Do We Still Need Pre-Owned Games?

Edwin Evans-Thirlwell: ''Publishers often claim that used game sales "cheat" them of revenue that would otherwise have gone towards new games. It's a claim seldom supported by any statistical evidence, but the prominence pre-owned sections now enjoy in stores - often displacing new titles in the shop window - suggests there may be some truth to the argument. The question is perhaps not whether a pre-owned block will happen, then, as how we should feel about it when the industry at large eventually forces the hands of manufacturers.

Enter the latest Hot Topic, published in issue 96, wherein Log and I briefly (punchily?) debate whether we really need the ability to trade in games down the line. As always (1) this is very much an exercise in devil's advocacy, so please check in your torches and pitchforks before reading on, and (2) go right ahead and vote in the poll over the page.''

[fluffydelusions]

Need? No (See PC games). Want? Yes. I'm not sure how well stores like gamestop and such would do without selling pre-owned titles however.

[Merrill]

Until review embargo's are lifted much earlier than the day of release, gamer's should forgo pre-orders completely.

They're not making any money off of me being misinformed about the quality of the game.

[joab777]

Great point. And demos are often deceptive. I generally buy new because i can right now. But i couldnt growing up and if something happens i may not be able to again. Also, i like selling the. I was in gamestop the other day and there there were two families that couldnt buy new ones. They bought a few used ones and were very happy. Now, until retailers can guarantee an alternative for ppl who are not doing well, and who is today, its a bad idea. I know that if used games are done away with, more money will b made and they might be able to drop prices but it would take a long time.

Yeah, steam has great deals but not every family has a good enough pc. its tricky and maybe publishers dont care because they dont get any of the money anyway but its bad for the industry as a whole if less ppl are playing. And guess who will succeed, apple amd android who sell games for cheap.

The only time it may be ok is if it became free to play and consoles were cheaper etc. And each one sold inline alternatives for cheap. It isnt gonna happen anyway, not yet.

[landog]

@fluffy

you can buy more used pc games online from amazon than ps3/360/wii combined

here's 14,000 of them, lol......only console gamers think you cannot buy and sell used pc games

http://www.amazon.com/s?rh=...

sure, some of the newest games that have an origin client or steam attached you cannot but most games, even those with a code, can be activated on many, many machines

if ms and sony block used games, they will straight up block them, tie it to your account, the only way to sell them would be to sell your account too, or if they tie it to the console itself, which would be the worst case scenerio, you have to sell the whole console and you id probably

[pr0t0typeknuckles]

no we do need them, you cant use pc as a reason why we dont need them most pc gamers for one have to wait for an even cheaper price so that they wont potentionally screw themselves over, and they have steam consoles dont have steam which we all know has some crazy deals, the day we wont need pre-owned games is when developers stop charging $60 for incomplete games.

[ApolloTheBoss]

That's same thing as asking "Do we still need pre-owned vehicles?"

[EZMickey]

Not really, but that's still a smart comment.

Games fall under entertainment whereas vehicles are considered assets. It would end up costing consumers, dealers and manufacturers a lot more money if they were to attempt to do away with used and unwanted vehicles.

With entertainment there's been a second hand market for a long time for books, films, even comics. Games are just the most expensive to create. This is a good discussion and a valid question, I think.

[parkerpeters]

I wouldn't even necessarily say they are the most expensive to create. Once a game breaks even in sales, everything is (mostly) pure profit. It is the same in books and movies, yet a book, in and of itself, costs much more than the $0.25 disc and leaflet included in your $60 game.

Games cost more to develop, but they are piss-cheap to produce.

[Hicken]

I disagree.

If these complaints were coming from smaller developers and publishers, I might have some sympathy.

But it never is. It's EA and THQ(though they're kinda defunct, now), it's Activision and even Sony. The smaller devs out there would like to see better sales, of course, but they tend to be pleased that people are even that interested in their games.

You're right that games cost a lot to create(movies still cost more, but they DO have more revenue streams). But my problem is with people thinking they have ANY right to money from the sale of something they've already been paid for.

I can't think of ANY other situation where this happens. And I think there's a good reason behind that.

[TacoTaru]

If a used vehicle were like a used video game then it would not wear out and it's value wouldn't go down based on how much it was used. A person would be able to have what is essentially a brand new car forever, no matter how many miles were driven. The only reason to trade a car in would be if you were just tired of it and wanted a different one.

