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Kanluwen wrote:Computer games generally are not what is being resold, given that most have single-use registration keys and it's cheaper to do things via digital distribution.

It's console games where the money is currently at.

its not whats been sold, its getting idea of what % of people hold off purchasing at full price for initial release.
It wont be the exact matching number as finding out how much % is been done with purchasing "used"
but the psychology behind the 2 arn't that off.

Lux_Lucis wrote:Has anybody actually got any figures on this? My personal suspicion is that in recent years publishers have started to become better off not worse thanks to the various codes and internet requirements they put in these days, but I'm loathe to make a sweeping statement without proof.
Despite this argument being quite old I've never actually seen any figures, not ones about profits etc (inflation and the expansion of the game market would make those hard to compare I guess), but some kind of annual round-up of new sales versus used sales.
Should think downloads have offset things somewhat as well, but again, would like PROOF.

Part of the problem with hard numbers is that (afaik, and I don't follow this debate THAT closely) Game Stop, the principle offender of the alleged losses, doesn't release specific numbers on used game sales. They might account high numbers, and they account for the percentage of their income (it was like 40% last year I think), but I don't know if data exists on, say, how many used copies they sold of Modern Warfare 3 (insert other titles as necessary).

Even if we had the number, its hard to determine how much money Activision really lost as a result. Just because someone bought a used game doesn't mean they'd buy a new one.

The irony is that last years report shows Game Stop's largest growth last year was actually in digital distribution.

Computer games generally are not what is being resold, given that most have single-use registration keys and it's cheaper to do things via digital distribution.

Not really (unless you actually register the key which few people do it can be used and reused on some systems). The reason Game Stop has never gotten into used PC games is because of the myth that PC games are easier to pirate. Thus, back into their earliest days they've had a store policy that they do no deal in used PC games (I think back into the late 90's). EDIT: I'm going back like, 5 or 6 years when I say this.

Used PC game sales were kind of dead on arrival

LunaHound wrote:its not whats been sold

Yes it is.

No matter how hard you try to weasel word, to lie, to apologize, a company still makes nothing off of used game sales.

It doesn't matter if the used games are on sale or at full price or given away for free. The company makes nothing off of them in any scenario unless they do something like adding an access code that for used agme buyers must be purchased to play the game or access certain contents-- a feature, I should note, which itself was only done specifically to combat this problem.

I suspect they still make large profits (for decent games at least). Depends on whether you think they should get every single penny or whether distributors should be allowed to make more money from used games than they would just through selling new ones. Certainly it allows them to be more competitive than selling new games seems to allow them to be.

The point may be moot in a few years anyway, reports seem to suggest both Sony and Microsoft will be implementing systems in their new consoles that prevent users playing used games without shelling out more money.

And just to respond to Melissia's point, increasingly these days they do, with many games requiring people to buy extra codes etc. to make the game work fully.


Automatically Appended Next Post:
Oh, added that before I saw your post. Apologies.

Melissia wrote:It doesn't matter if the used games are on sale or at full price or given away for free. The company makes nothing off of them in any scenario.

Again who cares? Paramount doesn't get money from used movie sales, a record label from used albums, car manufacturers from used cares. No one makes money from used sales because they aren't entitled to it. We all know that a company gets nothing from used game sales but that's not the point. They aren't entitled to anything.

LordofHats wrote:Again who cares?

The company that makes them, the developers who work there, anyone who wants to see them make more games or to have he time to make higher quality games, and so on.

Lux_Lucis wrote:And just to respond to Melissia's point, increasingly these days they do, with many games requiring people to buy extra codes etc. to make the game work fully.

Which was done specifically to combat this problem.

I'd be more accepting of their view if games weren't so expensive. Yes they cost a lot to make but several AAA titles have made more money than blockbuster films.

Melissia wrote:The company that makes them, the developers who work there, anyone who wants to see them make more games or to have he time to make higher quality games, and so on.

The idea that used games are going to end the industry is ludicrously absurd and it always will be. Again, I cite Bioshock. One of the most high traded in games of all time and it still shipped 4,000,000 copies (by 2010). At the end of the day used game sales are limited by new game sales. This concept, commonly known as supply, basically prevents as a matter of course used games from doing actual harm to a developer. At worse, they don't make as much money as they might have.

LordofHats wrote:

Melissia wrote:The company that makes them, the developers who work there, anyone who wants to see them make more games or to have he time to make higher quality games, and so on.

