Are Used Games Killing New Games?

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Are Used Games Killing New Games?

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According to Gamasutra, the reason for the collapse of the game industry is coming from within.

According to the article, the main problem at the moment seems to be how to get enough money back out of the struggling economy whilst game pirates and re-sellers drain off precious resources.

Atari is taking the position that the used game sales are
'extremely painful', but has its own methods to get around it, such as online components, but it's difficult to see whether that will work.

Gamestop's CEO weighed in in support of resales. So no change there then.

However, David Braben, (Creator of ELITE, and now head of Frontier Development) wasn't quite as enamored. "Five years ago, a great game would have sold for a longer period of time than for a bad game - which was essentially our incentive to make great games. But no longer. Now publishers and developers just see revenue the initial few weeks regardless of the game's quality and then gamers start buying used copies which generates money that goes into GameStop's pocket, nobody else's."

Do you think 2D Boy want to make another 'World of Goo' with this hanging over them?

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That's just because of the retail shelving model -- lots of game releases per month plus about one shelf in the entire store containing games (at least in the stores I've been to recently) means that games don't live long before being tossed into the bargain bin.

Online releases (including both online retail shops selling boxed games and digital download shops) have much greater longevity, from what I've seen. (And considering World of Goo is one of the latter, your reference seems misplaced.)

They could try adding incentives for new copies. Throw in cheap brickabraks, or things that improve the game experiance but aren't necessary. You know, the kind of shit usually reserved for special editions.

I feel like downloadable games are better for companies in this aspect.

Oh, and I hate pirates, seriously, what the heck guys?

TsunamiWombat:
They could try adding incentives for new copies. Throw in cheap brickabraks, or things that improve the game experiance but aren't necessary. You know, the kind of shit usually reserved for special editions.

So DLC and patches(may or may not be necessary)?

CoverYourHead:
I feel like downloadable games are better for companies in this aspect.

Oh, and I hate pirates, seriously, what the heck guys?

Love digital distribution.

As for me, if it's new then I buy new. Haven't been to a Gamestop in..... a yearish? I can't remember. Didn't care for the place since the EB buyout and lost what little was left with Zero Originality. If I want used, there's a locally owned game and movie shop with a decent selection (a lot of oldies too...SNES, Genesis, etc.) If it's out of print I turn to the internet for Amazon.com or Steam.

Second-hand bookstores haven't killed the publishing industry.

-- Alex

What collapse of the gaming industry?

TsunamiWombat:
They could try adding incentives for new copies. Throw in cheap brickabraks, or things that improve the game experiance but aren't necessary. You know, the kind of shit usually reserved for special editions.

Gears 2 did this, I bought it used and didn't get the flashback pack. Needless to say I have a sad.

TsunamiWombat:
They could try adding incentives for new copies. Throw in cheap brickabraks, or things that improve the game experiance but aren't necessary. You know, the kind of shit usually reserved for special editions.

they should, but wont

Digital distribution helps.
So does DLC goodies for new copies.(gears map pack)
Also some games will be able to monetize the playing of the game, not just the intital sale.(WoW, micropayments)

i am having the feeling that there should be serial numbers on the games...
i mean i know there is already but like they do on computers where if you already used it, it cant be reused. Unless you go through the lengthy process of going to the site and removing it from their records.

Another problem i have noticed is the new Xbox 360 download feature where you can just download the game on to your hard drive and not even need to buy it.

tomany2:
i am having the feeling that there should be serial numbers on the games...
i mean i know there is already but like they do on computers where if you already used it, it cant be reused. Unless you go through the lengthy process of going to the site and removing it from their records.

Another problem i have noticed is the new Xbox 360 download feature where you can just download the game on to your hard drive and not even need to buy it.

You need the actual disc to run the game though. Hard Driving just stores important data on the HD, the actual Exe is still on the disc.

[sigh] Here we go.
I'm going to take a hardline this time.
GROW UP PUBLISHERS!
The used market is a reality. Deal with it like professionals.
Hate Gamestop? Then call them out by name and stop providing them with exclusives.
DO NOT, however, tell me what I can do with a game I legally purchased.

These guys want their cake and want to eat it as well; they want more sales (not pre-owned), but will do nothing to address the issue. Try having a (positive) reason as to why I should buy new instead of pre-owned, and, well, then you'll get more sales.

But MP3 already killed the record store. the difference is that digital media is much easier to copy and is lot more durable. (discs don't wear out in the same way books do.) that said, napster didn't hurt the artists, it hurt the record houses and the stores that specifically stocked CDs.

