Lionhead: Piracy "Less Problematic" than Pre-Owned Games

Echoing the comments of Blitz Games founder Andrew Oliver, Lionhead producer Mike West has claimed that piracy is far less of a problem when compared to the impact the pre-owned market is having on publishers and developers.

"Piracy these days on PC is probably less problematic than second-hand sales on the Xbox," claimed West, speaking to Eurogamer. "I've been working on PC games for many years and piracy is always a problem. There are a lot of honest people out there as well, and if they like your game they'll buy it."

We covered the issue of pre-owned games extensively in a feature late last year. Particularly in Australia, the pre-owned market is the area in which retail outlets are making the most profit.

And according to some executives in retail, the pre-owned market is an area where most large publishers are starting to let their guard down - attempting to use it to their advantage as opposed to demonising the process. Some publishers are actually attempting to work with specialised retail outlets such as EB and Game, creating offers that entice gamers with extra value trade in bonuses towards new games.

Perhaps there is some sort of compromise here?

Lionhead: Pre-owned worse than PC Piracy [Eurogamer]


Comments

    There has to be. Without pre-owned games there would be no 'boutique' stores left... the only places that actually care more about games then profit. Well most anyways...

      *edit the people in the store not the business itself

      Im sorry but these boutique stores disapeared long ago.

      We used to have an awesome one in my town until EB and Game moved in. and it promptly went out of business, because they couldn't compete with a franchise.

      And based on the fact that not one of the people in their knows much about games, we lost the battle ages ago.

        EB gets worse and worse. I used to find the occasional guy that knew what a game was. I just stopped going as I found the internet a more hoest and reliable source.

          My local EB has 3 staff who play games almost as much as I do, and that's entirely too much.

            The problem is though that EB Games costs around 30$ more than just buying from somewhere like Kmart.

            It's only really good for 7 day returns.

              the EBGames near me, the boss actually plays games and so does one of the female employees, but that's nothing in comparison to Gametraders I go to. I know it's a little more expensive to buy games from them, but at least they know what I like.
              On the preowned game debate, how else am I going to get my retro games? I think this is the game companies just complaining. They got the money from the first purchase, what are they going to do? Demand you send the game back to them so they can sell it again?
              Unfair =/

    The pre-owned thing is an interesting battle. I mean, book publishers have had to deal with this for hundreds of years, yet the game industry is screaming its head off about it.

    I can see both sides of the story, though. If you have a finite customer base, and your game is only sold to 1 out of 5, with the other 4 buying it second hand, you the publisher/developer have to make up the other 80% of costs by building up the cost of the original game. That's kinda bad for us consumers in the long run. Eventually games will become so expensive that fewer than 1 in 5 people will buy it new, making things worse.

      yeah but the book market doesn't work on a principle of return it here in the next 7 days for this much money so we can sell it for 5 dollars less than we sold it to you.

      The other thing is that book's take on wear and tear. Something that unless a moron has had their hands on the game doesn't apply in the field of games

        Also, a book doesn't cost 60 - 100 million to make and second hand books aren't sold alongside new ones.
        Second hand booksellers are independant... there isn't a large chain collecting, catagorising and redistributing them and the don't allow you to use used books as credit to new ones.

          There are chains of second hand book shops, such as http://www.elizabethsbookshop.com.au/. When you buy books from them, they usually have a label on them telling you how much you'll get back if you sell the book back to them. They also sell a range of new books in addition to the second hand ones.

          Video game retailers are not as different to book shops as you make out.

    I think its disgusting when a 2nd hand game is only $5 cheaper than a new release game, which I saw recently in a GAME store! e.g. I saw that with Dragon Age Origins for PS3 - the 2nd hand game will obviously not have any "free" DLC attached to it as that would've been used (and doesn't EA charge $10-$15 to get their "free" DLC?).
    I don't think 2nd hand game should be anywhere near the "new" game price, I reckon at most 2nd hand games should be 50% of original new release price (as a starting point).

    If he made a game that wasnt so dissapointing that I didnt want to buy used or pirate then I'd probably listen but after Fable 3 and all the unfulfilled promises I don't really care what he says.

      So, do you rob a McDonalds after getting a bad burger?

    Publishers are a bunch of sooks. Smart purchasers are always out to get the best value for their dollar, and most hunt around for a good bargain. Considering certain retailers (not naming any) often place prices of pre-owned games higher than their brand-new counterparts, it's safe to assume that the onus falls back onto the publisher to keep prices at a respectable level - as to entice the purchaser to choose new over pre-owned.

    Publishers:

    1: Lower your Australian Prices. If I see a game for $50 and for $25, guess which I'd pick. That's not to say I don't feel bad for the developer.

