Publishers Want a Slice of Used Game Market 664
grigory writes "GameStop's business model depends on a healthy flow of used games: incredibly '[GameStop] enjoys a 48 percent profit margin on used games.' Game publishers do not see a cut of the secondary sale because it falls under the first sale doctrine. Now, some
publishers and manufacturers want a piece of the pie. 'One marketing executive, who did not want to be identified for fear of angering GameStop and other retailers, said the used game sale market is still depriving publishers of money because it gives consumers an all-too-easy alternative to buying a new game.' Interesting picture of companies fighting for your business, and (surprise!) complaining about being left out of the money stream."
anonymous coward wants slice of first post market (Score:5, Funny)
Re:anonymous coward wants slice of first post mark (Score:5, Insightful)
How about they actually make games that have replay value and don't suck so that nobody will want to trade them in?
Re: (Score:3, Insightful)
Re:anonymous coward wants slice of first post mark (Score:5, Interesting)
The height of American corporate practice - we won't do anything to keep our customers but will spend millions creating artificial mechanisms to distort the market and end any competition for them.
The good news is they're succeeding wildly - for instance I've neither pirated nor bought big corporate music in years because I can't stand either option. Instead I just buy direct from bands for half the price in a market *not* distorted by Sony and BMG, and by odd coincidence the artist gets to keep all of it.
It turns out market arbitrage is not a constitutionally protected right.
Pug
Re: (Score:3, Insightful)
See oddly I consider the ability to buy any song (just one song), DRM-free, an absolutely amazing shift in how things work.
here's how they could threaten gamestop (Score:5, Insightful)
they could announce they were cutting the price of games by 1/2 unless gamestop revenue shares. If they did that then the price of used games would drop by half too and game stop would lose half its revenue!
The price drop would actually not mean fully half revenue loss for the publishers because they would sell more games.
Re:here's how they could threaten gamestop (Score:5, Insightful)
I was just thinking the same thing. The presence of a used games market demonstrates that there are customers who prefer to buy games at a lower price. The real question is whether they would buy the game at the higher price if there were no used market (that is, they're out for a bargain) or whether the lower price convinced them to buy something they wouldn't buy normally.
If there are enough of the latter, it's worth doing.
Re:here's how they could threaten gamestop (Score:5, Interesting)
I was just thinking the same thing. The presence of a used games market demonstrates that there are customers who prefer to buy games at a lower price. The real question is whether they would buy the game at the higher price if there were no used market (that is, they're out for a bargain) or whether the lower price convinced them to buy something they wouldn't buy normally.
If there are enough of the latter, it's worth doing.
that's a really good point. For example, I don't mind paying extra for a toyota or an apple computer in part because I know that when I sell it, I get more back too. I do take that into account when I compare prices of cars and computers. Oddly I think most people do not.
Re:here's how they could threaten gamestop (Score:5, Informative)
that's a really good point. For example, I don't mind paying extra for a toyota or an apple computer in part because I know that when I sell it, I get more back too. I do take that into account when I compare prices of cars and computers. Oddly I think most people do not.
Given that I don't buy things I anticipate selling anytime soon, considering resale value is secondary to meeting my demands. For example, with computers I still have mine from a decade ago. Given the depreciation rate of computers, resale value is pretty low on the list. Basically, paying extra for a feature I don't want in order to increase the resale value doesn't motivate me because it won't increase the resale over the additional cost. Why spend $500 on something to increase the resale $200?
Cars? I buy them to last a decade or more in my possession - Of course, the reason toyotas have higher resale values when used is that they last forever - that's a consideration.
Re:here's how they could threaten gamestop (Score:4, Interesting)
Most people tend to buy things they plan on keeping around for a while. I pretty much keep a computer around until I have no use for it, at which point I can hardly give it away because most everyone else has no use for it either. Cars are kind of the same way - though I do tend to get ones with higher resale value because there is a strong correlation between resale value and reliability.
I find that most of the people who are concerned the most about "resale value" are the ones who are using twisted reasoning to try to justify something they can't afford. "It's not a $60,000 car, it's a $20,000 car because I'll sell it for $40,000 in a couple of years!" I leave applying the same kind of logic to real estate as an exercise for the reader.
Re:here's how they could threaten gamestop (Score:4, Insightful)
I find that most of the people who are concerned the most about "resale value" are the ones who are using twisted reasoning to try to justify something they can't afford. "It's not a $60,000 car, it's a $20,000 car because I'll sell it for $40,000 in a couple of years!" I leave applying the same kind of logic to real estate as an exercise for the reader.
True as far as it goes - for example, when I buy something I don't consider resale value because I tend to only buy things I want to keep. I've had my car for 8 years now, and I fully intend to still be driving it when it clocks over a million kilometers (at 380k now). That said, I bought it when it was 12 years old, and I have no problem buying used stuff when possible.
Regardless of trying to justify an unnecessarily expensive purchase, the sale price of many goods with long lives _does_ have the resale value rolled into it. If cars lasted 3 years and then had a resale value of $0, they wouldn't cost anywhere near what they do. Likewise, you couldn't sell CDs for $30 each if you didn't count on at least having the option of trading them in for $10 when you're sick of them.
Oh, and as for the real-estate market, the logic is skewed there because unlike the other goods we've discussed, land actually *appreciates* rather than depreciating. Unless you're unfortunate enough to have to sell in the middle of a property crash (such as we're currently undergoing), you will always sell land for more than you paid for it.
Re:here's how they could threaten gamestop (Score:5, Informative)
Re:here's how they could threaten gamestop (Score:4, Interesting)
I don't think it's right to give a publisher $60 for a game that I will only get 20 hours play out of, regardless of whether or not I can sell it later. I buy a lot of WiiWare games simply because they are only $10. I really don't mind if I only play it for 5 hours when I only pay $10.
So you're willing to pay $2 an hour for entertainment, but not $3?
That's a pretty tight range. Perhaps you should buy a game for $60, play it for 20 hours, and sell it for $30, so that you can get things down to $1.50 an hour? OR, my favorite option- renting at $7.50/20 or ~$.38 an hour.
