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What Happens To Your Used Games?

samzenpus posted about a year and a half ago | from the gently-used dept.

Businesses 276

silentbrad writes "GameStop's bosses are obviously tired of hearing about how used games are killing gaming, about how unfair they are on the producers of the games who get nothing from their resale. One astonishing stat is repeated by three different managers during presentations. 70 percent of income consumers make from trading games goes straight back into buying brand new games. GameStop argues that used games are an essential currency in supporting the games business. The normal behavior is for guys to come into stores with their plastic bags full of old games, and trade them so that they can buy the new Call of Duty, Madden, Gears of War. GameStop says 17 percent of its sales are paid in trade credits. The implication is clear — if the games industry lost 17 percent of its sales tomorrow, that would be a bad day for the publishers and developers.'"

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276 comments

i sell them for profit (2, Funny)

Anonymous Coward | about a year and a half ago | (#40893425)

to stupid people that ask dumb questions

Absolutely! Down with 'used' products! (5, Interesting)

Anonymous Coward | about a year and a half ago | (#40893431)

Just as used car sales are bad for auto manufacturers, and home resales are bad for builders, and garage sales are bad for retailers, ... and ..., ... and ...

Re:Absolutely! Down with 'used' products! (1)

91degrees (207121) | about a year and a half ago | (#40893485)

Cars and houses are a little different though. The extremely high cost means that the market wouldn't be viable without reselling.

The garage sales comparison is fair though.

Re:Absolutely! Down with 'used' products! (5, Insightful)

arth1 (260657) | about a year and a half ago | (#40893621)

Cars and houses are a little different though. The extremely high cost means that the market wouldn't be viable without reselling.

Just like with games, then.

What, you don't think $70 for renting a game that's simple enough for your grandmother to play (although she might not like chain mail bikinis) is extremely high cost?

In the past, the pewter figurine, book, packet of pocket fluff, cards and and a cloth map made you feel you got some value. Now you pay four times as much for way less content. Sure, you feel entitled to spread the pain of the high price around by re-selling it after the four hours it took to get tired of it.

Re:Absolutely! Down with 'used' products! (-1)

91degrees (207121) | about a year and a half ago | (#40893677)

What, you don't think $70 for renting a game that's simple enough for your grandmother to play (although she might not like chain mail bikinis) is extremely high cost?

It's just over a day's work at minimum wage, so no. It's quite affordable with or without trading in. Few people can buy a brand new car without saving up for quite some time, and hardly anybody could buy a house without an old one to sell. Based on the article, it seems most people buy games without a trade-in. The entire infrastructure of housing and cars assumes that you will trade in.

As for value for money - that's something you consider before you make the purchase, surely. But it's irrelevant. I'm not defending the games industry. Simply pointing out that comparing it with a market that works completely differently is a poor argument.

Re:Absolutely! Down with 'used' products! (5, Insightful)

jank1887 (815982) | about a year and a half ago | (#40893783)

"But it's irrelevant."

how on earth is it irrelevant? It doesn't matter if I'm buying a $10 watch at Walmart. If it has resale _value_, that is something that will and should affect the initial 'price that the market will bear' for the good.

Things have value. Houses have value in the fact that they are still good for their intended purpose after many years of use. When you move, you sell them instead of abandoning them because they still have value, and you can trade on that value. The 'price the market will bear' for your house is based on it's value to the market.

A used car has value in proportion to its features and how much useful life it still has. It wears down over the years, and by the time mileage reaches 100k it has significantly less value than it did at 20k. But value has not reached zero, hence I can find someone to buy it for a few thousand dollars because to them, it has value worth paying for.

If publishers are insisting that people throw away the value left in the good that they would normally resell, then the prices better come down to reflect that loss of value in the product.

Cars and houses have high prices because of the value present in the resale market. The fact that there is Value left in the items is the cause, the prices are not. The used game market being what it is shows that there is still value in used games, just as there is in used books, electronics, cars, houses, etc.

Re:Absolutely! Down with 'used' products! (0)

91degrees (207121) | about a year and a half ago | (#40893851)

how on earth is it irrelevant?

Because the point I'm making is that comparing one marketplace with a completely different marketplace with completely different goods and a completely different price and selling structure is a poor argument for making comparisons.

When you last bought a game, what sort of finance did you get? Did you consider the fact that you could get a better, nicer game on the same purchase plan and so change your mind about the game that you wanted to purchase? People do this with cars. The manufacturers know that if people can get a trade-in they'll spend the extra money on a more expensive car. Perhaps this is true with games, but when something is less than a one-hundredth of the price, it's not really the same thing.

Re:Absolutely! Down with 'used' products! (-1)

Anonymous Coward | about a year and a half ago | (#40894019)

And the point OP was making is that used goods are bad for manufacturers in any market. And it still stands. So...congratulations on your pedantry?

Re:Absolutely! Down with 'used' products! (1)

91degrees (207121) | about a year and a half ago | (#40894215)

Which is a perfectly valid point.

I thought it was illustrated with a poor example. Perhaps you think it's good to illustrate good points with bad examples, but I think it tends to detract from the argument rather than contribute, and if I find myself agreeing with people I like them to agree with solid arguments.

Re:Absolutely! Down with 'used' products! (4, Insightful)

mwvdlee (775178) | about a year and a half ago | (#40894095)

But if the trade-in of cars and houses was banned, the prices of cars and houses would go down to make it a viable market.
Surely the value of a product which cannot be traded in would be percieved as less than a product which can be traded in?

Re:Absolutely! Down with 'used' products! (4, Insightful)

evilRhino (638506) | about a year and a half ago | (#40894241)

I think reducing the supply of an item (the used car market in this example) actually leads to increased cost.

Re:Absolutely! Down with 'used' products! (1)

jbolden (176878) | about a year and a half ago | (#40893805)

I don't know that this is true. It would change the market considerably though. The long term rental / lease market would be much larger with cars. If you wipe that out too then costs would just have to be much lower.

Houses... its hard to imagine what a world is like where you can't resell land.

Re:Absolutely! Down with 'used' products! (4, Funny)

PopeRatzo (965947) | about a year and a half ago | (#40894037)

Cars and houses are a little different though. The extremely high cost means that the market wouldn't be viable without reselling.

Have you bought a game recently?

