Publishers Want a Slice of Used Game Market [Slashdot]

[DP ServBot]

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."http://games.slashdot.org/slashdot-it.pl?from=rss&op=image&style=h0&sid=09/06/04/236201 (http://games.slashdot.org/story/09/06/04/236201/Publishers-Want-a-Slice-of-Used-Game-Market?from=rss)
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[monkeychemist]

I never understood how gamestop ever sold a used game. They are all beat up and only $5 cheaper than a new one. On a $60 game why not pay the extra $5 for a nice brand new copy?

[chicnstu]

If they succeed, would people have to pay even more for a used game at GameStop? They are already only $5 less than a "New" copy, tempting people to just go ahead and give them $5 more for a "New" one.

[unwinddesign]

Beaten to death, but in other news:

Record labels, movie studios want cut of used CD and DVD sales...

[think about how ludicrous that would sound...obviously that publisher didn't...]

[TonyTheTiger]

I never understood how gamestop ever sold a used game. They are all beat up and only $5 cheaper than a new one. On a $60 game why not pay the extra $5 for a nice brand new copy?

Because used games older than a few months are actually a good value and it's not impossible (or even difficult) to find copies in good condition. Everybody is looking for a bargain and new game prices just don't meet that standard. Publishers are learning this the hard way.


depriving publishers of money because it gives consumers an all-too-easy alternative to buying a new game.

This is my favorite line because it is a perfect snapshot of the obvious willful blindness. It's like how professional sports teams are always talking about how to get more people in the stadiums and arenas and come up with 100 things yet carefully sidestep the fact that the empty seats are all $70+.

Whether or not games are too expensive is one thing. But there's no question the price is high enough to create a more than lucrative used game market. Maybe publishers can't afford to sell games cheaper upon release. But if that's the case then tough luck. GM can't stop people from buying used Chevys either. If you sell an expensive product then you have to suck it up and deal with people looking for an alternative and other people providing one.

[Sosage]

Beaten to death, but in other news:

Actually beaten to death before we even leave the Game Industry borders. Every 6 months someone writes about the pub/devs getting cut out of "possible used game cash", followed by everyone kind of shrugging at each other.

The answer that would make everyone involved happy isn't black and white, if it exists at all, although that's what all sides seem to be fishing for. Getting profits from good, worthwhile DLC is definitely a good start (worthwhile as in...not Horse Armor).

[TheDomesticInstitution]

thanks for sharing!....

bot (http://www.digitpress.com/forum/showthread.php?p=1567270#post1567270), thanks for the share!....

[FantasiaWHT]

That 48% figure is highly misleading, too. Sure, they may pay $25 for a game and then price it for $45 (which, after knocking out overhead etc. gives you the 48% profit figure), but not every game GS pays $25 for is going to sell for $45. If that game doesn't sell, it'll get marked down to $40, then $35, then $30, etc. and they may wind up taking a loss on it. It's easy to say GS is making a huge profit margin on a used game sale, but the reality is while, yes, it's significantly higher than the margin on a new game, but not as astronomical as a first glance would make it appear.

[chrisbid]

uh, cutting off your nose to spite your face?

people trade in games to get credit to buy new games

gamestop is a major buyer of new games, and carries a wider variety of titles than the box stores

restricting used game sales in any way will only hurt the sale of new games. period

[Hep038]

I am sure if the profit margin was around 10% they would not even care. I am also sure if game stop agreed to give them a % of the profit if they agreed to pay a % any losses they incur.

[Kuros]

Quoting myself from a CAG topic about the same article:



Here's what I see from this:

1. Much whining about them not getting profit. They want strict restrictions on their games but don't want to abide by First Sale Doctrine. You can't have it both ways guys. On top of that, who the fuck are they to expect to get money from someone else selling their game?

2. Much bitching about Gamestop. Gamestop is just doing what has been around for hundreds of years, basic economics. Why buy a book for $10 when I can buy it for $5 and get the same experience out of it? Sure, it's a bit frayed, but the words are still there.

3. If they want more profit, they should offer the game at a lower price point to create more sales, (E.G.: Left 4 Dead saw huge sales when it went on sale for $20) offer a high quality game that warrants us purchasing the game for full price, (E.G.: The last game I purchased at full price was The Orange Box, well worth it), or try to bring in extra profit by providing quality DLC. Quality DLC meaning extra maps, skins, etc. at a fair price point, not Horse Armor or pretty much every DLC from Namco (Beautiful Katamari being the worst offender).

