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[PATV] Wednesday, July 3, 2013 - Extra Credits Season 6, Ep. 17: Used Games
Posts
Because retailers make $3 off of a new copy. Publishers take 30-40%. Devs + other costs eat the rest. Yeah that's fair.
Those games will not be worth buying, so nobody will. In fact that is exactly what is happening now, and they are sitting there with their thumbs up their butts wondering why they're not making any money selling shitty product in a finite market.
Furthermore, I don't know why people are defending publishers here. They're part of the problem.
I refuse to be part of any future version of this industry where I am refuted the ability to sell, trade, gift or destroy my own property at whatever price I choose, to whomever I choose.
So you're saying that the costs, skillsets and number of persons involved in producing a good invalidates the consumer's right to resell that good. (I don't think that makes a very good argument, but hey, you're entitled to your opinion.)
You are correct that making a game is more labor intensive than making a book; that's why most games cost 6-10 times as much as most books. The studios increased cost in producing the game is (or at very least should be) factored into the cost of their good. I'm very sorry if a studio isn't able to recoup their investment over time from some of their products and not others ... but that's a risk you run in the entertainment business: some of your products will win, some of your products will lose and some of those products will break even.
A studios failure to recoup their investment from sales is the result of a broken business model... that doesn't mean the consumer should be penalized for a business's inability to recoup on their investment. I shouldn't be restricted from giving, selling or trading a product I own because the business that created it is having a hard time making a buck.
Pirates have long ago created a generalized "steam_api.dll" emulation framework. Essentially you can drop this into almost any steam game relatively unmodified, and thats your crack, done.
Cars and houses are capital goods, which are fundamentally different from other types of property. Among other things, they are necessary - they aren't entertainment - and the number of houses and cars is proportional to the population. You HAVE to have these things. If you get rid of a house or a car, you're getting another one unless you're dying.
And I will note that, as population trends have changed, these markets have changed. As cars last longer and are replaced less often, the automobile industry has suffered - and badly at that. This is not a bad thing per se, but you have to understand, the net result is that people are making fewer cars. A LOT fewer cars - indeed, if you do the calculation at the present number of cars per year versus the average age of cars, you'll find that we're actually at sub-replacement on cars, meaning that the average age of cars is going up as far fewer cars are leaving the car market, and fewer people are entering the market, meaning that the industry is in decline. It will stabilize eventually at whatever the replacement rate for cars will become as they become increasingly reliable. This is only going to get worse for them when electric vehicles take over, because they require so much less maintenance - electric motors are just better than ICEs as far as that goes, and the main things that get replaced will be tires and batteries, which aren't really produced by the same people who make -cars-.
In any case, though, the reason it is different is because it is a different market dynamic. Cars are not optional, and sharing cars is often difficult - people DO carpool, but not having your own personal vehicle makes your life more difficult in many ways, even if there ARE other options. As such, while the used market for cars exists, the reality is that in the end, the number of cars being used is finite. The ratio of people using cars to people who own cars is very close to 1:1, and as such, every used car sale more or less means that the person SELLING the car is buying another car to replace it, and in the end, this chain of sales means that someone, somewhere is buying a new car.
So if I sell my old car to a teenager and buy a nice used car, the guy who sold that nice used car bought a new car. The teenager would never be able to buy a new car (the cost is far too high), so it works out for the car manufacturer. Added to that is the fact that they DO make money off of used cars as well in the form of selling parts for repairs.
The problem is that the game market doesn't work this way. There is no such ratio for games - whereas everyone needs a car pretty much all the time, not everyone needs a game all the time. So if I sell one copy of a game to someone, that same game goes to five different people. Moreover, games are not like cars - they are not interchangable. As such, if a game changes hands three times, that's two lost sales from the originator. Moreover, because there is no upkeep cost (at least, not to the manufacturer) for games, the manufacturer doesn't make money off of upkeep either. Moreover, there are a lot more games manufacturers than there are car manufacturers - most people buy one of less than ten types of cars in the US.
http://www.wikinvest.com/images/8/87/F_US_market_share_1.JPG
http://4.bp.blogspot.com/_oDUSGXa_xQs/TSSLgCphZkI/AAAAAAAARmE/MhVUxsZ8fhA/s400/New+Vehicle+Market+Share+Canada+2010.jpeg
As you can see, in the US, GM, Toyota, Ford, Chrysler, Honda, and Nissan combined make up 84% of the market. The games manufacturer market is far more fragmented - sure, EA is a huge publisher, as is Activision, but that doesn't help individual games studios much at all.