    I would (maybe) stop importing if the local price was cheaper.

    Would more people buy more games if the price was less? Would publishers/devs end up making more?

    2: Give retailers an incentive to stock less pre-owned games; if you're a games-only retailer, and you only get 10%* of every game sold, you need to sell preowned games to stay afloat.

    *That value is unsubstantiated, but I'm pretty sure retailers get very little profit from new games.

      In response to proposal #1, there are multiple factors as to why the prices here are higher than our American counterparts (aside from profiteering by publishers and/or game retailers which I will not name).
      Some of which include:
      - The cost of getting the game classified here (until we can move towards a system similar to the ESRB)
      - The shipping costs and taxes involved (since games are shipped in bulk)
      That's all I can think of at this stage.

        Classification costs around 2000 dollars each time it's performed.

        So if they were to sell 2000 copies at 51 dollars they have recouped that cost.

        As for shipping it isn't going to be comprising another 49 dollars a copy.

        Import tax could have an issue, esp. if they still do the old abuse the system by shipping it to the US and then on to australia.

        Fair points,

        Do you think downloadable games from retailers like Steam could be cheaper? There are no disc production or shipping costs. Granted,there is server hosting, and the tech side of it.
        If online retailers weren't under pressure from brick-and-mortar retailers to adjust prices, could downloadable games be even cheaper than they are now?

        Probably not. Because everyone loves money.

        the main reason games cost more in Australia is the high cost of rent for retail shops in here visa-vi the US/Japan/Europe is very high

          That's simply not true.

          It costs a retailer more to purchase a game through a local distributor than it does for a customer to buy a game from an online store.

          Store rental is a factor in pricing but the games already cost more for Australians before that becomes a factor.

    I never buy pre-owned games. It feels like cheating the system and a "legal sort of piracy" that doesn't help game developers and publishers at all.

    I am struggling to wrap my head around this debate.

    I can understand the problem that the game industry is screaming about, but when you try and charge me $105 dollars for a new game, something has to give.

      Part of the problem is that there are so many links in the chain that need to take their cut before the game even gets to the retailer that people tend to get pretty screwed by that alone.

      Then a retailer, who might be paying $80 for a game will sell it for $110 in order to make a decent profit on the thing (which isn't even that big of a mark-up for a retailer) but will also sell a pre-owned copy for $105 because it looks like a better value purchase compared to the new one. Of course, cost to retailer for a pre-owned game is substantially lower than a new game but if they didn't have to pay so much for new stock to being with, the pre-owned situation would be less of an issue.

      If retailers were able to buy a game for about the same as what they'd pay for a pre-owned copy, you would bet they wouldn't bother with the whole pre-owned business. If they did bother, they'd be paying customers even less for pre-owned games and there would be even less incentive for customers to sell their games in store.

        So the system is broken is what you are saying?

          Yup.

          Steam is able to do their massive sales with ridiculous discounts because they are more direct. They then make up for the reduced margins by simply selling a high volume.

          Retailers can't do that.

        That's pretty much spot on, Trjn. But, here's the kicker, and this makes me MAD. All these publishers complaining about preowned? They're talking about USA-level pricing. $60 games. It's ridiculous. If GameStop are as bad as I've heard for trade and preowned prices, there should be nothing to complain about.

        In Australia, the situation is different. There are fewer legitimate complaints that can be made about preowned, here down under, so it's a more interesting debate. But the US is ridiculous. It's vile, abject greed.

    The second hand market goes away once games are priced reasonably. Of course Australia has a big second hand market because retail prices are a rip off. Once everyone figures out about importing from the UK which is gaining huge momentum. See you later Australian game retailers. Why buy second hand when you can import new for cheaper.

    I think what people are forgetting is that to sell p/o stuff people have to trade there games in. If there was no market for that then p/o games dont get sold. Doesn't it offer the consumer another way of affording a game? No one forces peole to trade just like no one makes you buy pre-owned. If publishers dont want people

      * if publishers dont want people to buy pre-owned maybe produce more games that people will be less likely to trade.

        Hear hear~~~

        but how many games these days are actually worth keeping tho? That aren't on PC :P

          And are longer than 10 hours long? I guess that's why games like Dead Space and Assassin's Creed Brotherhood are getting multiplayer. Games like your CoDs, your Halos, GTA and Red Dead are mainstays on Live, making it hard for newer games to compete with that. I just hope consoles games don't start coming with one-time activation keys tied to your gamertag.

    They need to offer more better incentives to by the game new.
    I get sucked in with bonus pre-order only DLC and free gifts that add to the game experience such as the Pokewalker.

