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Your Princess is in Another Castle ... If You Bought Your Game New

by Nick DiMola - November 17, 2008, 12:26 pm PST
Total comments: 27

This isn't the first time game publishers have brought up the fact that they get burned on used game purchases; however, it is the first time something so radical has been proposed. While Capps has all right to be upset by this obvious injustice, withholding the ending of the game is not the proper solution to the problem.

Gaming will likely fade away if something like this was to happen because most people won't be willing to cough up the extra dough necessary to get the full game they already paid for. Not only will players need to pay for the content, but they will also need a reliable, high-speed internet connection in order to get the information. The rampant DRM will likely rub the dedicated gamer wrong as well, further segmenting the market that would be willing to take the plunge on this new system. By the time you pare away these unwilling parts of the market, the remaining devotees will not likely be large enough to subsidize the industry.

To an extent we have already seen this concept in practice; hiding content on the disc to be unlocked via a DLC code seems strongly familiar. Thankfully gamers have already rallied against these efforts which should send a strong message to the publishers.

It seems to me that there is an obvious solution to all of this: make games more affordable. I don't have any numbers or statistics to back this up, but I bet more people are buying games used on the 360 and PS3 now that the standard pricing of games is at $60. I'd bet that if games were a bit less, people would have less incentive to bother with a used copy when they could have the game new at a reasonable price. I believe more publishers should adhere to Iwata's philosophy of pricing games what they are worth rather than what publishers feel they should be. Or maybe publishers should start figuring out how to make games cheaper, rather than stretch for these "epic" games that aren't feasible in today's marketplace.

Talkback

MorariNovember 17, 2008

Yes, yes, yes!!!

New games shouldn't cost anymore than $30-$40--at most. Why try to milk the maximum amount of money out of the fewest customers when you could instead charge a fairer price and tap into the most possible customers? Oh yeah... blind, shortsighted greed.

S-U-P-E-RTy Shughart, Staff AlumnusNovember 17, 2008

The argument that gaming will "fade away" seems a bit silly - I just don't think anybody will buy a DLC-raped game.

E3 Hype Train EngineerNovember 17, 2008

All this effort wasted when they could be inventing VR headsets or something.

Nintendo has shown how to win over customers: invent new stuff, make something fun, move gaming forward.

DjunknownNovember 17, 2008

Quote:

I believe more publishers should adhere to Iwata's philosophy of pricing games what they are worth rather than what publishers feel they should be.

Then according to him, every game Nintendo makes is worth $50 dollars  ;) How about some practicing what you preach? I'm sure Wario Land Shake it! could've gone on sale for a little less. Heck, ToS:Dawn of the New World is many, many, times bigger than Wario Land, and it went for $40!

But seriously, the gaming media, bloggers, consumers and whoever else needs to keep people like Capps in check.

Destructoid hosts a similar editorial.

GoldenPhoenixNovember 17, 2008

Oh no a discussion on the value of a game. BTW anyone that says Wario Land for Wii can't justify the $50 hasn't really played it. The game has great production values and has lots of value in game length. If things do go digital there is a chance we could see a drop in game prices because there will not be nearly the need to advertise the heck out of the game or spend resources in printing copies of the games and trying to get them into stores.

BeautifulShyNovember 18, 2008

S-U-P-E-R I think the point that Mr. Jack was trying to convey was if all games went with this system than no one would purchase the game. Think back to how you beat Super Mario Bros. You would have to pay to beat Bowser and see that you have a new quest.You would have to pay for a New Game+. In TOS you would have to pay to transfer your Grade over and get all of the extras.Chrono Trigger is a prime example of why this is a problem.Some publisher could charge for all 13 endings. My point being you have to pay for much more than the Final Boss.

S-U-P-E-RTy Shughart, Staff AlumnusNovember 18, 2008

Yes. And the point I'm trying to convey is that basically no video game company will consider this to start with because it just won't sell. I mean, one guy from Epic (who wasn't even Cliffy B) floated the idea and everyone simultaneously threw up. People won't be keen on paying for half a game, and I just don't see the relevance of imagining paying to finish a NES/SNES game or any game in the present or future, because it would only be in a retarded bizarro world that I would possibly consider purchasing such a game.