And games are hideously expensive to produce, and yet have very small retail price tags. If your game retails for $50, and costs $50 million to make, then even if you take home 50% of the sales, it takes 2 MILLION sales to BREAK EVEN. If the average game you sell gets resold once, then you have to effectively sell 4 million copies to break even. And that's 4 million sales at $50.
Now remember, these guys aren't stupid. They know this. So what do they do?
They have to figure out how to make more money per customer, spend far less money (which is possible in some cases, but not in others), or stop making games altogether.
One avenue is attacking resales in some way. If they can prevent them outright, bully for them. Another option is making people less likely to resell their games, which is the current avenue - day one DLC free to people who get the game new, making games excessively long so that people put them down but don't resell them because "I'll get around to beating it one of these days", attempts at multiplayer, often crammed into games that don't need it, hurting the single player due to pulling focus away from it while still being bad... the list goes on.
And as you can see, these are -bad-. And yet, it meets their goal, doesn't it?
If you make reselling your game impossible, none of these things are necessary.
@SomeNorCalGuy: You don't get it. Let's explain it to you simply.
You're putting them in the situation where they simply cannot exist. If you cannot profitably make games, then there won't BE games. If games cannot have budgets of above X many dollars, then games with budgets above X many dollars simply won't exist.
Period. That's reality.
You can't resell something that doesn't exist. It is a meaningless right. And that's the point here.
You can talk about your rights until you're blue in the face, but if you put them in a situation where there is no possible model for profit, or where the only model for profit is making WORSE GAMES, then you're doing it wrong.
I find the argument that used games will destroy video gaming as we know it to be ludicrous and completely lacking any basis in reality.
Instead of looking inwards to their poor budgeting skills and boneheaded management decisions, publishers and developers put the blame on consumers for their failures. Yes, used games and piracy hurt their bottom line (there, I said it) but nowhere nearly as badly as a piss-poor umpteenth version of Call of Duty or awful James Bond remake trying desperately to bring back the Goldeneye glory days.
If the gaming industry can't turn a profit because I bought Skyrim used or traded in Borderlands 2 towards a pre-order of Assassin's Creed III then they've got a broken business model and no amount of restrictions you place on the consumers who want nothing more than to enjoy a few hours with a well-crafted game will fix that. When you sell 3 to 5 million copies of a game at $60 a pop in the first 4 weeks and THAT'S a failure (Tomb Raider, Hitman:Absolution, Resident Evil 6, Dead Space 3...all "failures"), you stop blaming the people buying used and you start looking inwards to fix what's broken. (Given the fact that each of those games are sequels and/or reboots, you might want to start there.)
You don't get to negate a basic part of English common law just because You Feel Bad.
What's the thesis here? What's the legal reasoning for this special exception? How is it that the First-Sale Doctrine in games -- not in cars, not in houses, not in real property, not in dishwashers, not in satellites, not in breadmakers, not in software-that-is-NOT-games, not in tanks, not in guns, not in computer hardware, not in services -- just in m'ther'f'ng _games_ -- gets an exception.
Answer: because publishers, and some devs, are butthurt.
Yeah, see, here's the thing: that's not a legal argument. No, really. There isn't a law school in the nation that teaches that.
If the industry cannot survive the Doctrine of First Sale, then _the_industry_cannot_survive_. Period. My Pet Bedazzling service can't survive without gutting consumer law; thus, shall we change the law? Nope. My business fails, and it should.
There isn't a EULA that will hold up in court. They're all Contracts of Adhesion. The only reason they exist is because they tend to force the parties under them to go to arbitration, instead of court, which is highly favorable to the contract-writer (hence the contract of adhesion status). EULA CANNOT negate the doctrine of first sale. If a EULA prohibited fair use of a product, do you think that prohibition would hold up in court? Obviously not. There are rights you simply cannot blindly sign away, period.
Even if Itunes' ruling is not reversed, Itunes is not an exclusive way to receive a piece of music. I can always go out and buy the music the old-fashioned way -- and then resell it.