Re:here's how they could threaten gamestop (Score:5, Informative)
That hourly rate neglects risk. Not all games are created equal. There's a certain risk that you're going to get a game, open it up, start to play it, and realize it sucks.
If you realize a $60 game sucks, you're out $60, or at least ($60 - (resale value)). If you've only paid $10, that's the most you risk losing.
Consumers are understandably wary of plunking down more than a couple of bucks unless they're very sure they're going to like the game. This is why it's a lot easier to gain traction and marketshare in the low end "casual game" end of the market, but also why there seems to be so little innovation at the high end. People are willing to take risks only when they don't have too much skin in the game.
Re:here's how they could threaten gamestop (Score:4, Insightful)
It's easy to get caught up in your own perspective. For a while I was very price sensitive, because income was short and free time was abundant. These days I hardly find time to game, but when I do the $/hour is nowhere near as important as fun/hour. If that's the game I like best, I'll pony up 60$ no problem. It's not that I want to flaunt it, it's just that different things seem natural to different people. Take something as simple as shirts - you can buy a ton of shirts but you'll still just wear one each day. Buying more cheap shirts, while fully functional, doesn't change the fact that you're walking around in a cheap shirt. So you buy a nice shirt, not because you need it but because it's more functional to you than buying another cheap shirt. Best computer example I got is probably the SSD I bought. Yes, it was expensive but it's also a dream to work with and I can only use one computer at a time (technically not true, but you know what I mean).
The question is really how many there is of me, and how many there is of you. Are you really naive enough to think that noone on any media (games, books, software, music, movies) ever tried cutting the price by 50% and saw if they made more money or not? Truth is, you tend to run into more halfers like "30$? Why not cut it to 15$, you'll sell much more." while people like me are of course happy to get away with paying half. Eventually everybody ends up in my category, people aren't interested in buying a near-infinite amount of music at 0.01 cent/song because there's no point, they'd never get around to listening to it. If you spend lots of time listening to previews on iTunes and do find something you like, it's probably worth a buck or the value of your time is really, really low. Personally I'm waiting for the video variety, single-click DRM-less movie/TV show download in Blu-Ray/1080p/720p quality. I got the service, it's just that you can't pay to get it legally...
Re:here's how they could threaten gamestop (Score:5, Insightful)
Buying more cheap shirts, while fully functional, doesn't change the fact that you're walking around in a cheap shirt. So you buy a nice shirt, not because you need it but because it's more functional to you than buying another cheap shirt.
This is a valid point. Personally, though, I buy nice shirts for $5 from goodwill (seems I usually end up with Ralph Lauren, though I never look for any brand in particular). It's cheap because the stores can't sell last season's shirts, and they'd rather take a tax write off giving them to Goodwill than pay to ship them back to the factory.
The thing is, you're not paying $60 for the game. You're paying $60 for the latest game. Just like last season's shirts, lots of people don't want to buy last season's games, and if you're one of those people, that's fine, but I think it's clear that it's not the quality you're paying for. There are games that are certainly worth $60 for the entertainment they provide, but those games are rare, and in any case, you're always overpaying for the right to play the latest thing.
Re:here's how they could threaten gamestop (Score:4, Insightful)
So many people in this thread have posed the same question and they ALL miss the point.
It's not only the $/hour that matters. The absolute cost of the good is a consideration as well, because the lower the cost, the lower the risk.
Re:here's how they could threaten gamestop (Score:5, Insightful)
I'd much rather wait a year or more and buy the game at $20 new on sale. I still get the same content, I get the benefit of a year's worth of reviews to decide if I like it, and most bugs and game play issues have been fixed. I just finished Mass Effect, loved it, and bought it new for $20 instead of $59 when it was released.
Publishers have definitely priced themselves out of my market and what I'm willing to spend on entertainment. Even though I can easily afford to pay more, I won't because it offends my sense of reasonable value. I think the turning point for me was around $40... anything more than that just seems like they are gouging me. I probably purchase 10-15 games a year, so assuming 10, if they priced at $40 they would get $400 from me, instead, I wait and they only get $200 from me.
Re:anonymous coward wants slice of first post mark (Score:5, Insightful)
All i'm hearing is "whaaa! I want more money" bullshit. I am tired of these companies who want everyone else to play by the rules (copyright) trying to circumvent the first sale doctrine. Guess what assholes, someone already paid the market price you set for the game and you got your compensation. If you think it's unfair, raise the prices and see if you get as many people purchasing your game. It is bad enough game companies sit on games that they have effectively abandoned, abuse people's PCs with malware designed to "stop piracy" and overall treat the customer with general contempt.
Gaming companies have already done a bang up job preventing PC gamers from selling/giving away their game to other interested parties and now they want to double tax paying customers because of their silly said business model. So go ahead and cripple the resale market. You may be able to kill it but there will always be the black market and those first sales you may have gotten will dry up as well.
Re:anonymous coward wants slice of first post mark (Score:5, Insightful)
The translation:
"Wah wah wah!"
Perhaps if you greedy bastards didn't sell games at the price you do more people would buy them. Instead, for a lot of people, they can't just casually pick up a game and take a chance like you would on, say, a $20 DVD. $70 is a LOT of money to gamble on something that stands a 50/50 chance of being garbage. And no retailer I've ever come across will give you your money back under any circumstances, so you take a big chance buying most new games.
Perhaps if the industry didn't put out so much absolute garbage we'd be more willing to take the chance. Unfortunately they aren't willing to not release unfinished games, crap games, and so much other effluence.
They're reaping what they have sown. And all they seem to do is cry about used games and how they're losing revenue.
Cry me a river.
Re:anonymous coward wants slice of first post mark (Score:4, Insightful)
It's much worse than a 50/50 chance.
Re:anonymous coward wants slice of first post mark (Score:4, Funny)
At least we know Duke Nukem Forever will have sufficient development time behind it. That's a certain buy on release game.
Re:anonymous coward wants slice of first post mark (Score:4, Informative)
Valve Software recently announced that during the recent "75 percent off" sale on Steam, Valve made more revenue than when the games were at full price. Lots more people bought the games.
Re:anonymous coward wants slice of first post mark (Score:5, Insightful)
Bingo. And that they're not doing that is what convinces me they're not really interested in giving customers a good value proposition; they're just bitching that someone is preventing them from screwing customers as hard as they'd like to.