UltimatePartyBearNovember 18, 2008

This blarg post jumps from complaining about charging used game purchasers for content new game purchasers get for free to complaining about charging everyone for the content.  I don't see why anyone would jump to that conclusion if the stated goal was to discourage the used games market.

Also, I strongly disagree with the line "Capps has all right to be upset by this obvious injustice."  Sure, he has the right to get upset over whatever his tiny brain can perceive, but it is not an injustice to buy and sell used games.  The right to resell a copyrighted work was codified by the Copyright Act of 1976, and it was recognized by the Supreme Court as far back as 1908.

Nick DiMolaNick DiMola, Staff AlumnusNovember 18, 2008

Quote from: UltimatePartyBear

Also, I strongly disagree with the line "Capps has all right to be upset by this obvious injustice."  Sure, he has the right to get upset over whatever his tiny brain can perceive, but it is not an injustice to buy and sell used games.  The right to resell a copyrighted work was codified by the Copyright Act of 1976, and it was recognized by the Supreme Court as far back as 1908.

That comment was intended to be somewhat tongue-in-cheek. Yes he sees it as an injustice, but it is the reality of the situation. At the end I gave companies a pretty simple solution that applies to pretty much any industry: price competitively. It's obvious people are only buying used to save a few bucks, so if the games were more appropriately priced people might be willing to spend that extra 5 bucks for the new copy.

KDR_11kNovember 18, 2008

I don't think the high base price is the culprit for the used sales, the price of the used copies doesn't differ much from the new price. What it might affect is the willingness of a user to resell the game once he finished it. Saving 5-10€ on a 70€ game purchase is insignificant and doesn't make the price more reasonable anyway. Saving 5-10€ on a 20€ game would be a significant cut and add up over several purchases to allow buying a lot more games but with 70€ games it'll take a lot of money to save enough to buy even one additional game.

There are a few questions I have surrounding this issue.

1)  What's the markup on a retail game these days?  $50 and $60 are the price points, but why?  They seem completely arbitrary.  The public has little visibility into what it costs to make most games (aside from the biggest titles, like GTA IV).  No matter what Nintendo, Sony, or Microsoft say, I've never seen any of them justify WHY they price at those price points, aside from the fact that they can get that much for a game (or, in Nintendo's case, they're undercutting the competition).

2)  Somebody who's worked at Blockbuster may be able to answer this.  When Blockbuster rents a movie, do the movie companies get royalties off of each rental?  It would seem that game companies should view renting like TV syndication; a third-party is making money off of what they made, so they should get a small cut.  Same thing goes for buying used copies of movies.  Do the movie companies get a cut of that?

I don't know why this isn't a problem in the movie industry, but it is a problem in the game industry, when it's essentially the same concept.

Ian SaneNovember 18, 2008

Quote:

I don't know why this isn't a problem in the movie industry, but it is a problem in the game industry, when it's essentially the same concept.

Well the movie industry does have the theatre revenue.  Videogames don't have that though they kind of did when arcades were big.

Buying stuff used isn't illegal so I think anything like what Capps suggested would result in class action lawsuit city.  Pissing off your customers and getting into legal hotwater doesn't sound like a good plan.

Are used sales REALLY making videogames unprofitable?  Shouldn't they have some sort of logical business plan in place so that the projected amount of revenue is greater than the investment?  They make it sound like the whole thing is a crapshoot: spend X money on the game and hope to hell you make it back.  With big corporations it always feels like the rich don't feel they're rich enough and get pissy about anything that cuts into the bottomline whether it's a legitimate complaint or not.

And if your game SUCKS then do not for even one second complain about sales figures to me.  You can cry all you want if you've got a good product that doesn't sell but if your product is sh!t it deserves to sell like sh!t.  You don't have the right to success.  You have to earn it.  Not all games are equal.

DeguelloJeff Shirley, Staff AlumnusNovember 18, 2008

Well a lot of the price is development, packaging, tiny cuts for retailers and publishers.  And marketing.  Definitely don't forget marketing.

Considering the skyrocketing costs of development, I'm somewhat surprised games haven't reached N64 launch Prices of $80 and $90.

