Used game sales

[soundcreepy]

Used game sales

There was a story published by EuroGamer about how Lionhead's Mike West (FABLE and the Black & White series most notably) said that used-game sales hurt a company more in the long run than piracy. http://www.eurogamer.net/articles/2011-05-17-lionhead-pre-owned-worse-than-pc-piracy

"Piracy these days on PC is probably less problematic than second-hand sales on the Xbox," declared lead Fable III combat designer Mike West. "I've been working on PC games for many years and piracy is always a problem. There are a lot of honest people out there as well, and if they like your game they'll buy it.
"The pirates, whatever you do on whatever system, they will crack it. It might take no time... I think the longest it's taken to happen is two days. Someone will crack it somewhere and there's not much you can do about it....

"For us it's probably a no-lose even with piracy as it is," shrugged West. "But, as I say, second-hand sales cost us more in the long-run than piracy these days......"

Why do game publishers and developers not like second-hand game sales? Because they don't get any money for the transaction - the shop reaps all the rewards.....

Since the release of Witcher 2 for 360 is coming up, and the talks about CDPR's recent actions against PC piracy is causing quite a buzz, I'm curious to find out if West's opinion is shared by others.

I had posted something along these lines in one of the piracy debate threads.

I would have to agree with West's stance. With piracy the way I see it two things will happen, either the game will wow them (with either gameplay elements or post release support, both of which Witcher 2 has aplenty) and they will buy it, (either quickly or when it fits their budget aka sales or something) or they won't be wow'd and won't finish the game or make a purchase. In my experience with talking with people I know very very rarely will a pirated game thats liked NOT be purchased, nor would the pirated game be completed, therefore the company would either gain a sale eventually because the pirate was impressed by the game, or won't lose anything because a sale wasn't going to happen anyway.

Now with second-hand/used-game sales, the company sees the initial purchase money, but nothing from the subsequent used sales. Even with rentals (however the chance of seeing some money is slightly greater) the company sees the intial purchase by the rental company, but thats it. About the only way that some companies are starting to combat this is with those damn "online pass" things, but with the Witcher 2, obviously that wouldn't apply.

 

[Georgie_Porgie]

I like Lionhead as much as CDPR but they are always full of shit. Unlike piracy they still receive profit because a person has to buy the game first in order to sell it later. If second had sales were a bigger problem than piracy then they wouldn't make half of their games XBOX exclusive

 

[tommy5761]

I think eventually you`ll see a key issued to one customer then if he sells the game that key will not be valid and the customer that bought the game second handed will need to contact the dev studio or publisher to retrieve a new key for maybe 5-10 dollars after which the old key becomes invalid . At least in this way the devs still get some money out of it . Just pure speculation on my part but if i thought of it then you can bet they have .

 

[soundcreepy]

Lets do a bit of numbers here

I made a game for both PC and Xbox 360. On PC and 360 it sold 100,000 copies initially for each platform.

The PC copy was pirated an estimated 30,000 times

The 360 copy was sold used about the same, 30,000

Now lets say of those 30,000 that pirated the game it impressed 10,000 of those to purchase it at least somewhere down the line

The 360 used game sales I'm still never going to see a penny of those 30,000 copies

So when its all said and done I have seen money from 110,000 PC copies and still only the 100,000 copies of the 360 version.

Now whether those extra 10,000 PC copies were purchased at full price or a few dollars, it doesn't matter, something is better than nothing.



Now, granted this is a very crude (and possibly extreme) example, but I hope my idea is coming off clear enough.