"As you can see, there is actually a fairly reasonable argument on both sides," says EC.
No. There. Is. Not.
I love video games and have since -- jeez, possibly since becoming sentient. And I'd rather see this industry crash and burn than become slave to an illegal and immoral practice. If devs and publishers can only make money by cheating, then, and I mean this _personally_, those devs and publishers should be driven out of the market. Blaming the consumer for their mistakes is horrible, especially in an age of tremendous corporate corruption.
There is no compromise with the "used games are problematic" position because it begs the question -- it assumes that both sides have an equal claim. Not even close: one side has morals and several centuries of common law on its side, the other has terrible and stupid business practices and utterly pathetic self-indulgence and resistance to change on its side. The latter is hardly a virtue. There's no compromise possible because nothing the latter side can ask for is even remotely reasonable.
***
Other inanities brought up in the thread:
• Depreciation is irrelevant. Wine appreciates in value. Wine can be resold. A rare, classic computer could both depreciate (due to lost practical functionality) and appreciate (due to antique status) in value. This factor does not determine any aspect of the used game market; it is irrelevant.
• Video game production costs are _also_ irrelevant. Again, these costs are the fault of the publishers. If the publishers have created an unsustainable market due to their incompetence, the market will fall.
Welcome to capitalism.
Screwing consumers for the sake of an incompetely-designed market is blatantly anticapitalistic. It's no wonder that it requires the publisher to use completely unenforceable (e.g., illegal) contracts in order to do so.
The $60-make-the-money-back-in-the-first-week game will die. And if the industry is dependent upon that, everyone in the industry is a dumbass that deserves failure. The market has spoken.
• As described above, there's nothing about a video game that makes it a substantively different type of property than any other property. The main legal distinctions in property in English common law are between real property and personal property. What's happening here is that people are attempting to rewrite English common law, replacing it with bs. There isn't a logical or legal basis for this; there's nothing that separates video games as personal property from any other personal property (especially other types of software). Wishing really hard doesn't make it so.
So why should game publishers make this argument when nobody else in any business do?
1. People CHOOSE to use Steam as a digital distribution platform. Valve has built a exceedingly strong gamer friendly reputation. Reputation is EVERYTHING. As hard as EA and Ubisoft try they will never come close to touching that gamer friendly reputation that Valve has built for Steam. It took YEARS to do.
2. Do not be surprised when you will be able to sell/trade 'used' games via Steam. It's coming.
One could say that since it's digital, a used copy doesn't depreciate in value like a car. But the same logic would also apply to books. A story doesn't lose value because it's been passed around either. If anything the fact I could play a digital game 1000s of times and not have the product be damaged should mean I could sell it at a higher price than a damaged copy.
Yes we should get mad that we can't sell our own digital property. But the fact there hasn't been an uproar over it doesn't invalidate outrage over what AAA makers are doing. What you're doing is a false equivalence.
If we're not buying games but buying licenses that can be revoked at any time for any reason, then the stores need to change their displays. Right now their displays read "Games" when they should read "Licenses". But if they tell us we're buying a game, then that's what we should get, something that is ours and not a license.
@Titanium Dragon
The reason why games cost millions to make is because publishers decided they cost millions to make. The indie game market has proven you don't need a multi million dollar budget to make a great game. But the big publishers feel they have to add stuff the game doesn't need. It's like Michael Bay spending a million bucks on explosions and a fraction of that on writing for his movies then bragging about how much his movie costs. Spending money on a game does not guarantee quality.
The problem is one company used underhanded business practices to destroy the competition. Once they established their monopoly they went about making a 2% discount on a used copy 95% of their business model.
This is something the myriad of smaller chain retailers that were put out of business never did. Yes used sales were a large part of their business models but never more than 75%. They also had to decency to price used copies at a real discount.
I know this may sound counter intuitive but trust me. 50 different small companies making used sales 50% to 80% of their total sales returns a great deal more money to the publishers than one big company that sells used 95% of the time and only sells new copies as a last resort.
The funny thing is that the industry can fix this without any help from the consumer whatsoever. All they need is for 5 companies (Sony, Microsoft, Nintendo, EA, Activision, and maybe Ubisoft) to stop selling merchandise through Gamestop. There are a dozen big box stores and online retailers that will be more than happy to pick up the slack and once the monopoly is broken we might see a few small chains with a focus on customer service return from the grave.
