Game makers strike back at used game market

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Game makers strike back at used game market

Postby Roy Mustang » Fri Mar 12, 2010 8:08 pm

Used game market

Yahoo News wrote:Buying and selling used video games has become a fact of life for many consumers -- but if game publishers get their way, it's about to become a lot more difficult.

One 2009 estimate puts the size of the used game business at about $2 billion, representing about one-third of all annual game sales. That's a big deal, especially for market leader Gamestop, which is thought to get over 40% of its profits from reselling traded-in games. Major retail chains like Best Buy, Walmart, and Amazon have all dipped their toe in this lucrative market over the past year.

But while it's a serious earner for retailers, it's a complete bust for game publishers, who make nothing from secondhand sales of video games. They're looking for ways to get a piece of the pie -- or, failing that, to take the pie away altogether. Here's a few of the tactics they're using to make buying and selling used games harder for consumers.

Single-use download codes

Were you one of the millions who bought smash hit space opera Mass Effect 2 last month? If so, you probably noticed it came with a card bearing a code that gives the purchaser access to the game's online "Cerberus Network," containing all manner of downloadable goodies. Buy it used, though, and you'll have to pay a $15 fee first. Ouch.

Multiplayer restrictions

But those are extras, right? You can still play the game without the Cerberus Network, if you don't want to pay. Nobody's actually removing features from games for used purchasers, are they?

Actually, yes, they are. Just-released PSP shooter SOCOM: U.S. Navy SEALs Fireteam Bravo 3, which proudly trumpets "a robust competitive multiplayer component...continuing the franchise’s tradition of unparalleled multiplayer gaming," requires buyers to register online before they can access its online modes -- and that's a one-time deal. Buy it used, and you'll have to fork over an additional $20 (which goes straight into the publisher's pocket) if you want to play online.

Digital distribution

Buying games through Xbox Live, the Playstation Network, Steam, or other download channels is convenient. It's quick, it's easy, and because your purchases are tied to your account (Xbox Live ID, Steam username, etc.), you can re-download them easily in the future. But what you gain in convenience, you lose in value: there's typically no way to transfer ownership of these games without giving up your whole account. Want to sell just one digitally-purchased game? Tough.

Limiting installs

Think you can avoid that by only buying physical copies of PC games? Not so. Take Spore, one of the best-selling titles of 2008: if you have a physical, boxed copy of the game, you can certainly resell it. But the buyer won't actually be able to install the game without the username and password originally used to register it. Don't have that? Better hope you can convince the seller to cough it up, or else you're out of luck.



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Postby Mithrandir » Fri Mar 12, 2010 8:58 pm

This doesn't really surprise me. I've kinda seen this coming for a while. The real question is, will it become the norm. If so, I may end up moving away from gaming. I really like the 2nd hand market for games.
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Postby Mr. SmartyPants » Fri Mar 12, 2010 9:04 pm

I think the free goodies only accessible by first-hand copies is a good idea actually in the publisher's perspective. Granted I like the used-game market, but I think having some restrictions (which will still let you play the game) seems fair and balanced to me.

However, I don't think it's really all that fair for the consumers. I am perfectly free to buy a used game. Why can't I get the perks that come with it too?

I guess I hang pretty 50/50 on it.
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Postby Nate » Fri Mar 12, 2010 9:14 pm

No other industry gets money from second-hand sales, and I don't see why gaming companies feel the need to complain about it either.

I realize the developers want more money but if games got second-hand sales do the developers really think they'd see that money? It'd all go to corporate anyway, the rank and file workers wouldn't see a dime of it.
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Postby blkmage » Fri Mar 12, 2010 9:22 pm

Nate (post: 1380535) wrote:No other industry gets money from second-hand sales, and I don't see why gaming companies feel the need to complain about it either.

I realize the developers want more money but if games got second-hand sales do the developers really think they'd see that money? It'd all go to corporate anyway, the rank and file workers wouldn't see a dime of it.

Pretty much this.
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Postby Bobtheduck » Fri Mar 12, 2010 11:00 pm

The comments about steam / XBL / PSN are why I'm against digi-distro exclusivity for big titles (more expensive than 15 bucks.
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Postby ShiroiHikari » Sat Mar 13, 2010 5:35 am

You said it, Nate.