As for whether or not renting movies/games gives the publishers a cut, I think the answer is yes.  Blockbuster's wikipedia says it gives 40% of the rental fee to the studio.  As for the publishers getting a cut of used sales... hell no.  Let's use widgets.  If A sells a widget to B, and B with the right of resale, sells his widget to C, there is absolutely no way A gets a cut of that.  They already got paid full price.

I agree with Ty.  This is too stupid to use, but lots of game companies have been stupid this generation, so it wouldn't surprise me if Microsoft or Sony tried something like this in a desperate attempt to boost revenue.  (and before the "fanboy" accusation, this is just numbers here.  Nintendo is sitting pretty damn fat on profit without contemplating the selling of "game endings" as DLC.)

Ah yes, marketing.  It always makes me laugh though, some publishers gives games zero marketing, but they still make you pay as if it got Madden money.

KDR_11kNovember 19, 2008

Quote from: Ian

Are used sales REALLY making videogames unprofitable?

No but it's a great way of telling shareholders that you don't deserve being fired over losses because "it's all those evil used sales! If we can destroy them we will become profitable again!" Sounds a whole lot better than "I greenlighted a pile of shit games and wasted so much money on developing them but they didn't sell because they sucked."

Quote:

Considering the skyrocketing costs of development, I'm somewhat surprised games haven't reached N64 launch Prices of $80 and $90.

Fixed costs don't affect the optimum price for a product, only variable costs do. The dev cost just affects how much money you have to make to break even but the optimum price is always the price at which the product will make the most money, going above it will actually reduce your income. If raising the price means more money then you are below the optimum price and should ask yourself why the hell you needed an increase in fixed cost to start charging the optimum price. Cart-based games have higher variable costs than disc-based games.

oohhboyHong Hang Ho, Staff AlumnusNovember 19, 2008

Hell games are expensive. Expensive enough that I don't have a Wii yet. The only reason why I game at all is because of used games. I do buy the odd game at retail, but if such a thing was to become the standard, I would have to walk away. Sure in the future I have no doubt I could afford retail prices, but I would be far too soured to ever enter such a system.

As bad as the idea is, I would not be surprised if somebody did try to implement it. Idol Master and Horse Armor are already examples of normal successful companies doing batshit insane things.

S-U-P-E-RTy Shughart, Staff AlumnusNovember 19, 2008

So just how big is Gamestop and co's profit margin on used games? I imagine it's huge and is thus the reason game companies want a bigger piece of the pie.

Although, I have to wonder, if that profit margin is coming from being able to flip used games really fast, or because people are willing to sell them back for so little?

vuduNovember 19, 2008

Quote from: S-U-P-E-R

So just how big is Gamestop and co's profit margin on used games?

Take a look at GameStop's Trade-In Values page for an idea.

Here are a few comparisons I picked out at random.



Game (System)         
Trade-In Value   
Used Price


Saint's Row 2 (PS3)
$25.00
$54.99


Fable II (360)
$30.00
$54.99


Deca Sports (Wii)
$10.75
$26.99



Looks like a pretty healthy margin to me.

Yeah, it's ridiculous.  Look at one of Gamestop's financial statements...they're making so much money off of used game sales, that new game sales are honestly just a nice little bonus to them.  That's why I think pubs/devs are P.O.'d...Gamestop is more interested in selling used games than selling their new product.

It's a catch 22 - devs/pubs are forced to deal with a retailer who's too big to tell off, but doesn't really have their best interests at heart (i.e. isn't really acting like a "partner").

ButteryPatNovember 19, 2008

Gaming will fade away if you charge for the end of used games? That's completely unrealistic. Explain to me how used game sales, which account for precisely zero dollars and zero cents of revenue for the game companies, are somehow the linchpin of the industry. Most people don't buy used games. In fact, companies like Wal-Mart, Target, Costco, Best Buy etc. account for way more game sales than your Gamestops and other specialty stores, and they don't sell used games. That doesn't mean Capps' idea isn't idiotic, and quite possibly illegal, but you saying that the industry will collapse as we know it if this happens shows me, once again, that people in the gaming media have delusions of grandeur and really think themselves and people like them make up the overwhelming majority of people who buy video games, and that they really think they have power and influence.

