UK Stores Discuss Sharing Pre-Owned Sales Revenue With Publishers

The issue of pre-owned sales at retail is a thorny one with publishers, with some folks believing it's a bigger threat to the games industry than piracy. But speaking to MCV, some UK retailers have discussed a solution: they're happy to share some of the pre-owned revenue with publishers, providing they remove 'Online Pass' features from upcoming games.

As a solution to the problem of publishers and developers receiving no money from pre-owned games, many have added 'online pass' functionality which restricts players who have bought a pre-owned version of the game from engaging with certain online features. It's a scheme intended to provide an incentive for consumers to buy new titles instead of pre-owned.

Gordon Crawford from independent retailer Gamespod believes there could be a third way.

“As a retail store we would happily share part of the sale from a used game if we get something in return. Perhaps new games at better prices and no more online codes," he said.

It's an interesting compromise, and personally I hope publishers consider it. The current system of online passes, I believe, is a flawed solution that punishes consumers, and that's usually bad for business.

We covered the whole pre-owned debate in this feature. Retail margins for pre-owned sales are exponentially higher for pre-owned sales, so if they are willing to share revenue for a little breathing space in the new games market, then that sounds like an ideal way of moving forward in the future.

Retail: Stop online codes and we will share pre-owned revenue [MCV]

Thanks VG247!


Comments

    I doubt this will happen.. There's a tonne of places who sell preowned, and I doubt you could get them all to agree on a set price. What if one retailer says no?

    Online pass sucks, but I can't see it going away anytime soon.

    Simpler solution is for retailers to be able to purchase new online passes to bundle with preowned games. Publisher sets the wholesale price, and retailer adds it on to the retail price. Simples!

      You, sir, should work in marketing.

      Oh ... wait ... your idea is sound, logical and probably profitable.

      It makes perfect sense - however there is still the problem of when the publisher and/or developer go bust.

      What is the point of content that is locked until activated if the servers eventually get shut down?

      Publishers need to wake up - the average consumer sees this as money grabbing and the publisher are their own enemies. Instead of spending so much money on anti-piracy measures that are easily circumvented, they should focus on post-release content.

      If they had better support for games after release, then maybe more will be willing to buy new copies instead of used.

      But my own reasoning is flawed because the game itself has to still be well developed in the first.

      Disagree, at the moment the publishers don't offer the option to purchase the online pass, do you think they flick a switch and turn this option on? no.
      Who is going to pay programmers, developers, testers to get that working and how long would it take. Also in the end who end up paying for that cost? The customers.
      What the retailer is suggesting is a cheaper alternative, say they give $5 from the profit of pre-owned to the publisher then the publisher sells a new release to retailer $5 cheaper and does not have to pay to manage and online pass system + over heads related/year.

    I can't believe this is even being discussed. It's publishers being greedy, simple as that. Can you name ANY other product where the original seller gets money from subsequent sales of the same product? I certainly can't,

      ANY other product does not have the ongoing costs that online gaming does.

        Eh the ongoing cost thing is BS.

        Considering most games use a P2P architecture they don't have high costs at most your tracking stats/level.

        Then there is the fact that when people are trading their games in. You still only have 1 person with the ability to use that copy online.

        If the online costs were so high. They would be charging everyone to play online. Or at the very least every 6 months you would be repaying to play the game. Since what is the difference between 1 guy who plays the game an hour a day for the next 2 years.

        And 10 guys, 9 of which play for a couple of hours max before trading it in. Until the last guy either plays it for an hour a day for the next year or it goes on his shelf. The only difference is that the company has 9 most likely 1MB or less data files with the persons level/stats and thats assuming they aren't store on the console itself.

          I'm not aware of any P2P games that have an online pass.

            Off the top of my head, i know uncharted 3 doesn't have dedicated servers and has an online pass.

            Not sure of too many other examples mainly because my platform of choice is PC.

            But then how do you explain the online passes of Batman: Arkham City and Rage. Which lock out content in the game. There is no online to worry about(Well there is limited racing Multiplayer in Rage from memory and co-op which is all done by P2P systems)

            Online cost's are not the reason most games do it.

            And if the issue is that the online costs are ongoing then surely there should be an ongoing cost for all the players. Because again 1 copy is still only one user. There may be a data file with other people who used that copy stored somewhere. But the cost would be to maintain the dedicated servers. Which even if you removed all used sales. Is still going to be a cost with respect to time.