In the long run, used game sales aren't going to hurt developers as much as publishers. Publishers will take a hit, the big budgets may dry up, and developers may not make as much in royalties for a while, but consumers will still want new games to play. I know a lot of people who make a point of financially supporting their favorite media by buying their products new, and as more and more companies move towards things like digital content delivery and online play, new revenue streams will develop while reducing production costs and broadening the market.

EDIT: i took too long writing this and everyone made my points for me :(

TsunamiWombat:

tomany2:
i am having the feeling that there should be serial numbers on the games...
i mean i know there is already but like they do on computers where if you already used it, it cant be reused. Unless you go through the lengthy process of going to the site and removing it from their records.

Another problem i have noticed is the new Xbox 360 download feature where you can just download the game on to your hard drive and not even need to buy it.

You need the actual disc to run the game though. Hard Driving just stores important data on the HD, the actual Exe is still on the disc.

Oh Okay i just heard from a friend because my Xbox is currently being reapired!

Currently the reason I buy second-hand is because I think a lot of games are overpriced. I've only played a few games I would be willing to spend 50 or 60 dollars on and ironically I got Half-Life 2 for free and American McGee's Alice second-hand for 2 dollars.

In support of first-hand though, you do get very nice box/cover art which is sometimes missing in second-hand purchases. I think though to really make first-hand a viable option they should bring down the prices of their games.

Shade Jackrabbit:
I think though to really make first-hand a viable option they should bring down the prices of their games.

I respect that game companies need the money to pay their employees and to fund servers and stuff, but I assume they never look into the majority of the population that plays games.

How many people do you know that can afford as many as 3 or 4 new $50-60 releases per day to week? How many people do you know would spend that kind of money on credit and slowly pay it off?

I am one of those people in an already failing economy who never could afford everything new. Heck, I buy most of my stuff used (games, furniture, music, clothing; yeah thrift stores are awesome) and I still have a really tight budget. I'm sure most of the other gamers in the world are in a similar position. Not to mention, I don't think I've ever really seen someone who could easily afford those expensive new releases actually play games on a regular basis, they are usually out to get your money.

i'm sorry but is there anything not killing the industry, Compact Cassettes where expected to kill the music industry since every one would record from the radio, Video recorders where expected to kill the Film industry since every one would record from the TV, iTunes was expected to kill the CD stores, The computers where expected to create the paperless office, and PIRATES are expected to brutally slaughter every producer of intellectual property.

Everything and every one eventually dies so can we joust get on with our merry fucking lives already!?!?!

Like the previous poster stated, lots of sources have been cited as various industry killers but they survived. However,

The_root_of_all_evil:
"Five years ago, a great game would have sold for a longer period of time than for a bad game - which was essentially our incentive to make great games. But no longer.

this implies a reason much closer to home when it comes to the recent supposed death of the gaming industry. The majority of publishers are producing crap. Crap with a £40 price tag. If a game is actually good, enough people will buy it firsthand to make it worthwhile making in the first place. Isn't that the reason the industry isn't dead already?

I don't buy into the fairytale that people don't continually buy a great game over a period of time these days. If it's so great, why are second hand copies even available? As for piracy, that's always existed, but we only seem to be hearing excessive whining about it recently. Why? In my opinion, not because people have unanimously decided to never pay retail again, but because of industry resignation to produce crap with a hefty price tag that precedes this whole debacle.

Sure, it must be very temping to look at figures of piracy and used sales for your game and go "Look at these figures! If the million pirates and resellers had bought the game for £40 we'd have £40,000,000! Those total and utter SHITS!" But that money never exisited. If they couldn't get it for free or cheaply, they likely would just skip it altogether. Not all of them, but i'd bet on a majority. If suddenly we were all offered free/cheap ice cream now during winter, what would happen? The whole country would be eating ice cream because it's free or to a lesser extent cheap. That doesn't mean everyone was winding their merry way to buy ice cream at full price before they realised they could aquire it freely/cheaply. The people that could afford it and regularly consumed it would mostly go on buying it as they always had. Unless the quality was questionable. Would you buy ice cream full price when it regularly got less chocolatey? Would you feel like you had a justification to rip off the makers, who were ripping you off with inferior ingredients and taste?

I'm dead against being able to 'steal' another persons creative property, but the ironic thing about piracy and the resale market is that they're shafting a lot of publishing companies far more than the developers that work for those companies. The dev's wouldn't be seeing much of the extra revenue that comes with launch sales at all regardless, having signed their souls away to aquire inital funding. The publishing company would be making money hand over bastard fist however. As far as independant developers go, they in theory get utterly shafted by piracy, but do independant developers even exist anymore? Ones that don't mostly make cheapo 2D games where they break even after 100 or so sales?

