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Fable III Dev: Used Game Sales More Costly Than Piracy 342

Posted by Soulskill
from the granting-a-license-to-temporarily-rent dept.
eldavojohn writes "A developer working for Lionhead, the studio behind Fable III, told Eurogamer that piracy is 'less problematic' than used game sales, from a business perspective. Mike West, the lead combat designer for the latest Fable, said, 'For us it's probably a no-lose even with piracy as it is. But, as I say, second-hand sales cost us more in the long-run than piracy these days.' So downloading a game is bad, but apparently stopping by a second-hand store to pick up a licensed physical copy of the game ends up hurting them even more."
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Fable III Dev: Used Game Sales More Costly Than Piracy

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  • by MrEricSir (398214) on Wednesday May 18, 2011 @05:49PM (#36171558) Homepage

    Ford, Toyota, etc. would LOVE it if the only option was to buy new.

    • Re: (Score:3, Insightful)

      by Wyatt Earp (1029)

      They all still make a ton of money off spare parts and dealerships wouldn't survive without the shop business.

      • Bad analogy. Most car parts you find in the parts stores come from 3rd parties, not the OEM. If your car is in warranty then you'll likely get them from the dealer who in turn gets them from the OEM but that's usually as far as it goes unless it's a "dealer-only" item in which case it's also a part that rarely breaks or is hard to reproduce otherwise(the control computers being a good example) and while those do bring in a decent profit when they're needed, they are rarely needed often enough to justify you

        • by cpu6502 (1960974)

          Some smarter companies, like Volkswagen, are making it impossible to fix your own car by using non-standard sockets/wrenches. So that means you HAVE to go to the garage, and typically not an independent. You have to go to someone with the necessary VW tools.... aka the dealer.

    • Ford, Toyota, etc. would LOVE it if the only option was to buy new.

      If it was totally illegal to sell or buy used cars, then the majority of the people who would usually buy a new car every two years would instead buy cheaper cars and drive them for a very much longer time. Those who find it hard to afford a new car would buy the cheapest new car they can find and drive it until it falls apart.

  • SCOTUS needs to address this, badly.

    • "License" (Score:5, Interesting)

      by KingSkippus (799657) on Wednesday May 18, 2011 @06:00PM (#36171714) Homepage Journal

      The problem is that when you plunk out your money to buy the shiny new, it is not a sale. Legally, you're buying a "license" to use the game, which gives game companies the ability to dictate and/or change the terms of those license at their will.

      It's not really SCOTUS that needs to address it, it's Congress. We need a law that basically says, "If it looks like a sale, acts like a sale, works like a sale, then it's a sale." Software shouldn't be able to be licensed except in very specific circumstances, none of which apply to individual end users purchasing entertainment software.

      If SCOTUS did take up the issue, they need to basically rule most EULAs unconscionable [wikipedia.org].

      At any rate, I doubt any of that will happen any time soon. People are too addicted to that hot new Xbox/PS3/PC game to worry about little details like consumer rights.

      • Re:"License" (Score:4, Informative)

        by gman003 (1693318) on Wednesday May 18, 2011 @06:22PM (#36172036)
        The judiciary actually does has enough power in the US to do this. In fact, several courts have ruled EULAs invalid (see in particular SoftMan v. Adobe, which ruled that software is sold, not licensed, although it did uphold license restrictions as valid).
      • Re:"License" (Score:5, Insightful)

        by SoftwareArtist (1472499) on Wednesday May 18, 2011 @07:57PM (#36172972)

        The problem is that when you plunk out your money to buy the shiny new, it is not a sale. Legally, you're buying a "license" to use the game, which gives game companies the ability to dictate and/or change the terms of those license at their will.

        Let me tell you a story. This story didn't actually happen in the real world. It only took place in a fantasy world that software companies wished they lived in.

        I went into a store that sells software. (Pick your favorite - GameStop, Target, Office Depot, whatever.) They had lots of boxed software on the shelves. I selected the one I wanted, took it up to the register, and said, "I'd like to buy this." The cashier replied, "I'm sorry but that isn't for sale. If you'd like to license it, though, please read this agreement and sign here."