I think eventually you`ll see a key issued to one customer then if he sells the game that key will not be valid and the customer that bought the game second handed will need to contact the dev studio or publisher to retrieve a new key for maybe 5-10 dollars after which the old key becomes invalid . At least in this way the devs still get some money out of it . Just pure speculation on my part but if i thought of it then you can bet they have .

unfortunately this already happens. (EA is the biggest one) An online pass is given to new purchasers free of charge, but if bought used, you need to pay 10 bucks to obtain one, just so you can play the game online or use other features (I think use certain "free" DLC)

 

[secondchildren]

Well second hand sales also hurts publishing and that's the main reason why they raise the school books prices so much that a family can't afford. And that's the reason why there are second hand markets, more or less like in a spiral.
I am afraid that both piracy and second hand may hurt companies nowadays, but since it's not illigal not even immoral, I don't think there's no way to stop it. Not to mention that in certain countries, buying a game is equal to the income of a month and kid living there do not have all those money in the wallet.
But since you can commonly pay a game less after a few months (the price goes down very shortly) so why buying a used one? Just asking, coz I don't know exaclty how it works. I mean: I'd rather my money goes to game devs and publishers, even when it's 10$. So might also work if they low down the price as soon as they can to avoid second hand sales.

 

[soundcreepy]

Well second hand sales also hurts publishing and that's the main reason why they raise the school books prices so much that a family can't afford. And that's the reason why there are second hand markets, more or less like in a spiral.
I am afraid that both piracy and second hand may hurt companies nowadays, but since it's not illigal not even immoral, I don't think there's no way to stop it. Not to mention that in certain countries, buying a game is equal to the income of a month and kid living there do not have all those money in the wallet.
But since you can commonly pay a game less after a few months (the price goes down very shortly) so why buying a used one? Just asking, coz I don't know exaclty how it works. I mean: I'd rather my money goes to game devs and publishers, even when it's 10$. So might also work if they low down the price as soon as they can to avoid second hand sales.

100% agree with you. If the game stayed at $60 even a year after release (COD im looking at you) I could fully understand buying used. But your right, with games dropping in price so fast (even in the console world) why buy a scratched up second hand copy and miss out on any extras a new copy may have.

 

[Kaldurenik]

I would say in the eyes of publishers it is worse. Note: Im not saying its illegal or immoral or something. Why is it worse? Because a pirate is not a customer. If you make a pirate into a customer thats simply good you have gained a customer then for the future products.

A person that buy used games go into a store with the intent to spend money. They look upon the shelf's and see (example) Game1 for 50$ (new copy) and a used copy for 40$ next to it. So he picks the 40$ because its cheaper. In other words the publishers dont get any money because the new copy did not sell. In other words they lost a sale.

What was it ONE store chain made again... 2billion $?

Not only that... It slows down the need to make games cheaper. Why? Because the store wants to sell used copies (100% profit) instead of a new one. So they have no real reason to lower prices.

 

[dragonbird]

There's another way of looking at this though, and that's to study the FIRST sale.

Each of these used games came from someone who bought it and paid full "new release" price. How many of them only did so because they knew they'd be able to resell it later? How many weren't 100% certain if they'd like it, if it would work on their hardware (if we're looking at PC games)? How many only play a game once before moving onto the next one? But they stayed legal - they didn't use any of these points as an excuse to resort to piracy. And after they sell the game, they'll probably use the money to help pay for the next one, so the money goes back to developers, even if it isn't the same developer.

So in your example about the "used copy for $40", say $30 of that went back to the original buyer, which then went to another developer of another game. It isn't really lost money.

Yes, reselling may appear to be bad for the industry, but in practice, it's a bit like DRM. If developers only look at the surface and "instant profit", the result is something that's bad for their legitimate customers, and doesn't really help the developers themselves in the long term.

I think that book publishers do have some reasons for concern, because the money that someone GETS for selling his books doesn't necessarily get used for buying more books, but in gaming, I suspect that a big chunk of it does. It would be interesting to see if anyone has done an analysis on this.

So a couple of extra poll questions:
- Have you ever sold a game that you bought new and, if so, what did you do with the money?

