same title that is being sold used doesn't mean they have a right to continued revenue on it. They made their revenue when they sold it the first time. However, if they lower their price after a time on a new box of the game then they can also share in the long term market for certain titles. They often do this by repacking titles with extra stuff like levels etc.

What happens to those publishers who don't adapt to the market (as opposed to their current desire to adapt the market to them)? There is some radical that happens! New publishers start up and actually develop business models to exist in the market. They do things like publish titles with higher demand and/or they develop business models to survive the peaks and troughs of publishing high visibility titles. Valve is a classic example of this kind of competing company. You can hate many of their practices, but you at least have to acknowledge that they have found a different way to profit in the market. They focus on revenue from add-ons, they "took back" the margins that the publisher was previously taking, and they developed different licenses for game cafes.

I think it is ridiculous the number of people, including executives at large game publishing companies, that claim they are so pro free market, but they constantly want to adapt the market to what they want instead of vice versa.

How are they planning to sell these new games?

The profit margins on new games are so slim that retailers like EBGames are making their money on the resale of used games. If no one buys used games, who's going to retail all of the new games?

Game Retailers Make Money On The Margins [slashdot.org]

Paying more, getting less

Blaming second hand games is a cop out. I think the problem is the 4+ million dollar budget needed in order to make a modern game. We seem to be paying more and getting less when it comes to gaming these days. Perhaps if we look at the reasons that games have become more expensive over the past 10 years, we can change the entire economic model of game development to make the most out of the development dollars.

It's not just that games are more expensive to develop these days, but the problem is that we are overall seeing less creativity in gameplay. The xbox in particular lacks creative design. It seems like the Japanese games for the playstation and nintendo have a lot more creativity and depth than the American made Xbox titles. For the xbox all we see are generic shooters, generic war simulation games, generic sports games, and of course the often terrible movie based games. Just go through the list of xbox games and you will see that most fall in those categories.

They say that developers are not taking chances on innovation these days so that they don't lose their investments. By not taking chances, they are losing their money. Players can only buy the same style of sports game for so long until they realize the old game is about the same as the new. Give us a reason to buy a new game, developers! Better graphics just don't cut it anymore.

not to worry

Soon games will only be available through your (xbox|nintendo|ps3)live account, and only for $50 for a license, and $1 a play. So, game sellers, don't worry.

Sigh...

There's a supply demand curve. They know this! Increase the price, and as a rule, demand goes down. You don't increase the price because your initial costs are higher. The only reason for increasing prices is that you believe that the increase in per-unit profit will compensate for the loss of sales. If people spent more money on games, they'd be less innovative! Not more. Why would they bother to take the risk?

And anyway, innovation is cheap!. A game with a clever idea can get away with poor graphics and smaller levels. It just needs the clever idea. Just how much extra did it cost to develop Tetris?

A lot of the time..

... the consumer can be to blame for buying the same old sequels over and over again.

For example, if people stopped buying the Madden series.. logically, the demand will dwindle as will the funds to make the game, and therefore they stop making the game.

So, if we encourage this sort've behaviour through purchasing these 'Madden' titles then we encourage lack of creativity since they really don't to make new and innovative titles if there is enough demand for the same old shit.

It's not like the early days of videogaming where essentially a small cliche of the population were videogamers and the developers had to try to make games that are neat and innovative, now people buy through franchise. Example, hrmm, I liked the last Halo/KOTOR/Madden, so I'll buy the next one, etc.

This is why innovative games today aren't as succesful and the sequel crap is.

So, yeah, it is mostly the consumers' fault for not being as explorative towards innovative titles and forcing such little competition to make the games industry un-innovative.

The Secondhand market doesnt affect much at all.

The secondhand market actually provides more sales of new games.

When someone has finished playing a game they trade it in or sell it and typically use the money raised to buy a new game that they might not have been able to afford otherwise.

This effectively cancels out the loss of sale when someone comes along and buys the used copy.

Scale The Whole Economy, The Balance Remains

However, if it continues to grow, it could potentially starve us of the funds necessary for research and development, and therefore, developers will be less willing to take a risk on new and genre-diversifying titles.

OK, I'll call bull.

1) How much of the cost is really in research and development?