Re:Absolutely! Down with 'used' products! (4, Funny)

David Gerard (12369) | about a year and a half ago | (#40893503)

Watching Nyan Cat on YouTube is S*T*E*A*L*I*N*G from the band of live musicians you should be paying money to perform every time you play a video.

Poor Analogy (4, Interesting)

eldavojohn (898314) | about a year and a half ago | (#40893515)

Just as used car sales are bad for auto manufacturers, and home resales are bad for builders, and garage sales are bad for retailers, ... and ..., ... and ...

This is a fairly poor analogy in the same way that calling file sharing "theft" is a poor label. The value of the game isn't the physical cartridge or disc on which the game comes -- sure, the manual and external artwork to the packaging may have some value to you and especially to collectors. But the real value of a game is that copyrighted information and artwork and writing stored in a digital manner on whatever medium.

I still think you should be able to sell secondhand copyrighted information, I really do. But I also think it's a poor comparison when the value of the car isn't so much the intellectual property but more so it's got X lbs of steel and other materials specially arranged to get you from point A to point B. Games are artwork, not vehicles.

Better comparisons are books and DVDs. Of course, I'm sure those industries want secondhand sales abolished as well to keep their sales up and I totally disagree with that considering how much I shell out for said objects.

Me, personally, I've learned my lesson. I sold my Ocarina of Time collectors games a while ago and now truly regret it (I had thought that one day N64 cartridges would be as unplayable as NES cartridges but they appear to work for much longer). So I maintain a library next to my books and movies. Sure you might think it looks "tacky" but I think that attitude will change in the near future. I played my dad's pong game, my kids will probably play my Zelda games.

Re:Poor Analogy (4, Informative)

edwdig (47888) | about a year and a half ago | (#40893635)

NES games are still playable. The problem is the NES itself - the connector the cartridge slides into gets bent out of shape. It's easy to open the system up and swap the connector. The new part only costs a few dollars.

Blowing on the cartridges never actually did anything to make them work. What did help was simply taking the cartridge out and putting it back in. It would sit differently, and eventually it would sit well enough to make a solid connection with the bent connector.

Re:Poor Analogy (1)

Anonymous Coward | about a year and a half ago | (#40893839)

Blowing on the cartridges never actually did anything to make them work.

BLASPHEMY!

Re:Poor Analogy (1)

TFAFalcon (1839122) | about a year and a half ago | (#40893965)

But will they play them on a NES, or will they just download them from piratebay and fire up an emulator?

Re:Poor Analogy (2)

dywolf (2673597) | about a year and a half ago | (#40894205)

The IP is not the source of value, or rather it is irrelevent to the value.

The value for a game comes essentially from its usability. In this case, the gameplay, the enjoyment. You can load a game with tons of IP but that doesnt mean it has any value.

Value is determined by the market.
Market makes this determination according to demand.
Demand for games is determined by enjoyability.

And that is why highly enjoyable games are worth more on a trade in, while others are not.

Re:Absolutely! Down with 'used' products! (0)

Anonymous Coward | about a year and a half ago | (#40893687)

Used girlfriends?

I jest.

There's two fundamental problems with "preowned" things.
- That some value is lost from it not being new
- That some value is not restore or repairable from being preowned.

With software, the first never applies, because a used game is identical to a new game. The latter sometimes applies if the preowned game is shipped as "disc only", no manual. Digital downloads however have neither.

Your homes, and cars always have both of those points apply. A homes value goes up or down, over time, depending on property values, independent of the building's cost of materials. You can build a house in 1980 and it cost 30,000, or you can build it in 2010 and it costs 300,000. But the underlying property value hasn't changed. With cars, the value depreciates over time, and it can't be recovered unless you lock the car away for 50 years, properly maintained. Most people don't do this, because the car is to be driven, not collected.

So aside from game collectors, who care about both points, and will only buy new, in-box games, everyone else does not care.

It's like the virginity thing. People want virgin product, and virgin mates, but just because something isn't virgin, doesn't make it any less functional.

The thing is, the old cartridge games (NES/SNES) actually could have value added to them if you left save games on them, but the battery backups don't last forever. Hell even finding floppy disks of RPG games that used to save to the disk (Ultima, StarFlight) could save you some time if you don't want to invest the time playing it from the beginning.

Anyway, the problem I find with new games, is that they're actively removing value from new games, and putting it into DLC. So instead of having a game cost 59.99 (oh wait, games are now 79.99 now aren't they?) it's now closer to 100$ to have the full game. People who wait and buy the game new after it's been out for 3 years, may only pay 39.99. And if you wait longer you can get a preowned version for 9.99.

There's nothing wrong with preowned Xbox360, Wii or PS3 games. However preowned windows games are useless, since the keys have been used. Effectively Windows games have a value of ZERO. You may as well just pirate the media, or buy it directly off steam.

Every single industry that sells tangible products (5, Insightful)

Anonymous Coward | about a year and a half ago | (#40893435)

I'm tired of hearing it as well - because other businesses with narrower margins have survived some form of First Sale Doctrine for literally centuries at this point.

When people buy stuff, sometimes they sell it. You don't get that money, because you already sold the product. Suck it the hell up.

Re:Every single industry that sells tangible produ (5, Insightful)

wild_quinine (998562) | about a year and a half ago | (#40893565)

I'm tired of hearing it as well - because other businesses with narrower margins have survived some form of First Sale Doctrine for literally centuries at this point.

Of course, some of them have not. And, crucially, that's a good thing, too.

Re:Every single industry that sells tangible produ (1)

mwvdlee (775178) | about a year and a half ago | (#40894181)

Individual companies perhaps but not an entire business (as in "market") as a whole. If there is sufficient demand, there is a viable business model.
It might not be the business model that some companies want, but that just means they misjudge reality.
Even buggy-whips are still being made.

Re:Every single industry that sells tangible produ (3, Informative)

Artraze (600366) | about a year and a half ago | (#40893625)

Well, the counter argument to this is that the, let's call them 'informational', goods don't depreciate with use like a tangible product does. A (pressed) game disk will be just as functional in 5 years, though your, say, lawn mower will probably be all gunked up with grass, rusting a bit and have some wear on the engine.