All I know is I love games and absolutely hate the experience of walking into a Gamestop. Let alone trying to buy anything in there.
I just do not get the money mongering that goes on in our corporate culture these days. I mean, what, the expect to get paid twice for it? I realize I sound heartless but these are multinational, billion dollar corporations whining and crying because they're not working within their means. I'm sorry but that is nobody's fault but their own.
You buy something, it's yours. This is universal.
Indeed, it is without question that the used video game industry hurts the video game industry, because we have seen it hurt the video game industry. The video game industry takes steps - deliberate steps - to make reselling games much less favorable. We've seen it with lots of games with day 1 DLC (and really with DLC in general) which is free to people who buy the game new. We've seen it in the form of multiplayer being shoved into games unnecessarily. We've seen it in the form of unnecessary padding to make beating the game take longer, and thereby greatly reduce the odds of people returning it.
We know these things are true because the video game industry has said that they do these things in order to fight used game sales. And these are all entirely legal.
What you ARE doing is making things worse. You are making it so some games cannot exist because they are unprofitable. The used games industry decreases the take of publishers, and that is directly harmful to them producing games. -Anything- which reduces the take of publishers hurts publishers for obvious reasons - for a project to be worth investing in it must generate enough money to make a profit.
Now, this is not a justification for unlimited whatever. But on the other hand, if they're going to do entirely legal things - which actively make games worse, but which are necessary from their point of view to combat resales - then what is the point of your "rights"? Nothing. Your "rights" make games worse.
"But but but that's not my fault!" Of course it is your fault. You want to blame mismanagement, when in fact, it is what you are doing, as a consumer, which makes things worse. It is your behavior which drives this, not the behavior of people who don't participate in the used games market.
Look, here's reality: there's no reason to do digital resales. You buy a license for the game to play it. You can redownload it, whatever. No physical media to keep track of, but it is tied to your user identity.
You don't want to reward companies for making bad games, but you seem to WANT to reward exactly that. You want to punish people for making short, single player games. That is what your view is, because that is the net effect of your view.
All that matters in the end is what the end effect is. Do digital resale rights help consumers? The answer is "no". And thus, they are bad.
"But mah rights!" What rights? You don't own the code.
@Fun With Sociology: Here's where you don't understand English law.
First sale doesn't actually work - at all - with digital goods. The reason for this is bloody simple and bloody obvious: you have no right to copy stuff.
The first sale doctrine gives you the right to resell something you purchased. But it does NOT give you the right to make copies of something you purchased. And as it turns out, if you are installing something onto a computer via any means, guess what? You're copying it. And yes, consoles are computers.
Thus the first sale doctrine doesn't apply to digital goods. It is obvious, with any basic understanding, of why it wouldn't apply to digital goods. And moreover, it is in direct conflict with copyright law if it DOES apply to digital goods.
This is where you are going horribly astray. The idea that first sale would apply to making copies of something is just insane and goes against everything that first sale doctrine is about.
And you know, it is possible to change the law. Its not like the First Sale Doctrine is enshrined in the Constitution somewhere.
The reason that physical media exists is because some people have terrible internet connections. An all-digital console would kill Gamestop dead, and there would be exactly nothing Gamestop could do about it.
@Alverant: Bad argument is bad.
Sure, you can make games for less than $50 million. We've known for decades you can make a great game for less than $50 million because people have made many great games for less than $50 million.
But you see, you can only make certain types of games for really cheap. And most indie games suck. Sure, there are bad, even terrible AAA games. But there are gigantic piles of terrible indie games. The lower the budget, the higher the probability of badness and of cheapness.
Games like Arkham Asylum, Starcraft 2, and Crysis 2 don't get made on a $1 million budget. It just can't happen. Are there great, low budget games? Sure. But there are lots more terrible ones, and AAA titles have higher standards of quality. There ARE bad AAA games, but there are a lot more bad indie games. A lot more, both as a percentage and in absolute numbers.