The idea that used games are going to end the industry is ludicrously absurd and it always will be. Again, I cite Bioshock. One of the most high traded in games of all time and it still shipped 4,000,000 copies (by 2010). At the end of the day used game sales are limited by new game sales. This concept, commonly known as supply, basically prevents as a matter of course used games from doing actual harm to a developer. At worse, they don't make as much money as they might have.

To add to that, the industry hasn't ended and controls are getting tightened. In fact it's expanded massively. So not a world-shattering problem for them.

Lux_Lucis wrote:I'd be more accepting of their view if games weren't so expensive. Yes they cost a lot to make but several AAA titles have made more money than blockbuster films.

And they will continue to do so. But not all games are "AAA titles". Would you suggest that the only games that should ever sell are AAA titles?

The industry is expanding, but used games are still causing problems. Games really can't be compared to movies because of the vast differences in interactivity.

Used Games aren't all that bad, honestly; For example, if I had a problem with Activision, in a perfect world CoD: Modern Warfare 47 would be $45 to $70 New. Why should I support a company that is A) Increasing prices, B) releasing the same shtick every year, C) just full of utter douchebags? Gamestop is the lesser of two evils in this scenario. Capcom is another prime example of whom every game should be bought used (As they, luckily, aren't smart enough to include Online Passes in their games yet), because lets face it; when you release MVC3, and then six months later MVC3 Ultimate Edition, and within two years your on the sixth edition of Street Fighter, the whole Devil May Cry debaucle, and one of the planned campaigns in RE: ORC, your nothing but greedy.

Also, they just need to find a better system of selling things; look at TF2, before that went F2P that was one of the most loved/purchased/oldest shooters on the market. Now, it's just loved and old, without the purchase!


Automatically Appended Next Post:

Melissia wrote:

Lux_Lucis wrote:I'd be more accepting of their view if games weren't so expensive. Yes they cost a lot to make but several AAA titles have made more money than blockbuster films.

And they will continue to do so. But not all games are "AAA titles". Would you suggest that the only games that should ever sell are AAA titles?

Lets see, of my favorite games....

Ghostbusters; the game
Splatterhouse
Alice Madness Returns
Brutal Legend
Blazblue
Darksouls (?)
And Metro 2033

Would never have been released. I would be a sad panda

Melissia wrote:

Lux_Lucis wrote:I'd be more accepting of their view if games weren't so expensive. Yes they cost a lot to make but several AAA titles have made more money than blockbuster films.

And they will continue to do so. But not all games are "AAA titles". Would you suggest that the only games that should ever sell are AAA titles?

The industry is expanding, but used games are still causing problems. Games really can't be compared to movies because of the vast differences in interactivity.

I know, and I have no solution or answer to that (unfortunately). But since games come in at £45-50, and are no doubt due to go up with the new lot of consoles, more competitively priced games would be nice. As an example, I don't buy CoD games for a long while until the price has dropped considerably because I cannot justify spending that much money on something that is going to last about 5 hours. Instead I rent. Maybe it's just because I don't really play multi-player.

Actually in 2011 the profits of the game's industry dropped. It was 2% but this is the first time that's happened in nearly two decades (EDIT: Or is one decade?).

The game's industry mini-bubble has been building for awhile and imo its getting ready of start deflating ( by that I mean I think it won't pop)

The industry is expanding, but used games are still causing problems. Games really can't be compared to movies because of the vast differences in interactivity.

Interactivity is relevant how? Second hand sales are a basic factor present in nearly all industries. The makers of the original material profit from those sales in none of them and none of those industries are 'dying.'

Because it requires an entirely different level of expertise than merely good acting.

Melissia wrote:Because it requires an entirely different level of expertise than merely good acting.

Good Movies require a bit more than just acting, you know; you need good writers, then there is the cost of sets/on location, the cost of any form of CGI associated with the film.... To say otherwise is merely fictitious.

Melissia wrote:Because it requires an entirely different level of expertise than merely good acting.

Good acting? What movies are you watching

At the end of the day cost of development relative to income from sales is all that matters. The developmental costs of games and movies have been comparatively similar for quite some time (marketing in games has taken most of its notes from the film industry too).

The only real difference is the existence of theaters reducing the retail costs of a movie relative to a game, which is a pretty significant difference but the market behaviors of second hand markets are pretty much universal for most things that cost less than four figures.