4. They can push for full digital downloads of games, but there are a couple of problems with that. The first is the storage space that is available on the current consoles. Either pretty much nil on the Wii or a small amount on the 360 or PS3. 20gb doesn't mean shit when your are downloading 3-6gb games, only the 120gb systems would have a substantial amount of room for downloaded games, but even then the hard drive will fill up fast. Add in the fact that not everyone has super high speed internet and that the downloads could take a few hours, I'd rather go and buy the physical game.

I do like the NBA Live 09 DLC example. Offer up someone a bonus for buying a game new, such as DLC and then offer the DLC to everyone for a minor sum. Someone buys the game for $50 and gets the DLC, the consumer is happy and the publisher is happy. Someone else buys the game used for $25, then buys the DLC for $5, the consumer is happy because he saved $20 and the publisher is happy because they still got $5 out of the deal. Now not everyone will buy the DLC after buying the used game, but for the ones that do, it's nearly pure profit for the publisher.

[The 1 2 P]

I'd like a slice of the used game market too but it's not going to happen. Publishers need to keep coming up with interesting ways to make consumers buy their products new. Then they need to keep things coming such as downloadable content so that these original owners keep their games for well after the purchase date.

[XYXZYZ]

Then they need to keep things coming such as downloadable content so that these original owners keep their games for well after the purchase date.

Also, don't most people finish these 40 hour quest games and trade it in, not caring to replay it some day?

[s1lence]

Old news......


Remember, there still has to be a NEW game for it to end up used.

[Push Upstairs]

I've said it before and I'll say it again: there are some games that just aren't worth paying full price for.

$50 for 4 hours of gameplay and no replay value? Sure. LOL

[FantasiaWHT]

There's no way game makers could get away with the prices they're charging for new games now if they limited used sales in any way. Part of at least some people's consideration when buying a new game is that even if their up front price is $60, in reality they only may wind up paying $40 for the game experience because they sell it at some point.

[Trebuken]

One element that does not get mentioned is that this is forcing developers to make better games. They have to add multiplayer, or make longer games to keep people from trading the game in quickly. Uncharted 2 is adding multiplayer. Completely needless, even if it is great. The solo campaign of the first was awesome...I suspect the game is too short and they wanted to sell more 'new' copies in the first few months.

I don not really like the tacked on multiplayer in many games; I think it is often a failure. I'd like some developers to try extending the single-player element more often...

[udisi]

I fear the day that bandwidth can support Digital Download, cuase that's where this is heading. The developers will cut gamestop and every other retailer out of the loop completely. There will be no such thing as a used game.

They've already started testing this, with xbox live arcade, wii ware, PSN network. They've even announced download only games for PSP and the DSI.

It'll be a slow change, but I can see it gradually taking over.

It defeats piracy and it defeats used games. saves manufacturing costs, distribution costs, etc.

The time isn't here quite yet, but it's coming.

[monkeychemist]

I fear the day that bandwidth can support Digital Download, cuase that's where this is heading. The developers will cut gamestop and every other retailer out of the loop completely. There will be no such thing as a used game.

They've already started testing this, with xbox live arcade, wii ware, PSN network. They've even announced download only games for PSP and the DSI.

It'll be a slow change, but I can see it gradually taking over.

It defeats piracy and it defeats used games. saves manufacturing costs, distribution costs, etc.

The time isn't here quite yet, but it's coming.

one can only hope that when that happens the games start at $40 as opposed to the ridiculous $60. There is no game that I will ever pay $60 for, EVER!

[chrisbid]

digital only will also effectively kill almost half of the potential market. broadband penetration is still only around 60%, and rather than the prices coming down, bb providers are increasing bandwith and maintaining current price points. with the depression, extras like broadband and cable are being cut out of household budgets.

the first company that goes digital only will be the first to lose, big time

[mnbren05]

broadband penetration


haha you said penetration LOL

[Gentlegamer]

There's no way game makers could get away with the prices they're charging for new games now if they limited used sales in any way. Part of at least some people's consideration when buying a new game is that even if their up front price is $60, in reality they only may wind up paying $40 for the game experience because they sell it at some point.This is my view of the matter, too.

[j_factor]

A good point about this was brought up in #vbender, that I'm going to expand upon a bit. Game companies are looking at used game sales, but that's only part of the equation. Those used copies didn't come out of a vaccuum, they were traded in. If game companies want in on used game sales, maybe they need to get in the business of it. One of the reasons used games sell well is because if you don't like the game, you can return it (within 7 days). Perhaps what they need to do is offer consumers a buyback program on their own games, which would also deprive Gamestop of any profit on those copies. Except that doesn't sound as appealing now, does it? They want to take some of the profit, but they don't want to do anything for it.