The same is true of movies. Michael Bay movies are ABOUT the explosions. People don't go to Michael Bay movies for awesome characterization, they are going to watch his movies to watch stuff explode. And that doesn't get made on a shoestring budget. And given how many people watch and enjoy Micheal Bay movies, obviously there's something there.
The game studios didn't spontaneously decide that spending $50-200 million on AAA games was totally awesome. The consumers decided that with their spending habits. Its the same reason that action explosion fests make it to the big screen - people spend money on them.
@Citanul: How do used game sales help the industry?
With digital sales, they're pretty pointless really. Given that they can sell the same games forever, there's no reason for used game sales. They don't help the industry at all.
@Tarrker: You don't understand at all.
If 50 million people play my game, if only 5 million people buy it, then resell it 10 times, then I make a lot less money than if all 50 million of them bought the game. As far as I'm concerned, I make exactly the same amount of money if 5 million people buy it and 45 million people pirate it.
It is a lost sale either way, and it makes no difference to me, the manufacturer.
The fact that I got paid once is really meaningless. Imagine the most extreme case, where only one person bought it, and everyone resold it to the next person down the line. I've made virtually no money, but tons of people have played the game.
How does that make sense?
The goal of an economy is to distribute value in proportion to created value.
I'm all for supporting a developer that made or makes quality products, what I don't understand is if the selling of used games is such a financial hit for producers and developers why don't they just stop letting GameStop distribute their wears? I can't speak for all areas but Kmart styled stores were in my area WAY before a Electronics Boutique was. While it would be a strong armed approach it would likely to get GameStop to cut a deal.
Before I leave you all to your comments, I'm honestly surprised that gaming companies didn't protect themselves in a distribution agreement before they let a store handle their products to prevent such matters from appearing in the first place, or at least have a clause that gives the company some reign on the situation in cases of abuse.
Steam could easily have a way to return a game if a person has either not played the game for X amount of time since it records how long you play, or it could base your progress on achievements. Many of them are story driven ones you get at the end of each chapter, so perhaps as long as you haven't gone through, say, about 30% of the game you can return it for steam credit.
As for used console games, what if Gamestop struck a deal with developers and publishers on them? Gamestop sells a used game for 5 dollars less than a new copy and gets 100% of the profit there, when a new copy brings them maybe 2 or 3 dollars per (I could be wrong, feel free to correct me). What if gamestop willingly offered 10% of profits of used games to the developer? It's at worst a loss of $5.50 USD if the game is fairly new, the developer gets some more revenue back and Gamestop still sees profits of $49.50 USD for newer games.
Edit: Ok I honestly didn't factor in the credit given to the people trading in the games, but going by the "profit" figure on that it could still be 10% and not be significantly damaging to gamestop.
The size of the used game market for a game is directly proportional to the primary sales of that game. In your example of the single game passe around forever the if "The goal of an economy is to distribute value in proportion to created value." then the consumers at large have determined that they get sufficient value by waiting an inordinately long time to by the one used copy of the game and so value has be distributed correctly.
I made a game, it has penguins in it. It's pay what you like on Gumroad.
Currently Ebaying Nothing at all but I might do in the future.
I have a steam library of about .. let's say 60+ games. Depending on how the return policy worked, that number would be a heck of a lot lower if there was a return policy. And quite often the returns would have been less than an hour after purchase. If the return policy lasted longer than a week, probably even less.
Now imagine you have someone with impulse buy issues. They impulsively buy 3 games one payday because heck, there's a sale, and he's wanted to play that one for awhile. Puchases... two days later, eh, he needs the money more and hasn't even downloaded 2 of the 3. Returns 2. At the click of the button (or 2, or 3, maybe a text form here).
The point I'm making is that this would add a lot more strain to the purchasing system, people who had the absolute power of automated returns would probably end up making their financial paperwork (or ... digitial work?) look like a nightmare. Laws might change about what type or how they run their business (seriously, that's an issue. Gamestop falls mostly under pawn shop laws in most states).. So it looks to me like there are a huge number of issues to consider before having a return 'policy', especially one that's explicitly stated. People will find ways to abuse it, even if they're not doing it intentionally (by just being finicky consumers) and the headaches and probably extra staffing issues that come along with that alone..
