Developer Hopes Microsoft And Sony 'Go Nuclear', Destroy Used Game Sales

Many, many rumours continue to fly around the internet concerning the future of Microsoft and Sony's game consoles. One of the most contentious and repeated assertions about the next iterations of both the PlayStation and the Xbox is that neither will easily support used, rented or secondhand games.

Gamers and developers have gone back and forth for weeks now on whether the next generation can and should accommodate used games, and who gets hurt if they do or don't. In an opinion piece at GamesIndustry, developer Richard Browne asserts that the hidden costs of used games are crushing the industry and adding to consumer misery.

Citing an anecdote about a colleague being nearly unable to purchase a new copy of a game at his local GameStop, Browne issues his challenge: what are the real costs of used games, that consumers say make their hobby more affordable? His answers:

The real cost of used games is the death of single player gaming. How do I stop churn? I implement multiplayer and attempt to keep my disc with my consumer playing online against their friends.

Browne cites Ninja Gaiden 3 as one (but not the only) example of a recent game in which the multiplayer mode is completely superfluous. He asserts that the multiplayer has no reason to exist in the universe that the Ninja Gaiden franchise has posited, and that its development must certainly have taken away from the core game.

The real cost of used games? Let's take someone like Tim Schafer. Tim works his genius in the video game medium primarily through selling fantastic stories in fantastic worlds, and primarily these experiences are single player games. Tim walks into publisher X and puts his latest, greatest piece of work on the table with a decent mid-range budget. It doesn't stand a chance.

Browne goes on to mention Schafer's spectacular Kickstarter success, but where many are optimistic about the future of crowdsourcing, he sees only disappointment. Digital delivery and smaller-scale games are no Brütal Legend, Browne asserts.

While this is true, he provides no reason why digital delivery itself, rather than store retail space, is in any way an evil. Nor does he provide any specific reason why larger-scale games (AAA, big-budget titles) could not move to digital distribution in the future — in fact later in the piece, he encourages it. Plenty of games in recent years have seen success through Steam, the PlayStation Network, and Xbox Live Arcade; the lack of a major disc-based release doesn't seem to be terribly detrimental to either consumers or developers in the gaming world of 2012.

Similarly, Browne claims that the variety of games available is "shrinking", and while the examples of sameness he cites in aged franchises are correct, he once again seems to be overlooking the existence of any game that does not suit his thesis. He writes:

Some single player games naturally have been launched with great success in the past year or two; Rockstar have had such fortune with Red Dead Redemption and LA Noire. Both these games take a different tact to combat churn - they're absolutely huge and take weeks to complete. Guess what? Making those games was extraordinarily expensive. The risk for the publisher on such products is enormous. So we now have a situation where risk is being eliminated from a publisher's purview.

Both games were enormously expensive, but both risks also paid off for Rockstar, in critical acclaim as well as in sales. To discount their existence, and the success Rockstar has enjoyed in publishing different games from many of their competitors, weakens his point.

As for a culture of risk in game design, Browne's observation that most big publishers and big franchises release iterative games, rather than innovative games, is correct. Big-budget games are expensive and when tens or hundreds of millions of dollars are on the line, as Hollywood sequels have shown us, it's easier and less risky to make something that has proven popular before. And again as Hollywood sequels have shown us, the delicate balance of risk and reward in creative media is hardly unique to the game industry.

Browne is, however, accurate in his final conclusion:

Give us no used games, give us digital access to software on the day it launches to retail. I don't think we'll see even a minor drop in sales; in fact, I think we'll see it rise.

While used games may or may not feature into the future of console gaming, digital distribution most surely will. And when there is no physical disc to purchase, by definition it cannot be sold secondhand. But the trend towards digital distribution, which seems all but inevitable at this stage (though not necessarily quick), doesn't guarantee that more games will be sold, or that publishers and distributors will see more money. For many gamers, the choice isn't between buying a game new for $US60 or buying it used for $US30; it's between buying it used for $US30 and buying it not at all.

The model under which GameStop operates does seem doomed to an eventual decline, as every gaming platform slides gently away from its reliance on discs and moves toward an all-networked future. But while discs are still the law of the land — and until reliable broadband reaches the entire country with network cap issues resolved, they will be — blaming consumers for seeking discounts when they can seems short-sighted. Having Microsoft and Sony "go nuclear" and disabling secondhand discs entirely would be one solution to one problem, but seems likely to create just as many other problems in its wake.