[dcbronco]

Apollo, that is not even close to the same thing. Car are sod at a huge profit. The dealer makes money on everyone sold. Designing cars has gotten cheaper and cheaper. Developing games has gotten more expensive. Plus it is easy to sell a car directly to the next owner and the seller can get a fair price. If the only option was selling to a dealer it would be more like games.

But places like Gamestop cheat the seller and next owner. There is no reason for them to pay so little and then charge so much. Gamestop only gets a few dollars when they sell the new copy. They stand to make $25 or 30 for a used copy. The developer might not make $30 per copy.

Gamestop needs to die. They are crooks. The chance for developers to crush them is coming. And I'm not sure why people think Gamestop provide any real value. Anything popular will cost $54.99 used. Five dollars cheaper is no great service when most games go on sale a few times a month. Unpopular games will quickly drop in price whether they are new or used so again, I don't see the value in Gamestop.

[Lvl_up_gamer]

"There is no reason for them to pay so little and then charge so much."

- Demand. That is all the reason they need.

[rainslacker]

So the whole reason all consumers should suffer is because GameStop has a perceived bad trade in policy?

What it comes down to is the developers can't "crush" GameStop without first revamping the whole distribution of video games as a whole. You would think with the number of NEW games that GameStop sells developers would want to do their best to keep them going. But you don't see publishers letting GameStop make more than $10-15 profit on a new games sold. New Video games, or software in general have one of the lowest mark ups of any consumer product. Is it any wonder that they look for other ways to make a profit.

There are many avenues to give or receive used games. Cutting them all out to simply punish one retailer because some people are too naive or lazy to exercise their own judgement or choice to not use GameStop for trading is just selfish and immature.

I'm all for supporting developers and publishers of the games that I enjoy. But this isn't about GameStop. This is about our rights as consumers. Stop letting your hate for them cloud your judgement over the bigger issues at stake here. I'm sure a lot of the people saying it's all good, we don't need used games, will one day be wondering why they no longer have some basic consumer rights inherent in the free market system for almost every thing sold within it.

[dcbronco]

Gamestop will be crushed in the next ten years. It's business model is based on cheating people on used games and selling extended warranties. People should become comfortable with buying consoles without the warranties next generation pretty quick. The die sizes won't have the heat issues that caused the problems with this generation. And more and more of the content is being sold as DLC or as downloadable games. That will only increase.

There goes the vast majority of Gamestops profits. Accessories are another part of their profits, it will be hard for such a specialized store to survive if they don't find something else. And there is no reason to believe they are smart enough to adjust to that world.

And I don't just want Gamestop to die. I want all of the companies that do business the way they do to die too. Amazon is far more fair so I have less problem with them. I still think the developer deserves a cut of the used sales if the buy/sell ratio is going to be so high. No second hand dealer deserves that amount of profit. Their talent is having enough money to finance the purchases.

And I have blind hate for nothing. Except unfairness. Also, please stop with the consumer rights argument. Stores like Gamestop don't care about the consumer and don't deserve our protection. Consumers should protect themselves with their money.

Have at least some understanding of how a business works. Companies like Gamestop are built on the idea of exploiting the ignorant. They treat everyone like a women buying a car. Which leads me to another business that needs to be fixed. The fact that you believe the death of Gamestop has any effect on consumer rights means you need to learn more about how they make their profits.

So it's not cloudy judgment. It's a belief that a business should be viable and not just another form of exploitation disguised as smartly conceived business plan.

[rainslacker]

Alright, lets talk unfairness. Say you open a business selling new games only. How long will you last working off a 20-30% profit margin all while requiring having millions of dollars of inventory per store? If you think you could make it then it seems that you are the one with very little understanding of business. Places like Amazon can do that because they don't have the same overhead. Best Buy can do it because they have other items to carry the lower profit margins.

Given current market trends, the consumer will not likely bear a price increase in games. What this means is that even though prices are remaining the same, profit margins for the retail market are going to decrease. Do you think the publishers are going to be willing to give up their profits for retail? No, they are going to pass those additional costs onto retail, causing them to have an even lower profit margin.

So what are specialty stores to do? Grin and bear it, or find other means of making a profit to continue their existence?

The reason I keep bringing up consumer rights is because people like you who go off on these rants about GameStop completely disregard the fact that crushing GameStop is just a red herring. It is something that takes rights away from us, the consumer, while you celebrate your victory over unfairness. Quite honestly, if people are willing to trade in to GameStop, despite their "unfair" trade policy, then that's on them, and should be no concern of yours...as you say, "Consumers should protect themselves with their money".

