EA: Second-hand sales are a "critical situation"

Publishing giant Electronic Arts has said that it's currently trying multiple new business models to help battle the critical problem of second-hand videogame sales.

While retailers reap the benefits of selling the same product multiple times, publishers and developers don't see any income once a title hits the second-hand market. But realising it's powerless to stop retail from selling second-hand goods, EA is looking to combat the problem by capturing the consumer with online content and services.

"I'd actually make the point that for us second-hand sales is a very critical situation, because people are selling multiple times intellectual property," said Jens Uwe Intat, senior VP and general manager for European publishing at EA, speaking exclusively to GamesIndustry.biz.

[morganfell]

Here is a solution. Stop making ass games that people quit playing after the first level and stop making games that have absolutely zero replay value.

EA should start to realize where a large portion of the blame lies and man up.

[newneto]

For a fair price I can get all games via PSN. I like the way it works.

[InMyOpinion]

Give us reasons to keep the games longer.

[Mode2]

Seriously. I completely and wholeheartedly agree with you. Back in the day I could never have even imagined selling any of my NES, SNES, Genesis, 64, PSX, or Dreamcast games. Now I feel like selling almost every game that I have every few months or so because they get absolutely no play or are just completely dull after the first play-through (IMO *cough* GTA IV *cough* XD). I can't sell Shadow of the Colossus, Okami, Ico, Halo: CE, Fable, Oblivion or a multitude of other games I just keep coming back to or just love the thought of long-term owning.

[Lord Shuhei Yoshida]

So EA wants used money revenue too.EA,how is that new console you guys are working on doing?

[Spydiggity]

if it were up to EA, they'd hold us all at gun point and force us to buy their unpolished, rushed games.

this is just another example of corporations forcing their 'law' onto the people. and they'll get away with it too. they'll buy a few politicians and the sheep population will lay there and take it.

[kevnb]

people are always going to buy things second hand. Its not just video games, for instance how many people never buy new cars?

[Harry190]

Drop the price after a few months, just like what happened with Burnout Paradise and it works wonders.

[soljah]

best idea yet.

[Tacki]

Burnout Paradise is a great example of not only dropping the price... but continuing to support a game through DLC. If more developers did that for their games then people who play them longer. And I don't mean small little things like 'extra costumes', but significant upgrades like bikes in Burnout or jetpacks in Warhawk. Those games are two of the best examples if you ask me.

[blackskimmer]

I understand this, I do. But look at why we sell our games in the first place, its so we can afford the new games coming out. I make decent enough money so does the wife, however when you buy 20-25 games a year at 60 bucks a pop thats 1500 dollars a year. Yeah yikes.

Want my solution? Do what you are doing with Burnout Paradise all your titles. However make me benefit from your system. 29.99 for a brandnew release via the PSN vs a 59.99 boxed retail copy? Sign me up. I would never buy retail again. You see deal a massive reduction in second hand sales. Everybody wins.

[Kyur4ThePain]

F you EA.

[deeznuts]

Same company that puts out a new Madden each year, instead of updates right???? Just sayin ...

[Statix]

I'll continue to buy my used games and bargain bin games from EA (if they happen to make a title that interests me, which hasn't happened in the last 5 years). That's good to hear, EA, thanks for the tip on how to not support you.

[jerethdagryphon]

rentals and preowned games dont give them anything and infact arent counted as sales on any chart

nor are preowned consoles

problem is they want us to keep our games because they add more multiplayer or more online functions

sorry but i dont play multiplayer and i dont want a lot of unnessesary online

i play single player games or games i enjoy with coop

if you want us to keep our games then make single player more involving or when the multi player aspect gets dull we trade them in

this generation has the highest volume turnaround in games

want to keep us interested make them more instersting

[name]

What do they hate more? Game rentals or game trading?

[Lumbo]

trading as a business model i guess. Rental copys have special license fees so they get their share there. And the usual trade between friends is not something they care about.

But they hate the concentrated Gamestop approach, that pushes the "preowned" version in your face for a $5-10 discount and tries to get you to buy it before the new one cause their cut is higher on the used game. That a) hurts sales and b) only benefits Gamestop, no one else, not even the customer as their buying prices are low and they sell it for close to nothing less than a new one.

[Rooster15]

The gaming industry has a bigger revenue then the movie industry and EA has the audacity to call second hand gaming stores a "critical situation"! These small buisnesses do sell new games but the meat of their revenue is the used inventory. I know because I'm the manager of a small gaming specialist store (which I will not devulge the name).

Let me explain something that I think most people don't realise:
As Major Corporations grow bigger they take over smaller companies and not only increase their revenue but destroy competition. When competition cesses to exisit the corporation in question does what it wants with their product and sets the price at what they want it to be. Because theres no competition!
HENCE, Competition is good for the consumer (and don't forget it)
Second hand gaming permits consumers to exchange their old games which are not being played anymore for new/used games. This in no way decreases EA's revenue...THEY JUST WANT TO INCREASE IT!

I was against EA taking over Take-Two Interactive...why? because they are just buying the name and pushing out the competition. Look what Wal-**** does to small towns in North America and now the rest of the world.