The Real Cost of Used Games [GamesIndustry International]

Top photo: GamesIndustry International


Comments

    Dear publishers,
    simple solution - undercut the used game prices that retailers sell at.
    Someone buys a game at $90, plays it, sells it back to EB for $20, then EB sell it again for $70.
    If the publishers set a price point at, say... $60 + whatever new game incentives they think'll get buyers interested, then there's far more incentive to buy new rather than used.

    An alternative is to instigate a 'used sale tax' or something, where the retailer has to pass on a percentage of their profit back to the publisher.

    Either way, my opinion is probably invalid coz I dont buy used games. Not because the publisher is getting ripped off, but because the 'RRP minus $5' sale price for used games isnt worth the saving. May as well wait 2 months & get it at half launch price new.

      Retailers will ALWAYS undercut the RRP for a used game, so your argument doesnt make sense.
      Its not in the best interests of the retailer to sell new over used. Used they get 100% profit, new they get much much less.

      Retailers have no obligation to developers or publishers, so a "used sale tax" wont work either.

      Getting rid of used games (or making it much harder to sell them) is a great idea.
      Developers and publishers get more money which means we will (hopefully) get better games.

        Just pointing it out but retailers most certainly don't get 100% of what they sell a used game for as profit, you have to take into account what they bought it for and that becomes its cost price.

        there's already a (sort of) precedent for a used game tax in Australia - the royalties system (bit of a convoluted explanation follows).
        eg : a radio station licences a single to play on air. this is done to attract listeners, the station also plays ads, this makes a profit, in effect, the station is profiting by playing that song. Now, for the 1000's of people who hear that song arent paying for it, so thats why every time the station plays that song, they pay the publisher a small fee (part of which goes to the artist).
        A similar system is in effect for educational institutions using off-air tv recordings in classes - a agency called ScreenRights takes a census of whats been recorded & used, & then takes a fee from the school to pay the publisher for the use of their IP.

        tl;dr a tax on retailers for the sale of used games would work.

        as for used games themselves, I dont care if retailers sell them or not, but on console DRM would stop me taking it round to my mates place to play local MP with em, or lending it to my brother etc. which isnt cool.

        i buy used games if i cant find them anywhere else

      EB would readjust its used prices to match the 'new' RRP.

      used sale tax. That's what they are doing with the online pass, instead the consumer pays the tax when they get home. If they want that extra content.

        Whatever price the RRP is will always be refelcted in the trade price. EB need to keep the pre-owned margins, not the pre-owned prices. It doesn't really matter what the RRP of a new game is, the profit on used will still remain at approximately 175% of the trade price.

      The simplest solution is for people to go back to pirating all there games, and using modchips/software hacks for consoles again.
      I Refuse to pay more than $50 for a game unless i know i will love it (deus ex, SWTOR, fallout games). I buy second hand cos 90% of the time they are a waste of money, if people stopped buying games based on PR hype and paying $100+ for games that are total pus (MW3 as the best example) developers would catch on that people arent as stupid and blind as they know the majority to be, mainstream developers need ti know that its thier own fault we buy second hand, make better games like you used to and people will buy them braand new.
      VIVA LA Tim Shafer!!

        no your the reason used games are a PROBLEM you buy new games used if you dont like it research it a bit more if people bought used games because they cant be bought at k mart or some thing like that there wouldnt be a problem

      @#35 Your argument is fail. Used will always be less than new . Basic common sense .

    I have no problems whatsoever with them eliminating used games all together personally.

      The main problem I have with used games sales is the blatant profiteering that retailers take part in. But either way, there's gotta be a better way of doing it than blocking it at a console level.
      What happens when you want to lend a game to a friend, or you cant get online to activate it?

      hell, console based DRM will also destroy the games rental business as well.

        I haven't 100% thought this through but: The game is registered to a key. That key is linked to the account of the first purchaser. Anyone with that account on their friends list can play the game. If they wanted, they could limit it to, say, 15 friends, but still.
        That would effectively shut down used games, but still let you lend the game to friends.

          They won't do that though - they want your friends to buy it too. It's not about Gamestop making money it's about people playing without paying, lending included.

    Make Digital Versions cheaper than boxed copies.

      ^This
      Especially if your selling via an online store your company owns.
      (Did ya get the goddamn hint EA?)

      +1

        You're absolutely right. Tiger Woods 13 on the PSN Store $109. They've got to be joking.