The death of GameStop itself will have no berring on consumer rights...the reasons for their death is what is the whole issue here. One which you completely disregard in favor of watching one of the largest retailers of NEW GAMES in the world being destroyed.

I also believe GS does have the ability to adjust to the market. If all this comes to pass they will be forced to. They are already expanding with their toy stores. It's reasonable to assume that they will look to other methods to make money.

In conclusion, and in response to your final statement...your belief isn't justified because selling only new games and accessories is not a viable form of business when it comes to games. I know this because I used to do it, and never sold used games, and had nowhere near the overhead that a place like GameStop has, and didn't make enough to make it worth my while.

[dcbronco]

I don't think a store selling new games only can last. It would be a terrible business idea. The big Box stores are going to have to figure out a way to stay in gaming once digital becomes that main way people acquire games. And they don't get 20-30% profit off of new games. They only get a couple of dollars off of each new game. The make their money selling consoles and the majority on accessories and other things. The games just bring people in the door. Up-selling is how you make your profits.

When gaming was small, it was a viable business. Now that it's huge, the big boys want in and have squeezed the small guys out. So they looked to other ways to make money. Like extended warranties and now used games. That is where their profit comes in.

http://www.businessweek.com...

We've already established that the margins on used games are huge. Buy for $25 and sell for $55. The developer probably doesn't make $30 after taxes and other cost. That why so many want tax breaks for gaming. And Gamesstop doesn't give you any real price break. $55 for a used game that you can find on sale for $50. Those high margins Gamestop makes are why they remain in business an so many developers are gone.

I'm sorry that your business didn't work out. But the reality is that it and stores like Gamestop will all die as the way distribution happens changes. Adapt or die. It's unfortunate, but it is reality. A friend of mines once had a video store. He bought it from his former boss. That was in the early '90s. It was the only store I used. Unless he told me there was something it wasn't worth him getting.

In '99 I started a Netflix account to see what it was like. I loved it. I started to tell him he needed to start looking at other business'. He was into bike riding with friends and they spent a ton on repairs. He soon started some minor bike repairs in the front of the video store and rented movies in the back. Slowly the bikes took over. He now has a profitable bike shop. But he had to see the writing on the wall that renting movies was on the way out. Gamestop couldn't give me a franchise.

Rumors of no used games in console and digital downloads are the writing on the wall that your time is up. Transition to something else or die. There is still a way I believe they can be profitable and remain in business. They just need to think. But they are so busy getting over that they refuse to. So they should and will die. It's just the nature of business.

[rainslacker]

My business worked, and it was profitable, just not enough to make it worth while. Mostly due to not having the revenue to build up a large enough stock to maintain it indefinitely. In the end, the amount of work required just wasn't up to par with the amount of income I was bringing in. It sucked, because I enjoyed it, but that's the way it goes sometimes.

Anyhow, most profit from NEW sales comes from accessories. Consoles have very little markup, and they aren't something most people keep coming back for(ie it's a one time purchase). I'm not sure exactly what the current mark up is on games, which is why I gave a range. When I did it it was about 15 years ago, and I know what games cost to buy then, and what they sold for. Keep in mind I was a small internet seller, so didn't have the advantage of high volume. The range itself was based on reports about how much it costs to distribute the game, the ones that give a breakdown of the actual amount that each party gets, and the costs for making the product itself for retail. They tend to be pretty consistent, and the ones I've seen over the years go down.

Small game stores themselves have taken trade ins for a very long time. I remember 20 years ago I was trading in games at Buy-Rite Video games. I was young, and in retrospect I think their trade in policies were about as bad as GameStop's. GameStop itself has so many forms of revenue generation that many people complain about the up-sell policies. Those policies however are important to them, and in a way even help their used game revenue stay lower on the selling side. Play protection is pretty useless in my opinion, but I understand the extended warranties, which themselves are at all retailers. Most people decline such a thing anyhow.

As opposed to cutting out used games, I would like to see some method where the publishers or developers do get something back from them. They've taken those steps themselves in the forms of an on-line pass and DLC. The DLC itself even helps prevent used game sales as some people are now keeping their games to play new content. Whatever happens in this regard though, the cost is likely to be passed on to the consumer, and the retailers will end up being hated more because trade in prices will go down, or sell for more.