Of course, we all know this is pretty bunk. Game disks get scratched fairly easily, or the booklets/cases get lost and there are plenty of physical goods that keep their value as. Computer are such a thing: aside from a possible aging hard disk, they pretty much run just as well as when they were new. Still, there's only very limited used computer market. Why? Simple: New computers offer something more than used computers; usually they're faster and/or draw less power. Intel spends their time making better chips and exploring new markets, rather than complaining about how unfair it is that people trade used computers or don't every one released. Game companies should do the same. Offer something worth buying and people will buy it. Don't shovel out a new revision of the same old crap and complain when people are content to swap the old version and skip the new one.

Re:Every single industry that sells tangible produ (5, Insightful)

arth1 (260657) | about a year and a half ago | (#40893657)

Well, the counter argument to this is that the, let's call them 'informational', goods don't depreciate with use like a tangible product does. A (pressed) game disk will be just as functional in 5 years

And so will a book. In fact, a book will easily outlast CDs and DVDs. That doesn't mean that if I sell a book I have read, I steal from the author (or his publisher's grandchildren, more likely).

First sale. It's not just a good idea, it's the law.

Re:Every single industry that sells tangible produ (0)

Anonymous Coward | about a year and a half ago | (#40893995)

First sale. It's not just a good idea, it's the law.

Unless the product has the technological capability to force you to agree that you didn't actually buy it before you can use it.

Re:Every single industry that sells tangible produ (3, Insightful)

TFAFalcon (1839122) | about a year and a half ago | (#40894089)

The problem is the time it takes for people to think about selling their games. Each new generation of games might be 'better' (yes I know only the graphics improve with most other things getting worse and worse), but a new game from a series will be released once a year at best, while the customer will be thinking about selling the old game in a couple of weeks.

Game maker should be thinking about ways to keep players playing the games they buy, rather then preventing them from selling them.

Re:Every single industry that sells tangible produ (1)

dywolf (2673597) | about a year and a half ago | (#40894235)

Game Depreciation: graphics, AI, usability (drivers, OS, hardware reqruiements), ease of use features not implemented that now taken for granted.

Re:Every single industry that sells tangible produ (3, Interesting)

dkleinsc (563838) | about a year and a half ago | (#40893699)

More to the point, anyone trying to claim a portion of the proceeds from every resale is just engaging in rent-seeking. You sold it, it's not yours anymore, and you should have no say in what they do with it after.

Re:Every single industry that sells tangible produ (2)

gutnor (872759) | about a year and a half ago | (#40893761)

Suck it the hell up.

That is indeed a question of principle. Lots of consumer regulation are not (should not be) thought with the business in mind, but with the customer in mind. You cannot sell dangerous product, make false advertisement, lie in the ingredient list, and ... you cannot profit from your product resale. There is no point arguing if this is good for business or not, that is beside the point.

Of course, we may open the discussion if first sale doctrine is still actually relevant, but the profit margin of game studio and there relatively insignificant impact on economy compared to cars and house market and nobody seem to complain about those ones.

Re:Every single industry that sells tangible produ (2)

roman_mir (125474) | about a year and a half ago | (#40893935)

Every single industry that sells tangible products

- yeah, but in some cases it's not the industry that prevents tangible products from being resold. How is that secondary market for used condoms doing?

17%? (2, Interesting)

Anonymous Coward | about a year and a half ago | (#40893445)

Gamestop does not make 100% of game sales, so losing that would in no way be NEAR 17% of all sales in the gaming industry.

Re:17%? (2)

Goaway (82658) | about a year and a half ago | (#40893455)

And of course, some part of that 17% is used sales, where the money goes straight into Gamestop's own pockets.

Re:17%? (0)

Anonymous Coward | about a year and a half ago | (#40893599)

And imagine that!! If you took the time to actually read the summary, you'd see this line:
"70 percent of income consumers make from trading games goes straight back into buying brand new games."

Which indicates while 70% of the 17% is for buying brand new games, 30% is for used games.

My only irk with them is the lousy pricing they offer on used games. I understand the game can sit and sit, and they need some mark up.. but when you trade in a game for say 25 cents, and you see the sticker print out they'll put on your game once you get your cash and that sticker reads $19.99 or so.. that's one hell of a mark up

Re:17%? (1)

Anonymous Coward | about a year and a half ago | (#40894125)

If you don't like it you can undercut their 19.99 on ebay and make the same markup yourself. Of course then YOU have to sit on the stock until it moves and do all that business shit.

Re:17%? (1)

aaarrrgggh (9205) | about a year and a half ago | (#40894247)

When they pay you $0.25, they don't expect to sell it; they are making a market. It is likely to take more used games off the market so they don't need to compete at half the re-sale price.

Re:17%? (2)

DMorritt (923396) | about a year and a half ago | (#40893691)

If you're the sort of person that has a game you want to trade in, and trade it in for another used game, then I guess, in a few weeks or months you'll be trading that one in for another? How is this not helping the industry? Everyone needs to make money somehow, if Gamestop are getting a slice of the new and used games I don't see a problem with that, they have supply, there is a demand (for cheaper used games as well as the latest ones). Not everyone wants to buy the latest blockbuster.

The fact that someone can trade in a game, and use that as credit for the next game they want to play is a good thing, I know/knew people that buy/bought a moderate number of games and used this method, if they couldn't part fund next months new release with an old game they no longer play, they probably wouldn't have bought it at all (or waited till the price was cut to a reasonable level, after all games are quite expensive).

Personally I think a thriving second hand industry is a good indication that the games industry as a whole is doing well, it's not the consumers fault that games are released with limited replay value, if they don't want people reselling games, give people a reason to want to keep them in the first place!

Re:17%? (1)

FyRE666 (263011) | about a year and a half ago | (#40893457)

Additionally, if they used the credits to buy other used games, then that money goes direct to Gamestop.

Re:17%? (3, Insightful)

DarkOx (621550) | about a year and a half ago | (#40893837)

Hardly.

It goes to pay the guy behind the counter, it goes to the power company to keep the lights on. It goes to local sales and property taxes, it goes an insurance company who has the policy on the store, etc. Does Game Stop get lots on Contribution margin in this case sure, but they have lots of fixed cost overhead.

They are preforming a service many find useful the offer a market place and facilitate it by functioning as a broker. If you want to keep more of the sale price for a game your selling there is ebay and Craig's list. Its going to be lots more work on your part though, and when the sale happens is when you find a buyer rather than anytime you are ready.