        Like I said, that didn't really happen. Here's what actually happened.

        I told the cashier, "I'd like to buy this," and they replied, "That will be $30." So I handed over my credit card, they scanned it, and I signed the receipt. Then they handed me the software back and said, "Here you are."

        At this point, the sale was complete. The purchase agreement was concluded. So I took the boxed software (which I now owned, since it had legally been sold to me) home and opened it up. Inside was a piece of paper covered with tiny writing that I did not bother to read, since it obviously contained no information of value. But if I had read it, I would have discovered it to be mostly incomprehensible legalese. If I had then taken it to a lawyer, they could have translated it for me as follows: "You know that software you just bought? You didn't really buy it. You actually just licensed it, and if you want to use it, you have to agree to all these other terms we didn't tell you about before you bought it and before we took your money."

        The only reasonable response, of course, is "@#$% you! I do not agree to any of your terms. Nonetheless, I will continue to use this software, because it belongs to me and I have every right to use it." A purchase it a contract. Once that contract is complete - once they have taken my money and given me the software - it's too late for them to rewrite the agreement and add in new terms.

    • Ugh, I don't want to see what such a corporate-happy supreme court will do with that.

      [Read in a Scalia voice]: "As the corporation made the product, and as the corporation is a person and the consumer is not a person, the corporation retains the rights to the game and the money. Selling a used game is essentially triple theft: it deprives the corporation of it's rightful copy of Fable VI, it deprives the money paid to the person selling the game that should be going to the corporation, and it deprives
    • by Tharsman (1364603)

      This has nothing to do with the First Sale Doctrine, and it is not really an issue of being able to trade your used copy. First off, we have to see what the guy actually said in the article:

      "But, as I say, second-hand sales cost us more in the long-run than piracy these days."

      The reason second hand sales cost them more is not obvious unless you give it some thought. One reason is that pirates are very unlikely to had bought a legitimate copy either way, they never saw enough value in the product to pa

  • by Homburg (213427) on Wednesday May 18, 2011 @05:53PM (#36171616) Homepage

    Game developer good at developing games, not so good at understanding economics.

    • Whats hard to understand here? Pirated games were not necessarily sales, whereas someone plunking down cash for a used game may very well have bought new-- but used, no money goes to the dev.

      Id say from a business perspective his comments were accurate. And youll note that he said "and theres not much we can do about it", not "we're hoping to crack down on this soon".

      • by nedlohs (1335013)

        Some people will buy the game who wouldn't have otherwise because they can sell it to someone else once they are done with it. So money goes to the dev that wouldn't have if there was no second hand sales of games.

        Some people will sell some other game they own and use the money they get as part of the payment of buying their new game. So money goes to the dev that wouldn't have if there was no second hand sales of games.

        So there's gains and losses, and they likely have no idea what the relative value of the

  • by v1 (525388) on Wednesday May 18, 2011 @05:53PM (#36171626) Homepage Journal

    The summary doesn't account for the very real possibility that a much higher percentage of used game buyers would have bought the game than pirates, had neither had a choice.

    In other words, if you look at 100 pirates and 10 used buyers, and stop the piracy and used market, maybe 5 used buyers would pony up, but only maybe 3 pirates. But I'm just pulling those numbers out of the air - you can't say either way without hard numbers, and they're' not being presented here.

    But I think we've all figured out at this point that a high piracy rate doesn't have to translate into a lot of lost sales. Every time we hear the "industry" cry the pirates are costing them money, they're conveniently counting every pirated copy as a lost sale, which is so far into fantasy land that it crosses clearly into insulting our intelligence.

    • by Ksevio (865461)

      Another thing it doesn't take into account it that the used copy was once a paid copy. Essentially the cost of buying the game is just being split among more people, freeing more money to buy other titles.

      Now for a company like Lionhead that doesn't really have any other titles, this doesn't help them directly, but for the industry as a whole it means more people are able to buy/play more games.