Melissia wrote:

LunaHound wrote:its not whats been sold

Yes it is.

No... its... not. Dont put words in my mouth because Im talking about something different.

Originally he said:

Lux_Lucis wrote:Despite this argument being quite old I've never actually seen any figures, not ones about profits etc (inflation and the expansion of the game market would make those hard to compare I guess), but some kind of annual round-up of new sales versus used sales.
Should think downloads have offset things somewhat as well, but again, would like PROOF.

Then I wanted to expand the idea while at the same time keeping track the # of people that buys initial releases
vs
the figure of people that waits a few month for a price drop, may it be in store, or online discount for example steam.

LunaHound wrote:To further expand on that idea, I would also want to see the initial sale # AND the discount sale # ( e.g steam sales , or most retailers lowers the price after 4 months ish? )

Then kanluwen jumped in, assuming the number Im drawing figure from steam is for the sake of getting a figure off computers

Kanluwen wrote:Computer games generally are not what is being resold, given that most have single-use registration keys and it's cheaper to do things via digital distribution.

It's console games where the money is currently at.

Which then I reminded him that its not what counsel or platform that is relevant.
is the % of people that would wait for a price drop that is relevant to my original figure.

LunaHound wrote: its not whats been sold, its getting idea of what % of people hold off purchasing at full price for initial release.
It wont be the exact matching number as finding out how much % is been done with purchasing "used"
but the psychology behind the 2 arn't that off.

Then you got confused by my response to a confused kanluwen and thought I meant something else.

Melissia wrote:Yes it is.

No matter how hard you try to weasel word, to lie, to apologize, a company still makes nothing off of used game sales.

It doesn't matter if the used games are on sale or at full price or given away for free. The company makes nothing off of them in any scenario unless they do something like adding an access code that for used agme buyers must be purchased to play the game or access certain contents-- a feature, I should note, which itself was only done specifically to combat this problem.

Videogame company doesnt lose anything.
Or else you can say the following are losing just the same.

Cellphone
Computer
Warhammer
Books
Heck anything you see on ebay.

Assuming the used games market is cannibalising the primary market... What solutions do they have ?

They can't push to outlaw second-hand sales, that would be madness. There is a second-hand market for everything, it's part of commerce ; it just so happens that it's allegedly giving the producers difficulties in that sector.

Can they make games that you want to buy new ? Of course they can, and that begins with making a game whose designers you want to support by giving them your money. So, a good game. Moreover if it has a long lifespan such as high replayability, it will take longer for it to appear on the secondary market.
But some customers are only loyal to their wallet, and estimate that the game isn't worth the retail price so they'll grab it second-hand. We have an obvious pricing problem here !

What are the solutions to a pricing problem ? I can see three :

Lower prices to increase competitivity with the secondary market. In the end, a good is worth what people are willing to pay for it.

Increase prices (in a feeble attempt) to increase gross margin (the GW way !). Do I really need to expand on that ?

Reduce costs to either increase or maintain gross margin (more flexibility in prices). Whether it is doable or not I don't know, but it do think it's ridiculous to have FPS reaching Hollywood levels of budget for one game.

Hyd wrote:Assuming the used games market is cannibalising the primary market... What solutions do they have ?

They can't push to outlaw second-hand sales, that would be madness. There is a second-hand market for everything, it's part of commerce ; it just so happens that it's allegedly giving the producers difficulties in that sector.

Can they make games that you want to buy new ? Of course they can, and that begins with making a game whose designers you want to support by giving them your money. So, a good game. Moreover if it has a long lifespan such as high replayability, it will take longer for it to appear on the secondary market.
But some customers are only loyal to their wallet, and estimate that the game isn't worth the retail price so they'll grab it second-hand. We have an obvious pricing problem here !

What are the solutions to a pricing problem ? I can see three :

Lower prices to increase competitivity with the secondary market. In the end, a good is worth what people are willing to pay for it.

Increase prices (in a feeble attempt) to increase gross margin (the GW way !). Do I really need to expand on that ?

Reduce costs to either increase or maintain gross margin (more flexibility in prices). Whether it is doable or not I don't know, but it do think it's ridiculous to have FPS reaching Hollywood levels of budget for one game.

Yes! thats why I wanted to see the % of people that would rather wait for a price drop or 2nd hand
instead of buying it during initial release.