If they sold "classic" (anything that's not the new hotness) games in different packaging for the price of used, who would buy used? They could take the wind out of Gamestop's sales right there.
Lots of companies spend giant piles of money trying to figure out what customers want so that they can try to deliver it. In this case, it's blatantly obvious what customers want -- a slightly cheaper game -- and it's even obvious exactly what price they're willing to pay. Gamestop has done all the market research for them. If they want to make money, it's on the table for them to take. If they don't, they can let Gamestop take it.
What used games market? (Score:5, Insightful)
Someone should tell them that, since Steam appeared there is no used games market.
Hell, come to think of it, now Steam's here, very soon there won't be such things as publishers!
Sucks to be them! Maybe someone should tell them?
Re:What used games market? (Score:5, Informative)
Steam only works on PC games. If you notice, a Gamestop stocks only the top... 10 or so PC games (in a tiny shelf hidden from everything else). That's because they can't resell them. They have more PS2 games than they do PC.
Seriously, about 60% of the store is resold merchandise. They stopped being a games retailer and became a pawn shop years ago. When will they buy my gold watch?
Re: (Score:3, Funny)
Gamestop -- pushing used games over new (Score:5, Informative)
I hadn't purchased anything from Gamestop until recently. My employer moved offices recently and now we are across the street from a Gamestop. I went over to purchase LIttle Big Planet and they assumed I wanted the used copy. There was only $5 difference between the used and the new and I figured I'd rather get the new. I knew something was up when the guy behind the counter kept telling me I could save a few dollars if I got the used one. Was I really sure I wanted the new one? Are you really sure? I figured they must be doing very will with their used games. Most of the store is full of used games.
What does Gamestop pay for used games? They must have some soft of dynamic system that keeps track of demand and quantity on hand before they quote a price. Is it worthwhile to sell games to Gamestop? They wanted to sell me on a membership card that would give me 15% when I sold a game to them.
The few games that I have bought used were from Gamefly. The nice thing about Gamefly is they at least give you a *new* case (not a beat up and gross one), cover art, and the booklet. I supposed I'm picky though, I don't buy a game unless I know I really want to keep a copy for a long time.
Re: (Score:3, Informative)
What does Gamestop pay for used games?
Shit.
Jack fucking shit.
Buy a $60 game on release day, return it tomorrow and get $40 TOPS, typically $30.
They sell it for $55.
Re: (Score:3, Insightful)
I would hope people would keep a new game for more than a week. It seems reasonable to me that if you keep a game for a couple of months, that you got at least $20 use out of it. Obviously people are willing to give up their old games for the price that Gamestop offers them otherwise they wouldn't have a store full of used titles!
I'm just wondering if the game companies are worried that Gamestop is going too far in pushing the used sales. They are becoming more of a game rental company.
Re:Gamestop -- pushing used games over new (Score:5, Interesting)
Re:What used games market? (Score:4, Insightful)
Maybe someone should tell you Valve fanboys a couple of things:
1. There's no Steam for the Nintendo DS. (as an example)
2. There's a booming used market for handheld and console games. I bought all of my Castlevania GBA games used, for example - along with New Super Mario Bros. and several other titles.
While Sony and Nintendo are slowly moving towards more and more DLC and downloaded games, they don't come with manuals or boxes and they're not portable in the sense that you can pull the cartridge (or optical media or whatever) out of your backpack and toss it to a friend to check out. The "downloadable" option isn't available for older machines - the heart of the used market, and where the "economically disadvantaged" buy their games.
What older machines? (Score:5, Interesting)
There's no Steam for the Nintendo DS. (as an example)
The Nintendo DSi has the functionally equivalent DSiWare.
While Sony and Nintendo are slowly moving towards more and more DLC and downloaded games, they don't come with manuals or boxes
You're right that they don't come with boxes, but all WiiWare and Virtual Console games that I've tried have an instruction manual under the Home menu.
The "downloadable" option isn't available for older machines - the heart of the used market
Apart from the Nintendo DS and PlayStation 2, older machines don't have any commercial developers to complain about them. There aren't any new SKUs for the GBA, the original Xbox, the GameCube, or any pre-PS2 system, unless you count the few games sold by homebrewers [retrousb.com].
Re:What used games market? (Score:4, Insightful)
There's also a booming market for new/used games and consoles from the 90s and 80s.
One only has to search eBay for "NES" to see this...
Re:What used games market? (Score:4, Funny)
What about people without the Internet? Well, they will always have hoop and a stick.
They're working on a way to charge $60 for that.
Re:What used games market? (Score:5, Insightful)
now Steam's here, very soon there won't be such things as publishers!
Steam is a publisher.
There will still be publishers (Score:5, Insightful)
In the context of a game "publisher" usually means "Guys with the cash." Basically the publisher is the company that ponies up the money to have the game made. That is why you'll see even companies like Epic have publishers. It isn't as though Epic needs someone else's name to sell their game. It is that they don't want to incur all the financial risk. So you get a publisher to pay for it, often a much bigger company.
Gears of War was published by Microsoft, for example. So suppose they spent $20 million on making it. Not an unreasonable amount for a game that quality, maybe they even spent more. Now let's suppose it had bombed for whatever reason. Had Epic incurred that cost, it would be real hard. They are a private company that employs about 75 people. Private means they can't just sell stock to raise money. A $20 million loss would equal over a quarter million dollar loss per employee.
Now MS is a massive public company. They've got the cash sitting around that $20 million is peanuts. What's more they can sell stock if they need to raise money. Thus the risk is something they can afford to take.
More over, many dev studios aren't sitting on much cash at all. So they need money during the development time of the game. After all you have to pay the programmers and artists and such while the game is being written, not after it sells. So even if they were willing to assume the risk, they just can't since they just don't have the money it would take.
You do see some companies that self publish. Stardock has done this. Galactic Civilizations II was written by them and published by them. Means they self financed the game. All the risk and all the rewards are theirs alone. They've now gotten in to publishing other games as well.
So publishers probably aren't going away. Many development studios will want someone to pay for their game, and that is what a publisher does. The publisher won't actually distribute the game, they'll just fund it, and then sign agreements with services like Steam and Impulse to get the game to consumers.