The gaming industry would make a HUGE mistake by trying to stop second-hand sales. Not only would they **** EVERYBODY off, but they'd make an impact on economic activity, too.
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Postby Robin Firedrake » Sat Mar 13, 2010 6:31 am

Well. Um...



I guess I found the thing to finally break me of my gaming habits. I only ever have enough for used games.
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Postby Straylight » Sat Mar 13, 2010 9:57 am

Nate (post: 1380535) wrote:No other industry gets money from second-hand sales, and I don't see why gaming companies feel the need to complain about it either.


I agree that it's wrong, but I'll bet you other industries would love to try this as well. Games companies have the advantage of being able to program online registration systems, feature restrictions, and the like - film studios or record labels don't have this option. The games companies have started doing this because they can.

Another point is that these registration incentives aren't just for getting people to buy games new, they help dissuade pirates as well, particularly for PC games.
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Postby Cognitive Gear » Sat Mar 13, 2010 10:36 am

Straylight (post: 1380636) wrote:I agree that it's wrong, but I'll bet you other industries would love to try this as well. Games companies have the advantage of being able to program online registration systems, feature restrictions, and the like - film studios or record labels don't have this option. The games companies have started doing this because they can.


This is the truth of the matter. Being able to do this is one of the many things that make digital distribution so attractive to movie studios.

(Though we all know that nothing will stop piracy.)
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Postby blkmage » Sat Mar 13, 2010 11:13 am

I don't believe that digital distribution will allow publishers to have an unreasonable amount of control. All you have to do is compare the music industry today to that of several years ago. DRM is just as vilified for music as it is in gaming. Most of the major digital download services for music are DRM-free and the draconian CD copy-protection systems that we've been seen have all diminished greatly.

Publishers will have as much control as we allow them to have. Steam and Battle.net are excellent examples of digital download services with reasonable restrictions and they get the praise they deserve. On the other hand, games with draconian DRM are constantly the focus of the community's ire. Just look at Ubisoft's recent troubles with their new scheme.
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Postby Nate » Sat Mar 13, 2010 12:26 pm

Straylight wrote:I agree that it's wrong, but I'll bet you other industries would love to try this as well. Games companies have the advantage of being able to program online registration systems, feature restrictions, and the like - film studios or record labels don't have this option. The games companies have started doing this because they can.

A big reason movie companies and car companies and the like haven't started doing this is a couple of reasons. Video games are kind of unique for a lot of reasons. Movies can make a lot of money in the box office before they go to DVD, libraries still have to buy books, and so on. The biggest comparison that can be made to games is probably CDs which (aside from digital distribution which is fairly new) CDs also don't have any other way of getting money.

But also there's licensing for specific game platforms and the like, which isn't applicable to CDs and DVDs (there aren't any movies specifically licensed to only play on Samsung DVD players for example).

Even considering all this, I still think it's wrong to "punish" people buying secondhand, and that companies do NOT deserve a cut of these sales.

Then again game companies also hold a strange bizarre kind of power over consumers that no other product has, and is a bit frightening. For example, if I buy a Ford car, I can change the stereo in it, put in a new engine, tint the windows, and so on with no problems whatsoever. However it's for some reason illegal to modify a video game console. I don't believe that video game companies should have the right to prosecute people who mod their systems]Another point is that these registration incentives aren't just for getting people to buy games new, they help dissuade pirates as well, particularly for PC games.[/QUOTE]
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Postby Htom Sirveaux » Sat Mar 13, 2010 4:45 pm

Nah. It's such a ridiculously stupid idea I don't see it actually happening.
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Postby Rusty Claymore » Sat Mar 13, 2010 5:29 pm

Well, there haven't been too many good games recently(imho), so it won't effect me for awhile. But I like the lady who runs the local store...
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Postby Mithrandir » Sat Mar 13, 2010 8:45 pm

Straylight (post: 1380636) wrote:Another point is that these registration incentives aren't just for getting people to buy games new, they help dissuade pirates as well, particularly for PC games.


This may be quite a bit different in the states than it is across the pond...