Videogame company doesnt lose anything.
Or else you can say the following are losing just the same.

Cellphone
Computer
Warhammer
Books

1: No. In order to use a cell phone you must ahve a cell phone plan.

2: Not really, most of the time the people who would b e buying used computers instead simply buy the constituent parts and make it themselves.

3: GW certainly thinks so.

4: Resale of books is something that literature has had a problem with for a while now. Only with e-books have they managed to try to find a real solution. Hell even with college textbooks the company implores buyers to get them new, not used, as it's a big problem there.



There are more than two options. One way to make used copies less desirable is to make them more worthless. Have an unlock code that is tied to an account it's first installed on, and if you are playing on an account which hasn't unlocked, you have to pay for it or you only get to play a short demo. The used copies are thus pretty worthless, especially when you consider that they're often priced only a few bucks less than a normal copy, than you haveto pay ten to twenty to actually play the game on top of that. Who'd want to buy used there? Problem solved. The ones that do buy used either don't get the full product (what does the company care, the company didn't get any money from them) or they fork over the money to actually support the developer whose game they are wanting to play.

It's an extreme example, but certainly companies are pushing to see how far they can go at the moment. Gamestop has actually tried taking these things out of the box (thus denying their customers the full product) because it cuts in to their profits-- Gamestop isn't really a new game seller anymore, they're a used game dealer who sometimes occasionally has new games in stock but will gladly lie about what's in stock to get you to buy used.

Hyd wrote:What are the solutions to a pricing problem ? I can see three :

Lower prices to increase competitivity with the secondary market. In the end, a good is worth what people are willing to pay for it.

Increase prices (in a feeble attempt) to increase gross margin (the GW way !). Do I really need to expand on that ?

Reduce costs to either increase or maintain gross margin (more flexibility in prices). Whether it is doable or not I don't know, but it do think it's ridiculous to have FPS reaching Hollywood levels of budget for one game.

If you lower the price of new games, you lower the price of the secondary market and thus increasing sales to both yourself and the secondary market. The only result is that you move more product and likely end up with the same profits and the same problem. The solution being proposed here is to eliminate or deminish the secondary market in order to lower the 'new' price.

Increasing pricing seems to be working. Pretty much all games nowadays are $60 with some even having day-one DLC or advantages for the collector's edition. People will pay for this stuff. Nobody wants to break the $60 price-point for console games, so every excuse to charge you further is being tried. People buy horse armor, and thus companies provide horse armor. Not only all this, but the DLC concept is benefiting the producers and not the retailers selling secondary product. Also note that comparing this idea to GW undermines your point (Throwing GW out there is the 'hitler' of wargaming forums).

There will always be the company that spends tremendous amounts of money on the production of a game. There are 'indie' developers out there that make games for comparatively little, there are the Activisions/EAs that create games for millions. Arbitrarily setting a limit is only going to stifle the industry.

I dont hear car companies complaining that the used car market is killing their business. They made their profits selling it the first time, they dont give 2 gaks about it after wards. Im with Lordofhats on this one, any game company that is using this as an excuse are fething idiots.

Car companies, however, use other methods to obtain money from used car owners.

Imagine if game producers started charging for patches, for example. Or if they charged you every time you reinstalled.

Used games, Is the best way to buy games. You guys realize that games that came out three years ago are still over $50? That is just plain sad. The price on new games doesn't go down enough for a normal person to actually get to buy it. I have played online games after the community as moved on. it sucks. And to add to this whole thing. WHO ELSE PRE ORDERED DUKE NUKEM FOREVER??? Yea, thats the reason why you don't buy new. Why pay $50+ on a game that no one really knows what the game is like? I have read reviews before buying a game. And yet, when playing the game have been so p'd that i have sold the game. You can't trust the people who review games for a publication. When companies finally start to realize games that are worth more than one play through, i'll start buying new. Right now the only reason to buy games is to play a 4 hour single player, crap story line, and then spend the rest of the time trying to play on line. Which the community has ruined that. This whole thing boils down to lazy people making games. Every once and a while there will be the game that gets released and everything is good. But for the amount of crap we have to dig through to get a good title. Its not worth buying new.

PapaPiggy wrote:Used games, Is the best way to buy games. You guys realize that games that came out three years ago are still over $50?

That's Gamestop's problem. Can't blame the developers for that.

Most games that old on Steam, for example, are cheaper than that.