      With piracy, there is no money (for this title) going back to the developers because duplicates are created for n

    • by DeadboltX (751907)
      Add in that some pirates are the "try before you buy" variety, or might later purchase the game out of guilt or because a game crack causes problems, or because they need a legit cd key to play multiplayer.
  • by GFLPraxis (745118) on Wednesday May 18, 2011 @05:53PM (#36171640) Homepage Journal
    Isn't this true of any industry? If I buy a used couch instead of buying it from the manufacturer, don't they take the same "loss"? It's amazing that now used games sales are being considered "loss" in the same manner as piracy.
    • by TrevorB (57780)

      Couch Piracy means getting bed bugs in your home. Yarr!

    • The prime assumption is that the person from whom you buy the used couch is making space to buy another new one. Then, you have to decide how many of the new buyers would pay the new product price if they knew there was no resale value.

      For your couch analogy, there'd probably be no change in new product sales. (Who buys a couch for its resale value?) But for good old-fashioned car analogies, I think a lot of people would pay less for a new car if they knew it would be 100% worthless whenever they sold it

    • You can't compare the market for physical goods against the market for digital goods, the two have very different investment and production models.
    • by Dahamma (304068)

      That is true. I guess the problem is that you tend to get a lot more long-term use out of your couch than a video game, and there is no real disadvantage to buying a game used (unlike that pee-stained couch ;)

      Of course, that just seems like an argument for designing more re-playable games or picking a better business model. I don't hear Blizzard complaining much about used sales hurting World of Warcraft (due to the business model) or Starcraft (due to the replayability). And apparently the Rock Band fra

    • by Pharmboy (216950)

      Because piracy sometimes leads to sales of new games. Sales of used games never leads to sales of new games.

      If only 5% of people who ever pirate games, also buy some of those, that is still more money than the people who buy used games. The games get two owners, the makers get only one profit.

      And as to "new games will be worth less if you can't resell them", I don't really buy that. I would venture most games are never sold once purchased. I have over 100 games that I have bought over the last couple of

    • by jaymz666 (34050)

      That used couch can quite easily have smells, squashed cushions, and be very different from when it was new. Games are digital and as long as the disk works it will work the same as when new.

    • Sure it is the same, but buying a used game is pretty much identical to pirating that game in that the developers get nothing.
      And why should some retailer make money selling used games and giving none of it back to the original developers? It is a legitimate concern.

      • It's worse than that. After pirating a game, the person who plays games has the same amount of money. After buying one second hand, they have less. Since they like playing games, there is a chance that they will buy other games. If someone buys one game second hand, this reduces the chance that they'll buy a different game new. If they pirate it, then there is the same probability.
    • by steelfood (895457)

      In the same manner? It's considered worse than piracy.

  • Time to make that illegal then.

  • by batkiwi (137781) on Wednesday May 18, 2011 @05:56PM (#36171664)

    I can really see this being true. Game piracy does nothing more than get your game's name out there. People are playing it, talking about it, etc. Pretty much no one (statistically) who pirates a game intended on ever purchasing it and thus aren't lost revenue.

    People buying used games intended on purchasing the game, but bought used to save $5. They did nothing wrong, but they were a potential source of revenue for the publisher that is lost.

    I don't know of a good "fix," because I don't support limiting your right to resell, but at the same time the scale that EB/etc do it causes issues.

    In my mind, morally, it's a bit like piracy itself. Me sharing an mp3 rip of an album I've bought with 3-4 friends is not "wrong" in my mind. Were I to rip an album and then sell it on the street for $5 a copy it would be a different story. How you legislate intent and morality, without killing genuine "sharing," is tough.

    • by batkiwi (137781)

      A possible, non-legislative solution:

      EA/MS/etc should simply refuse to sell "new" in stores which also sell "used." It will take a big name doing it, not a tiny publisher, and it will take doing so publicly.

      People will want halo15/madden 2035/half life episode 69 enough that it won't kill sales (it may dampen them a bit, so that's why you use a blockbuster).

      • The problem with this solution is Gamestop. They make most of their money on used game sales, and have enough retail power that if they didn't carry something it's sales would be badly hurt.
    • by Chris Burke (6130)

      People buying used games intended on purchasing the game, but bought used to save $5.

      I think they're doing it to save a bit more than $5.