EDIT:
Also, "make games more affordable" is an overly simplistic way to look at it. I'll mention the fact that very few games are profitable as it is, and with development costs getting higher and higher every console cycle, there are less and less profitable games. They theoretically changed the price standard to $60 because of that, and the market responded by buying more games than ever. So they've already proven, beyond a shadow of a doubt, that consumers will pay $60 for a game. So why would they ever go back?

KDR_11kNovember 19, 2008

Quote from: Lindy

Yeah, it's ridiculous.  Look at one of Gamestop's financial statements...they're making so much money off of used game sales, that new game sales are honestly just a nice little bonus to them.  That's why I think pubs/devs are P.O.'d...Gamestop is more interested in selling used games than selling their new product.

It's a catch 22 - devs/pubs are forced to deal with a retailer who's too big to tell off, but doesn't really have their best interests at heart (i.e. isn't really acting like a "partner").

From what I heard those huge margins make up for the new games bringing the store practically nothing. The industry demands so much money that the retailer would go broke from selling only new games, the games are used to bait people into seeing the higher margin stuff being sold. With regular retailers that's the other products, with Gamestop that's the used games. If the industry wasn't so greedy that selling new games makes almost no money they wouldn't see stores branching out like this.

Nick DiMolaNick DiMola, Staff AlumnusNovember 19, 2008

Quote from: ButteryPat

Explain to me how used game sales, which account for precisely zero dollars and zero cents of revenue for the game companies, are somehow the linchpin of the industry.

Gimping used games in this way would make people far less likely to purchase them. This directly impacts the trade-in revenue many gamers use to purchase other new games, which would in turn shrink the already small profits (as you pointed out) that game companies are seeing. Just because game companies aren't getting a piece of the used game sale profits doesn't mean that they aren't making money as a result of it.

Also, if you read the blog I said this:

Quote from: Mr.

Or maybe publishers should start figuring out how to make games cheaper, rather than stretch for these "epic" games that aren't feasible in today's marketplace.

Of course it isn't as simple as pricing the games cheaper. The type of games being made need to change and I pretty clearly pointed that out.

Quote from: ButteryPat

people in the gaming media have delusions of grandeur and really think themselves and people like them make up the overwhelming majority of people who buy video games, and that they really think they have power and influence.

This was a blog post where I shared my opinion. No one is holding a gun to your head asking you to consider the points I have made. I have no delusions of grandeur, nor do I think I have "power and influence." I'm just a normal guy who works a 9 to 5 who does this as a hobby in my spare time. The blog post centered around a hypothetical situation and my perception of the hypothetical outcome.

PlugabugzNovember 19, 2008

Is banks selling mortgages to people who cant afford it really a bad thing?

S-U-P-E-RTy Shughart, Staff AlumnusNovember 19, 2008

On this topic, I didn't expect to like buying games via direct download, but it's really working out for me. If it's banked by a big company like Valve or Microsoft, I know the DRM servers will be up for a long time, but the real hook is that they seem to be going out of their way to set up incredibly sweet deals. Five bucks off Left4Dead for preordering on steam, Half Life for 98 cents, and the id software pack for whatever ridiculously low price... there's a whole Valve pack up too that I'd be tempted to get if I didn't already own a big portion of it. And I just got Worms on XBL for five bucks. It owns. Not to mention, I can pre-load and get my game earlier than retail goobs in some cases.

Sure, I'd prefer to have a hard copy if it's the same price, but I'm all ears for special sales and incentives. The developer/publisher win too because it cuts their packaging/shipping costs, netting them a bigger profit margin. This would be the way to go instead of charging for the second half of the game after the point of purchase. Fuck that noise.

GOG.com is also brilliant.

GoldenPhoenixNovember 19, 2008

STEAM works really well like Lindy stated, it is nice to see deals, unlike so much of the online content on consoles (Especially Wii). If you have a decent enough internet connection it is really convenient.

UltimatePartyBearNovember 20, 2008

Steam is convenient enough that even when I buy boxed copies of games, I just type in the code in Steam and let it download everything instead of messing with the discs.  It takes longer, but I can go do something else instead of waiting for it to ask for the next disc.

Is it comedy or tragedy that Nintendo has decided to do something similar to the main topic?

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