Also, as big as Steam is, you are kidding yourself if you think it is more than a fraction of the market. There are plenty of publishers that don't release games on Steam, and even those that do are often not exclusive. EA sells many of their games on Steam now which gives Steam a huge boost in titles since EA is massive, however EA also sells their games in stores. The store copies don't use Steamworks or anything, they are totally independent of Steam.
Re:What used games market? (Score:5, Insightful)
Steam used games, no problem, sell your account with all your games. Next person can then change all the details on the account to make it accurate for them. No if steam was really nice it would allow you to transfer game access rights for a minimal fee to other account holders.
Re:What used games market? (Score:5, Funny)
I think that person should be you. I think that you should call GameStop up and inform them that there is actually no used games market and that the revenue they bring in from selling used games actually does not exist. I'm sure they would be grateful to be informed of that so that they can adjust their business model from the insight that you can provide. I would offer to do this myself, but clearly I do not possess the same insight as you.
Re:What used games market? (Score:5, Informative)
Now come back in 10 years and tell me GameStop are still making money from used games.
o...k... I'll be sure to mark that on my calendar. I don't think used games are going anywhere for the foreseeable future.
Just because a company's short term business model is pulling in a profit doesn't mean your shares will be worth anything in a few years time!
Yeah, no shit Professor Obvious. But considering the fact that GameStop's business model is 25 years old, and isn't exactly what I would consider "short-term", I really don't think drastic changes are going to happen in the next "few years" to substantially alter that model. People will always be buying games, and GameStop is one place that will always be selling them. The only way a place like GameStop would go out of business is if *all* game distribution switched to an online model. That isn't going to happen as long as people want to play games on devices that are not online.
If you disagree with that, perhaps you'd like to buy my shares in the company that made Tamagotchi?
Are you really trying to compare a decades-old multibillion dollar industry with a Japanese fad? And were you really stupid enough to buy those shares?
I hope you can understand my writing even though I'm not using exclamation points, let me know if that's a problem for you.
Re:What used games market? (Score:4, Funny)
Re:What used games market? (Score:4, Insightful)
Back before 1998 there as a set of nice used-game stores in San Diego that I used a lot. And the games were cheap. Then I moved to Silicon Valley and suddenly there was no such thing. The closest was Gamestop, which is not even close to being the same thing. They sell used games at nearly full price. What's the point? These aren't bargain games when you pay $40-$50. A bargain game is $10-20, or even some $4.99 CD occasionally. The other drawback of Gamestop is that it's almost all console games now, with only a tiny PC games section hidden in back, and they mostly stock only newish games instead of older (and usually better) titles. If they're only selling new games at nearly full price, I may as well go to a real retailer with a bigger selection.
I really do miss "real" used game stores.
Re:What used games market? (Score:4, Insightful)
I always just fiugred they already had a piece of the market. You know, the first piece.
Re:What used games market? (Score:4, Insightful)
Except steam sucks and has in inherent risks that owning a disk does not.
Re:What used games market? (Score:4, Insightful)
Except owning a disc sucks and has inherent risks that Steam does not~
Re:What used games market? (Score:4, Insightful)
Except owning a disc sucks and has inherent risks that Steam does not~
Name one, and I'll name a bigger corresponding problem with Steam.
Re:What used games market? (Score:5, Insightful)
DRM. And that goes for both sides of the argument.
Re: (Score:3, Insightful)
No, publishers exist to provide advance money and get you into brick&mortars.
Reviews, word-of-mouth, and liberal chargeback policies exist to seperate the wheat from the chaff.
Re: (Score:3, Insightful)
"Publishers exist to separate the wheat from the chaff. Otherwise, you'd have the situation like on Apple's app store, where you don't know which of the 25,000 apps are worthwhile."
Yes we do, through social networking.
WTF? (Score:4, Insightful)
I wonder if these game publishers (and music, movie and book publishers) ever stop to think about what they are saying. If the logic is that they have some ongoing interest in the product they sell us, then doesn't that imply that as a purchaser we have an ongoing interest in the money we give them? So when GPG takes the money I spent and buys new equipment for their offices, shouldn't I be getting a new monitor out of the transaction as well?
Or do they figure that this only goes one way?
Re:WTF? (Score:5, Insightful)
Even better analogy: You sell your apartment, then when the buyer sells you claim half the profit.
Re:WTF? (Score:4, Insightful)
I wonder if these game publishers (and music, movie and book publishers) ever stop to think about what they are saying. If the logic is that they have some ongoing interest in the product they sell us, then doesn't that imply that as a purchaser we have an ongoing interest in the money we give them? So when GPG takes the money I spent and buys new equipment for their offices, shouldn't I be getting a new monitor out of the transaction as well?
The answer is: yes, they do think about it. And their thoughts boil down to "If we get money from used game sales, then WE GET MORE MONEY! WOOOO!!!!"
Re:WTF? (Score:5, Interesting)
A modern game cost what? 15 millions on average? When was the last time you paid 15 millions for a game you played?
The car manufacturing plant is a lot more than they sell the car for. Using your logic, we can see that you don't buy a car, you can drive it as a reqard for you giving money to the car manufacturer. When you sell the car, you act like a car manufacturer yourself. The problem is that you never made the car, you just use the work of someone else to make money. To me, the best word for this is normal.
Your logic is so shoddy I suspect you're a troll. If they were only selling one game, then yes, you'd have to buy it for 15 million in order to not be a parasite, but they're selling more than that.
If a used bookstore can sell used books... (Score:5, Insightful)
If a bookstore can sell used books without giving any money to the publisher, I fail to see why a game store can't sell used games. For that matter, are we going to insist that everytime a geekstore resells pokemon, magic cards, miniature collectibles or other similar items that they need to pay the publisher a fee? Or the same thing for baseball cards. And if the stores need to, why not the individuals? (Maybe I shouldn't be too loud about this but I'm sure the Post Office would love to get money from stamp collectors buying and selling their stamps. Or the Treasure Department and coins...)
If your idea sounds ridiculous when the product is replaced by a functionally identical product, the idea is probably ridiculous.