Assassin's Creed sold millions and exceeded expectations. Ubi Soft has boasted about its sales a few times. But look at any Gamestop, and you'll see at least 20 used copies on the shelf. Would Ubi Soft be as pleased with the game if they had all those used copies in their own inventory? Would their profit on the game be as good? Of course not.

[udisi]

@gentlegamer

sure they could, they have before. Hell, even as recent as when it was the SNES and Genesis on shelves, there wasn't used game stores. New games like Final Fantasy 3 cost 79.99. If I recall correctly things like Phantasy Star IV and Virtra Racer were like 99.99. Granated there wasn't as many releases as there is now, but games today are actually cheaper for the consumer than ever inflation adjusted.

[Push Upstairs]

I'm pretty sure game prices will remain the same even if games go digital.

Reason: because they can.

[Berserker]

I'm pretty sure game prices will remain the same even if games go digital.

Reason: because they can.

That last part is half right:


Reason: Because they can, if we tolerate it.

This is still a good ways off, so there's no way to know how things are going to go, but I don't see any guarantee that people will tolerate it. Companies might be able to justify it for the big-budget releases because of the massive development costs, but if they can't then there's not much they're going to be able to do about it.

[YoshiM]

sure they could, they have before. Hell, even as recent as when it was the SNES and Genesis on shelves, there wasn't used game stores.

Um, gotta correct you on that point. There were used game stores, just not nearly as many as there are now. However there were a good amount of used mail-order companies that were very easy to work with. I bought used TG-16 games from mail-order quite a bit as I couldn't buy them locally. Places like Funco (as in Funcoland), BRE Software and Play It Again all had price lists in various gaming magazines in the late 80's/early-to-mid 90's.

[Enigmus]

Wow, they're evil. First, Nintendo will take the GameStops, then our thrift stores due to old games on Virtual Console, and then...

THE WORLD.

Okay, probably not. ROFL

[TonyTheTiger]

I fear the day that bandwidth can support Digital Download, cuase that's where this is heading. The developers will cut gamestop and every other retailer out of the loop completely. There will be no such thing as a used game.

They've already started testing this, with xbox live arcade, wii ware, PSN network. They've even announced download only games for PSP and the DSI.

It'll be a slow change, but I can see it gradually taking over.

It defeats piracy and it defeats used games. saves manufacturing costs, distribution costs, etc.

The time isn't here quite yet, but it's coming.

Digital distribution might actually increase piracy. It destroys a few outlets like game rentals and the second hand market so people looking for a cheap and quick fix are out of luck. That might push them to piracy. And people who want to buy the game for the extra stuff like a legit disc, box, and manual no longer have that reason to pay for the game. The only remaining reasons to buy something are the tech support (if that's even an issue), possible future updates (which could also be pirated), the desire to support the developer/publisher, or just to avoid the hassle.

[davepesc]

Beaten to death, but in other news:

Record labels, movie studios want cut of used CD and DVD sales...

[think about how ludicrous that would sound...obviously that publisher didn't...]



The thing is, used cd and dvd sales are a smaller part of the pie than used games (I would imagine). Heck, it's getting harder to find a new cd amid the store shelves stocked with digital download cards. I haven't seen a used cd in ages. The onlu used dvds I see are the clearance bins in movie rental places.

[j_factor]

sure they could, they have before. Hell, even as recent as when it was the SNES and Genesis on shelves, there wasn't used game stores. New games like Final Fantasy 3 cost 79.99. If I recall correctly things like Phantasy Star IV and Virtra Racer were like 99.99. Granated there wasn't as many releases as there is now, but games today are actually cheaper for the consumer than ever inflation adjusted.

There absolutely were used game stores at that time. There were used game stores back in the 80s, locally. The 16-bit era is when we first had game store chains, ie Funcoland, Babbage's, Software Etc., EB, etc. Most game magazines had ads for used game mail orders, as YoshiM stated. I know that one of the ones he mentioned, BRE Software, also operated an actual store in Fresno.

Also you're right that Virtua Racer and PS IV were $99.99, but those were rare exceptions.


The thing is, used cd and dvd sales are a smaller part of the pie than used games (I would imagine). Heck, it's getting harder to find a new cd amid the store shelves stocked with digital download cards. I haven't seen a used cd in ages. The onlu used dvds I see are the clearance bins in movie rental places.

I buy used CDs and DVDs all the time. The majority of what I buy is used.

[The 1 2 P]

I'm pretty sure game prices will remain the same even if games go digital.

Reason: because they can.