There's little incentive for digital services to provide this. Microsoft wanted to try something it appears but they knew from the get go that they would have to have some absolute control stuff going down to even consider it, and once that control was removed, they dropped the plan. So as it stands, i've bought 60+ games, and each of those developers, and steam, gets to keep all their money. And I'm okay with that. Buying bad games once in awhile makes you refine your choices better and better.
A good way to bypass that is of course to release a game digitally. However I and many others prefer physical media and I'll wait for a game to be released in the Game of The Year or Anniversary Edition or something just so I can have all the DLC on the disc and avoid all the hassle with buying and downloading separately episodes, costume packs and whatever. And sometimes a new game will be cheaper than its digital equivalent. For example I bought last week Asura's Wrath new for a third of the price listed on the Microsoft market. Or sometimes there would be a digital release that would perhaps be half the price of its physical used equivalent and I'll still buy the used one.
In regards to indie games, a lot of them offer DRM-free purchase from their website if one doesn't have Steam and I'll always go for that. Hence I only have a handfull of games on Steam. Torchlight is a good example of an amazing game that was released on the OSX only through Steam and I purchased it after I tested the game through a Wine port from a torrent site. And I really loved it and wanted to give my cash to the developer even though it was only available through Steam.
Bottom line is that the industry has to change their approach towards the medium in regards to new technology and new ways of distribution instead of treating the costumers as being all potential pirates and highway robbers.
Fantastic post. +1
SO. WHAT?
That is the basis of our entire economy. If you cannot make a profit on a game with a ridiculous budget, then it is not economical to continue making games with ridiculous budgets. Welcome to reality.
Making ludicrous claims that the used game market is the cause of your woes just highlights the incompetence in market research these days. Handing game publishers a choke chain on end user product rights of ownership is the worst possible solution that could ever exist.
Your saying that most indie game suck doesn't make it true. That's your opinion nothing more. Unless you have access to a company's spreadsheets you can't say whether or not a game could have been made cheaper and be just as good. How much less would have Starcraft 2 cost if they cut out the unnecessary voice acting and dull cut scenes? Those chew up a lot of dollars.
"The game studios didn't spontaneously decide that spending $50-200 million on AAA games was totally awesome."
Actually they pretty much exactly what happened. They focused on adding unnecessary bells and whistles to try and add value to the game like a home owner putting a small army of pink flamingos in his front yard then claiming the sale value of his home has gone up by 10 grand. The AAA companies add fluff that we don't want but we have to pay for anyway. In other words they are artificially spending more than they have to then crying televangelist tears when consumers say they're charging too much.
Every game has a different budget yet the vast majority cost the same, $60. That proves the budget does not influence a game's final price.
"If 50 million people play my game, if only 5 million people buy it, then resell it 10 times"
So that means that for every game sold it was resold NINE TIMES. For that to happen over the course of a game's lifetime (let's be generous and say 5 years) then the average player would have played it for less than 6 months. It couldn't have been a very good game and not worth being the arbitrary $60 price.
The used game industry started because margins on new games are remarkably thin. For a $60 game, the retailer will only see $5 of that as profit. If the game sits on the shelf for too long then they may lose money, so they have to keep less expensive product on the shelf to pad out the store.
There is a factor that you do not understand here that I will refer to as "used game churn". Many customers purchase a $60 title knowing that after they are done with it, they can resell it for a fraction of the price; let's say $30 after a month. If these customers have a gaming budget of $30 then they get a new game every month. Ignoring that they may sometimes not trade it back in and it stays in their library, the industry receives a $60 purchase every month. We will call these people "Level 0 New Gamers" and they are highest on the churn.
Gamestop puts the used game on the shelves for $50. This is where "Level 1 Feeder Gamers" with their $25 per month budget come in, trading in their last month's game (now a two month old game) for $25 purchasing the month old one for $50. The two month old game goes on the used shelf for $40 and Gamestop pockets the $25. Now if you think that Gamestop just made an easy profit then you haven't been following along. With the $25 from the L1-Feeder and the $30 from the L0-New they have only made up their cost of the brand new game. All Gamestop has done has shuffled stock around. They are still at a loss because the $55 went to the publisher for the new game and although they have a two month old game now on the shelf, they had to part with a newer one month old game.