              Uncharted, RDR, etc, are all single player games that you can play completely without having to set foot online.

              If you wanted to then explore their Online game modes, you'd need an Online Pass.

              That makes sense to me.

              Games like Batman needing online activation for the Catwoman section - eh, I'd put that in a different basket to "Online Passes", as it's more "Free DLC but activate it online" (not arguing right or wrong here, simply making the distincition)

                Catwoman was made as part of the game though.

                It was made DLC to accommodate an online pass system

                Oh and don't get me wrong i have no issue with the online pass system.

                But then i'm a PC guy so trading is mostly not an option and B) i like to keep my games so i can play them again. I still rock original copies of age of empires and Command and Conquer :D.

                The only problem i have is that what they should do is provide an hour free.

                Only because knowing some of the PC games i have played that were less than stellar online. You could concievably pay 10 bucks for an online pass to a game that only 10,000 people play and 9,800 of them aren't even remotely near Australia to get a somewhat decent ping off meaning you don't have alot of play options.(Hell it's a problem for some of the non TDM modes in CoD on PC(doesn't help that you have to unlock things like HC and the like)

      Can you name any other product that is being resold for 10% less than retail 24 hours after release.

      With the ability for that used copy to be resold every day for 2 weeks.

      Cos i can't

      The closest thing's that you can actually use as a relevant benchmark for games are CD's/DVD's. Thing is though you don't buy them with a 24 hour turn around that's what rental programs are for.

      When it comes to cars the distributors do make money because replacement parts have to come from somewhere.

      ---

      No other product in the world has to compete with itself within 24 hours of release. I have seen the same copy of a game boomerang it's way back to the store 10 times in a fortnight. Always at 10 dollars below the retail copy. Store was buying it at 50 and reselling at 90. And that was simply a copy that we marked because we were bored and wanted to see how often it came back.

      Would everyone of those been an actual sale, probably not some people exist solely off the used games market.

      Irony being that if they had even an iota of patience within a 4-8 weeks the game will generally have been on special or dropped in price to below what they paid for it

      The difference is that when most other products are sold second hand they are just that, used, in second hand condition, to some level degraded, most probably lacking warranty and deserving their devalued nature.

      When you buy a pre-owned game you receive an identical experience to new. The same copy of a game can pass through a retailer half a dozen times amd provide the exact experience the new copy can while priced only a fraction lower than new.

      So the retailer benefits from a 100% take from 6 sales of a product that provides an experience identical to the new product.

      That's the main difference between games and other markets. If retailers were selling second hand experienced that were proportionately devalued there wouldn't be an issue.

    What's wrong with the Online pass system? Buy it new, or cough up the cash. Simple.

    Thing is this isn't going to work at least not in my mind.

    A) It's only the UK that is proposing it. Which then means extra effort has to go into creating UK only copies that work without a Online Pass.

    B) Instead they create a system in which the UK companies can buy Online pass codes cheaper say 5 dollars instead of 10. And justify that as the money they give to the publisher. Which still leaves the online pass codes as an issue for those who say want to play Arkham City yet don't have a net connection for their console.

    C) They want cheaper wholesale prices as well. Which to me seems like all in all the game store is going to come out ahead.

    Since you have just cut the unit cost of the product. Meaning they make more profit on new sales. They are most likely paying the Publisher maybe 5-10 dollars for online passes or lack thereof. Which if they have just lowered the unit cost. Is essentially giving the publisher back the money they were already going to be charged.

    ----

    Personally i think there is an easy way to curb the used games problem as they see it. Make it so that game retailers can't sell used copies of a game withing 4-8 weeks of release. Sure it will probably open up the online market a little since you can't stop that. But those games are circulating money between gamer's. Where the current situation has most of the money being taken in by retailers because it's much less of a hassle to resell through them.

    It gives the publishers a window where they actually have a fair period to sell their game without loosing out as many sales to used games.

    You don't go to a car dealer a day after they release a new SS ute and find 15 of them sitting on the showroom floor with a 10% discount

    If both parties made more money and consumers were'nt affected then I don't see why not. We might be better without online passes etc.

    I get having new DLC included, but most are opting for the online pass system, which just rips consumers off right now.