If piracy and used sales takes down the major publishers, so what? That doesn't mean the death of the gaming industry by any stretch of the imagination. Just the gaming industry as it exists now. Who's to say that's not even a good thing? Developers get less and less creative freedom recently. Innovative and interesting games are often scrapped by publishers for fear of not being exploitable enough, with a double digit sequal followup series. We've all seen the evidence of games being rushed out the door before they were ready, and who makes that descion? Publishers mostly. Not developers. Why do they get away with it? Because of the ridiculous amount of money they have as a safety net. If an independant developer rushed a game out the door in a greedy effort they'd have their reputation tarnished and have extreme difficultly aquiring the funds to ever get a second chance. That, in a nutshell, would be 'essentially their incentive to make great games'. Their jobs.

If it was exessive money developers were after rather than a creative job, i hate to be the one to point out to them that developing games isn't one of the most lucrative choices.

We all know the industry is hurting, but trying to destroy elements of life you don't like is about as sensible as trying to turn back the tide. It would be nice if they could channel their abundant crying/whining energy into some constructive/creative ways to get on with their lives. Either make do, or quit.

Miral:
(And considering World of Goo is one of the latter, your reference seems misplaced.)

Well, given World of Goo suffered from massive piracy rates; and then has to run the gauntlet of used sales; we're talking maybe 2 weeks for it to replenish the time spent on it, with 90% of that already gone.

Let's take some hypothetical figures. One man-year to build sounds good for an indie game. Full time job would be 40 hours a week @ £5 an hour at minimum rate.
So the game costs the two developers about £20,000.

With the cover price of £20, say, you'd have to sell 1,000 to break even. Let's say used games are half the amount sold, so that 2,000 copies are sold.

With the piracy rate of 90%, that means 20,000 copies of the game have to be in existence just for the developers to break even.

Now, if Gamestop buy at £10 and sell their used copies for £15 and promote them, that means they get £5,000.

So, even eliminating the pirates, used game stores are reaping half the developers cost for doing nothing more than the normal publishers.

You can see why some software companies are upset, they only have a 2 week window to sell whilst Gamestop can keep gaining for a lot longer. And who pirates old games?

As for Zakull's wall of text, you do have a solid point. A lot of the money is hypothetical, but it has far longer to become reality in Gamestop.

The problem with relating it to other consumables is that games realistically have a VERY short shelf life in Game Stores; vegetables are often on the shelves longer.

That means that ANY game has to be hyped up to the elbows; unlike films, they don't have the tie-ins available so they make their money almost purely on release sales.

Just as a reference, I don't have a problem with Gamestop, but I think that feeding some of their profits back into the industry that gave them those profits would be an honourable thing to do if they don't want their own gravy boat to sink.

Alex_P:
Second-hand bookstores haven't killed the publishing industry.

-- Alex

College students and only a few others are interested in used books, as it's very obvious it's been used. On the other hand, in today's days of memory cards and internal HDDs, buying a used game is just about the same as buying a new copy. It's the same reason used games weren't such a problem in the days of cartridges.

Lvl 64 Klutz:
College students and only a few others are interested in used books, as it's very obvious it's been used. On the other hand, in today's days of memory cards and internal HDDs, buying a used game is just about the same as buying a new copy. It's the same reason used games weren't such a problem in the days of cartridges.

Not necessarily. Many used books -- particularly hardcovers -- are in very good condition. Some may have yellowed because they're 30 years old, but that's not actually damage from use. Even with paperbacks, it's not that hard to find ones without broken spines and dog-eared pages.

What's the difference between a used copy of Gears of War from a used copy of Super Mario World? An easily-removed save file on some EEPROM? (Or was in battery-powered RAM? I forget these things...)

The only difference now is that you've got a really big chain -- the most financially-solvent of all the video-game stores -- pushing used games.

-- Alex

The_root_of_all_evil:

Miral:
(And considering World of Goo is one of the latter, your reference seems misplaced.)

Well, given World of Goo suffered from massive piracy rates; and then has to run the gauntlet of used sales; we're talking maybe 2 weeks for it to replenish the time spent on it, with 90% of that already gone.