The best proof of this was how developers "promised" that all these in-game ads of the last five years were actually going to lower the price of their games. Five years later I'm still waiting for my $29.99 AAA games at release:shameful:

So I agree that, despite the fact that they will be cutting out the middle man, they will still attempt to charge full retail. I wish them luck with that because I will NEVER buy a digital only copy of a game for $60. It's just not worth it.

[FantasiaWHT]

Also you're right that Virtua Racer and PS IV were $99.99, but those were rare exceptions.

Maybe at the $99.99 level, yes, but it was definitely the norm for all major RPG's to be at least $69.99 in the 16-bit era.

[Leo_A]

sure they could, they have before. Hell, even as recent as when it was the SNES and Genesis on shelves, there wasn't used game stores.

I got many used Genesis and SuperNes titles from Electronics Boutique (Part of what is now universally known in the US as GameStop, though the name lives on as EB Games in Canadian locations) when those consoles were still a going concern and available in any retail location that sold videogames. I'm not aware of a mall in the region that didn't have a Electronics Boutique outlet in the 90s, and this is a pretty rural area.

[j_factor]

Maybe at the $99.99 level, yes, but it was definitely the norm for all major RPG's to be at least $69.99 in the 16-bit era.

A big part of the reason for that was the cost of larger-sized cartridges. I'm pretty sure Heimdall, Dark Wizard, Shining Force CD, Cosmic Fantasy 2, etc. were $49.99.

[DreamTR]

This is so useless. The companies are smoking crack because this debate keeps coming up and we all know it's not going to happen. ANYTHING can be used as this debate. Anything secondhand, that is why this is the stupidest thing ever and it's NEVER going to happen. Remember when Japan tried to have a "no resale" thing for a bit on used games?

They need to stop trying to whine to find alternative ways of making money and concentrate on quality games instead.

[udisi]

Corrected on there not being ANY used game outlets in the past, but yes there was mail order and some local, but it wasn't every store in the chain. I had Babbage's, electronics boutique, etc and none of them sold used games.

Also agree with DreamTR here, that there's nothing the publisher's can do to stop second hand sales.

Still think this will end up in digital distribution, and piracy will be easier to handle. Downloading to their machine that they can monitor or update whenever they want, means ever changing ways of detecting and preventing piracy.

I don't want to see it, I like holding a physical copy of a game with artwork and such, but the current generation of kids are much more open to digital distribution

[Push Upstairs]

What happens if I buy a digital only game and my console/computer HD dies? What if my system is stolen?

Are the companies going to allow me to receive another copy...gratis, or will I have to pay for it again because I might be a pirate? Will I have to jump through hoops and provide some console serial #, digital download e-mail, or CC#? What happens if the company goes under or is bought out?

Why is it the end of the world if *THEY* get screwed out of money, but if *I* get screwed it is perfectly alright?

[monkeychemist]

What happens if I buy a digital only game and my console/computer HD dies? What if my system is stolen?

Are the companies going to allow me to receive another copy...gratis, or will I have to pay for it again because I might be a pirate? Will I have to jump through hoops and provide some console serial #, digital download e-mail, or CC#? What happens if the company goes under or is bought out?

Why is it the end of the world if *THEY* get screwed out of money, but if *I* get screwed it is perfectly alright?

Normally I am on the other side of this argument but what you wrote is ridiculous. By that same logic, would you expect companies to replace a scratched disk that doesn't work anymore? What if someone broke in your house and stole all your gaming stuff. Would you expect each company to send you a replacement within 24 hours?

[FantasiaWHT]

What happens if I buy a digital only game and my console/computer HD dies? What if my system is stolen?


Somehow, my Wii system data got corrupted. Had to send my Wii back and they weren't able to salvage any of my saved games or downloaded VC/WiiWare titles. I was able to download them all over again for free.

[monkeychemist]

Somehow, my Wii system data got corrupted. Had to send my Wii back and they weren't able to salvage any of my saved games or downloaded VC/WiiWare titles. I was able to download them all over again for free.

PSN works the same way...

[TonyTheTiger]

Why is it the end of the world if *THEY* get screwed out of money, but if *I* get screwed it is perfectly alright?

I like to look at it a different way. In the end, publishers and developers are no different from you and me. And that makes sense since a company doesn't actually exist. It's just a collection of a bunch of you's and me's.

We see the same thing from the pirates themselves. It never fails that on a message board there's always one or two people who actively promote piracy and try to justify it through some roundabout "logic." It usually ends up boiling down to "It isn't fair that they can charge all this money, I have other things to buy, I have this, they have that, etc." These pirates then get pissed when publishers take steps to combat piracy. So when Lik-Sang gets shut down or when a new anti-piracy measure gets imposed, these people scream bloody murder. To them it's the end of the world if they get screwed out of something but if the publishers get screwed it's perfectly alright.