Now comes a couple of "Level 2 Bottom Feeder" friends with a $20/month gaming budget. They pool their money and purchase the two month old game for $40. Gamestop uses $30 to get a one month old game for the used shelf from a L0-New and pockets the cool $10. Finally, the store has a profit.
The opponents point out that it took 4 customers to purchase a single new game, and that is correct. However, the budgets don't change. Without used game options, L0-New buys a new game every two months instead of every one month. L1-Feeder buys a new game every two to three months. L2-BFeeders buy a new game every three months. Each customer will be much more judicious in their purchases now as they could be stuck with a poor game for 2-3 times longer than before. Gamestop loses product on shelf space and either has to gamble with more new product or scale back stores. Some stores close and some customers (especially L2-BFeeders) may stop purchasing games and spend their money on other forms of entertainment; perhaps a monthly movie instead of a 3-monthly game.
How is this going to help the industry? It's not. At best it slightly increases revenue for Triple-A releases at the great expense of smaller publishers and games that take chances. The industry will stagnate.
Even now I'm seeing tablets and cell phones (especially iDevices) start popping up in local EB Games (Canadian division of Gamestop). They're even selling high end headphones like Skullcandy too. They are diversifying because there is no room left for them to make more money from just games.
No no, I fully understand that you still pay editors and producers, but you don't split profits between all of them and the inventor of paper which is the important bit you seem to have ignored in my post. You also don't end up with a lot of best selling books or series that cause the author to go bankrupt.
Considering that active marketing research is actively hated, hated, by gamers, it's pretty hard for people to do marketing research openly. And when it's done secretly it meets direct opposition as soon as it's discovered or revealed. If you want, you can google anything about video game metrics and find plenty of posts about how people think video games companies are spying on them, or you can just look at the fallout over the Kinect.
Also, we're talking about an industry that has become built around technology that consumes large portions of movie budgets. Computer generated art assets cost a lot of money, and unless you want to go back to the late 90s level of art definition, then it isn't going to change.
It's virtually free money for the developers to sell more digital copies. Just take the used games industry and duplicate it digitally. Free money.
You'll find a lot more used copies of short games with no multiplayer than you will long games or games with multiplayer. And of course for games with account binding there is no point to a used game market.
@Gungan: The point is that "Ah've got mah rights" is meaningless if the result is that you don't get the game at all. You have no right to resell something which doesn't exist.
If you prevent a game from ever existing, then what good have you done anyone? None.
And of course, given that many people don't participate in the used games market at all, destroying it is a huge net benefit to those people.
I am all for no digital resales.
@Alverant: No, reality makes it true. Most indie games are terrible. Only people in denial of reality would claim otherwise. The lower the budget, the lower the quality is, on average. Indie games have smaller games, and as such tend to have worse sound effects, art, gameplay, testing, everything. Many indie games don't even warrant getting reviewed.
Moreover, I know you are out of touch with reality, but no one goes in and is like "Yeah, I'm going to have terrible voice acting!" People end up with terrible voice acting, but they don't know it beforehand - they go in thinking it will be at least competent. Even if it is bad, you've already paid for it. But I don't think that SC2s voice acting is unnecessary - it adds to the ambience of the game, and clicking on units and having them speak up is a nice little sound cue. Plus clicking on every unit until it says silly things is a fun quirk of Blizzard's games; people like it and expect it.
As for "dull cut scenes": Again, people don't go in expecting their cut scenes to suck. And not all of them are bad. Some of them are better than others. Obviously the introductory cut scene - which they used for advertisement - wasn't really optional, and people were very happy with that one, at least. Overall I don't think they were bad, though they weren't amazing either. If the cut scenes end up not being very good, very often they will have still spent a bunch of money on them.
I also have to imagine that they didn't spend -that- much on voice acting, as there aren't that many conversations.
And no, they didn't randomly decide to spend tons of money. I know you want this to be the truth, but this is simply a lie you are telling yourself.
Welcome to reality: people want games with good, high quality graphics, sound effects, lots of testing, ect. People want moar. And moar costs money.
You are simply wrong. You are lying to yourself because you want it to be true. You don't want it to be the case that games cost tens of millions of dollars because that's what is needed to deliver that level of quality, but it is so.
As for all games costing the same amount: I don't know what planet you've been living on, but I've seen games with starting prices everywhere from $10 to $70, and many games on the PC start out well below the $60 price point (seeing games for $40-50 at launch is common even for AAA games, and SSF4:Arcade edition retailed for less than that at launch IIRC).
