Friday, February 3, 2006

Used games: Good or bad

There's been a lot of discussion lately about the used games market, and whether or not it's good for the games industry.

In this corner:

Pro-used games: (1) Used games allow consumers to get more gaming for their dollar, the amount they were going to spend was a 'fixed' amount anyway, (2) Games are property, and people have a right to do what they want with that property, including to sell it, (3) low-price used games allow people to try games they otherwise might not, and provide a path for non-gamers to dip their toe in the water, growing the gaming market overall.

(Proponents include Alice, Billy, many others)

In the opposite corner:

Anti-used games: (1) Used games reduce the number of people that buy the title new, thus decreasing the revenue to the developer/publisher, (2) retailer margins are better on used games, incenting them to sell those first and foremost*, (3) while sold on physical media, the consumer is actually buying an entertainment experience, which shouldn't be transferable/replicable, or at least if it is, the 'performer' should get paid again in some way.

* I haven't seen any date on (2) above, but do have one anecdote. I had a game developer in Japan actually take me to a couple shops in Akihabara where (in one) the used games were stacked IN FRONT of the new games, so you had to dig for them, and (in another) the used games were on display and the new games were hidden away and had to be asked for (only displayed if they were sold out of used). I've only seen this taht one time, and only in Japan though. For this case at least, it was pretty clear where the retailer's preference was.

(proponents on this side include: Mark Rein, Mark Deloura, and -until recently- me.)

Anyhow. There are plenty of proponents on both sides of the argument - probably a good indication that the reality lies somewhere in between.

While I've stepped out of the "anti-" camp, I haven't stepped into the "pro-" camp either.

Why? Because I haven't seen a good thorough analysis of the problem. So I just don't know the truth.

What I would like to see is a piece of research, backed by data (ie. research, not opinion) that answers the following questions:

  • Do used games increase/decrease the amount of money the average gamer spends?
  • Do used games increase/decrease the amount of time the average gamer spends playing games?
  • Do used games introduce new gamers to gaming, or gamers to new genres?
  • How do margins compare, and what is the split between various parties, between retail new and used games? (Looking for something better than my original stab in the dark. This post looks like it goes into some detail, but I haven't made my way through it all yet).
  • Do the above answers vary significantly between different countries? different platforms? (e.g. PC vs console, handheld vs console...)
  • How does the above compare with other media (music, video)?
  • How does the rental market compare (e.g. I've heard that with video rentals, IIRC, some portion gets back to the publisher, but not game rentals. Is this true?)
Anyone know of one any piece of real research that can help answer the above, or is it just a religious argument and we are left to choose our favorite preacher?

5 comments:

kim said...

Update:

This CNET piece:

http://news.com.com/A+bright+spot+in+the+dim+video+game+picture+-+page+2/2100-1043_3-6034235-2.html?tag=st.num

(which I'm not sure is that accurate because of some assumptions and simplificatiosn they make in it) refers to GameStops margins on used games: margin on new titles 25%; on used: 45%.

They also make the point that the 'money' paid back to the gamer is usually in the form of credit toward other merchandise (which is stuff that is marked up 25-45% as stated above).

John Stark said...

Kim,

Answer the question of property vs experience and therein lies the answer. The rest of the arguments are pointless - if the game is property, it can be sold. If it is not property and only licensed for use... then it cannot.

I see games in the same category as books and CD's... we can sell'em. Fair use and all that. If it is good for the gaming industry is immaterial.

I personally buy used games, as I am not a committed gamer, do not think the "experience" is worth the money being asked for, and rarely finish a game before I tire of it. That being said, I still ociasionally buy new games in categories that I really enjoy playing - such as racing games. If fact, I would consider buying an XBOX 360 for PGR 3, or a new PS3 Gran Turismo 4....

Billy Zelsnack said...

None of the results from the research items you point out should matter.

Fair-use is fair-use. It is how the USA works and it is the way it should work (holy cow).

JimC said...

I can't disagree with the "fair-use" comments. If you want to sell your used Sly Cooper on eBay - go nuts. However, I am not totally comfortable with retail stores making 45% margin on used games. With that model *everyone* is getting ripped off - the guy who sold or traded in the game for peanuts, the guy that pays way too much for it, and the developper who gets nothing in return. To me this seems like someone selling mp3's they got off a p2p system.

I don't buy used games, however I *quickly* buy games when they get down to the "Greatest Hits" price. Rarely do I buy a brand-spanking-new title (there are a few exceptions).

Kim - that might be something else to figure into the equation - "Greatest Hits". How much money do those titles still generate at that price point versus original selling price, and what are the margins?

Chris Melissinos said...

I wouldn't question the fair use of content you purchased. I believe the problem is that games don't enjoy the same economic routes to market as, say, movies or music do.

Music and movies are distributed for 2 uses, public and private. Videogames are only for private use. This means that a movie has revenue opportuities at the theater, dvd sales, rentals and pay-per-view. Music had radio play, CD and digital distribution.

What avenues do games have? The day a game is released is the day people can rent it and the following day is a day they can buy a used copy.

Again, I don't think anyone is questioning the right to fair use, that would be silly. But when your primary distribution channel (retail) is pushing the used games just as hard as the new ones, it is difficult to make any money. This is why I am a firm believer that online distribution will help to change that economy and allow developers to capture a greater percentage of revenue from their customer base then they currently can today.

Hell, the BestBuy by my house has their used games on racks by the door and registers before you even get into the game isle. I mean, come on...