      They can't. Because they still have to deal with the retailers. PC gaming gets around this cause it died, and was brought back to life through digital downloads.
      Sony can't sell EB a new game for $80 expect them to sell it for RRP of $99, then turn around and sell it for the wholesale price of $80 online.
      The ACCC would have a field day.

        Technically doing this would not violate any ACCC guideline, although it would violate the spirit of the guidelines themselves.
        Sony can sell a retail copy of the game (disc) for one price and the digital copy at another (digital) technically, these are two different products and as long as Sony could justify the increase price to shipping and assorted other costs it would be entirely legal.
        It's the same as a wholesaler selling a product to company A for $5 then me walking into the wholesaler and being sold a similar but slightly different product for $3, not illegal at all

    So you won't be able to borrow games off friends or rent them making us (the consumer) put 100% faith in the developers to not make a steaming pile of shit.

      Theirs a thing called a review. Usually developer bonuses are tied to them.

        Problem is, magazines and review site are sometimes payed off in return for a good review.

        Hahahahahaha

        Reviews have got to the point where they are no longer an opinion rather a paid advertisement. Look at IGN almost every single AAA game gets an 8 or higher no mater how bad it is.

    How about a compromise? All new games come with an unlock code. Buy the game used and simply buy a code for $10. Publishers get their cut, consumers can still hunt for the occassional bargain and game stores wont have to lay off staff. Sure its not that simple I understand but you get my drift. Perhaps it would also convince publishers that multiplayer isnt the magical 'buy me new' button they think it is.

      I think this appears to be the best solution I've seen yet.

      Honestly, this completely destroys the whole 'Video Store' deal, can't go and hire a game anymore, can't purchase a game off your friend that he didn't enjoy.

      It seems pointless to effectively brick something not bought new, what's that whole deal about actually owning what you purchase? Doesn't seem like it's fit for purpose anymore if it can't be played.

      That said, I agree that the selling of used games via retailers is a piss poor effort and just a cash cow for them whilst the publishers and developers get wroughted.

      I just think there has to be a happy medium.

      Just my 2c

      They did that with the "Online Pass", or the Catwoman code for Arkham City, and people still rioted in the digital streets.

      EA's been doing this for quite some time, while it sucks if you want to buy a used copy, its fine for new.

      theres one problem with it not every one has conneced thier console to the internet so it would make it very hard to get the games unless their on a disk which you install to the console also not every one is on a +100gb plan

    Yeah - a few people have mentioned the obvious solution - cheaper digital copies.

    Or staggered release of free extra content (rather than withholding and then charging extra) so people hang onto the game past the first month.

    Or games that take longer to finish. He mentions costs there, but maybe there's just too many developers in the AAA space.

    I highly doubt this will happen.

    "the choice isn’t between buying a game new for $US60 or buying it used for $US30"

    I guess things must vary wildly from store to store, because when I look in EB, the used games aren't half the price of new. It's more like $5-$10 cheaper. And considering that's off RRP, I just laugh and go next door to JB and buy it new for less than the used one at EB.

    In any case, I seriously doubt they'll "destroy" used games sales. The most likely outcome will simply be mandatory "online-pass" codes for ALL games. So worst case is that you'll have to fork out $10 or $20 for an online pass, but you'd expect the price of used games to drop accordingly. So it won't actually cost any more to buy used games, it'll just mean that the developer/publisher get a cut. The real losers will be the people who trade in their games, as the trade in value would also drop due to the lower price tag when it gets re-sold.

    I just wanted to comment on this line.
    'And when there is no physical disc to purchase, by definition it cannot be sold secondhand.'
    There is already a digital distribution company that allows trading in games, Green Man Gaming. Sure there are no second hand games, but you can buy, play and then trade in to get credit towards your next game. Also, since digital distribution only should lower costs (whether it will is another discussion) then you will be able to get the game at a decent price to begin with rather than the overinflated prices we pay now (at least in Australia)

      Actually looks like there might be second hand games, in that if someone trades a game in, they reuse the key and sell it at a reduced price.

    I don't remember any other industry dying because of used product sales. What makes games so damn special?

    "The real cost of used games is the death of single player gaming."
    HA
    "Tim walks into publisher X and puts his latest, greatest piece of work on the table with a decent mid-range budget. It doesn’t stand a chance."

    Oh and you think this is going to change if you get rid of used games? Seriously this guy is comedy gold.

    "Give us no used games, give us digital access to software on the day it launches to retail. I don’t think we’ll see even a minor drop in sales; in fact, I think we’ll see it rise."
    Haha, see he's really good at this! Nobody actually believes this right?