Re:17%? (1)

plover (150551) | about a year and a half ago | (#40894113)

If the behavior at Gamestop represents the behavior of an average consumer and of an average game retailer, then that means the same thing happens at other game stores. So yes, that would be near 17% across the board. And Gamestop is one of the largest game retailers out there, so they do statistically represent a large fraction of how the trade-in gaming industry operates.

Stores like Target and Walmart sell new games but don't take trade-ins. Plus it doesn't account for on line sale channels like Steam, where trading doesn't work at all. But all together, game stores that accept trades do have a big impact on the industry. Quibbling over a percent or two of correctness from the slashdot submitter isn't the point: the point is that used game trade-ins matter.

Still doesn't matter (0)

Anonymous Coward | about a year and a half ago | (#40893459)

The price point for games are simply too high that it cuts out a large proportion of people from buying brand new games often.

If they were to simply pull up numbers of used games to new games sales, you'd see how large the problem was.
Used games are sold and resold over again.
They weren't kidding when they said wider. It seriously is wider. They never used numbers for a reason.

Only on a blue moon does this event happen that is talked about in the summary.

But...but...but (5, Interesting)

Anonymous Coward | about a year and a half ago | (#40893463)

Don't all these Games players have infinity deep pockets and can all afford to buy new and just throw away?

Re:But...but...but (0)

Anonymous Coward | about a year and a half ago | (#40893509)

Gamers are the worst sheeple ever. Glad to be fucked over by the gaming companies, glad to be fucked over by the console companies. And in response they don't even complain. What's not to like ?

Re:But...but...but (5, Interesting)

ZeroSumHappiness (1710320) | about a year and a half ago | (#40893529)

This needs some modding up. I would never have gotten into video games if I could only afford one once a quarter. Used games meant I could buy a game every month when I was a teenager. This broadened my experience and helped cement gaming into my life experience. I probably wouldn't be buying a couple games a month nowadays if I couldn't buy a game a month back then. Luckily, games commonly sell on sale for $5 or less nowadays so new gamers will still be able to experience a wide array of games if they so desire.

The industry can't just assume that they'll be able to sell all of the AAA titles to all of the gamers every time one goes on sale.

Re:But...but...but (-1)

Anonymous Coward | about a year and a half ago | (#40893833)

No. The reality is 90% of gamers are retarded minimum wage kids or married and aren't allowed or can't afford to buy games without trading their collection for teh new codzomg - the only reason GameStop has outlasted the previous big fish that it ate, Electronics Boutique.

Re:But...but...but (0)

Anonymous Coward | about a year and a half ago | (#40894071)

That's why I'm a PC gamer. Sure PC and console titles start life at the same price, but the PC version will drop like a rock within 6~12 months in most cases. I spend less than $200 a year on my gaming addiction and I get all the games I want and more.

Games on the PC are so cheap that it takes more effort to pirate them than it does to pick them up on Steam for a couple dollars during a sale.

Incomplete analysis (1)

Anonymous Coward | about a year and a half ago | (#40893491)

No stats on guys about to buy a new game, and ultimately deciding to buy plastic bags full of old games instead.

A 2yo's idea of copyright (5, Insightful)

David Gerard (12369) | about a year and a half ago | (#40893493)

Artists and companies both share a toddler's idea of ownership: "if I thought about it, it's mine."

The syllogism goes something like:

1. Someone, somewhere, is making money from something I am tangentially involved in.
2. Therefore, THEY STOLE IT FROM ME!!!!!!

The economic notion that you can't capture all the value you create if you want to maximise your take appears a bit complicated for them.

70 percent of income consumers make (4, Insightful)

guises (2423402) | about a year and a half ago | (#40893499)

70% of nothing is still nothing. The complaint is that Gamestop is making fat wads off of used games by paying out nothing and selling them for only slightly less than the new price, while pushing used games sales instead of new ones. No one cares what Joe Gamer does with the pittance that he makes.

Of course, while Gamestop's behavior here is contemptible, leveraging its monopoly to undercut the very industry that supports it, there's nothing whatsoever wrong with used game sales in general. No more so than used books or other media. The real shame is that this is the direction that the big publishers are trying to push the debate into - blaming used game sales for their declining profits, to justify more and more DRM.

Re:70 percent of income consumers make (2)

jbolden (176878) | about a year and a half ago | (#40893845)

Paying a low price and selling for a lot... i.e. a large spread indicates the market isn't very competitive or that Gamestop's service is considered extremely valuable by their customers relative to their competitors. I suspect the later. That people selling to Gamestop really like the brick and mortar vs. Ebay.

Re:70 percent of income consumers make (1)

Anonymous Coward | about a year and a half ago | (#40894147)

Of course, while Gamestop's behavior here is contemptible, leveraging its monopoly to undercut the very industry that supports it, there's nothing whatsoever wrong with used game sales in general.

What monopoly? In selling games? I'm pretty sure amazon, best buy and walmart have something to say about that. Unless you mean trading in and selling used games. But than there's Amazon and the lesser known used stores (play and trade, etc).

Gamestop may be the biggest, but they are far from a monopoly.

Re:70 percent of income consumers make (0)

Anonymous Coward | about a year and a half ago | (#40894193)

Also there are at least 4 'mom and pop shops' in driving distance from where I sit that deal in used games. Not to mention craigslist, the wantads (yes they still exist), ebay, etc etc etc.

I am a 'buy and hold' kind of gamer. But I know for a fact many of my friends would never played any games if they could not have sold theirs. Some even used that money to buy other goods such as a used car, or a decent bike...

This 'your buying a license' has hurt both gamers and studios. As it turns the consumer into the enemy instead of someone you want to buy your goods...

They better stop... (0)

Anonymous Coward | about a year and a half ago | (#40893511)

...with this "logic" - otherwise the producers will go bonkers!

Nice (0)

Anonymous Coward | about a year and a half ago | (#40893513)

Nice Share

Price discrimination (3, Insightful)

Vintermann (400722) | about a year and a half ago | (#40893519)

A used games market allows effective price discrimination [wikipedia.org] , because some people couldn't justify buying a new game unless they knew they could recoup some of the costs after using it.

In this market, price discrimination is a good thing. It allows publishers to still sell copies (and thus get something) to those who can't afford to buy a game at full price. They could have cut Gamestop out of the loop by doing this themselves, but that would demand realistic discounts on older/less popular games, something the publishers appear unwilling to do.