Well of course not (Score:5, Insightful)
If a bookstore can sell used books without giving any money to the publisher, I fail to see why a game store can't sell used games.
That's because you're rational, and understand the first sale doctrine.
Remember - these companies that are all in the selling entertainment business hold up the Holy Grail of money streams as their ideal. The RIAA. Make an item once, and every single time it changes hands, media - whatever - make a buck on it.
It's insane, but there's also a metric ton of cash involved, so of course the more unscrupulous types are going to gravitate towards that. Notice how the source who said the gaming companies "want in" on that revenue stream to which they are not entitled, refused to come forward and name himself/herself.
Any shakedown racket in its infancy would behave the same.
Re: (Score:3, Insightful)
> If a bookstore can sell used books without giving any money to the publisher, I fail to see why a game store can't sell used games.
I think the argument is that bookstores sell a product, whereas when you 'buy' software you're actually entering into a licencing agreement to use the software but you don't have the right to sell/give it to anyone else. Sort of a little like when you buy travelcards (ticket in London which lets you travel an unlimited number of times in a given time period, ie day/week) y
Re:If a used bookstore can sell used books... (Score:5, Informative)
Re:If a used bookstore can sell used books... (Score:5, Informative)
US law says otherwise. As defined by 17 USC 101, a "copy" is a physical instance of the physical media (game cartage, CD, etc.). Under 17 USC 117, ownership of a "copy" of software confers the right to install and use the software on that copy. As long as the transaction at the store counter relative to the physical media is a physical property purchase, then you get the intellectual property rights to install and use the intellectual property contained in that physical property.
devil's advocate (Score:5, Insightful)
I completely agree with you but their argument is simple: people are buying games new, installing it on their computer, installing any cracks necessary to make it play without the CD, then selling the game second hand (and then the cycle continues).
They can't stop the NOCD cracks. They've tried. They can't run the game from CD, the performance is lousy. So all they can do is whine and lobby.
Re: (Score:3, Interesting)
Re:If a used bookstore can sell used books... (Score:5, Interesting)
I have paperbacks from the 60s that are holding up better than ones from the 90s.
17 USC 109 distinguishes among formats (Score:4, Informative)
If a bookstore can sell used books without giving any money to the publisher, I fail to see why a game store can't sell used games.
First sale laws already distinguish among formats of works. In the United States, for instance, you can't rent phonorecords (copies of sound recordings) or copies of PC games without the copyright owner's consent (17 USC 109).
Re:17 USC 109 distinguishes among formats (Score:5, Informative)
Of course, that's a fairly recent change in the law (1990, IIRC), and not a good one.
Why shouldn't it be legal to rent those things? It was asserted that it was because people would rent them, then unlawfully make a copy to avoid buying one. However, events have shown that 1) That's not a serious problem, given that movies are rented and are thus susceptible to this sort of piracy, yet rental-related piracy hasn't noticeably harmed the movie industry; 2) With the advent of the Internet, it's unlikely that anyone would go through the inconvenience of renting music or games to pirate them, making the restriction on rental ineffective and thus in need of being eliminated.
First sale should not distinguish amongst types of works, nor should it be limited. That is just yet another example of the corrupt practices of the copyright industry, having the law twisted so that it no longer serves the public interest.
Re:If a used bookstore can sell used books... (Score:5, Informative)
That section also specifically exempts console games from the law prohibiting the rental of phonorecords without the copyright holder's permission:
It does. (Score:4, Informative)
I don't think PCs are ruled out.
They are (or at least my IP law books says so). IIRC, neither software nor music CDs can be rented. But books and video recordings can. BTW, the relevant distinction in that language is probably between "limited purpose computer" and "general purpose computer."
What's Next? (Score:5, Insightful)
Either that, or game publishers will be the next on the bailout list...
Re:What's Next? (Score:5, Informative)
That's the really funny thing, is that for durable goods there are very clear laws that car manufacturers can't interfere with resale or used car markets and have to honor warranties and such. It seems that "copyright" related iterms keep grabbing more and more power when the power for actual manufacturers is consistantly kept in check.
Automakers tie diagnostic tools and engine codes to "IP" rules all the time even using the DMCA and Congress routinely takes that away from them when they try to hide behind the "weenie" IP laws that game publishers are trying to hide behind.
How to destroy a used-durable-goods market (Score:4, Interesting)
dear publishers: don't like it? fight back! (Score:3, Insightful)
Sell us "second run" games for $20 or less as new/unopened products a few months after release, and we'll cut out the middleman (gamestop).
I don't buy $60 games unless I *really* want them -- badly. Otherwise I wait until I can get them for under $20 -- any way possible.
What if auto makers ... (Score:5, Insightful)
had done this also? Would they have managed to get their way, one is forced to wonder? Would GM be thriving if they had a cut of every used car sale? Who the F--- do these publishers think they are anyway?! If this happens will I have to pay Dell every time my business sells a refurbished Dell PC? Hell, the pawnbrokers alone will never allow such a thing to go through.
These are somewhat rhetorical questions and the slippery slope fallacy applies a bit. Still, the principle is sound as a reason why the publishers shouldn't get a cut of used game sales, in my opinion.
Just like.... (Score:5, Insightful)
This is just like with a car, or some other item, where the original manufacturer gets a kickback every time it is resold because -- hey, wait, they don't get anything from it because that's a stupid idea! The original manufacturer has already sold it and given up any future interest in it for a fair price! Why the hell would the maker of a bad video game get more money every time EB manages to fob it off again on an unsuspecting customer?
they already have a slice (Score:5, Insightful)
it's the original sale, that's their slice.
Their slice is THICK. (Score:5, Insightful)
Ask a manager or employee of a gamestore what their markup is on new games - what they actually make as profit. If they're not complete assholes, they'll tell you - a games store makes only a couple of bucks off of the new stuff, if that - the publisher keeps the remainder. Pay 65$ for a new game, the publisher gets at least $60 of that.
Pay $20 for a used game, the games store gets around 15-19$ of that, depending on the condition of and demand for the game. The markup may seem a bit ridiculous, but independent games stores would be out of business if it wasn't for the used market - the margins on new games are so thin that they'd have to move an enormous volume of product to make up for the difference they see in returns on used games.