GameStop's trade in policies themselves have changed a lot over the years. They've been doing it for a long time, and they even admitted to having a very complex algorithm to determine the trade in and resell values of games. A lot of it comes down to supply and demand. I'm not opposed to the way they do things because there are consumers that find it worthwhile, even though I never use them for trading. Other companies will eventually go the same route, because after all it is a business for profit. I would like to see better customer benefits to it for sure, but it is the individuals using these services which have to decide what is best for them.

I think one thing that bothers me most about this debate is that publishers are complaining about the used game market, but they just haven't shown any supporting evidence to the consumers to show how bad it really is. We also don't get any data on how much revenue they bring in from used game sales(say through on-line passes or DLC). The only data I've seen is from GameStop, who say that people fund new games by trading in, which is a beneficial thing. They surely have a pretty good idea how many people are playing a used game with today's technologies(multi-player, trophies), so it would be nice to see some hard data. If it truly is that bad then I may support them more in what they want. Until then I'll remain skeptical, and err on the side of the consumer.

[dcbronco]

The main part we disagree on is the benefit to the consumer. If a consumer sells a game to Gamestop that will be re-sold for $55, that doesn't help the consumer nearly as much as it helps Gamestop. It's truly like the relationship between an addict and a dealer. They both are getting what they want. But one is getting a much better deal.

If you look at it as beneficial to the industry when someone gets $25 for a used game and uses that money toward a new game, you have to think of that against that same person saving toward fewer more wisely chosen games. A person can buy 3 good games and 7 bs games. It helps in the short run, but it also keeps some cheesy developer around that takes a dump on the industry and discourages current and future customers. Which in turn takes away possible income from future quality developers on future games. So a quality game doesn't sell because some shovel-ware was hyped better and the quality developer goes out of business.

I'd rather have all of that money go to quality developers to finance their future projects. With Gamestop and others like them, a huge amount of that potential revenue ends up in third-party hands.

In the normal system where there is $500 to buy games over a year, add Gamestop. I spend $55 for that first game. I sell it back for $25. So I've spent $30 and no longer have a game. I played the game, Gamestop made $30. The developer made nothing. Except from the initial new copy they sold to someone else. After the $10 royalty, overhead for the business, paying development cost, various taxes on revenue and employees. I bet that developer has less than the $30 that Gamestop made. And the Gamestop way needs 0 talent. It's just scavenging. And why not pay the extra $5. And you rarely do because the games are always on sale.

I don't understand this need that people have to protect Gamestop and not the developers. Most developers don't sell 3 million copies of a game. If they sell 1.2 million and re-sellers sell another 500,000, don't you think it would be better for the developer to sell another 200,000 and make some money as opposed to Gamestop making 500,000 sales. I know some people are cheap, but if you really want the game spend the extra $5.

But when I say people need to adapt, I meant that for the developers too. I think what they should do is add a code to each game. Not to stop it from being re-sold. To attach it to a console and Gamertag or PSN number. That way, when the game gets re-sold and the new person logs on with it they will pay for an on-line pass and additional cost for all DLC. Up to $20 until they get fair market value for their work. So $10 online pass. $10 for DLC until they reach a total of $20. That way a game like CoD will net the developer an additional $20 for each used copy. The code could be transfered from a broken console or to a newer one. But it has to be attached to that gamer tag.

We need quality developers to stay in business more than we need Gamestop. Another way to get past this for developers would be to allow people who buy digital copies of games to have access before the hard copies. Instead of Tuesday, digital becomes available on Friday. Even add some exclusive DLC or price it $5 less since it's cheaper anyway. That would eliminate a ton of potential re-sellers.

You're out of bubbles so you can respond through IM. If not good debate.

[fermcr]

YES !!!

[SnakeCQC]

yh as its a form of recycling you get of things you dont need so others can reuse them

[parkerpeters]

Yes, quit asking.

It is part of "console gaming culture"
the reason we have no used PC game market is that it was never really popular, and as such, we are not used to it by now. Though I would love to see PC games be more re-sale friendly.

But used gaming is part of what makes the hobby wonderful. I have an expendable income, and buy most of my games new, but there are kids out there who have no income save what they can get from mom and pop, and they can't afford the $60 (or maybe more next gen) price tag of most games. A ban on used games sales would hurt the industry as a whole by alienating these young, poor gamers. And remember, these young, poor gamers grow up to be gamers with expendable income to buy new games. Install base.