OK you've just proven you have no clue about what you are saying.
World of Goo is only available at retail on the PC. Wii version is digital not to mention it's spread across several well known PC distribution sites.
Do you really think used PC are hurting them?
Right now there are 3 sellers (all retail) on Amazon MarketPlace and 3 ebay options for the game.
Where is this "gauntlet"?
2D-Boy has already stated, on their blog, they believe DRM to be pointless. I wonder what their stance on used sales might be.

To the larger issue. Whiny publishers need to cowboy-up and deal in a way that doesn't adversely affect the consumer.
Whiny forum posters need to buy more from small publishers on the console and more indie games directly from developer websites if the really give a damn about supporting creative works.

It's hard to justify $60 for a game that lasts you 2 weeks. I'd by new more frequently if they were priced in the $35-$50 range. Actually, I can usually only afford to buy new when it's on sale. So, either quit churning out so much crap product or lower the initial price point.

Walls of text are inevitable i'm afraid. Though this time you can skip to the bottom for a conclusion of sorts relevant only to the orginal question, devoid of piracy issues and digression.

The_root_of_all_evil:

...with 90% of that already gone.

You're falling into the hypothetical money trap there Root. 90% of it is only in theory 'gone', there's no evidence to support that those people would otherwise have paid for the game if they couldn't get it for free. I know you know that, but saying it's gone is a fallacy.

As for the money GameStop recieves, they can only make money on the 10% of copies produced that wern't pirate copies. The games have to be sold new before they can become used. Meaning, the publisher gets 10% of the money out of the 100% figure for copies in existance. Those 10% sold retail are then recycled into GameStop who make pure profit on them because they didn't pay for them new. The publishers are claiming that GameStop in this case, stole 10% of retail sales from them by reselling used copies instead of buying new ones from their distributor. In the publishers minds, they've lost profit on 10% of sales to GameStop. The breakdown here being;

Copies Sold As New: 10%
Copies Sold as Used (No money returned to publisher): 10% or less <-- This CANNOT be higher than the amount sold as new because they're the same copies
Pirated: 90%

For the numbers you gave Root;

1000 Full retail becomes ---> 999 Used/ 1 Original source of pirates copies

Only 1,000 need to exist to break even. When those 1,000 are sold full retail, then they can become 999 (assuming our pirate keeps their copy) used copies, with one of them being used as a pirates orginal copy, allowing them to create say, 19,000 other copies.

So yes, it's ridiculous that for 20,000 copies of the game existing, the maker is seeing the sales from 5% of that figure.

However, let's assume that of the UK's 60+ million population, 5% are gamers, 3million.

Let's assume of those 3 million game enthusiasts, 10% have heard of World of Goo, 300,000.

Of those 300,000, let's assume a mere 1% buy it full retail, 3,000.

At £20, that's £60,000.

That's the break even point if we assume £20,000 production costs, and a years average full time wage for the two developers, £20,000 each, right there. Certainly it's annoying as hell to think of all the hypothetical money lost in this situation, but both developers have been paid as if they'd done a full time job for a year, presumably doing what they love. If they don't love, or even like it, maybe they should get a different job, because it pays the same.

However, i doubt that only 3,000 people paid the retail price of a measly £20 in Britian. To say nothing of international sales.

Those were some tiny figures i worked with for just the one country, and it still equaled a years minimum wage. I can empathise with the view of piracys utter wrongness, but can't see how it's 'killing the industry' in this case when it's more than clear you can make a living out of it.

If we remove piracy from the picture totally and assume even 1% of the 90% that otherwise would of pirated, bought full retail then traded it in, then the idea that the used games market is even making an impact on publishers or developers is laughable because their wages were secure even when piracy was part of the picture.

--------------------------------------------------------------------------------------------

I hope you can see what i'm getting at. The used games market is a theoretical source of loss for the publisher (assuming that person would of bought new, if they couldn't buy cheap), but someone still has to buy it new for another person to get it cheap in the first place.

The impact is nowhere near as staggering as is made out.

Furthermore, what's to say the person that trades the game in doesn't use their trade in money to purchase another brand new game?

proj235:
It's hard to justify $60 for a game that lasts you 2 weeks. I'd by new more frequently if they were priced in the $35-$50 range. Actually, I can usually only afford to buy new when it's on sale. So, either quit churning out so much crap product or lower the initial price point.

I agree with this as a good soloution to gain more sales that become profit for the publisher, but I can see why publishers don't, or think it isn't. World of Goo was hit with a 90% piracy rate and it only cost £10.

I don't know. When it comes to actual soloutions to these problems, the whole situation is an irretrievable mess and I honestly have no new or innovative ideas.

So piracy is killing PC gaming and used sales are killing console gaming?