I'm all for the used market, even though I buy most of my games new - it keeps the stores in business, even with dozens (hundreds?) of copies of crap and not-as-popular-as-they-thought-they-would-be (Nintendogs, anyone?) games sitting on the shelves.
Cry me a goddamn river (Score:3, Interesting)
Re: (Score:3, Insightful)
How is the price relevant?
Start selling new games at new movie prices, DUH! (Score:3, Insightful)
$10 - bargain bin chumps
$20 - standard rate new game
$30 - AAA rated new game (think like the extra 10 bucks you pay for BluRay discs over DVD)
$40 - AAA rated special edition bundle mumbo jumbo (i won't buy em, but some people like the extras I guess)
This is the fault of the game companies. (Score:5, Insightful)
Instead people say "Hey, I want to buy a CHEAP game, and don't care if it is not the newest thing out there."
So if you are a game company wanting to get into the 'cheap, not recently released game' market, it is easy. Simply cut your prices for the stuff you brought out last year by 30% and for two years by 50%.
You are not going to be cutting into your 'new releases' money, and you will be giving the people what they want.
Open your own damn stores! (Score:5, Insightful)
If they want a piece of the used game market, they can open their own stores and compete against GameStop just like everyone else.
They need to bring some value to the table (Score:5, Insightful)
In the rest of the world, the only time the original Vendor/Distributor/Manufacturer/Whoever gets a cut of a second sale is when they're adding some value, by doing a factory refurbishment, or inspection, so why should the game publishers be any different?
They can "refurbish" the game: Reset any DRM installation restrictions, clear out the multi-player accounts, check the disk for scratches, and replace any missing bits of paper in the box.
Then they can have a cut.
Until then, welcome to second hand sales.
Why I buy used games (Score:3, Insightful)
Some games are good, just not so good I need them ASAP, and not so good that they're worth ~$70. (CAD, as I'm in Canada, don't know exactly how much less they are in the US, and don't feel like looking it up) If all games were $50 or less new, I'd probably buy a lot more new games. Most games I buy for $30 or less used. %50 off is nice, $70 for 10 hours of gameplay isn't.
It's also worth noting that some games don't get cheap even when used until months after they've been released. Fallout 3 is currently only $5-10 less for a used copy, so I may as well buy it in the shrink wrap.
The only thing I can see game publishers doing to try to sell as many first hand copies as possible is have a grace period of a month or two from the publishing date when you can't sell used copies, but they'd probably have to pay off stores to honour such a deal. Expecting a cut of re-sale of your product is just silly.
Re: (Score:3)
I buy used PC games because the "minimum requirements" written on the box are 1) bullshit and 2) more than any machine I will own for the next 2 years.
Oh com'on! (Score:5, Insightful)
I've been a gamer for over a decade now. The fact of the matter is the market is diluted with crap, and even a lot of the "hits" are a lot less fun/shorter than the games from last decade. I mean, sure, Gears of War is fun for a time, but how does it even compare to Deus Ex or Jedi Knight? I mean, you can even see how video games have progressed in the sequels of some titles. For example, compare Deus Ex 1 & 2, or Thief 2 & 3. Mario Party 2 and Mario Party 8.
Then there's the sheer amount of crap, even from "trusted" and "quality" companies. Like Soulcalibur Legends. My friend is a big fighter game fan and bought that game. Usually Soulcalibur is a "quality" title, but that game was so shitty! It seemed like a demo it was so short and lacking features.
You raised the prices of games by $10 and eroded their value. People aren't paying for new games because the price of a "new game" isn't worth it to them anymore. And it shows. It used to be that a New game would cost $50 and GS would be selling it used for $35. That means there's a lot of people buying the new game and few buying the used game (high supply of used games, low demand.) Now, the games costs $60 new and $55 used. Which means the exact opposite (low supply of used games, high demand.)
If I was a game publisher and I wanted to kill the market for used video games, I'd lower my prices to $30 and probably sell more than twice as many copies, making it up in volume. I mean, if you want the new Gears of War, you'll try and save $5 off of it because it already costs so much. But the difference between $25 and $30? Not many people care. In addition, when I get sick of GoW and return it, I'm getting $30 bucks back. That's like a tank of gas. What would you get back for a $30 game, $15 bucks? That's not enough motivation.
I want my pie and eat it! (Score:5, Insightful)
Pay no attention to the man behind the curtain (Score:5, Insightful)
What are these guys on? (Score:5, Insightful)
Sony and Panasonic aren't complaining about used TV sales, Toyota isn't complaining about used car sales, and Dell isn't complaining about people reselling their computers. In what world is someone reselling the game considered taking away money from the publishers? Lets set aside the fact that some people will pay full price for a game because they know that they can resell it later and recoup some of the cost...
Its not like people are going out to buy used games. They want cheap games. If they kept publishing their old games, and dropped the prices as the games got older, I'm sure they could take a huge chunk out of used game sales. Its not like I'm falling all over myself to save $5 off of a new game at GameStop. Seriously, every time I buy a recently released game, they offer me a used copy for $5 less. Oh boy, sign me up!
It looks like that, instead of thinking about the problem and adjusting their business strategy, they've chosen to whine like petulant children about something that every other industry in the world (well, at least those based on real physical objects) doesn't have a problem with. Or maybe my brain just isn't sophisticated enough to understand their business genius. Either way, their little rant makes me feel like I'm taking crazy pills.
Not to suggest the obvious, but (Score:3, Insightful)
Not to suggest the obvious, but the publishers seriously want to sell used games then they could take the games that aren't sold after a period of time and sell the at half the price of new games.
It's just software. And with software you have relatively high fixed costs for development and then you have practically no marginal costs for selling the product. Suppose for the first year, you sell X number of games of a title at $69, .3X at $69 the second year, and .1X units at $69 in the third year. Used games are selling .4X units at $30 in the third year. 0.4X times $30 brings more revenue than 0.1X times $69.
So just price the unsold new games of that title at slightly less than the used games of that title are selling for. Since you have no marginal costs on your sales product, you will be profitable. But no, you're a fucking marketing major and math is hard, so you want to pass a law to prohibit any 'advanced' business model that your little brain doesn't understand.