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Postby mechana2015 » Sun Mar 14, 2010 3:14 am

Interestingly enough, another industry that reacted the same way is the college textbooks industry, who, once a roaring used book market started, began including single use codes for online supplements and CD's that were easy to lose. The incentives they set up for professors to use the included digital content, along with packaging incentives that made buying used books and separate codes prohibitively expensive, HAVE effectively slowed the used book market down. If they can balance the incentives right they definitely could put a dent in the used game market, and transfer the sales back to new games.

In addition they also introduced edition changes that force purchases of new books more often, since used books went out of date faster. I don't see how the VG industry could enact that sort of strategy as much though.
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Postby ShiroiHikari » Sun Mar 14, 2010 6:40 am

If they can put more money in the hands of those who would buy their games, I'm sure they'd see more new sales. :\ If my husband and I were forced to buy every game new, we'd play FAR fewer video games. What about those developers who care about the games they're making and just want people to play them? Oh wait, I forgot, it's all about the dolla dolla bills.

Also the college textbook industry is pretty messed up if you ask me. Who the heck can afford to buy all those books/software new?
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Postby Davidizer13 » Sun Mar 14, 2010 10:31 am

[quote="Nate (post: 1380706)"]
Then again game companies also hold a strange bizarre kind of power over consumers that no other product has, and is a bit frightening. For example, if I buy a Ford car, I can change the stereo in it, put in a new engine, tint the windows, and so on with no problems whatsoever. However it's for some reason illegal to modify a video game console. I don't believe that video game companies should have the right to prosecute people who mod their systems]

But you can't mod your Ford to pirate software like you can with a console. While we both realize that the vast, vast majority of people who modchip consoles aren't doing it for purposes of piracy, and even if modchips didn't exist, someone would still find a way to pirate games, console manufacturers find even the possibilty of piracy too big of a risk to allow modding.
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Postby Etoh*the*Greato » Sun Mar 14, 2010 10:52 am

Mr. SmartyPants (post: 1380531) wrote:I think the free goodies only accessible by first-hand copies is a good idea actually in the publisher's perspective. Granted I like the used-game market, but I think having some restrictions (which will still let you play the game) seems fair and balanced to me.

However, I don't think it's really all that fair for the consumers. I am perfectly free to buy a used game. Why can't I get the perks that come with it too?

I guess I hang pretty 50/50 on it.


I think the items that you can get for free is a good deal. Honestly, of all the means listed I support this one. However, what they did with Spore was disgusting. Limiting installs is at best a violation of the rights of the buyer in that you paid for your game, but if you need to reinstall it on your system so many times you're out of luck. At worst it is merely an unnecessary inconvenience in the form of having to talk to the kind folks who put out the game to deactivate some of your installations - if they'll do it.
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Postby Nate » Sun Mar 14, 2010 1:53 pm

Davidizer13 wrote:But you can't mod your Ford to pirate software like you can with a console. While we both realize that the vast, vast majority of people who modchip consoles aren't doing it for purposes of piracy, and even if modchips didn't exist, someone would still find a way to pirate games, console manufacturers find even the possibilty of piracy too big of a risk to allow modding.

*shakes head* Wrong, wrong, wrong, wrong.

When Betamax first came out (Betamax was the precursor to VHS tapes, by the way, if you didn't know), there was a court case. A Supreme Court case, I might add. It was called Sony Corp. of America vs. Universal City Studios, Inc. The case was that since Betamax allowed people to record TV shows off their TV sets, Betamax encouraged illegal copying of intellectual property and that videotapes should be outlawed.

The court ruled in favor of Sony obviously, or we wouldn't have VHS tapes. The court's decision was extremely clear:

"Accordingly, the sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses...."

In other words, the court ruled that even if people CAN use it for illegal purposes, as long as it has perfectly legal purposes, it should be allowed. Console modding is much the same. Even if people CAN use it for illegal purposes, modding has perfectly legal uses, therefore it should not be outlawed.

It's kind of like guns. Yeah, you CAN use a gun to murder people, but it has legal uses as well, such as self-defense and hunting. The fact that it can be used illegally is not an argument to make it illegal.
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Postby ShiroiHikari » Sun Mar 14, 2010 4:46 pm

Also I fail to see how discouraging used game sales is going to help solve the piracy problem. If anything, I'd think it would exacerbate it.
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Postby mechana2015 » Sun Mar 14, 2010 5:07 pm

ShiroiHikari (post: 1380888) wrote:
Also the college textbook industry is pretty messed up if you ask me. Who the heck can afford to buy all those books/software new?