    Well I'd rather stick to having the privilege to transfer ownership of goods thank you.

      yes I realise I sound like a bit of a dick there. It's just I really don't see a "problem" and also don't see a solution to it either.

      Your argument is slightly flawed. No other second hand market has the turnaround time that games do, nor do they keep their original value within the timeline of a secondhand transaction the way games do.

      Cars lose 30% of their value the second they leave the dealer, and you use a car for a significant period of time before you trade it in. With games, the turn around is as long as it takes you to finish the game, and the investment in making it is quite possibly just as high as designing a car.

      Movies, people buy them to own them, if they wanted it for a single viewing, they would rent it, or wait for it to come on TV. No 'thriving' second hand movie market. Same for books.

      Furniture, same deal as cars, you buy it for continuous usage.

      The cost of used games IS the death of single player. At least imo. Would it have been killed off by something else anyway? Possibly.

      Could it change if they got rid of used games? It's possible, though it would likely take a while for publishers to be willing to take the risk again, and have the money to spare for the non-cash cow games.

      I'd be interested to see if the price of games would drop if used game sales declined, and first buyer sales went up. More first buyer sales, means higher profits for the publishers, which means they can lower their prices to try to get more people willing to buy (a pipedream perhaps, but one can hope :P).

        Actually, just at a glace I would say that NEW GAMES are the cause of used games being a problem. You mention how movies and books are for keeps, but for some reason games are not? I keep wondering why, and I can only come to the conclusion that the trade in deals are so attractive. But why are they so attractive then? Don't movies and books try to have such good trade deals, I mean, if I were them I would use the same underhanded trade economy game stores do and yet they can't... Effectively I feel that the fact that new games at their current price don't create a constant 'new game only' purchase economy for the consumer. These consumers can just keep trading for pretty much twice the amount of games over what they could afford if they only bought new for keeps.

        Buy game for $60, trade for $30 now next game is only $30
        instead of 1 + 1 + 1 = 3 the we get 1 + 0.5 + 1 = 2.5 that's a whole 0.5 more will get you a fourth game to play for the price of 3.

    Maybe all DD would be ok if every gamer had an unlimited internet connection and consoles of the future do not use proprietary hard drives.
    I can definitely see M$ building the new Xbox with a relatively tiny, non user removable HDD that you need to pay them a huge sum to upgrade just so you can fit all your purchases on it.
    Also if they drastically lower the price; but why would they? People are willing pay current prices and if you have no choice... Imagine if the Xbox live store was the only option to buy the latest Halo or whatever. Thats what they are talking about, not Steam.

    Another area which I see suffering, which neither publishers, retailers or even developers care about, is the life of the game.
    Bioshock is a fantastic game, but the PC version has limited installs and requires a connection to an online server before it will.
    What if that server gets taken down? Will my kids be able to play it if I bring out the old disk when they grow up or will I have to wait until the high-def version is released?
    What about AC? The DRM requires always-on internet connection to a server. Will Ubisoft release a "free-for-all" patch which removes that 10 years down the track?
    In the worst-case scenario downloadable content will no longer be available and the key to unlockable content will be lost.
    Nostalgia may not be the most valuable market, but surely it cshould be an important one.

      If you remember a culture know as "Abandonware" back 10 years ago and the fact that it was never considered legal, then you already have your answer to what publishers think of you playing old games (on old formats that is. They'd happily resell you that Bioshock or Assissins Creed as a 'classics' 10 years from now)

        That is the biggest concern I have. I don't care if you can only play new, but as a collector I want to be able to play these games 20 years on like I can do with my NES

    Going down a purely digital distribution route won't work for many, many years to come. Around half of all xboxes that have been sold have never connected to Xbox Live, so this would mean that you are instantly reducing your market by going digital.

    I'm surprised the "entitlement" issue hasn't come up, as many blame this for the reason that gamers perfer to buy a secondhand copy versus a new one. I'm not sure that it is true, but it does normally come up in discussions like this.

    They should make it so that each disc comes with a code that gives you a digital copy, and you have to be signed into your account to play.

    Used game sales are evil. When they die, so does day 1 DLC.

      "Used game sales are evil. When they die, so does day 1 DLC."

      Haha, as if even if you can't used game it up you can be day DLC is a permanent item now.

      Hahahahahaha.

      Yeah right. As if they're going to get rid of one revenue stream because we've handed them another.

