The used games debate

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Used games have plagued publishers and developers for many years but with a move towards digital content and talk of patents to stop used games sales from both Sony[1] and Microsoft[2] could the age of second hand games be coming to a close? It is very doubtful that only one developer will pursue this type of tech, otherwise they risk a large portion of their fan base switching sides. Nevertheless digital sales are on the increase and with no way to sell your digital content license after you have finished with it you no longer have the option to make money from old games (and nor do retailers).

You can’t blame console manufacturers for wanting to cut back or even stop the sale of used games; after all they normally sell consoles at a loss. Even the PS3 sold at a loss when it was first released and that was priced at £425[3]. The reason behind this is to get a good install base built up and then generate revenue from software sales. If gamers decide to buy only used games this means the console manufacturer will have no way to recoup their costs; IGN’s Colin Moriarity talks more about this issue during an episode of game scoop! Which I suggest you check out [4].

Used games have been a staple of many games retailers for years; it is no secret that shops can make a greater profit from buying and selling used games than they can from new releases. After all when a new game is released is has to cover manufacturing costs as well as pay the publisher and developer; all of these factors eat away at a retailers profits. When buying and selling a second hand game the retailer is free to pocket all the profits (minus overheads of course) as the developer and publisher has no way to take a cut (although there are now online activate codes, which I talk about later). Selling second hand games isn’t illegal so a shop or gamer is well within their rights to make a profit from doing this.

This article raises several arguments for and against used games and from the offset I’d like to make it clear that I don’t present a right or wrong answer, I am merely presenting both sides of the story.

Why should the games industry be any different? 

Many of those in favour of used games can argue that the games industry operates no different from other industries with regards to second hand sales. Vauxhall for example won’t get a cut of my money if I sell my Corsa next year, nor should they. Why should the games industry be the exception to this rule? If you purchased the game as a boxed product then decide you no longer want it why shouldn’t you be able to sell it? Now on the other hand it could be argued that Vauxhall have a very good chance of continuing to make a profit long after my car has sold, not only do they offer services and MOTs on used cars but Vauxhall parts will need to be bought to maintain the car (of course 3rd party parts can be purchased instead).

Another way in which car manufacturers capitalise on used sales is by having their own used car show rooms and finance options. This would be akin to a developer or publisher such as EA setting up a dedicated store, specialising in the sale of used EA games. You could then argue that if used games pose such a large problem then developers should open up shops to sell their own used games at competitive prices.

DLC, online multiplayer and patches

Developers can still benefit from sales of used software, let me explain why. This generation has witnessed a sharp rise in the sale of DLC (downloadable content) and generally this is viewed as a way to extend the life of a game by adding new maps, levels, stories etc…

The original owner may have also bought a DLC pack which cannot be transferred to the new owner. If the new owner then decides to also buy DLC the developer makes a further sale even though only one game has been sold. Strategically timed DLC can even prevent or at least prolong a player selling on their copy of the game. The Call of Duty franchise for example, offers DLC over several months, therefore if you want to experience the new content you have to keep hold of the game.

Along with DLC this generation has also seen a big push for online multiplayer content and this brings us to another debate. DLC and online multiplayer both require an internet connection and are both offered to a customer via a server. When DLC is obtained by a customer the developer is directly benefiting from the customer accessing the server (which will cost money to run and maintain) whereas multiplayer is generally a free service. Developers have recently started to capitalise on this by only allowing access to multiplayer content if an online pass is activated. The pass will come free with all new games but can only be activated on one account. If the game is bought used the new owner must buy another online code in order to access the multiplayer content. In this situation you cannot blame the developer; after all you are not only playing a game in which they have received no money from you directly but you are now also using their server bandwidth and interacting with their online community. It could however be argued that the previous owner will no longer be accessing the multiplayer content and so their impact on the server and bandwidth has simply been passed on to the new owner.

Developers can also lose out when they offer patches and various updates for a game. Patches cost the developer money to create, submit and store on a server for gamers to download. Services like this are totally free so a player with a second hand copy of the game will effectively be costing the developer money when they update their used game.

Building a fan base 

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Although buying used games isn’t illegal this debate reflects a similar situation the music industry found itself in with the rise of Napster back in the early 2000s. Big well established bands such as Metallica complained that they were losing money from all the sales they were missing out on [5]. On the other end of the scale many artists (generally less well known bands) didn’t actually mind their music being stolen because word spread and their fan base grew. Arguably the same could be applied to second hand games, with one large difference (and note I am not saying that buying used games is as bad as outright stealing music). Musicians make the majority of their income from touring and not from sales of music; developers on the other hand make most of their income from the sale of games.

Building a fan base through the sale of used games can have long term positive effects on game sales; many franchises I got into as a kid have stuck with me to this day. When I was younger I remember waiting all year for my birthday or Christmas just so I could get a few new games. I also remember saving money for The Legend of Zelda: Ocarina of Time and this was a big event to buy a game brand new, on release! Generally this meant that if I wanted a game any other time of the year I would have to save a bit of pocket money and make a trip to the local games shop to sift through used games. Super Metroid was one game I remember buying second hand, years later I am still a fan and have bought brand new copies of every Metroid game ever since. This is one such example and I now find many established franchises I grew up with still interest me today and I buy new versions of these games. 

Retro games

Generally I will only buy a used game if it is no longer for sale brand new (retro games from old consoles) or if I have some sort of voucher e.g. CEX credit. This probably stems back to being a child and having to buy used games, generally in pretty poor condition. When I was finally old enough to earn my own money I opted for brand new games that I could open and be the first person to play (especially being a bit of a games collector and wanting to keep my collection in great condition). I no longer had to put up with kids who had smeared their jam and chocolate covered fingers over the cartridges.

As people get more invested in games they generally want to experience a back catalogue of a franchise they love or see how genres have evolved over the years. Others want mint condition copies of 20 year old games or to relive games they played as they were growing up. Previously I’ve never really considered retro games as part of the “used games” debate, owing to the fact that they are out of print and could not be bought new. This all changed with the release of consoles like the Wii and PS3, where back catalogues are now offered for many old franchises, effectively giving a developer a way to once again make money from old games.

Conclusion 

I can’t offer any real conclusion of sorts because I never expected to make a decision as to whether used games are a good thing or a bad thing. I think larger franchises which sell several million copies of a game won’t notice much of a mark on their profits from the sale of used games. If anything, my previous point about bringing in new fans to the franchise applies. With smaller developers and niche games that only sell several hundred thousand copies used games have a much larger impact on the developer. After all development costs are rising, teams are getting bigger and risky or poor selling games have a very large effect on the future of many developers. Maybe I’m biased because I work in the industry and see companies closing quite often. Maybe you think developers should be greedy and want to block all used games sales just so they make a bit of extra cash. Either way it’s an interesting time for the games industry.

[1] http://kotaku.com/5972787/sony-patent-could-stop-you-from-playing-used-games-possibly-on-the-next-playstation

[2] http://www.edge-online.com/news/the-next-xbox-always-online-no-second-hand-games-50gb-blu-ray-discs-and-new-kinect/

[3] http://www.guardian.co.uk/technology/2007/feb/01/games.guardianweeklytechnologysection2

[4] http://www.ign.com/videos/2013/02/06/game-scoop-the-pros-cons-of-an-always-connected-console

[5] http://web.archive.org/web/20071129061341/http://judiciary.senate.gov/testimony.cfm?id=195&wit_id=252

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