According to these people, we soon won't have any gaming left.

ZakuII:
Walls of text are inevitable i'm afraid. Though this time you can skip to the bottom for a conclusion of sorts relevant only to the orginal question, devoid of piracy issues and digression.

The_root_of_all_evil:

...with 90% of that already gone.

You're falling into the hypothetical money trap there Root. 90% of it is only in theory 'gone', there's no evidence to support that those people would otherwise have paid for the game if they couldn't get it for free. I know you know that, but saying it's gone is a fallacy.

I did credit you for that Zakull; but be careful yourself, not all of that money is theoretical either. Even if we're talking about 10% of the pirates would have actually bought the game, that's still a big chunk.

And that's specifically pirates.

However, if we remove used games, then the retail shelf life of money that gets back to the artists increases dramatically.

Bargain bucket stuff still gets back to the artists, used don't.

there is a very simple fix. the devs just need to make better games instead of the crap they have been.

If companies like Gamestop gave the developpers a small cut it could eases things...

TsunamiWombat:
They could try adding incentives for new copies. Throw in cheap brickabraks, or things that improve the game experiance but aren't necessary. You know, the kind of shit usually reserved for special editions.

I don't buy this or the DLC suggestion. The kind of person who cares about bric-a-brac or schwag is likely the kind of person who buys to keep anyway, for one thing. For another, you can keep the schwag and still sell back the game.

Concerning DLC, I have to say much the same thing: if a guy's selling back Gears of War after a week, then he's obviously not interested in plumbing the depths of the game. What difference would more content make to him, when he's already decided to skip some of the original content?

I think the solution is: better games cheaper.

But there's even a caveat there: publishers don't want a game that'll keep you occupied for 1,000 hours. They don't want people buying one game a year.

If the switch to 100% downloads ever comes, I think we'll see a variety of possibilities for terms of use, including expiring accounts. Clearly, I think it's worth paying about $30 to own Gears of War 2 for a month. It wouldn't surprise me to see downloadable games made available under similar terms.

The_root_of_all_evil:

However, if we remove used games, then the retail shelf life of money that gets back to the artists increases dramatically.

Bargain bucket stuff still gets back to the artists, used don't.

Uhhh... No.
IF you are speaking strictly retail the copies of a game either in stores or in the retailers storage have already been bought and paid for from the wholesaler. Whether that is directly from the producer/publisher or a middle-man it doesn't matter. Once a title hits the bargain-bin the retailer is usually selling the product at a loss because it is costing them more money to occupy shelf space.

This is why there are so many small (half-a-dozen) chains and mom n' pop stores that have brand new, slightly older games at ridiculously low prices. The either went bargain hunting or bought lots from a wholesaler trying to clear space for new product. It's my understanding that most, if not all, game publishers refuse to buy back unsold stock.
A game bombs when the initial shipment didn't sell well and wholesalers aren't ordering new copies. Because retailers aren't ordering new copies. Because the first shipment isn't selling.

Irrelevant of all that developers working on a title for a publisher have already been paid for something that has shipped. Sales determine less if they'll be employed on another project, and more on what that next project will be.

Double Fine is still in business because their first game became a cult hit. Hopefully enough to drive sales of their next game.
Iron Lore is dead because nobody wanted to fund their next project or use them to work on an existing property. A shame but it happens.
Claiming used sales destroy developers is pure ignorance.

The_root_of_all_evil:
However, David Braben, (Creator of ELITE, and now head of Frontier Development) wasn't quite as enamored. "Five years ago, a great game would have sold for a longer period of time than for a bad game - which was essentially our incentive to make great games. But no longer. Now publishers and developers just see revenue the initial few weeks regardless of the game's quality and then gamers start buying used copies which generates money that goes into GameStop's pocket, nobody else's."

I just love the fact that loads of people still play games that David Braben made fifteen or twenty years ago. I expect that copies of Elite have changed hands quite a few times over the years - or at least did before Ian Bell put all of the files on the ARPANET for free download.

Ray Huling:
If the switch to 100% downloads ever comes, I think we'll see a variety of possibilities for terms of use, including expiring accounts. Clearly, I think it's worth paying about $30 to own Gears of War 2 for a month. It wouldn't surprise me to see downloadable games made available under similar terms.

Then you are quite rich , and have rather poor tastes...

If the horrors you speak about come true , I will go to the dark side for good , and burn my illegaly downloaded games on individual CDs .
Then put the CDs in special homemade boxes , and put them on a shelf above my computer.
Because I like my games that way.

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