    If I buy a game and redeem my online pass, then I use the servers etc and cost the company money. If I trade the game in and someone else buys it they can't play online unless they pay for another pass, even though I'm not using the online services anymore. It just doesn't make sense to me :-/

    Clearly retailers are feeling threatened or feeling the pinch as a result of online passes. So if you were a publisher why would you let them get the power in the market again like they used to have?

    MOVIES BOOKS AND MUSIC, we can all trade these media-based commodities in. Games seems to be the only one people are yelling about, it wasn't a problem 15 years ago and it isn't now.

    yeah lets all try and get second helpings on profits, why aren't car manufacturers getting a cut of second-hand sales? cars have been around longer and are more widely used, surely the manufacturers deserve to get seconds?

    Ohhhhh wait it's not their property any more once they sell it, that's why no-one else in the business of selling gets seconds...

      "it’s not their property any more once they sell it"

      That's what everybody seems to be missing in these debates. Somebody gives up ownership of something in exchange for money. The person then buys it from that person at a discount because it's not a retailer-guaranteed new product. Retailers that do second hand simply allow easy facilitation of this process, they may do it amorally but it's still legitimate business.

      I don't trade in my games, but I don't see why I should just accept the "You bought it and now it's yours forever even if you don't want it anymore."

        yaha, and if they want to limit the sales of second-hand games than there is *already* a solution in the wild, digital distribution, with the prime example being Steam. Steam games cannot be resold or moved to another account, they are bound to that account forever, for example I have 382 games forever only mine.

        To encourage people to flock to digital distribution they can just easily leave out all the bullshit DRM they put on games (even ones on Steam some Ubisoft games have 4 or so layers of it!). Make the digital version have a bonus the store one doesn't to compel customers.

        Something like that won't happen though, the bottom line is profit, retailers are making profit from second-hand games and digital distribution platforms get a cut on the sale (which I have nothing against as they provide the service). Basically publishers want a bigger share of the money pie for themselves so they ignore customer welfare for the monies.

          Wait, my reply to your post was to speak out against the single-purchase no-resale restriction or online pass depreciation.

          As in I don't at all support the inability to resell steam games, the only reason why you can't trade in pc games is because the retailer can't prove that you haven't copied the key.

    I find it super annoying when a 2nd hand game has "free DLC" attached to it, but I know full well it is no longer there since the original owner claimed it already and the price of this 2nd hand game is around $10-$15 less than a full price new game, which means if I wanted to get that DLC I would probably have to spend $10-$15 or even more! Making it more expensive than buying a new game outright with the free DLC in it.
    If anything, 2nd hand games with DLC should priced much lower since they won't offer all the features that a new game has (in fact I think a lot of 2nd hand pricing is way too high in general - especially during so called sales, it always surprises me to see a new game discounted to sometimes be below a 2nd hand game price of the same game!! does no one pay attention? or they hope dopes and idiots won't see the price discrepancy and buy it blindly)

      I know, was just pointing out that the option for publishers to ensure they get all their profits exists in either having their own digital platform or using one like Steam. Thus it is unnecessary to frustrate and punish customers that buy the physical copy whom own it forever for realsies and not forever until the digital platform fails (like Steam might one day).

      Basically I accept that by buying Steam games one day they may all become inaccessible, but why does the person that buys the physical copy have to have such restrictions placed upon them? and why does the publisher deserve to get seconds all of a sudden when they no longer own that product in any way, shape or form? they don't.

    I quite like the idea of the publishers making the online passes available for separate sale to retailers so they can on sell it to a customer who buys a second hand game, that makes briliant sense.

    Whilst the publishers may not get a cent out of preowned sales, I don't believe it hurts them as much as they let on. There's a quote that sticks out in my mind from Epic games: 'Twice as many people played Gears (1) than actually paid for it". Meaning not everyone bought a new copy of Gears to play it. But for titles like Gears that evolve into a series, having that preowned option and exposing it so a lot more people means alot more pople wan to play Gears 2 and Gears 3, which they may very well buy brand new. It can work for them and against them, but there's no way they'll ever be able to tell a retailer they can't sell a used copy of a new release game until 4-8 weeks after it's release, they simple don't have the authority to tell any retailer what they can and can't do with a product that actually isn't theirs, and if it reaches that point, what's to stop them from saying, you can't trade in our products? I don't like the idea of any publisher/dsitributer having that much control over the retailers.

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