I'm surprised that with so many game companies in New England, no one seems to have adopted the sales model of Filene's basement.
They got their cut at time of first sale (Score:5, Interesting)
The game companies get their cut at the time of first sale. The selling cost of the game already includes in the price the value to the customer of the ability to resell the product. The assumption the game companies are making is that if they lock this out, they can sell more product at the current prices, but instead what will happen is that they will be have to drop their prices some amount to account for the fact that it is less valuable to the purchasers.
This is a fairly standard element of elementary economics; for instance, see this chapter of Price Theory [daviddfriedman.com], where virtually this exact problem is problem number 12 in chapter two of the book.
Which just goes to show that for all the supposed value of an MBA, people in business still routinely fail to apply even the simplest economics to their own worlds.
It's a basic principle (Score:5, Insightful)
"the used sale market is still depriving of money because it gives consumers an all-too-easy alternative to buying a new "
This is the precise concept that motivates the First Sale Doctrine. You only get paid for selling something yourself. Why should you get paid when someone sells something that used to be yours? When you sell your used car, do you have to give a kickback to the person you bought it from? It makes no sense at all given the set of commerce rules that we have come to accept over the centuries.
Really there is no end of the negative consequences that result if you decide that First Sale is not a valid concept. You have to question the entire meaning of the word "sale" if you do this.
It's the game design, stupid (Score:5, Insightful)
In the age of the internet, games are uniquely poised to capitalize on aftermarket sales (and sales due to piracy) in a way that no medium in history has been able to, and it can all be done just by modifying the design of the product. Here's some examples that work extremely well:
-DLC. Look at Burnout Paradise. Two years later, it's still getting meaty, significant upgrades on a regular basis. The game has had ELEVEN content updates, 5 of which were paid / premium add-ons. The publisher gets paid for each of those! Bethesda knows how to nail this too, despite some early mishaps with horse armor. Rockstar's figuring it out too. The right DLC will make you a ton of cash, even from the pirates.
-Recurring subscriptions: Some MMO's give away their clients, and make their money on premium DLC and monthly subscription fees. Apogee understood this years ago, with the original Wolfenstein shareware. Download it and get 1/6 of the game, which was a meaty, satisfying experience on its own. But pay up and you can get the other 5/6ths!
-High replay value: Rock Band & Left 4 Dead's co-operative multiplayer emphasis give them huge replay. I almost never see a reasonably priced copy of Rock Band sitting on the used shelf (trust me, I've looked, I want to import the songs into Rock Band 2). Rock Band follows the DLC model, too! The longer you convince someone to hold onto your game, the lower the aftermarket churn, and the higher you can keep your MSRP before you're undercut by the used market. Just ask the creators of Mass Effect, or Super Mario Galaxy (I dare you, get all 242 stars).
-In-game advertsiing. The people who buy games used are necessarily doing so after the big retail splash of the original launch. These new eyeballs can view ads impressions just as well as the original pair, though, and the value of that digital billboard is only as high as the number of people who can look at it at any given time.
Efforts to thwart the aftermarket's existence entirely, through one-time activation keys and emphasizing downloadable games, are just going to piss the customer off. The days of making a 4-hour singleplayer game with no replay value beyond deathmatch/ctf and expecting to have high sell-through are over; The high-budget $60 Terminator: Salvation game is only 4 hours long, it's going to be littering the shelves of used stores. The only way to stop the used market from undercutting the new market is to make the new experience so compelling, people don't want to part with their new game for a long, long time.
The DO get the used game sales. (Score:3, Interesting)
They are just too fucking greedy to realize it.
I don't sell games, though I have a couple of friends who do. Personally I just use gamefly and occasionnally buy a game that I've played and know is a keeper.
But let me tell you about my friends. When they sell a game, the money either immediately is applied to the purchase of a new game, or is basically put aside until the new game they want comes out. Rarely does that money not get put back into again, hell, it must, their game library is growing, not shrinking, and I hear about the new games they've purchased (from places that doesn't sell used).
So you go ahead and cut off used games and watch how your new game sales drop by an almost identical amount since those people no effectively went from paying $20 every month for the new bad ass game to paying $60, so they just don't buy games anymore. See how well it works out for you, ya greedy ignorant bastards.
Yours Truely,
Customer
This is really a Pawn Shop Business Model (Score:3, Insightful)
of selling used stuff.
Before the used game stores there were used record and CD stores and used Video tape and DVD stores. Pawn Shops buy and sell all of them and did this sort of thing before the "Used X" Stores.
Even Comic Book stores do that, buy used comics for pennies on the dollar and sell them for "retail" or "collector's price" based on how rare the comic is and in what condition it is in.
What next, Game Publishers want a piece of eBay and other auction sites that sell used games? Give me a break!
Game Publishers already got a sale from whomever bought the game new, but the person got tired or bored of the game or it didn't meet the expectations and they sold it to the Used Game store to get some of their money back. Game Publishers should love the Used Game Stores because it stops people from pirating the game because it costs so much to buy new and the used price is more reasonable.
Most of these comments don't quite get it (Score:4, Insightful)
In the past, I've defended the idea of stores getting involved in second-hand sales. I still stand by the first-sale principle. So, let's look at some possibilities here.
Option #1: Publishers don't like second-hand sales, so they enact legislation to stop second-hand sales OR they require a cut of every second-hand sale. This would be wrong. The first-sale doctrine prohibits this. And, consumers should be angry if this is what publishers were doing. Most of the Slashdot comments seem to assume that this is what publishers are doing, and they make comparisons to used books and car sales. This is not what publishers are doing.
Option #2: Publishers get involved in the used-game sales. If GameStop is enjoying 48% profit margins, then there's a strong impetus for competition from the publishers themselves. There's nothing wrong with Publishers doing this. They're just jumping in and competing the used-game market, just like everyone else. (In fact, Stardock is attempting to setup a "used game" sales system along with their "impulse" DRM system. You can sell-back your serial-code and someone else can "buy" it. Admittedly, this gets odd. "Used bits" are no different than "new bits". And, what's to stop Stardock from always saying "sorry, we're all out of used copies of our game; you'll have to buy a new one"?)