I don't think that used games are going to destroy the industry, but they do feel it at the developer level. If a company goes under because people only bought their games used then I honestly think there must be a problem with their business model. Honestly though, I haven't shopped in GameStop for a while. Also here is a comic about this very problem.

Melissia wrote:Imagine if game producers started charging for patches, for example. Or if they charged you every time you reinstalled.

Mel! Stop giving EA ideas!

Too late they're likely already scheming the price ranges on the size of the patch.

Why is a company entitled to profit from every possible transaction involving their product?

Short answer: they are not.

The comparison between EA not profiting from re-sale of ME3 copies on the one hand and an employer not paying her employees for a day's work on the other is laughably bad.

Developers are reshaping the market by using piracy and used game sales as an excuse to hold content hostage. The product stream that they are "cut-out of" is still providing them plenty of launch-price sales for quality (and even not-so-quality) titles. (Seriously, have you guys been to a Gamestop? The push pre-orders harder than anyone.) Even so, what you pay launch prices for is no longer complete until you engage in a digital micro-transaction that cuts out Gamestop, et al., from the deal. And now this is a Day One transaction. Using ME3 as an example, there is now also a "buy DLC to finish the game" precedent. (To head it off at the pass, I hope no one is stupid enough to think DLC, which once meant "additional content," will continue to be truly "additional.")

Another beneficial result of the DLC model is the "second bite" release, where you get some people at launch and DLC launches and get another batch with a "GOTY" or "Gold" edition that includes all the DLC, boosting the price of an old game by throwing in a very small amount of content. Why would people do this? IME, DLC prices do not sink as fast as the price of physical copies because there is no used market for DLC. In some cases, you're actually saving money by buying the GOTY edition instead of buying a "Greatest Hits" or used copy and then buying the DLC on top of that. And so there is effectively another launch that undermines used sales.

Developers -- or let's call them what they really are -- publishers are not nearly at the mercy of the used game market. But which model is better for consumers? On the one hand, you can buy a complete used game for slightly to significantly under the MSRP of a new copy. On the other hand, you can pay full price at launch for an incomplete game that you will need to keep investing in so that you can have a complete experience.

But by all means, let's line right up to defend the publishers' interest against Gamestop and all those douchebags who save money by shopping there (us).

Absolutionis wrote:If you lower the price of new games, you lower the price of the secondary market and thus increasing sales to both yourself and the secondary market. The only result is that you move more product and likely end up with the same profits and the same problem. The solution being proposed here is to eliminate or deminish the secondary market in order to lower the 'new' price.

The point of lowering the price would be to move the item up the demand curve. Of course it reflects on the secondary market, but new games would be more attractive and as a side-effect second-hand dealers would be subject to downward pressure to some extent.

Increasing pricing seems to be working. Pretty much all games nowadays are $60 with some even having day-one DLC or advantages for the collector's edition. People will pay for this stuff. Nobody wants to break the $60 price-point for console games, so every excuse to charge you further is being tried. People buy horse armor, and thus companies provide horse armor. Not only all this, but the DLC concept is benefiting the producers and not the retailers selling secondary product. Also note that comparing this idea to GW undermines your point (Throwing GW out there is the 'hitler' of wargaming forums).

I was thinking of a direct increase in retail price, but indeed DLCs and the likes make for a valid point. (and Manchu just happened to write an interesting piece on this ; I say they better stick to good business practices if they want to keep their customers.)
I'd also like to underline that mentioning Hitler in an essay on totalitarianism would be absolutely relevant and in no way warranting a Godwin point. I mentioned GW tongue-in-cheek to make an analogy with business practices people on this forum are likely to be familiar with : you're shooting yourself in the foot if you price yourself out of your market, which you agreed with when you mentioned the $60 cap.

There will always be the company that spends tremendous amounts of money on the production of a game. There are 'indie' developers out there that make games for comparatively little, there are the Activisions/EAs that create games for millions. Arbitrarily setting a limit is only going to stifle the industry.

Not sure who talked about setting a limit, and anyway I did say I don't know what can be done at that level. They do. Fortunately it's their problem, not mine ; I'm just trying to be constructive for the sake of discussion.


What I don't get is why the used games market should be the one to change or be impacted when they have done nothing wrong in the first place. There is a demand for used games, and they are here to fulfill it. Period. Maybe video games are not viable in their old format and producers just need to adapt, which they have began to do.