A typical game studio has a very small team working on a game until they have the core concept down and decide they want to progress. At which point it ramps up from 3-5 guys (a producer, an artist, a couple of coders) to 30-50 peopls (several more coders, lots more artists, a ton of level designers, sound guys, QA, etc.).

Staffing costs for an innovation phase are minimal. As for other costs, an innovative game likely doesn't use that much more unique coding on top of a game engine than any other title, doesn't somehow need more art assets, doesn't somehow need more "new" levels as every game requires new level design, etc.

2) If the costs of production for a new idea are much the same as the costs of production for a proven idea, perhaps they're meaning that innovative games are less profitable: with a clone, you always make 20-30% profit but a new concept crashes and burns 9 times out of 10 with the tenth being Doom or Worms or whatever and making several hundred percent.

OK, so if that's the case, just because profit margins go up, businesses will suddenly stop going for the safest and largest profit generators and will now suddenly become altruistic and make the innovative titles that now don't lose so much money but still don't make anywhere near as much as the clones that now make even bigger profits? Of course not, they're businesses with shareholders and will always do what makes the best return.

That's why I'm calling bull. Sure, a few indie companies may make more innovative games because they're not in it for the money and now those guys can afford to stay in business longer. The thing is, with a modern game costing $5-10m to make, how many indie shops can really enter the market anyway? Everyone else are just big producers - run as businesses - and, rightly so for businesses, they just chase profits not innovation.

And, if you don't believe me, check EA, a company famed for saying, "Our goal is to release around 20 titles a year. We try and ensure one of them is a new IP." We can mock them but they're the most successful publisher out there - what does that tell you about how economics work for big shops? Think it'll change just because profit margins increase for everything, not just innovative titles?

They buy new cars only?

I wonder if all game publisher always buy brand new cars instead of old, second hand ones. I hope they do so that they don't hurt the development of new cars.....

Hardware Requirements

SO it's our fault the Industry develops games for the latest hardware ? My PC is more up to date than most of my friends, yet my system does not meet the hardware requirements for games such as Battlefield 2, and FEAR would be pushing it a bit as well. There are people that don't contantly upgrade their PC's or consoles to the latest and greatest available, and these used games are a great way for them to be able to afford to game within their budget. I bought it and it's within my rights to transfer it in whole to another party. Next thing you know automobile manufacturers will be saying used cars are hurting their business.. I buy pretty much every decent game I see, that is published for Linux, so I can vote with my cash, but those are few and far between. and I have no interest in zelda episode 57 or whatever.. how about something a little different than the same old thing rehashed ? I really miss the creativity that went into some of hte OLD games like the zork series, or planetfall, sorcerer, etc.. a lot of the old games had little or no graphics but they had content, playability, and things to hold your interest. ahh the good old days.

I wholeheartedly agree!

I'm quite dissappointed in the quality of new games and I therefore recommend that the gaming industry double their prices. Sure the games are a load of dung for the most part, but the money will enable the next generation of games to be that much better, right?

Re:Tough fucking noogies.

though fucking noogies

What the hell does that mean????

Re:Cry me a river

Listen I don't want to sound like an ass hole but where the fuck do you think that monthly fee goes? An mmog server can not be hosted on some kids computer with a cable modem. It takes clusters of servers which cost money to run. It also requires huge amounts of bandwidth which also costs allot of money. I concider the initial cost of the game for all the coding and content that went into the game. The 10-15 a month I spend is for the ability to play with 10,000+ other people on the same server. It also provides the necessary funds for added content, bug fixes and patches not to mention the people who maintain the servers to keep them up.

I agree with you first comment about the game industry. The industry needs to die and from it small independent studios will emerge from the dust and find new ways to publish there games. We don't need madden 2006, ridge racer 6, quake 4 or any of the other mindless sequal titles that come out every year or so. I purchased half life 2 not only because it was a fun and interesting game to play but the value added from the mod community as well as online play. Valve has it right, easily distribute the content (although not perfect) and let the community creat new and exciting mods with your game extending its value.

Re:Cry me a river

This actually did happen a while ago (in the 70's or 80's), programmers were tired of not getting credit for making the games and they eventually just quit and started there own companies to make there own games. I think it will happen soon, once EA dies, i think alot of the smaller companies will have a pretty good spotlight.