      If law-abiding folk aren't willing to pay retail for your game, but are willing to pay a much lower cost for a used copy, then this seems to be speaking to an underlying issue. The problem isn't that they're able to buy it used. The problem is that they don't think full retail for your game is worth it. Maybe the problem is that you're charging too much.

      • by batkiwi (137781)

        Used games, especially for games under 6 months old, are rarely discounted more than $5.

        Buying a game at $10, but not at $50 I can understand.

        But if you bought a game for $47 instead of $52, you were going to buy the game either way, it's just "why not save $5" when both are staring you in the face.

        • by Chris Burke (6130)

          That must be a "feature" of the EB-style stores which I avoid. When I buy used, it's at a store that sells used and that's it.

          But in that case my next question is: Why are there so many used copies of the game available so quickly that it can have a significant impact on full-price retail sales?

  • Make sense, as those who pirate usually wouldn't be paying in any case, while those who buy used actually have some cash.

    But it's also a problem with shorter games without replay value, I'd never sell X-Com, Fallout 1/2, etc. because they can be played again and again, while many games are just 'unlock the next cutscene' with a static plot and outcome.

  • atleast not from a developer whose job is to design and write the game mechanics; not count the money.

    I dont know any devs personally, but i'd expect them to be on the payroll/contract for a game. That sort of stuff should be built into the budget for a game. They get paid if the game sells 100,000 copies or the game breaks record sales.
  • this guy from lionhead is trying to convince his bosses that their game did not sell because it was terrible, it is because of some boogieman out there they have little control of.
  • by LWATCDR (28044)

    Sell the games too cheap to make used a good deal. Or make games that people never want to sell.
    Really it is just too bad.

  • Wouldn't more reasonable prices for new games take the wind out of the huge second-hand games business?

  • how many more people suddenly become interested in pirating?
  • This is nothing more than rent-seeking.

    Hey Lionhead: Provide more content that people are willing to shell out money for. Either that or close up shop and get the hell out of the market, because obviously you are a bunch of idiots.

    Somehow the creators of content just want to create once and never work again. Sorry, but this is not how life works in the real world. Continued rent-seeking will make people avoid your new products, and with good reason.

    What a bunch of whiny cunts.

    --
    BMO

  • It IS bad for developers because retailers like Gamestop and EB will put used copies on the shelf immediately on launch whenever they get them in, and for a few bucks less. They get a 100% profit, with none of the proceeds going to the developer (which is fine, but it's important to remember that you're not their customer by buying a used copy of a game). It cannibalizes initial sales during the most important time of a game's release, especially when you consider that frequent used game buyers will opt int

    • Your comparison to video releases is flawed, since selling second hand DVDs is not regulated either.
      • by Runefox (905204)

        No, but that argument is also flawed; DVD (or Blu-ray, I'll refer to both as DVD for random, arbitrary reasons) sales aren't the sole revenue generator for a film that had a theatrical release, and you seldom see used DVD's on the same shelves as new ones, to boot. In fact, most retailers that DO sell DVD's don't bother stocking used DVD's.

    • Re:Agreed. (Score:4, Insightful)

      by Bert64 (520050) <bertNO@SPAMslashdot.firenzee.com> on Wednesday May 18, 2011 @06:32PM (#36172168) Homepage

      A used copy can only exist if someone has already bought a new copy and then chosen to sell it on. The supply of such copies very shortly after a new game is released is likely to have a very close relationship to how poor and overhyped that game is...
      Very few people are going to buy a game for $70 by choice and then sell it for a fraction of the price a day later. If someone does that, then they were effectively tricked into making that purchase in the first place.
      If anything, the purchaser should have a window in which they can return the game for a full refund, especially if they bought something which didn't live up to its advertising.

      Retailers should be able to resell used copies of games as soon as they have used copies to sell, to place an arbitrary delay hurts end users and hurts retailers.