Theres a reason that textbooks got made into a tax deduction this year.
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Postby blkmage » Sun Mar 14, 2010 5:09 pm

ShiroiHikari (post: 1381077) wrote:Also I fail to see how discouraging used game sales is going to help solve the piracy problem. If anything, I'd think it would exacerbate it.


It doesn't, but the industry hates both.
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Postby Nate » Sun Mar 14, 2010 8:11 pm

Yeah, the industry hates both piracy AND used game sales.

Piracy is a bit trickier to work with, for a lot of reasons. One, there's always going to be pirates. Always. You could sell games for 50 cents and people would still pirate it. Some people don't care about price, they just want it for free. Some people think giving corporations money is for suckers (ignoring of course that if the corporations went broke, there wouldn't be any games, but oh well). And others like modding games, being able to get into the code and modifying it for fun or challenge.

Whatever the reason, piracy is always going to exist. I think the gaming industry has to accept that to a degree. I'm not saying they should go "Oh well, pirates exist so let's do absolutely nothing to combat it!" But I think punishing paying customers to try and get rid of piracy is the worst thing they can do, because they're hurting the people they shouldn't be, and pirates aren't bothered by it.

Used game sales is honestly just greed, and I think they do need to just do absolutely nothing to combat it. A used market for games is GOOD, and trying to stifle it is definitely wrong. Used games can help people enjoy classics they may have missed, and get them interested in new titles in a franchise.

I realize the gaming industry doesn't like it (and I say they can deal with it honestly), but I still think "gimping" games that aren't bought new is shafting the consumer. Some people buy used games because it's cheaper, and not being able to get some DLC or neat weapons just because they have a tighter budget is a real jerk move. If I'm buying a game, I want the WHOLE game, not part of it. Not an incomplete version.

So to that end, I think that the best way to encourage sales of new games is preorder bonuses. And nothing that would be integral in the game, either. Like, don't say "If you preorder you'll get to unlock this character that you wouldn't otherwise" or "If you preorder you'll get a special weapon no one else can use." Again, that would be an incomplete game. But give them other neat stuff. I know the Pokemon Diamond/Pearl preorder bonuses were Dialga and Palkia styluses. Arc the Lad Collection had a preorder bonus of a nice pocket watch, and the Lunar 2 preorder bonus was a Ghaleon punching puppet. If physical items are a bit too expensive, offer things that are NOT integral to gameplay as a preorder bonus. Like I think Little Big Planet had an exclusive Kratos sockboy if you preordered the game. It's something that doesn't make the game incomplete (because the costume doesn't affect gameplay itself, it just looks neat). Offer custom skins for the character or something in the game. Preorder bonuses that contain things that do NOT affect gameplay but are neat to have, that's good incentive for buying new I think. This way, used gamers don't really miss out on anything, and the people who buy new get a little thanks for their support.
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Postby Mithrandir » Sun Mar 14, 2010 9:18 pm

Nate (post: 1381134) wrote:the Lunar 2 preorder bonus was a Ghaleon punching puppet.


Bwahahahahahahahahahahahahahahaha.



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Postby Valkaiser » Mon Mar 15, 2010 1:38 am

Nate (post: 1381134) wrote:Used game sales is honestly just greed, and I think they do need to just do absolutely nothing to combat it. A used market for games is GOOD, and trying to stifle it is definitely wrong. Used games can help people enjoy classics they may have missed, and get them interested in new titles in a franchise.