Buying patterns (1)

jem (78392) | about a year and a half ago | (#40893527)

I am a hoarder. I would never trade in my games. I would never sell them on. I also buy games infrequently.

The people that I know who buy games a lot, always trade in their old games. They wouldn't be able to afford as many games otherwise.

It is nice to think that you have have people who buy lots of games and hoard them forever. Maybe if we gave those gamers free money then it could happen.

Re:Buying patterns (1)

Bigbutt (65939) | about a year and a half ago | (#40893601)

Yea, that's pretty much me too. I buy a few games I want to play, mostly nostalgia I guess (Diablo III, Starcraft II). I don't buy used games (I figure it has a code which has already been used). And I keep them until they likely can't be used any more, overcome by OS upgrades.

[John]

Failed business model. (5, Insightful)

RyuuzakiTetsuya (195424) | about a year and a half ago | (#40893535)

In 2010, the video gaming industry made 66 BILLION. Saganesque billions and billions and they can't turn a healthy enough profit?

The business model for gaming has failed. The answer isn't digital either. Digital distribution only makes it easier to fail in the market place and do it faster too.

The problem is management. Management is failing in a big way. Even with Valve, Sony, Microsoft, Nintendo, Google and Apple's pound of flesh, there's no way in hell margins so thin that used game sales threaten it can be considered "healthy." Even in volume. Maybe especially considering the volume that some games sell at.

Where the fuck is all that money going? Is it a matter of creative Hollywood accounting or is there bigger costs involved with pushing pixels through silicon?

Re:Failed business model. (0)

Anonymous Coward | about a year and a half ago | (#40893593)

Development costs. 100 people working for 2 yeras isn't cheap.

Re:Failed business model. (1)

DMorritt (923396) | about a year and a half ago | (#40893751)

Not really, I doubt development costs are the main issue, those ads on TV, bus stops and the internet probably chew more money up than 100 people working for 2 years. If you have 100 people working for two years and they turn out a steaming pile of crap, then they get what they deserve. If they are making the next BF or COD however they can roll in their swimming pools of cash.

I think there is a lot of smoke and mirrors in this industry.

Re:Failed business model. (1)

SuricouRaven (1897204) | about a year and a half ago | (#40893629)

Production costs have increased. These aren't the days where gamers will be so easily satisfied with pixel-art, five-poly spaceships and text for dialog*. A top-tier game these days needs much larger teams making highly detailed resources from textures to level design, and even voice actors. It's exactly the same situation that raised the cost of hollywood movie production: Standards rose, to the point where audiences would reject any movie that used obviously painted backdrops and cheap special effects. If you look back at some of the movies considered great classics**, you can see that the production cost would suit the Asylum. It's a feedback loop of expense: The more money is spent on production, the more buyers demand and so the more must be spent to meet their expectations next time.

*Final fantasy excepted.
** The Birds is a good example. Painted backdrops and stuffed models on string, but it scared people back then.

Re:Failed business model. (0)

Anonymous Coward | about a year and a half ago | (#40893667)

Production costs? Do you include the artists, programmers and voice actors in those costs? or just the marketing and management side of the companies?

No, I think I got it right.

Re:Failed business model. (0)

Anonymous Coward | about a year and a half ago | (#40893693)

Production costs have increased. These aren't the days where gamers will be so easily satisfied with pixel-art, five-poly spaceships and text for dialog*. A top-tier game these days needs much larger teams making highly detailed resources from textures to level design, and even voice actors. It's exactly the same situation that raised the cost of hollywood movie production: Standards rose, to the point where audiences would reject any movie that used obviously painted backdrops and cheap special effects. If you look back at some of the movies considered great classics**, you can see that the production cost would suit the Asylum. It's a feedback loop of expense: The more money is spent on production, the more buyers demand and so the more must be spent to meet their expectations next time.

*Final fantasy excepted.

** The Birds is a good example. Painted backdrops and stuffed models on string, but it scared people back then.

While films cost a lot, they target hundreds of milions of consumers all over the world. And then you have tv channels that pay to broadcast the film, the blu-rays, the dvds etc...
For videogames you simply don't have that kind of market. So spending the same kind of money to make an AAA game that WILL NEVER EVER reach the same kind of audience as a blockbuster film is just PLAIN STUPID. It is for all intents and purposes economic suicide. Furthermore the dickheads controlling the videogame industry are convinced that all videogames are worth 60 $. Ding dong assholes, not in your wildest dreams. We need price flexibility. And most of all we need to spend the right amount of money in relation to your target market. I think it was Brad Wardell from Stardock that said it best. The videogame industry doesn't have a sustainable economic model. And no, the COD or other AAA videogames don't change the equation at all.

Re:Failed business model. (1)

MysteriousPreacher (702266) | about a year and a half ago | (#40893861)

Production costs have increased

Rising production costs aren't a problem so long as the market itself will offset them, either through being willing to pay more, or through volume. Where it gets risky though is when a single project can represent so much risk that a company can be ruined by it, but then the rewards are pretty good if it pays off. To use movie examples, look at how much cash Avatar brought in, but then contrast that with John Carter. It's a risky business creating AAA content, and it's likely going to be the preserve of companies with very deep pockets. They're in this business because they can make money.

And yes, Final Fantasy definitely had a pretty minimal budget for dialogue, but I find that pretty consistent in anime. The quality of animation was a bit better though than the usual stuttering and repetitive style I'd associate with anime.

Re:Failed business model. (4, Funny)

Rogerborg (306625) | about a year and a half ago | (#40894223)

look at how much cash Avatar brought in, but then contrast that with John Carter

But one of those had a script so insultingly trite, cliched, superficial and full of plot holes that it practically induced aneurysms in anyone with half a brain, and the other was John Carter.

Re:Failed business model. (1)

jank1887 (815982) | about a year and a half ago | (#40893889)

let me point you to Angry Birds, Zombies vs Aliens, and many of the early, top-selling Wii games. You make a fun game, price it right, people will buy it and play. If you can't make a high cost game and recoup your costs, too bad. You played and lost. such is business, maybe next time you'll do a better cost-benefit analysis.

Re:Failed business model. (1)

sohmc (595388) | about a year and a half ago | (#40894155)

Production costs have increased.

And the market is responding appropriately. A few people are willing to pay $60 for a new game. Others are not willing to pay that much, but would pay $30 plus a few months (after all, time has a cost). Others will pay no more than $10 and are willing to wait years.