      • Re:Agreed. (Score:5, Interesting)

        by Runefox (905204) on Wednesday May 18, 2011 @08:02PM (#36173012) Homepage

        True, but EB/Gamestop have huge incentives to bring new games back for trade value. When The Godfather was released, there actually was a promotion that if you could beat the game within a certain period of time (I think it was either a few days or a week), you'd trade it back in and it was 'free'. Nowadays, they have their "Most Wanted" lists, with new releases fetching the biggest bounties, and new releases tend to have a "trade 3 and it's free" promotion as well. In other words, EB/Gamestop have put HUGE amounts of effort into making people part with new releases in order to get other games, in a rather turnstile fashion. If you've ever been into an EB or Gamestop, you'll probably notice that there actually are a surprising number of new releases with used stickers on.

        It's true that on day 0, there shouldn't be many used copies, but I have witnessed it, in particular with Halo 3. Within less than a week's time, used copies lined the shelves for $5 less than new.

        I don't believe that it's fair for a product to have to compete with itself on the same shelves that it's on. Recently used copies are very likely to not have any damage or defects, and EB/Gamestop warrant them as working for a certain period of time, anyway, so there isn't any incentive to pay the extra to buy a full retail copy. This is part of the reason why multiplayer is becoming such a huge cornerstone of game development - Multiplayer communities generally mean that people who play online will continue to do so, rather than trading the game in. It's also why EA and others have been bundling one-use DLC with their games, and why it could very well be possible that in order to combat both piracy and used game sales, one-use (or limited-use) serial keys for console games might be in our future. With that in mind, it would be a LOT better to come to an agreement with publishers over street dates rather than having the bottom taken out from under the entire used game industry in the name of anti-piracy (which is exactly how it would be spun).

  • Epic, as in Epic Megagames (sorry, forgot they dropped the mega).

    Just got 1 copy of Bullet Storm. We have 2 XBoxes. Only one player at a time can load the game in their personal Xbox. However, to access any of the online play features the second player has to purchase a $10 "online pass". Hint: XBL is largely a peer to peer network, hence "Selecting New Host" -- We're not playing on their dedicated servers, only the player's own XBoxes and the MS sponsored matchmaking is needed -- both I've already pay for twice (once for each player in the house). Granted, some in-game stats & ranking may be an excuse to run a separate server and charge for hosting -- but an additional mandatory $10 just to play online? Inexcusable (note: MS servers store the achievements).

    From MS Game Studio Docs:

    Any matchmaking scenario involves the creation of a network session. Network sessions give XNA Framework games access to profile data on all the gamers in a potential game.

    Perhaps they don't use XNA, and roll their own instead -- whos fault is that?

    Seems like a non-issue to me as long as this type of XBL lock-out extortion racket is allowed (Even moreso a non issue for me since I've added Epic Games to the list of abusive companies I boycott).

  • "Unless you sit down and meet a pirate face to face and have a conversation about what it does, I don't think anything will stop them."

    ... so we'll make the legit version of the game harder to pirate because we all know that annoying customers makes them spend more money!

  • If a game costs 10 bucks new, not much of a secondary market. At least none that a Gamestop like company would have enough wiggle room to bother with. There might be a craigslist here and there, but no business in trade-in games. If you planned at doing $50 at your volume moves up by five-fold, revenue wise it's a wash, your game is more popular, and given the margins in software distribution your profit is probably the same too.

    Similarly, the relative hassle/risk of pirating a game isn't appealing if yo

  • if a game is pirated no money exchanges hands. if a game is passed down no money exchanges hand. if the game is sold then resold, ad nauseam, then it is still a viable asset in the economy. the same goes for books. the only reason games are looked at differently than books is because the industry had created this bullshit belief that their content is somehow more holy.

  • by NeutronCowboy (896098) on Wednesday May 18, 2011 @06:26PM (#36172076)

    Yeah. I said it. Fuck off. Let me repeat something I've said multiple times already: You are not entitled to my money. You sold it once, you got paid what you asked for; now shut the fuck up. Think that copy is worth more? Then ask for more when you sell it. Think you're not getting your fair share? Who the hell are you to determine what your fair share is? This isn't a free market that you're after, that's nothing but "Give me money because I said so" highway robbery.