[landog]

again, see my comment above, there are more used pc games to buy than all ps3/360/wii games combined, here's 14,000 of them to choose from

http://www.amazon.com/s?rh=...

only console gamers or clueless pc games think this

i just picked up age of mythology used, its from 2002, pc is also backwards compatible going back to the 80's lol

and on console people are just praying the ps4 will play ps3 games....which it probably won't , cause they can re-sell the games you already own to you later, just like everyone lined up to rebuy all those ps2 games that you can play for free on pc with much higher resolution graphics and better performance if you own the original, all legal on pcsx2!

none are more hopelessly enslaved than those who falsely believe they are free !

[00000000000000000001]

There is a big difference between a game and a car! You own the car, you do not own a game, you hold a license to play the game. The big debate is are you intitled to sell that license?

[parkerpeters]

This is the line of thinking that is going to tank the industry.

It is enabling EA and the great Satan himself (see Bobby Kotick) to take your money, repossess your games, and charge you for things you don't want.

I know this comment may garner some hate, but I am out of speech bubbles for this thread.

/out

[rainslacker]

This is shamefully true. It's a distinction that came around in the late 90's. It was a very quiet transition and no one really noticed it because used software sales in general(not console) were not as commonplace. It actually works for certain types of software where the companies need a continuous revenue stream(most productivity software), because it is very uncommon for companies to upgrade.

When it comes to games however, there has always been some level of ownership. Outright online games excluded, every game purchased to date on consoles can be resold and used without additional purchases(excluding online passes for multi-player).

I know publishers want games to fall under the same licensing umbrella enjoyed by almost every PC product sold(not games), but I find it anti-consumer, particularly since games are not productivity software. I at the very least believe that with physical media, you own the license to use that media, and as such you are selling the license along with the media. Recent lawsuits in Europe are exploring this very issue, as even though it's DD related, the principle is still the same.

[Jek_Porkins]

I think pre-owned games actually help some studios. I know there were new IP's that I didn't want to spend $60 on, so I would wait and buy them used, I'd love the game, buy DLC for it and buy the sequels new.

I think new IP's are going to have a rough go of it in a world of no used games, people are only going to want to spend money on games that they know and like. So if you think sequels are getting out of hand now, wait until there are no used games. This will hurt smaller developers a ton as well, wouldn't be surprised to see almost all of the smaller developers close up show or get bought out.

Also, people like to take their games to their friends/families houses. I know every Christmas I take over some sports games and my brothers and I have epic tournaments ect... No used games take a bigger toll than just stores.

The reason I don't think the PS4 or 720 will block used games is because Nintendo doesn't, Sony and Microsoft wont want to risk being the only company that does that, imagine going into a Gamestop and only seeing Nintendo and Microsoft or Nintendo and Sony used games? That brings more awareness to those companies and far less to the one that didn't allow used games.

Gaming is an ecosystem, if you upset the balance, you could see another crash.

[_LarZen_]

Easy! The answer is NO!

[KMCROC54]

Plain and simple the answer is no. It is time to put that horse down permanently. Buy new games already so either way I do not care.

[SlyFamous02]

If you dont care, then why comment?

[KMCROC54]

Felt like I needed to share my 2 cents on the matter with everyone.

[2pacalypsenow]

Yes

[V0LT]

no

[SlyFamous02]

Dumbest question yet. All these kids saying no, are little boys who's daddies buy their games for them. Their are many people out there who cant always afford a brand new game so why cant they get the opportunity to play some of the games they could not get on launch.

[V0LT]

......

[rainslacker]

I buy most of my games new as well. However I also sometimes miss out on games that I later decide I want to play. More often than not I can not find them new, so used is my only route. I buy between 50-70 new games a year, and maybe 5 used a year. I also purchase old games from the entire history of video game consoles...many of which are impossible to find new.

I consider myself someone who supports the industry. But I still think the used game market is a valuable asset to the game industry. It certainly isn't as detrimental as some of the bigger publishers make it out to be. If it were truly that bad, then they would surely be able to provide some statistical data to back up their claims. Ever notice the comments they make have no supporting evidence to go along with it?

[NateCole]

I always buy games brand new so it is not an issue for me. As i buy games i like and there are many of them i normally don't have time to finish them and such don't borrow games.

This is just me though.

[belac09]

i think used games actually help, it lets more people play and see the product and spread the word, thats how we did it when i was growing up. all the spoiled kids on here that say other wise will regret it when it actually happens and so will the industry. mark my words now, it will kill the gaming industry.