    One thing that concerns me about obliterating used games is in regards to collecting. I dislike the massive margins that game retailers take from used copies (and will always buy new if the option is available), but preowned titles can be are extremely useful for tracking down rare or unappreciated titles. In another twenty or thirty years, when the PS4 and Xbox 720 are long dead and the servers are taken down, how will people go about finding and playing the unappreciated titles that fell through the cracks. Culture and history is as important to me as gameplay and quite important for the long term health of the market. It's the same reason as to why I buy under appreciated films and animations, as in another fifty years time I may be one of the few people that still has a copy and would like to preserve their work.

    Not to mention the amount of fans I've made for various series from lending out games to friends . <.<
    It'll be interesting to see how this all pans out.

      Unfortunately the developers won't be interested in the consumer experience on the 720 in 30 years, likely they will be concerned about the consumer experience of HyperSystem or whatever they come up with.

    I just hope that next gen systems will have bigger hard drives at launch to accommodate for digital downloads of larger games. I think a 500gb base model and a premium 1TB model would be a good place to start. Even better if it's 1TB and 2TB respectively.

    Without Preown in time we will NOT see any shop fronts,
    then without those shop fronts we have nothing but the online 'digital' outlet to purchase from
    which will be the point where EVERY SINGLE COMPANY will charge what they want and for how ever
    long they choose to charge it.

    i can understand where developers come from in maintaining their argument about missed profits
    but what about those people who trade in for their product because they cannot afford to purchase
    day one?

    i honestly believe if we are left with only a digital outlet or even a single state outlet of no preown
    gaming sales will decrease specifically if the prices we pay in Australia are still as extravagant as they are now.

    They don't want you to pirate because "You own the physical media, and that's illegal", but they don't want you to be able to trade the physical media either - how is that Fair Use?

    So basically your Disc becomes a One Time Use (virtually becoming little more useful Digital Download but with none of the benefits of being supposedly cheaper or if I lose it I can re-download it).

      This seems to be a widely spread misconception. You don't "own" anything. What you're buying is a license to use the software. The physical media is merely a medium for delivering that software to you. That is why, when using a system like Origin, a rule violation in one game can stop you from accessing your account, thereby effectively revoking your rights to play any other games you have on that account as well.

    all drm of this nature is going to do, is cause piracy on a MASS scale.
    i would donate cash to hacking teams to bust this shit open with no hesitation. right now, i buy a fair few games. the majority of them i hang on to. on disc i have probably 50-70 PS3 games. about 10 or so are X360. digital games on both systems, ive got over 100 combined. at the moment i have the option of selling, returning or giving them away. take that option away from me and i'll happily pirate each game that is released.
    for the record: ive traded about 10 games. sold zero. and given away about 5.

    All I can say is that any single-player (or MP, for that matter) game that I have had a genuinely awesome experience with stays on my shelf.. I may never replay it again but it has sentimental meaning and I won't part with it.

    If these people make good quality games that are, even if there's only a small chance that you actually will, replayable because of their awesomeness, I don't see any major problems. The problem is that there is so much crap being churned out that those games eventually end up being resold.

    Simple solution: make the singleplayer good and people will want to hang onto them for the future. Game industry has survived so far with a second hand market dont see why it couldnt in the future.

    The juggernauts like EA should just open their own shops, if they want to reap the rewards of trade ins they can then do so. They could set up a small commission system with other publishers, take $10 bucks say when a non EA game is traded in their store an the rest goes to the original developer/publisher. Everybody wins. Or not, I didn't do business management, but this seems to make sense to me.

    Haven't really got much to add that wasn't already said by LawfulSarcastic. If it came to pass that all consoles were locked in such a way and required online certification etc, I would seriously have to consider whether I would even bother getting one any more. God knows I have enough unplayed games in my collection, I could easily survive going through those. Then start on the whole lot once again after everything's finished.

    ...why do I feel like I should be wearing a tinfoil hat.

    I have bought very few used games in my life and buy 20to 30 new console games a year. As I trade in the old games I have finished or did not like for money to buy new games, I would not be able to afford anywhere near the amount of new titles I currently buy. I understand that we already buy a great deal of games digitally, just look at itunes app store or xbox live, but the big difference is that these games tend to cost $20 at the very most and more often $10 or less. This means that you can afford to be a lot more speculative with your purchases as apposed to paying $100 for one game and risking you will not like it.
    It is also very true that digital only will take all competition out of the market and it will be one price to all.

    The real solution? Make better quality games that people actually want to keep, and make the legit versions hassle free and easier to obtain than their pirated counterparts.

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