If you want whats best for the consumer don't buy into this BS. It is far from critical, it's healthy for the industry. In the words of Kyur4ThePain, "F you EA".

[Lumbo]

Sorry, but Gamestop is NOT a small business. And their preowned first practice hurts developers more than warez

[Nevers]

... soon EA 'll team up with Hasbro and DC (if they were as blood-thirsty/greedy) to root thru all the people's yard/garage sales to get their "fair share"(real people still have those still right?)

[ScottEFresh]

Well said. EA is money hungry and do things for "the bottom line". They don't have the gamer in mind.

[Adamalicious]

Just make better games that we want to keep in our library and you're all set - nothing else you can do about it.

[Tobias123]

I think what they don't realize, is that a gamer who picks up a used game for $20 or something, probably wasn't planning on paying the full $60 for a game anyway. I know if there is a game I'm only half interested in, I won't pay $60. But if a gamer likes the game they picked up for $20, and they like it a lot, when another game from the same people comes around they'll probably be more likely to pay the full price for them.

[RadientFlux]

EA should just start selling discounted versions of games that have fallen off the radar.

Give the consumer the option of buying a pre-owned version of "Army of Two" at EB for $20 or buy it new from them for $15.

[witchking]

EA is not the only publisher being hurt by this practice. They happen to be one of the few who are standing up and saying something about it.

I know it's great to say "F you" to EA, but EA as the publisher is not the only one getting screwed by second hand sales; the developer of the game is also being hurt.

If a game sells 1 million copies, and a third of those were second-hand sales, then EA and the developer only realize revenue on 2/3 of 1m copies. That might be a bit on the high side of second hand sales, but understand the point. The cost of game development is increasing exponentially in the current generation of video games. We as consumers are demanding the most realistic, high fidelity quality to these games. And as the cost increases, the need of the publisher to realize all the revenue from all the sales of the game will play an important part in ensuring the publisher and the developer realize a profit.

I buy and sell second hand games, mostly via eBay. I do feel kinda bad for the developers of these games that they will not realize revenue from such a sale. And I'll tell you this, as more and more games are sold via second-hand retailers (eBay, GameStop, Best Buy now, etc.) you're going to see publishers INCREASE the price of games to ensure profitability on the first-hand games they do sell.

[Kyur4ThePain]

My comment was aimed squarely at EA, nobody else.

[Rooster15]

They had to be sold new in the first place! so second hand games are being sold SECOND HAND, EA already made its profit from that perticular game when it was sold NEW to the previous gamer.

[orakga]

You see... at a certain level you are correct. But the reality is that $60 is simply too much to pay for 80% of the games in the market, period.

Don't give me the "but the cost is too high and the consumers have to pay this or else the developers would go out of business" rhetoric. It's bullshit. PURE. BULLSHIT. It's the same thing I used to hear when music CDs were $15. "But it costs $3million to market a new CD!! Someone has to pay for it!!"

The reality is... second-hand sales will always exists, and the only way to prevent or reduce it is to make sure the consumer feels that the full price is justified for the product. You can either drop the price (not they don't want to do that), or make better products. But sadly, EA is not known for either strategy.

[nirun]

EA can blow me, innovate your games before you innovate your business model

[MrWonderful]

this really must suck for ea as im working on a business model that gives gamers what they deserve when trading in used games. and currently the 200+ peoples that i have run it by also say that it would give gamestop a run for their money.

[Dpa]

So basically if you buy second hand games you cause the same harm as pirates and your down $20+.

[NanoGeekTech]

"_"

want the most for your game trade-in try a Pawn Shop...Get a loan they give you the most money..and just have them keep the game..

If you want to buy a pre-own game you can get a good deal at Pawn Shops because you can negotiate..

[JD_Shadow]

...go and force Valve to fix the PS3 Orange Box.

[DevastationEve]

I buy all my games retail. So, now it's EA's turn to be honorable and start putting quality back into the agenda. I just bought BF Bad Company, and I feel that they ARE getting there. But it's really only because they are getting better developers under their wing. Hopefully Dice's Mirrored Edge will continue on to be a great game.

Something that I WOULD pay top dollar for.

[Knightofelemia]

Second hand sales are worth it, I found a copy of Shenmue 2 for the xbox in a second hand shop. It is the best place to buy a game instead of paying a bigger price when u go onto ebay. The way i see it I payed for a game when i walk out of wal-mart after i played it or get bord of it i sell it or trade it in for another game. Most of these games are hard to find unless you go to a second hand shop or u realize you know i never owned an xbox i might as well buy this used game I am only out 10 bux. If EA decides to stick their nose into a persons buisness after they baught the game then people will just bootleg the game and put it on the game at half the price. Unless a game is a big name like Resident evil then i will usually rent it then buy it and if i cannot find it on the store shelves then u know what it is at the second hand shop. If EA really wants to be a pain in the ass then they would start putting a key onto the game to unlock it like they do for some pc games once used the game cannot be used again with out the key but then that would just drive down the sales for EA