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Used Games: Why Punish the Consumer?

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Wednesday, June 09, 2010

 

Used CarPublishers insist that used game sales are killing them.  Gamestop laughs all the way to the bank with their massive profits from used game sales.  Gamers, well, gamers are torn on the issue, including me.  Part of me thinks when you buy a product, you should have every right to re-sell that product in its entirety.  NOT with features disabled or removed.  Another part of me understands that some publishers and development houses are fighting tooth and nail to survive.  The last thing I want to see is a gaming industry where only the giant, mega publishers like Activision can survive.  The third part of me, the smart part, realizes that there MUST be some sort of compromise to be made.

The publisher’s position on used game sales is easy to understand.  Publishers don’t see a dime from used game sales – at least not directly.  They tend to dismiss the idea that used game trade-ins actually contribute to new game sales.  

Retailers certainly don’t give publishers any portion of used game sales.  In addition to that, retailers tend to only knock off 5 bucks at the most on the price of used – which they have learned is a perfectly acceptable price point for consumers.  “I can get the same game for 5 bucks less?  I’ll take it!” 

Used game sales are almost pure profit for retailers.  With sites like Amazon that can cut prices to the bone on new games, retailers HAVE to keep their margins low on new games, and hence don’t see a large profit.  But sell them your used game for 25 bucks that they can turn around for more than double that, and you can see why they are happy with the way things are now.  Like the publishers, they are in business to make money. 

So how could retailers and publishers work together to fix this?  I have a few ideas that they could try.

gamestoreMake new game sales more compelling by lowering the introductory price.  If you want to make new games more compelling, quit trying to push prices UP.  I remember when game makers started making the switch from cartridges to disc-based media.  One of the ways they "sold" this was to suggest that game prices would come down.  What they failed to mention is that they would shoot right back up shortly thereafter.  Now I’m not naive, I realize that development costs are a little bit crazy, but games at a softer price point could spurn larger sales numbers to make up the difference. 

Lower initial game purchase price to brick and mortar retailers.  B&M stores NEED used game sales right now because they can’t compete with the power of Amazon and other retailers that can slash prices due to lower overheads and such.  Publishers have to help B&M retailers out, and one way to do that would be to sell new games at a discount to those retailers.  If you let them increase their profit margin on new releases, perhaps you could also work out a deal for part of that used game pie.

Find a way to restrict used game prices.  If you insist on implementing things like the $10 fee EA is putting in place, you need to control the price used games can be sold at.  Savvy gamers will be smart enough not to pay for used games at a mere $5 discount if they then are forced to pay $10 for full functionality, but not all game consumers are that well informed.  Work with the retailers.  Tell them if they want to be able to sell your NEW games in the future, they have to keep their used game prices down. 

My question is this:  why aren’t the publishers working with the retailers to find a way to remedy this?  From the recent “new game only” DLC to the new one-time-use online codes from EA, the publishers are going right after the people who buy used games.  Maybe it's easier to go after the consumers rather than try to negotiate any kind of deal with retailers, but that's no excuse.  

Let’s imagine that a particular store is breaking street dates with reckless abandon.  You decide to head over there to grab Super Awesome Robot Hunter 6 a little bit early.  The game company finds out about said store, and decides to punish the people who bought the game early while allowing that store to continue its practice with no repercussions.  In what universe does this make sense?  If publishers want to see some money from those used game sales, they should start with the companies reaping all the profits – not the consumers.

 
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Comments (5)
Stoylogosmall
June 09, 2010

I say they should sell used games at a lower price than just by $5 dollars. I know they have that "Edge Card" that saves more, but their price point is just them taking control of the used market (they are the only massive used game marketer right now). Only the "older games" seem to work at an advantage, because it's not like you can walk into a store and find them new anyway. However, I do not like Gamestop's "we'll buy your game for 40% of what we are going to sell it for" policy. 

I liken this to buying a used car vs. a new one. When you buy a new one, you get a warranty that comes with the car. With the used car, you either get a "1,000 mile coverage" or nothing at all. I think the extra content given to you when buying new has been a standard practice for years in other industries, and to me this is just another evolution in video game sales (keep in mind how fast this industry is growing). 

I think a few remedies would be, yes, have publishers request, if not force, the retailer to sell the used game at a lower price (good for the consumer). 

Another would be for Gamestop to offer some sort of kickback to the publishers (if that can be at all arranged). This may be far fetched, but a good starting point for change. 

Another thing is to change Gamestop's practice of being snakes when it comes to video game sales. They snake you into "reservations" and "buy a used game for cheaper," with that money going directly to them when they are only in the business they are in NOT BECAUSE of the customer, but because of the PUBLISHERS putting these games out. Let's face it, without the new supply, there will be no demand for new OR used. 

This is why I don't care for Gamestop. They monopolize demand, push unnecessary options to the consumer (and they don't even offer their employees cash incentives! I know because I'm a former employee), and jerk you on trade in values. 

Default_picture
June 09, 2010

I am no fan of the Gamestop model either, and hate the practice of the whopping $5 mark down.  I worked at an EB back when they started selling used, and at that time the price break was more significant.  

As far as the comparison to the car warranty, I understand what you are saying.  I see what the game companies are moving towards is more along the lines of used cars coming without windshield wipers or hub caps.  Not 100% necessary, sure, but something that you should EXPECT when you buy a used car.  Just like I expect a full game if I get it used.

Robsavillo
June 09, 2010

A car warranty is not "extra content." Its a guarantee that if your shiny, new vehicle breaks within a certain period of time, the manufacturer will fix it at no cost to you. You cannot compare this to limiting online functionality to new buyers and charging everyone else another $10.

Ultimately, what publishers want to do is build a system in which they get paid every time a single copy of a game exchanges hands. Their assault on the used-games market is an erosion of [i]your[/i] consumer rights of ownership.

But I think this will backfire -- when used games are devalued, stores like GameStop will buy back games for less money, which means less money in the hands of the consumer, which means less money for new games.

People may very well spend that extra $10 for that one game they really want to play online, but I think the end result will trend towards buying fewer games over time because consumers will have less money to work with.

Gaming is expensive enough as it is -- these practices only make it worse.

Default_picture
June 09, 2010

Pretty much - Remember the PS3 and it's heavy price point? Remember the Neo-Geo with it's heavy price point? Sure, enthusiasts continued, but the PS3 didn't take off until the price went down, if I recall correctly, and the Neo never took off at all.

The more expensive gaming becomes, the less people will do it. I already find myself quite content in picking up about 3 titles a year, with none of them being published by the AAA publishers.

Default_picture
June 09, 2010

This is exactly why I'm so happy I found a good way to trade out my games.  I buy a couple new-ish releases when they hit really low price-points on Amazon, but for the most part my catalog is built and maintained through trading.

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