Microsoft's One Consumer Games: A Bitter Pill to Swallow

Nik Wood writes about the rumour of Microsoft moving to "one consumer games" and the widespread effect it would have,

[Ulf]

This guy doesn't seem to realize that the reason console hardware is so cheap, is because its sold at a loss, or nearly break-even, after the retail cut is factored in.

I'm not supporter of MS'es One Consumer strategy, but I can say that selling hardware is NOT one of the ways they make money. Nintendo is the ONLY company to manage such a feat in the past 8 years, because they sell aging tech for relatively high prices. The DS, Wii, 3DS, and likely the Wii U, all follow this model.

The X360, OTOH, is a bargain at $199.99, as is the PS3 at $249.99. The Wii is probably not worth more than about $99, but Nintendo retails it for $149.99 -- heck, they don't even pay DVD royalties, like the PS2 does.

Nintendo aside, NO hardware manufacturer makes money on selling hardware. They get *everything* from software and accessories. Hence, MS's business plan.

I still don't like it, but that's the truth of the matter.

This article uses the same, tired arguments, trying to compare the games industry to film and cars, without respecting the details of not having to, for example, by replacement parts for you game, or paying to get it serviced from another company who pays service licensing fees, and sometimes needs to buy OEM parts. It also doesn't consider that films come out, and make a huge portion of their income, 6+ months before they are allowed to be sold as used titles at all, or that hardcover books (which are out a good year before paperback) are incredibly difficult to pawn off as used items at reasonable prices, relative to paperbacks.

There are NO parallels to the bad-for-publishers-and-devs financial model of the games industry. I don't like MS'es brute force approach, but there DO need to be some regulations on used RETAILERs. If they can't return some % of the used sale to the publisher, then there should at least be an embargo on used sales for 6 months after a games release... or something. The %-cut wouldn't hurt consumers AT ALL. I don't know why people even complain about such a concept.

[Malice-Flare]

i think 3DS is sold at a loss, for now. that 3D display isn't cheap yet. also, it's one the reasons Iwata took a pay cut as tradition was broken...

[Chevalier]

You know I think publishers also forget that gamestop/EB also have preorder promo's for trading old games towards new ones, so it's kind of ironic that say EA/Activision will go on about how great sales were for say COD/Mass Effect or Battlefield and forget to mention that part of the reason their sales were so great was that people traded their old games to preorder the new ones.

For example my store is doing a midnight launch for ME3 and 30-40% of those people who preordered it traded a game towards it. So the publishers benefit greatly from used games traded in regardless of what they say.

[Ulf]

You're assuming these people wouldn't have ordered the game without being able to trade-in a game for some paltry credit. I think you're mistaken.

I think its more likely that the average GameStop customer has games (probably largely games they bought used from GS), usable as coupons, just laying around, and will trade them in whenever they make a pre-order. I doubt they would cry if they had to pre-order from Amazon at $3 off the full price instead.

[MrBeatdown]

Ugh. More of this nonsense about used games making gaming affordable and comparisons between games and cars.

First of all, unless you're buying the dirt cheap under-$30 used games from GameStop, you have absolutely no business crying about used games making gaming affordable. Practically every game NEW aside from Call of Duty drops to $30 or less within eight to twelve months.

Second, vehicles deteriorate. Games don't. If I walk into GameStop and buy Call of Duty 2 for 360, it's guaranteed to work just as well in 2012 as it did in 2005. Unless someone can just as easily find me a car that's been used since 2005 that a dealer guarantees is in the exact same condition as it was when it was driven off the lot, the comparison between games and vehicles is nonsense. The condition of used cars helps drive new vehicle purchases. A dented DVD case and missing manual doesn't do the same to encourage new game sales in the same way a used vehicle's condition and life expectancy does for new car sales.

And third, MS isn't going to block used games flat out. They would be insane to do so. I'm sure GameStop would gladly sell a next-gen Xbox with the "feature", but selling customers a console that can play used games will be their priority to ensure their used business stays as big as possible. If Sony or Nintendo consoles could play used games, which console do you think GameStop would push harder?

At worst, it will be some kind of $10 activation fee to play a used game on a console that isn't already registered to an account with the rights to play it.

[Knightofelemia]

I think Microsoft might piss off the customer more than anything if they adopted the one game feature. That would be the worse feature on the next gen console Microsoft already has the history with the RROD this one time game feature. Would go down in Microsoft history as the worse thing ever making the RROD a thing of the past. They want people to buy the next gen console and with the rumor of the one time game feature floating around people are getting angry or scarred. Personally unless Microsoft announces the one time game feature I am not going to believe this rumor. I can see an online pass that Sony is doing and EA are doing it as well. But right now rumors about the next gen consoles are just rumors. Sony and Microsoft are keeping tight lips about their next projects because nothing ruins a secret more then when your competitors know your secrets.

[ElliePage]

Microsoft would have no problem with this considering they shove ads onto the consoles of people who actually pay for P2P multiplayer.

[banner]

I hardly buy used games but if any console maker takes this rout, I will not buy the console until that feature is removed...

Don't like used game sales cause you don't get a cut? Then open your own damn stores and sell them to compete against g-stop and others.

I don't feel bad at all when I check games on demand and I see games like blood on the sand for 50 bucks and a bunch of other games that have no business being over $20.

[Knightofelemia]

You have to keep in mind there are people out there who can't afford to get a brand new $60 game. All they can settle with is the $20 used game.

[palaeomerus]

Yep. There's really not much point in buying a console with games you can't lend out or borrow. That's half the fun. Take that away and I really don't much care about video games.

[BuffMordecai]

Microsoft is going to fail hard next gen if they enforce this idiotic one use one console crap.

[brish]

Simple poll:

Agree to this message if you will buy the next microsoft console if it has this feature.

Disagree if you won't buy it.

[SleazyChimp]

For one, companies shouldn't try and bend the market to their will. They don't seem to understand that the whole reason the used game market exploded over the last 10yrs is a direct result of a broken price model. If you force every consumer to pay a full 60 or 70 bucks on every game they get a urge to play, then your transforming a impulse buy into a more informed and discreet buy. Game sales would plummet. If you want to stop the used game market they got to be more aggressive on the pricing of games. Some games should release @$40,$60,and yes $20. If there was a standard price cut built in such as all titles that have been on the market for 90 days automatically dropped $15 off the retail price and another $15 after 6mos. The consumer who is unsure of a day one purchase will know that if he wants to wait 6mos, the game will be around NEW for 30 bucks. The early adopters are still gonna pre order and buy day one, so this would not effect them. In short these companies will never accomplish anything by trying to force the consumer. They just need to beat Gamestop at their own GAME!

[Chevalier]

"You're assuming these people wouldn't have ordered the game without being able to trade-in a game for some paltry credit. I think you're mistaken.

I think its more likely that the average GameStop customer has games (probably largely games they bought used from GS), usable as coupons, just laying around, and will trade them in whenever they make a pre-order. I doubt they would cry if they had to pre-order from Amazon at $3 off the full price instead. "

What I mean is we specifically have promotions for certain games, like preorder this game with trade and we'll give extra credit to go with your preorder bonuses. Also it's not always 'paltry credit'. I did a trade for a customer who brought in COD Black ops for 360 and it qualified for a bump up so instead of $10 credit he got $30. So I don't see how an extra $20 is a small amount for a game that came out over 2 years ago. I had a customer trading in Forza 3 and left for dead 2 for 360 also do the same thing and get $30 for each of his games.