      +1 for the pre-order bonuses.

        When buying a game if I had a choice between preorder dlc and spending $50 less, I'm picking the $50.
        Preorder dlc is small-time, boring. But, if it were awesome and game-changing, that wouldn't be fair to later adopters.
        I preordered the Mass Effect 2 and got some armor I never used. I'll be preordering ME3 from overseas, for half the price.
        I understand the idea behind the Cerberus Network and online passes for sport games, even if I don't appreciate it.

    My standard for preowned games is I will buy them once the game has been on the market about a year or more.

    By that time the preowned will either be on a good sale price compared to new (eg $25AUD preowned, when the new will be $50AUD plus). And at that point I can't justify spending more.

    Or the game will just not have new copies available. This is very common with smaller budget games. By that point they've made most of their new sales worldwide, and are not going to reprint the game.

      Exactly, if there were a 3 month delay from release where only originals can be sold, they wouldn't be able to undercut the publisher on day 1

        Or alternatively, that would mean there is no downward price pressure during the first three months and publishers could charge more for the game during that period ...

    My ps3 is 2nd hand, and so are most of my games. If I could buy an old game brand new for close to the preowned price I would. But when older games are $60 or more and I can get it for $20 in good condition.. why would I buy new?
    I want to support developers, but I can't justify paying the high prices for some preowned games from early 2010, or even 2009.
    And for the record, brand new games I do buy new copies, unless the game isn't worth it, I'm a student so I am willing to pass or wait if its very buggy or medicore at release. Quality > quantity, plus developers shouldn't be rewarded full price for subpar games.

      Yeah but your talking months after release where the difference is larger but the shop is making much less profit on that 2nd hand copy

      At day 2 of release when they are selling the copies of the game that they bought of the people who rushed through for 60 dollars and selling it for 5 dollars under retail(95) they are making 35 dollars off every copy sometimes more

      I think the main problem with the pre owned market lies in the 3 months following release where the publisher is competing for it's initial sales peak against itself

      I mean if they were selling 10 copies at a store a day

      There's no other industry with second hand sales where the product is sold in the same location as a new copy mere days after it's original sale/release.

      You can resell a car but I'm yet to see people buy a new car trading it back the next day, unless theirs something wrong with it
      Finishing a game because you played for15 hours straight does

      And then there's 3 pre owned copies and only 7 normal ones sold the next then the odds increase that they will get more perished the next day both from the new copies and those who bought a preowned copy.

      Their sales are essentially being canabalised by their own product

    Dirty, filthy, thieving bastards. I'm sorry to have to say that, but its nothing but greed. I'm so sick of the greed these mega-companies display these days. Do you see the wheelbarrow companies kick up a big shit storm when someone offloads it on ebay? Or a garage sale? No, because you bought the damn thing, you really should own it, fair and square. does Nissan complain of the second hand cars? No. These damn game companies and their despicable EULA agreements are down right dirty underhanded greed. I buy a CD for $20, thats a fair price. I will likely get wayyyy more enjoyment and time with it than most games. It represents good value per enjoyment factor. If from the get go, games charged the same as a CD, this whole mess of piracy would be minimal, the second hand market would become a very tiny part of the market and the games companies would still be doing great guns. I don't buy the fact they can't make profits on games for $20. If the damn CEO's and upper managements were paid a decent salary instead of millions, and stopped the waste, this whole problem would be in the past.

    Man, I have not ranted like this in forever, but this treating their customer base as friggen slaves farming them for more and more cash is disgusting.

      HERE HERE! If no employee earned over $200,000 (USD or AUD, w/e) per year including bonuses and share payments, how many millions would they save...?

    Seriously anyone who would by a second hand game for 5-15 bucks less than brand new is an idiot!!! The pre-owned game market instores is a cancer on the gaming industry. To many tight arses around today who expect everything for nothing. Games prices havent changed much since the NES days. If you are paying $100 for a game stop shopping at EB. A store like them who can sell the same game 4,5,6,7 times and take 1000%+ profit from it is hurting the gaming industry.
    If I buy a new game from EB and it's not sealed how do I know it's not second hand?? I have seen some dodgy practicers from EB and when I saw a game that I thought was brand new with a price tag of a new game only to notice the price tag was covering a pre-owned price tag..... Yep no longer a customer....

    As a gamer support the developers, not a store who rapes the industry and rips-off gamers!!!

      Wow, new tag over a pre-owned tag? Stupid AND lazy.

        EB's 7-day return policy gives you a full refund; I assume that game goes back on the shelf. On a rare occasion they may hand you a copy still in its manufacturer's seal; apart from that, you're right in saying it may or may not be a new copy.