 

[Georgie_Porgie]

I don't get one thing:
Buying a second-hand car or any other thing is fine
Buying second-hand game is wrong

Whats the problem? its exactly the same thing

 

[Jackinthegreen.152]

Well second hand sales also hurts publishing and that's the main reason why they raise the school books prices so much that a family can't afford. And that's the reason why there are second hand markets, more or less like in a spiral.
I am afraid that both piracy and second hand may hurt companies nowadays, but since it's not illigal not even immoral, I don't think there's no way to stop it. Not to mention that in certain countries, buying a game is equal to the income of a month and kid living there do not have all those money in the wallet.
But since you can commonly pay a game less after a few months (the price goes down very shortly) so why buying a used one? Just asking, coz I don't know exaclty how it works. I mean: I'd rather my money goes to game devs and publishers, even when it's 10$. So might also work if they low down the price as soon as they can to avoid second hand sales.

Again, it depends where you live... "Down here" in South America, common prices for NEW games are 100 dollars... its TWICE the prize of some games, when you think of it... So when the prize finally "goes down", it's in the 60s or 50s... Varely rarely drops to 30 (when it's a PC game perhaps). Games are so overpriced down here, that the only thing you can get for 10 dollars is actually a pirate copy.

So yes, used copies are a real alternative for me, if I want to stick with a ratio of purchasing at least 10 games per year or smthg. Another good alternative is trading games (I do it both locally and internationally). I recently traded a spare copy of Heavy Rain+LA Noire for a new copy of Catherine+ 15 dollars.
And back in May I traded a Premium version of Witcher2+Assassins Creed Brotherhood+Dragon Age2 for a used copy of "The Vampire Diaries"(old FMV/point & click adventure). That was a preety sweet deal(save for the dragon age2 bit ). I then traded the Dragon age 2 game for the PS3 versions of God of War I, II and III...

 

[secondchildren]

Which leads to my assumption: low down the price--> reduce second hand sales damage

@dragonbird
I don't think it's the Devs. I think (and I know because I work into publishing area) that most comes from the publisher and most from the retailers. When they sells something (game, book, cd, comic...) they do a math like this: developing\production cost + packaging\dvd cost + marketing adv + distribution in the market (sellers\retailers) + damage from piracy\unsatisfied customers + extra bucks for people involved (10% - more or less).

 

[dragonbird]

Which leads to my assumption: low down the price--> reduce second hand sales damage

@dragonbird
I don't think it's the Devs. I think (and I know because I work into publishing area) that most comes from the publisher and most from the retailers. When they sells something (game, book, cd, comic...) they do a math like this: developing\production cost + packaging\dvd cost + marketing adv + distribution in the market (sellers\retailers) + damage from piracy\unsatisfied customers + extra bucks for people involved (10% - more or less).

True - replace "devs" with "publishers" in my previous post for more accuracy

 

[soundcreepy]

Keep in mind guys we aren't debating morality or anything here, nothing is wrong with second hand/used sales, it just could be debated if it hurts a publishers/devs wallet more than piracy.

Each of these used games came from someone who bought it and paid full "new release" price. How many of them only did so because they knew they'd be able to resell it later? How many weren't 100% certain if they'd like it, if it would work on their hardware (if we're looking at PC games)? How many only play a game once before moving onto the next one? But they stayed legal - they didn't use any of these points as an excuse to resort to piracy. And after they sell the game, they'll probably use the money to help pay for the next one, so the money goes back to developers, even if it isn't the same developer.

So in your example about the "used copy for $40", say $30 of that went back to the original buyer, which then went to another developer of another game. It isn't really lost money.

Yes, reselling may appear to be bad for the industry, but in practice, it's a bit like DRM. If developers only look at the surface and "instant profit", the result is something that's bad for their legitimate customers, and doesn't really help the developers themselves in the long term.

You bring up a good point, I never thought about what is done with the money that the seller makes. However when I made this topic I was more thinking along the lines of a Used Game store (Game Stop I think even Best Buy, Walmart, and RedBox do this in certain locations) but I guess the same thing could be applied, because obviously the store normally has at least some new copies on hand, however they most likely won't buy too many copies of a certain game. And used PC games last I knew the majority can't be resold because of the codes that come with them, so I know PC second hand is less common.