This is just a more sophisticated adult version of "he made me do it." When you do/say something stupid and need to make yourself look like less of a jackass, blame the other guy. So when publishers say or do something stupid like demand Gamestop give them a piece of the pie or impose really idiotic DRM measures, the defense is "he (pirates) made me do it." When pirates try to explain themselves, the defense is "he (publishers) made me do it."

In the end, everybody is looking to get something for nothing and they'll try to justify it however they can.

[j_factor]

I don't think it's fair to associate Lik-Sang (and the shutting down thereof) with piracy. They sold a lot of great, legitimate merchandise. They were only shut down for violating an EU trade law that they were most likely unaware of -- what they did was not illegal in the US, Japan, Australia, Canada, and so on.

[JunkTheMagicDragon]

the long and the short of it is, what makes software so special that the pubs legitimately think they should have a cut of the secondary market? no other goods are treated this way, so why should games have special rules?

if i sell my truck, i'm not required to send a portion of those profits to ford. if i sell off my cd collection, bmg and warner aren't going to be knocking down my door for their share (though i'm sure they'd love to).

how's about this, games publishers:
1) make your games worth $60.
2) add free dlc / bonuses for new buyers
3) profit!

[Rob2600]

what makes software so special that the pubs legitimately think they should have a cut of the secondary market?

Video games are the only products I can think of where four days after a game is released, used copies are sitting on the shelf right next to the new ones, but for 10% cheaper.

[Daft Punk]

If all or most games went digital only my buying new games days would be over.

I refuse to buy something that has 0 value after buying it other than being able to play it.

[Push Upstairs]

Normally I am on the other side of this argument but what you wrote is ridiculous.

Whining about how you aren't making money off of a product you already sold isn't equally as ridiculous?

If *I* create something I don't get to make money off of it every time it changes hands. The place that made my computer desk, my TV, my DVD player, my stereo, my carpet, the shelves I bought, my lamp, my couch, my bed, and damn near everything else I own, they don't get a cut if I sell it or buy it used. What makes video game publishers (and record labels) so goddamn special that *THEY* need money from used sales?

[j_factor]

Video games are the only products I can think of where four days after a game is released, used copies are sitting on the shelf right next to the new ones, but for 10% cheaper.

That goes in with my original post. The only reason people trade in a game less than a week after release day is because they're unsatisfied with it and want to get something else. If publishers don't want people to do that, perhaps they should offer some sort of satisfaction guarantee, buyback program.

At many music stores, if you buy a new CD and don't like it, you can return it within 7 days for partial store credit (usually around 3/4). Then they'll sell it as used. So that's an example of something other than videogames where that happens, although your exact scenario happens less often due to other factors, mainly the lack of a national used music store chain, and the fact that release dates aren't as important. Videogames are the only products I know of where the initial release date is such a big deal, and one of only a few where releases older than a couple years aren't stocked.

[Rob2600]

What makes video game publishers...so goddamn special that *THEY* need money from used sales?

Again, video games are the only products I can think of where four days after a game is released, used copies are sitting on the shelf right next to the new ones, but for 10% cheaper.

For example, if a furniture store gets a new computer desk in stock, four days later, I don't see a used computer desk in mint condition sitting right next to the identical new one, but for 10% cheaper.

I'm not necessarily taking the side of video game publishers, but I do think that the used vs. new video game market is different than most other products because of the insanely quick trade-in time.


The only reason people trade in a game less than a week after release day is because they're unsatisfied with it and want to get something else.

That's not true. When I worked at EB in the late 90s and early 2000s, our regular customers traded games in constantly, often less than a week after they bought them. Sometimes they beat the games that quickly, sometimes they just didn't like the games, but the main reason they traded in games so often was because they were addicted to buying video games.

Every Friday, they'd cash their paychecks, come into my EB, and spend $100+ on new video games. Most of them were nice people, but they were addicted. They'd buy games and end up only playing them for a day...then they'd trade them in and buy the next new games they'd end up only playing for a day...and so on.

[monkeychemist]

Whining about how you aren't making money off of a product you already sold isn't equally as ridiculous?

If *I* create something I don't get to make money off of it every time it changes hands. The place that made my computer desk, my TV, my DVD player, my stereo, my carpet, the shelves I bought, my lamp, my couch, my bed, and damn near everything else I own, they don't get a cut if I sell it or buy it used. What makes video game publishers (and record labels) so goddamn special that *THEY* need money from used sales?

you are talking about 2 completely different things... you were whining about digital only games and I replied to your argument and now you are talking about the topic itself and I agree with you there.

[noname11]

never mind :)