      I traded Virtua Tennis 2 to EB for $14 a few years back. I checked the shelves that day, to check how much they sell pre-owned VT2, so I could use that as a bargaining chip, but I found there were no used or new copies on the shelves.

      A week later I found one 'new' copy of VT2 on the shelf for $60.

      Because of this I don't buy used games from stores. Would be happy to buy off an individual though. I don't see anything wrong with selling something you own cos you don't want it anymore.

      Its not a cancer, its a painfully predictable outcome of releasing a product that conducive to resale. Consumers tend to want value for money, not everyone wants to engage in $5-15 charity every time they buy a game.
      If developers see this facet of the game market distasteful they need to adapt. Deals and compromise with a couple of the retailers-of-the-moment is only likely to be successful in the near term, and _only_ if the deal is beneficial to both sides. Which doesn't seem likely without making things more expensive anyway.

    I thought EB was Electronics Boutique?

    Suggestion to developers: run your own stores. Sell copies of your games to people directly. Several smaller developers do this - NIS America are a really good example - and a lot of people will happily buy through you simply to support your work.

    There is actually I specialized second hand game and DVD store in Launceston in Tasmania.

    They have hundreds of games from half a dozen diffent consles including the consoles themselves.

    XBOX, 360, PS2, PS3, PSP, Wii and DS and I think some older ones just from the retro gamers.

    I used to love my Mech Warrior on PS1 and my old 64 and Atari, oh how I miss those days.

    People have been pirating movies, music, books and games all along. People have been selling and trading movies, music, books and games all along. Nothing has changed.

    Its quiet simple make a good product and people will want to buy and own the product.

    I've been copying games since the Commodore 64 days of tape to tape. Movies since VCR came into the homes and music as soon as i had a tapedeck.

    The only way i can afford to buy most of my games is to buy second hand games. If i by a game say Call of Duty second hand and love it, guess what new game i'm going to buy when the next installment is released. If i buy a second game like Guitar Hero and the songs arent very good and its not much fun anymore, guess which game i'm deffinatley not going to buy when the next installment is released.

    Is it still the case for retailers e.g. EB Games that they still make non-taxable profits off 2nd hand games? Or is something being done about this?

    What really shits me is the game developers that don't release demo's for their games, which forces your customers to do one of three things:

    1: Pirate the game, to test it out.
    2: Go out on a limb and buy the game straight out.
    3: Not buy it at all.

    Since if the game looks good enough, 3 wont really factor in, the industry bitches and moans about the pirates who pirate the games, and then to their legitimate customers who went out on a limb and bought the game, they bitch and moan if the game gets returned.

    So really, they get no sympathy from me.

    Something needs to be done. New games are too expensive and still offer little profit to the shop selling them. The price makes buyers trade it in so they can recoup some of their money or buy the second-hand one (which is frequently only a little cheaper).

    Here in the UK bloody everyone has started doing second hand games - even HMV, Asda and Argos!

    Something also needs to be done about games that you can't find "new". If I want to buy, say, The Mummy on DVD (a film from about 12 years ago) I'll be able to find it quite easily new in HMV in town. If I want to buy Banjo Kazooie N&B (a game from about 2 years ago) I'll probably be out of luck unless I go second hand.

    Make digital downloads cheaper. When ME2 came to PS3 they trialed selling it in the PS Store and it was $99. I bought it in Big W for $89. When a digital copy of something is more expensive than its physical counterpart something is horribly wrong.

    They tried to make as much profit as humanly possible. In short; they're greedy.

    My 2ç, preowned games are actually SAVING THE INDUSTRY from turning into pure crap. Allow me to explain:

    How often do you walk into a game store and see pre-owned copies of Nintendo games? Almost never! Thats because the games are well made and often alot of replay value.

    Now lets take Halo Wars, it had popularity with the halo brand attached but the game itself wasn't good in many buyers opinion and walking into any game store you'll find around 10-15 copies pre-owned.

    Now lets say a new mario game comes out and sells 2million and halo wars sold 2million. Is it fair that both companies earn the same ammount of money when many of the halo wars customers are unhappy with their purchase?

    Thats where pre-owned games come in, instead of buying a brand new game someone buys a pre-owned game and thus companies make more money for making longer laster games.

    tl;dr version:

    bad games go into pre-owned section and the company makes less money, good games dont go in pre-owned and company earns more!

    I can imagine that in places that aren't Australia and charge $50 instead of 80~100+ actually have somewhat of a tighter margin, and they might have to consider such things as where they can capitalise.

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