Option #3: Publishers create additional content so that people hold-on to their games. The article states that this is what publishers are doing - trying to incentivize customers to hold-on to their games, thus lowering the number of people selling them. Again, nothing wrong with this.
I'm sure there are plenty of other options people could come up with.
There is nothing wrong with publishers getting perturbed over used-game sales, and there is nothing wrong with their attempts to get money in the used-game market. The only issue is whether or not they go about it the right way. Option #1 is the wrong way, but there are good ways to go about it. Most of the Slashdot comments seem to assume that publishers are trying Option #1 - and then complaining that publishers are greedy and underhanded. I see nothing wrong - in principle - with publishers trying to make money off used-game sales or being disturbed by GameStop's 48% profit margins.
what used games ? (Score:3, Insightful)
A used computer game is as good as the day you baught it.
It's only devaluation is that it is not the newest thing.
The problem with games publishes is that there is very little
new under the sun. In fact they are publishing "used" games
in the concept that the games have already 'used" ideas
and people are not prepared to pay top dollar
They do not see enough difference between "used" games and "new" games
G
Me Too! (Score:4, Funny)
some publishers and manufacturers want a piece of the pie.
Ooo Ooo! Me too! Can I have some of that money too, please? I have just as much of a property right over that copy as the publisher does, so I'd like to have some of GameStop's money too, please!
Thanks!
Difference Between Video Games And Cars (Score:4, Insightful)
The main difference, in my opinion, is that in the first year of owning a car or TV, only the first owner can get value from it. In the first year of life of a game disc, 12 people can get value from that one disc.
I don't think you'll see Bungie, Epic, or Infinity Ward complaining about this. They've figured it out... you sell people the game and give them a great multiplayer mode (or some other reason) to hang onto it, and they will. Used copies will be few and far between.
The people who are really suffering are those that make truly fantastic single player games. Prince of Persia comes to mind... it was great, I thoroughly enjoyed it. All 20 hours of it... and on my schedule, that's 5 days of having the game to do 100% of everything there is to do. So I rent it. I actually rent all games that have no multiplayer aspect. The only games I purchase are the ones I can see myself playing online still, 6 months down the line. You might say make the games longer, which is an option, but I personally don't WANT to invest more than 20 hours into any single player experience, and to be honest, when it is longer, like 100+ hours for a Final Fantasy game, you spend most of that time not having fun, just trying to level up to do everything.
This applies to DVDs and to a lesser extend music as well. One DVD can easily fully serve a group of 20 people in one week if they pass it around and watch it in groups.
I'll leave you with this... I think more than the disc, game companies, movie companies, etc are selling you the experience. The experience of playing through the game or the experience of watching the movie. And I believe they should be compensated for each experience they provide. I do think that $60 is a bit much for a video game, but I think it's to compensate for rentals and used game sales. Once everything goes digital, we will see a shift. Let's say that for every 1 copy of a new game that is bought, 2 people probably play that disc, on average, could be more or less, not sure. So $60 provides 2 play experiences. The publisher sees approx $30 per experience in this model, but assuming the first copy was $60 and the used copy was $55. That's $115 spent, and Gamestop probably paid the original owner about $25 for it, so they paid $35 for the experience. If the second owner sells it back very quickly for $25, then he would have paid only $30, bringing this in line with the above of $30 per experience. So $65 spent total for two plays, or $32.5 per experience. If the publishers had complete control over this, the players could have each spent less money for the same amount of, or more (because they get to keep the game), game.
However, it may be be a utopian thought to think the publishers would pass these savings onto us completely, I like to dream.
This happens already in the art world (Score:5, Informative)
There is no right to profit (Score:3, Insightful)
If the publishers want to compete with the used market, it seems to me their best option is to either:
1. Produce such a high quality product with so much content and replay value that everyone will WANT to own it first hand, and that it's so good that it will be months or never that a first sale customer is willing to let it go.
2. Sell at a price that makes it make no sense to wait for used copies to become widely available.
Neither of which the game publishing industry is willing to even seriously consider. Instead they want to use RIAA tactics to force the used market out of existence.
Hypocrisy? Greed? (Score:4, Insightful)
What the matter with these people? On one hand they want to be able to patent "Computer Implemented Inventions" (ie SW) - where the traditional, or at least the popular view is that patents are for significant, real-world inventions like machines or tools; something tangible. So they seem to argue that software, such as cmoputer games, are tangible enough to be patented. But on the other hand they want money for each time it is being sold, copied or even looked at - because now it is suddenly "intellectual property" on par with works of art, like music, paintings and novels.
Either way, I don't see the merit in their arguments - if you sell tangible goods, you pass on the ownership, and if it turns out that the thing you sold for $100 can be sold on for $100000, shame on you for not seeing that opportunity. The same goes for works of art, as far as I can see; isn't that almost the way it goes - a painter sells his work for pennies, and later it goes on Sotheby's in London and sells for £10000000?
It is this kind of behaviour that time and again show us all that those in the self-proclaimed "upper class" are in fact not rich because they have worked hard and been extremely clever and intelligent, but because they are greedy low-life who lack a few basic building blocks in their moral and social instincts. Is it any wonder that socialism seems like a good idea sometimes?
Re:They already got their cut (Score:4, Insightful)
Clearly the reason there's a huge profit margin in used games is that new games are priced way too high.
I was thinking along the same lines. If they don't like the used games market, then either make games that are too much fun to part with (I almost giggled typing that one) or adjust prices according to how old the game is, and price used games off the market. You want brand new game X? Pay 59.99 for it. You want 6 month old game X? Pay 35.99 for it. 12 month old ...you get the idea. Use the Wal-Mart philosophy and undercut as you go, if a used copy is 18.99 and the new game is $20, I'll pay the little more for the brand new, even if the used copy looks spotless. But if the used copy is 35.99 and the brand new copy is 59.99, the game makers themselves would save the 25 bux without hesitation.
Record Rental Amendment (Score:5, Informative)
Good luck getting that done. http://en.wikipedia.org/wiki/First-sale_doctrine [wikipedia.org]
I see your 17 USC 109(a) [bitlaw.com] and raise you a 17 USC 109(b): Record Rental Amendment [wikipedia.org].