The gaming industry has a few options:

  1. Find a way to control costs, which I submit is already being done with the number of sequels, etc. instead of brand new content
  2. Increase the price, which they've done since demand for brand new games has decreased and demand for used games has increased (granted, the demand for used games increased because people don't want to pay the higher price)
  3. Move to a product-key model where each device must be registered. This seems to be the direction gaming studios are moving.
  4. Decrease the price for the game, hoping that people will purchase new instead of used.

This option is probably not going to happen since it requires long-term thinking. You're hedging that more people will purchase the game new if the price is so low that it negates the savings of buying it used. It also would discouraging selling since the owner wouldn't recoup much of the cost anyway.

But when has the gaming/music/movie industry ever been this forward-thinking without being forced to?

Re:Failed business model. (1)

Junta (36770) | about a year and a half ago | (#40894171)

They have increased, but not *nearly* so much as film production costs have increased. To pick two examples, Call of Duty: Black ops had a reported budget of $10 million. Despite being a tad older now, it still is priced at $30 a pop on amazon. How to train your dragon had a budget of $165 million and can be had for $20 a copy on Blu-Ray, in line with moderately new releases. The games industry is making the *MPAA* look reasonable by comparison. Per-unit pricing is what *really* frustrates people, though for the sake of drama throwing out the $66 billion is more interesting. I don't think anyone would begrudge $66 billion to the industry of the pricing and behaviors were a bit reasonable.

Also, gamers are still satisfied with sprites (see many popular IOS/Android games) and modest-detail spaceships (see sins of a solar empire). There is a very profitable market segment that care more about the gameplay than artistry. There is certainly a market for visually overwhelming gaming, but that does not preclude people actually looking for a fun game to play.

Really, the only digital distribution industry that I think has their stuff *mostly* together is the recording industry. Legitimate DRM-free copies of music to actually *own* at reasonable pricing, ad-supported streaming. RIAA lawyers still go overboard in some cases, but the general business model has gotten pretty damn consumer friendly. Meanwhile ebooks, movies, and games are still dominated by DRM and hubris around pricing that interfeces with pricing for optimal revenue. ('if someone doesn't want to spend $60 to appreciate my work, they don't deserve to'). There are bright points (Frictional games DRM-free donloads, Baen e-books, don't know any movie examples), but in general I'm looking forward to a day these other industries mature like the music industry did.

Re:Failed business model. (1)

MysteriousPreacher (702266) | about a year and a half ago | (#40893633)

In 2010, the video gaming industry made 66 BILLION. Saganesque billions and billions and they can't turn a healthy enough profit?

66 billion? In their fevered minds this number can always be higher. Look at Paramount's Al Perry and his response to Louis CK pulling in over a million dollars in just a few days of offering his stand-up show video DRM-free. A success perhaps? No, could have made more money if he'd used DRM. Perry and his ilk are fundamentally wedded to preserving the existing business model, or replacing it with something so hopelessly draconian and self-defeating as to all but kill the very product they're trying to "monetize".

Corporate Math (2)

Arancaytar (966377) | about a year and a half ago | (#40893557)

No, see? If used games were not resellable, those 17% would be paid in extra money that all gamers have an infinite amount of. It couldn't possibly result in a loss in sales due to reduced disposable income.

Downloadable games should be cheaper (2, Insightful)

Anonymous Coward | about a year and a half ago | (#40893573)

If they get rid of the used games market, they better be prepared to charge less money for games. Right now Batman Arkham City is thirty bucks on PSN. The game of the year edition is the same price on Amazon (which I think has all the DLC included). Amazon is also offering 15 dollars to buy the used version back.

If they're going to sell a less complete version of the game that can't be resold or brought over a friend's house, takes up a ton of hard drive space and doesn't have to be manufactured and shipped, I should think they could pass at least some of the savings on to me.

Re:Downloadable games should be cheaper (1)

Darkness404 (1287218) | about a year and a half ago | (#40893843)

Cheaper and more accessible. What needs to happen is for there to be a truly global market for games, I always had hoped that digital distribution would help create that, but it hasn't. You need to be able to choose the region you want your game in when you digitally download because the versions aren't identical and it doesn't cost extra to ship. Want the Japanese version of the game on the Japanese release date? Download it! Want the European version with some added features/languages? Download it! Want the American version sold at Wal-Mart on disk? Download it! They also need to release back-libraries quickly. Had the Nintendo Wii (and 3DS) shipped with every first party NES/SNES/N64 game on the Virtual Console it would have been awesome for retro-gamers (again also, let us download games for other regions so there's a legal way to play the obscure SNES RPGs released only in Japan) but instead they release 1 or 2 games a week thus negating a lot of the possible benefits.

Ban libraries.... (4, Insightful)

JaJ_D (652372) | about a year and a half ago | (#40893597)

...we cannot have people reading copyrighted material for free!

Seriously where is this sort of BS going to stop?

Re:Ban libraries.... (2, Interesting)

Anonymous Coward | about a year and a half ago | (#40893723)

Ban libraries...we cannot have people reading copyrighted material for free!

Libraries are not free. They are, at best, pre-paid by local taxes.

Seriously where is this sort of BS going to stop?

You could start by not saying that public libraries are free.

Re:Ban libraries.... (3, Insightful)

speculatrix (678524) | about a year and a half ago | (#40893809)

mod parent up!

Actually, here in the UK it's been worked out that it would be cheaper to close all the libraries and give all active library users a bunch of amazon vouchers and a kindle.

Re:Ban libraries.... (1)

Anonymous Coward | about a year and a half ago | (#40894159)

In my town in the US, our library has already started doing something similar to that. You can check out ebooks from the library through thier website. Once you check out the book, it takes you to amazon.com where you download it to your kindle for 14 days. Love it!

Re:Ban libraries.... (0)

JaJ_D (652372) | about a year and a half ago | (#40894003)

Some of the comments depend upon where you are

Libraries are not free. They are, at best, pre-paid by local taxes. The build, maintenance and staff yes. In some countries publishers have to give free (yes 100% free, no cost etc..) copies of books to libraries.

You could start by not saying that public libraries are free.

may want to check my comments. I NEVER mentioned "public libraries" - there are many types of libraries (company, private, academic,etc..) as well as public.