    At least the cat's out of the bag now. The problem that creative types (music, film, software) have with piracy has actually nothing to do with whether something illegal is taking place around the fruit of their sweat and blood. It has everything to do with them feeling that they're not making as much money as they think they could. It's a pure money-grab, nothing else. The only difference between the people who complain that the second-hand market is ruining them and basic robbery is that the first group hires government agents to do their bidding. The second group has at least the decency to do their own dirty work.

    To that, I say Fuck You. Don't like it? Fuck you, with a chainsaw.

    Peter Molyneux, I have great respect for you. You created Populous, which by itself gives you a near eternal free pass to be a dick. But any interest I have in Fable III will now be satisfied by buying it second hand. I might even write you an email, showing you my original copy, the second hand sticker on it, and a big middle-finger across it. Yeah, I know, you didn't offer up these sentiments. That was one of your underlings. Then get your underlings under control. The same goes for every other entitled asshole who feels that just because they made something pretty, they deserve to be paid in perpetuity anytime someone looks at their work, or creates something that vaguely resembles it.

    And just in case anyone missed my point: Fuck you. I'm going to the flea-market.

    • by xMrFishx (1956084)
      Dude, you just made me feel the emptiness that is the lack of Populous in my life now...damn you!
    • I totally agree with you. Btw, flea markets rule--the only places left in America where bartering and haggling are still very valid.
  • The conclusion seems misleading.

    Misleading conclusion:
    Buying a used game doesn't hurt more than pirating the game.

    More accurate conclusion:
    Companies lose more money to used game sales than to piracy.

  • This developer is wrong. Second hand sales cost them nothing. Not making a sale to someone isn't a monetary loss. This sense of entitlement from copyright holders - that somehow it is their moral right to get paid, not on the basis of units shipped, but whenever anybody looks at their creation - needs to get stepped on, hard.

  • Developers complain about pirating on the PC, so they make console-only titles, then they complain about used game sales. I would have purchased Red Dead Redemption on Steam, had it been available -- instead I bought a used copy at GameStop for $20. Sorry Rockstar. Eventually all games will be delivered digitally, and the producers will need to have a more sane stance on pricing. Not every game is worth $60.

    • by JSBiff (87824) on Wednesday May 18, 2011 @07:16PM (#36172646) Journal

      Funny you should bring up Steam in this discussion, since Steam is a blatant attempt, at least in part, to forever destroy the secondary game sales market. You can't transfer games from one account to another, and if you try to sell the account, and Valve catches you, they just ban the account forever and NO ONE ever plays those copies of the game again.

      There was a story awhile back about Valve catching someone, and banning their account, which had something like $2000 worth of games on it.Flush. Watch it swirl down the drain.

  • by Charliemopps (1157495) on Wednesday May 18, 2011 @06:45PM (#36172324)
    I bet Ford and GM feel the same way. Perhaps they should stick something in the contract when you buy a car that requires you to destroy it when your done with it and to never sell it second hand to anyone. Then they should install software in the vehicle that allows them to remotely disable it if someone other than you trys to drive it. And if you think this comparison is ridiculous, let me assure you that I've seen purchases for software in the corporate environment that BY FAR exceed the value of any car you could buy and had these very restrictions on it.
  • What is keeping them from selling more is pricing too high. If they dropped game prices down to about $20, they would kill the used games market and sell games to people who wouldn't even think about whether or not they would like the game at all.

    • Oh come on, you gotta look at it from their side! Why drop the price of the game to $20 when they can make selling 2nd-hand copies illegal and sell it for $60!?
  • Used games
    App store $2 price point
    Online free entertainment

    Welcome to DVDs Vs VHS, there's a paradime shift is upon them ... deal with it
  • Ahh, I see, now that they've pretty much given up trying to fight piracy they're setting their sights on the LEGAL sales of previously-owned games. Hey douchebags, why not just make great games and sell them at a reasonable price? No one wants to spend $60 on a steaming pile of horse turd, which is over 90% of the shovelware that publishers are putting out these days. Most of them aren't even worth buying used. And then they are totally flabbergasted why no one wants to buy their shit.
  • Make games people want to replay and they won't resell them, however judging by the reviews of Fable III it seems they are struggling to make games people want to play once.

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