I would agree with you to an extent, and I personally buy used games almost exclusively. There is however, an interesting factor to note in this market. Nowadays, a large number of gamers buy the games when they come out, play through them in a handful of days, and immediately sell them to a used game establishment. This leads to a situation where a product that loses essentially no value after being used is available within 2 weeks of a game's release at slightly reduced prices. This would still be considered prime selling time for the game itself, but there is no way that the publishers can undercut the price of their competitors. You can see how this would make the entire exercise nigh unprofitable for the publisher. Lower profits means less spent on games which means lower quality games with less replay value which mean less incentive to not immediately sell back the games and so on.
I do agree with your thoughts on combating the problem, especially for collectors edition type perks (If I'm actually going to fork over $50 for a hot off the presses game, then I am likely to pay $60 for the commemorative bangles, fold-out maps, and paraphernalia).
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Postby ShiroiHikari » Mon Mar 15, 2010 1:08 pm

Nate (post: 1381134) wrote: the Lunar 2 preorder bonus was a Ghaleon punching puppet.


My husband has one of those!
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Postby Nate » Mon Mar 15, 2010 1:26 pm

Valkaiser wrote:Nowadays, a large number of gamers buy the games when they come out, play through them in a handful of days, and immediately sell them to a used game establishment. This leads to a situation where a product that loses essentially no value after being used is available within 2 weeks of a game's release at slightly reduced prices. This would still be considered prime selling time for the game itself, but there is no way that the publishers can undercut the price of their competitors. You can see how this would make the entire exercise nigh unprofitable for the publisher.

I agree, but then, how is this different from movie rentals? A movie comes out on DVD, and a rental store gets a copy which is rented by fifty or a hundred people. The studio sees none of the money made by the rental store, and the studio has now lost 49-99 sales from the people who rented it.

Again, as I said, movies have a bit of an advantage in having a theater run before being released on video, but that doesn't change the fact that a person could buy a book and sell it back to a used bookstore two days later after having finished it, or could sell a movie to a pawn shop four hours after having bought it (through they would probably just rent it).

And actually most used game stores, like GameStop, don't seem to sell their used games for as cheap anymore. Steve was telling me the other day he went to GameStop to see if he could get a copy of Batman Arkham Asylum and the used copies were on sale for 52 dollars. USED. That's only 8 dollars less than a new copy which isn't really that significant of a difference.
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Postby Valkaiser » Mon Mar 15, 2010 2:11 pm

Nate (post: 1381229) wrote:And actually most used game stores, like GameStop, don't seem to sell their used games for as cheap anymore. Steve was telling me the other day he went to GameStop to see if he could get a copy of Batman Arkham Asylum and the used copies were on sale for 52 dollars. USED. That's only 8 dollars less than a new copy which isn't really that significant of a difference.

Dude, that was, like, entirely my point :P
Prices for used copies of the game couldn't get that high unless the demand for them was almost as high as the demand for a new copy. It is a symptom of how messed up the whole thing is.

Nate (post: 1381229) wrote:Again, as I said, movies have a bit of an advantage in having a theater run before being released on video, but that doesn't change the fact that a person could buy a book and sell it back to a used bookstore two days later after having finished it, or could sell a movie to a pawn shop four hours after having bought it (through they would probably just rent it).

Yes, I think that most people would say that anyone not intending to keep a movie will rent it. Thinking about this has brought a question to my mind. Why don't the people that immediately sell games back just rent them instead? There must be some factor that distinguishes them from the movie market in some way, because the rental system has been stable and uncontroversial for quite some time now. Also, movie studios have a little control over rental places, you can't just buy a movie and rent it out. Excerpt from the wiki entry on Blockbuster:
[quote]The standard business model for video rental stores was that they would pay a large flat fee per video, approximately US$65, and have unlimited rentals for the lifetime of the cassette itself. Sumner Redstone, whose Viacom conglomerate then owned Blockbuster, personally pioneered a new revenue-sharing arrangement for video, in the mid-1990s. Blockbuster obtained videos for little cost and kept 60 percent rental fee, paying the other 40 percent to the studio, and reporting rental information through Rentrak. What Blockbuster got out of the deal, besides a lower initial price, was that movies were not available for sale during an initial release period, at least at an affordable price point - customers either had to rent, wait, or buy the film on tape at the much higher MSRP targeted at other rental chains and film enthusiasts, at that time then between $70–]Note: The $65 figure is from when VHS tapes were $10 or something.
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Postby Shao Feng-Li » Mon Mar 15, 2010 2:19 pm

Man, there are some games I wouldn't have bothered with at all if they weren't used.

As a company, folks can do whatever they want, but it sure is stupid of them :\
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