Giveaway (0)

Anonymous Coward | about a year and a half ago | (#40893663)

Last time I moved, I gave most of my games to a friend, except those that I plan to play again when I have the time and inspiration (namely Thief 2 and Civ 3).

And my old Civilization, original box, 4 3.5" dd floppies and a manual, I'm not giving up on that. Ever! Got that sometime in the early 90s and even this year I have played a couple of games, it's still that awesome.

Who is this a problem for? (2)

Alkonaut (604183) | about a year and a half ago | (#40893671)

No-resale, DRM, always-on etc. is fine by me. I license something, I don't buy it. I don't expect to be able to transfer my license to anyone and I don't even expect to be able to play the game myself in a few years. So a game for me is 1-2 years of entertainment, without resale. If the price of a game feels to steep for what I'll get, I'll just NOT buy it. If it turns out I can resale in a few years from now, or that the game will be open sourced or DRM/always-on removed, then that is a BONUS, and something I didn't expect when I bought it.

As long as the seller is upfront with what I'm paying for, I can choose to not buy it. The unforgivable failures on game producers behalf is when they have DRM servers not working, or *hidden* caveats such as no-resale licenses, always-on requirements and so on. As long as I can make an informed decision I'm happy.

Re:Who is this a problem for? (1)

omnichad (1198475) | about a year and a half ago | (#40894201)

It's a problem for me. I still play Myst now and then (released in 1993 - that's 19 years ago), I love the original Sonic The Hedgehog, and I own a Wii and 3DS. I want a good value for my money, and I don't buy games I won't want to replay in 10-15 years when it's new again to me. I just opened a Steam account 2 weeks ago because I could get World of Goo for $2.50. I was holding out for a physical CD, but the price never came close. I loved the game Machinarium, but ordered it from the UK to get it on CD-ROM, because I don't want to lose it in the future.

I still buy most of my music as CD, and the rest as DRM-free. DVD's and Blu-Rays that are ripped, since there will always be a way to access it.

Don't run on Windows7 (0)

Anonymous Coward | about a year and a half ago | (#40893695)

None of my used games will run on Windows7. They sit in a closet, unused. Half of them were unplayed to start.
Bought a PS2 many yrs ago and got games every Xmas and birthday. Only the most popular games, in hopes of enjoying them. The only games that I got enough enjoyment from were:
* Grand Turismo
* SOCOM
* Ace Combat
I own multiple versions and played them all to completion on the mid and hardest levels. I earned an O2. Never used a cheat guide. Visiting my teenage nephews and kicking their butts in 1 game was enjoyable.

Also have GTA and MGS - these games weren't for me. I plaged GTA:Miami about 20 hrs, not really knowing what I was doing. It was fun for about 3 of those hours. Tried the orginal and didn't like it at all.

MGS was cheesy to me. Did a few missions and stopped. Thankfully, it was a gift (I asked for it), so it wasn't my money.

When the X-box and 360 and PS3 came out, I thought long and hard, but decided against the purchase. I have 10 PC games that I've never played, but own. My friends would come over and we'd have a lan party playing Real-War and Command-n-Conquer and that deathmatch game. Probably had a party every month for 2 yrs, but never played any games outside that time. Not much entertainment value to me.

I have never traded in a game. Never. Gave away DDR after trying it a few times. Felt like exercise.

When the TV in the game room died in 2007, we never fixed it. It never seemed important. Guess we aren't the target audience for gaming?

Re:Don't run on Windows7 (1)

speculatrix (678524) | about a year and a half ago | (#40893799)

so, basically, your not part of the demographic discussed in this article and so irrelevant, other than having spent a small amount on some games.

Another problem waiting for you.. (1)

cheros (223479) | about a year and a half ago | (#40894167)

One I discovered with very old games: max rotation speed.

If the game is *really* old, it may be on a CD that was designed to spin at maybe 8x speed. No prizes for guess what happens when that gets spun up to 48x, but it's very spectacular and the shrapnel most likely nukes the optics in the drive.

Hmm, that's a game in itself :).

Next up: recycling game CDs by using them as clay pigeons..

Depreciation is the real issue (0)

Anonymous Coward | about a year and a half ago | (#40893725)

Instead of concentrating on the used game market how about solving the problem of a games retail price reducing to half in 6 months. Why is the game worth more when it first releases than 6 months later? If you sell it to me at the 6 months price, maybe I won't buy it used because the value will be so low anyways, why not buy new.

Re:Depreciation is the real issue (1)

biodata (1981610) | about a year and a half ago | (#40893873)

When something is 'new' the publishers spend a lot of money advertising it, so more people want it, so they charge more. Once they stop advertising, noone wants it so it gets a lot cheaper. This is the way these weird content markets work (music, film, games, books). Due to the advertising, and people's 'shiny shiny' mentality, some people are willing to pay more for something when it is new. I don't understand it myself, and only buy old things, recycled things, and 'used' content. The content industries try to argue that if I wasn't allowed to buy used things I would buy more new ones, but this is just not true.

They sit around and take up space... (1)

jacknifetoaswan (2618987) | about a year and a half ago | (#40893743)

All my games sit around for about four years, until my dad finally upgrades to the previous generation console. Seriously, he finally bought himself a PS2 about three years ago, so he got all my old games, but really all he'll play is Tetris, MLB Baseball, and a couple other randoms.

Re:They sit around and take up space... (1)

cheros (223479) | about a year and a half ago | (#40894135)

Junior, don't embarras me in front of my office colleagues or I'll put a comment on your Facebook thingy about what you did with fish fingers. Dad. :)

Wait, What? (2)

MacGyver2210 (1053110) | about a year and a half ago | (#40893767)

GameStop says 17 percent of its sales are paid in trade credits. The implication is clear — if the games industry lost 17 percent of its sales tomorrow, that would be a bad day for the publishers and developers.

Is GameStop now the only place that sells games in the world? Losing 17% of GameStop sales is not equal to losing 17% of overall sales. Also, GameStop has this nasty habit(which I have seen countless times myself) of taking pristine used games and selling them as new. They often only cut ~$1 to $5 off a recent used game's price, which is ridiculous for a $60 game. If someone already had that game, and used the crap out of it, it is no longer worth $58. They already paid the premium to the distributor and the developer, so that becomes pure profit that goes right into their corporate pockets.

There's also the issues of $60 for a disc-only game without manual or proper case, and totally chewed discs that they won't accept returns on, but will instead try to make you pay the difference for a new copy. They are slimy as hell, regardless of why people don't like them.

Re:Wait, What? (0)

Anonymous Coward | about a year and a half ago | (#40893891)

Essentially. With the exception of online distribution, which Steam dominates - mostly deservedly - the only other place to buy games is from a general retailer or something like Best Buy (in America).

precedent (2)

slashmydots (2189826) | about a year and a half ago | (#40893775)

They know damn well that trade ins fund new games. What they really want is a cut. Well, guess what. Gamestop makes money off used games so that's a huge "NO" from them and if they pursue legal means, well, that's a dead end. Autodesk (makers of AutoCAD) attempted to stop everyone from reselling their software after its initial purchase and completely and utterly lost that court case. They must have thought they were some sort of magical exemption from a free market economy.

a good car analogy (2)

speculatrix (678524) | about a year and a half ago | (#40893789)

Most people who buy new cars do so when trading in their old one.

Imagine if people couldn't trade in their old car and had to keep it forever or have it scrapped/recycled?

Or, imagine that if they sold the car, half the features on the car stopped working.. say, because the radio required a non-transferable licence key which expired when sold, so requiring the new owner to buy their own.

Depreciation of used cars would be even worse than it is now, and the reduced sale price of used cars would fall and people would be hold onto them longer. New car sales would also fall significantly in response, and either manufacturers or dealers would reduce their prices to try and boost sales, or simply that there would be a big shake-down and manufacturers and dealers would go out of business to allow the survivors to maintain volume and margins.

In the meantime, "piracy" would increase as people found work-arounds to renable or retrofit features to their cars to add and restore features "stolen" by official dealer network. There would be a boost in jobs for people to repair or maintain older cars, and cost of spares would rise, and thus growth in third party components, and a backlash from manufacturers trying to copyright, patent or trademark spares to prevent that loss of revenue to unauthorised parts manufacturers.

Everyone is a tad contemptible... (2)

Junta (36770) | about a year and a half ago | (#40893849)

Game publishers price in a way that pretty much demands a secondary market. The path to make used sales irrelevant is easy: lower prices so there isn't appreciable profit to be had by trying to facilitate a used market. People don't wan't to pay $60 on a game they'll, on average, maybe play for a week before being done with it. This is the most effective strategy that can possible be done.

On gamestop's end, the delta between the money they give for someone trading in and the price they put on it is huge. That delta is likely the bit that the game industry finds problematic. Percentage wise, it's far more severe than other used markets get away with (a used car sees maybe 15-40% markup between trade-in and resale, gamestop is more on the order of 100-300% from what I understand).

If publishers decreased their price just enough and not too much, they'll be able to get as much, if not more, overall revenue in the gaming industry without leaving room for a secondary market. If revenue is flat compared to the current circumstances, at least Gamestop's markup would be going to publishers/developers instead of Gamestop.

Incidently, if they *did* succeed in eliminating the secondary market without taking steps to adjust pricing, revenue would take a potentially sharp dip. It might be tempting to think the money spent would be constant, that people would just buy one new $60 game instead of 3 used $20 games. However, people tend to get more careless with their spending when spending in small chunks, so they may be more rulectant to even buy one $60 title than five $20 titles spread out over a bit of time.

Brick & Mortar will [hopefully] die soon anywa (0)

Anonymous Coward | about a year and a half ago | (#40893955)

Soon, all of your game purchases will be downloads instead of physical media. Dispose of the distribution companies and game stores, and the industry will profit, even at a lower price per game.

One-sided story (0)

DNS-and-BIND (461968) | about a year and a half ago | (#40894033)

The other side of the story is that these used games are then bought by other gamers. This "deprives" the industry of cash that gamers would have otherwise paid for full-price products. Unlike other products such as used cars, used games are perfectly fine as they do not degrade (ignoring dogeared manuals, missing maps, DLC, and scratched DVDs for now). Not trying to defend a greedy industry, just presenting the other half of the argument that the self-serving retailer seems to have left out.

If they lose 17%..... (0)

Anonymous Coward | about a year and a half ago | (#40894051)

They will just blame piracy 117% more for their problems.
It's worked so far.

Several fallacies here. (0)

Anonymous Coward | about a year and a half ago | (#40894165)

There are lots of ways to think about this - but the bottom line is that the community of gamers have a fixed amount of income to spend on games. No matter how games are bought and sold, 100% of that money ends up in the pockets of either the publishers/developers or GameStop and their ilk. Selling used games shifts some of that fixed amount of money from the manufacturers and towards GameStop.

Gamers (if they are thinking rationally) should prefer to have that money end up in the hands of the manufacturer because that way more of the gamers' money goes into new game development and less on high street stores.

Of course this presumes that the profit margins for both the publisher/developer and GameStop would remain the same no matter what. That might actually be true - but it's obviously not a certainty.

What's different about games (compared to previous analogies such as cars and houses) is that a game can more or less be played forever. A used game doesn't need to have it's engine replaced after 120,000 miles or it's roof re-shingled after 15 years. It's more or less everlasting. The only reason that used games have a lower price than new ones is because the technology is advancing and "new" games are generally better than "old" ones...hence there is a certain depreciation for that reason. But it's not directly comparable to any other kind of thing you buy in stores...so these analogies are flimsy at best.

Used Games Helping Market (1)

lunatic1969 (1010175) | about a year and a half ago | (#40894197)

I don't think used games are killing the market. I think they're helping it. I'm sure I'm not the only one on the planet that has paid $ 60 or more for a game only to find out it's absolute crap. If it wasn't for used games or Gamefly I wouldn't buy any games at all.

You are all looking at it backwards (1)

rjejr (921275) | about a year and a half ago | (#40894225)

The gaming industry doesn't care if YOU sell or trade in your used game. That's First Doctrine and that is correct. Yard sale, eBay, Craig's list, it's yours, do with it what you want. But Gamestop isn't just selling it's used games, it's making money as a middleman and that is what bothers the industry, their entire business model is making tons of money off of selling used games FOR A PROFIT. When you sell your used game, you are almost always selling it for less than you paid for it, but when Gamestop sells a game they are selling it for more than they paid for it. That's the problem. Gamestop is MAKING money, not losing money like you and I do when we sell a used game. The industry feels Gamestop is getting rich off of their hard work. Which they are. So they have a point.
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