That being said, this is also an extremely stupid argument for another reason, and that is volume. If I make a game, and sell it for $60, and sell 2 million copies, and bring home 50% of that, that means my budget can be up to $30 million, less profits. If I make a game, and sell it for $60, and sell 4 million copies, then my budget can be up to $60 million, less profits. Volume is a major influence. How many copies I expect to sell is a huge factor, as big of a factor as my per-sale take.
And I don't know where you get the idea that playing a game for less than 6 months is a bad thing. Very few games are even worth playing for a month, let alone six, and many of the best games of all time can be beaten in a single day. Chrono Trigger is around 20 hours long; Portal is about 3 hours long; Portal 2 is maybe 8 hours long. Are those games "not very good"? Because if you think they aren't, then the real problem is that you just don't like video games at all, and thus your opinion is totally irrelevant anyway.
@Psykechan: If this was true then no one would buy games on Steam. People buy games on Steam, ergo, resales are really not a big deal. In fact, I would say it is utterly irrelevant to most people.
Moreover, you are not doing your math at all.
Let's say that selling through retailers at all is bad (because it is). The publishers would like to eliminate all retailers and go pure digital.
Now, let's look at your situation. "The gamer has a $30 budget per month, they go to gamestop to trade in their old game to buy a new game, so they get $30 back and they put another $30 in." So the industry is making $30 a month off that gamer, right?
WRONG.
Let's look at this more closely. Let's say that guy was spending his money on Steam. 70% of that money goes to the guy selling the game, with 30% to Steam (supposedly - the exact numbers are under a NDA, but that seems to be considered the standard in the industry for such things). So of that $30, $21 is going to the people who made the game.
Now let's say the guy is spending his money at Gamestop. Let's assume half of that money is going to a game developer; the rest is going to distributors and the retailer. Thus as far as the developers are seeing, that guy is only spending $15 a month.
But it actually gets worse than that. Why does Gamestop buy used games? To resell them. Assuming they resell 80% of the games that they purchase for $30, and they resell them for $50 on average, that means that the publisher, for TWO sales of the game from gamestop, is only seeing $30 out of $100 - or that 70% of the money which is spent on the game is going to the distributor/retailer, with only 30% of it going to the publisher.
To put it simply, a $30/month gaming budget where you supplement your budget by selling used games is really only putting about $9/month of that money into the pockets of the people who made the game. If only new games were available, that would put $15/month into the pockets of the people who made the game. If the games were only sold via digital download, $21/month would go into the pockets of the people who made the game.
I think you can see why this is a very big difference.
Your argument is straight up idiotic. Just because it costs too much to produce personal space shuttles for every household doesn't magically fucking negate the concept of ownership rights in general.
If it is too expensive to create, then it shouldn't exist. Period.
SWTOR. They actively decided to spend a ton of money making the entire game voiced by famous voice actors, in a genre that up to that point had never used or needed voice overs.
How many you need to sell to recoup costs is different from how many you "really, really want to sell pretty please with a cherry on top". Publishers are completely overreaching on the second number. Tomb Raider sold 3 million+. I guarantee you they made their money back, but they definitely failed to meet their retarded 6 million forecast, which is why it is considered a "failure". Publishers assume that a larger budget equates to a linear increase in volume sold, and they're wrong. Publishers need to stop making completely arbitrary guesses as to how much their next game will sell.
The problem isn't the size of the budget, it's where the budget goes when it's being allocated. Game developers need to understand that higher quality graphics or a more cinematic experience doesn't turn into more sales.
As to the supposed arbitrary nature of their estimates. We have no information on where they are getting their information from. Most game metrics are completely silent when being collected and we don't know where all their calculations are coming from. So, yes, to those of us who have no idea what they are basing their estimates on, they seem arbitrary.
That's pretty ridiculous. Since we're starting to conflate video games with every product on the planet I'd like to point out that there are many vaccines for extremely rare diseases that will still save thousands of lives but will never make back the cost of researching and creating them. IBM will never make back their money from researching and inventing Watson. NASA will never make back the cost of landing on the moon or going into orbit. No country will make back the cost of fighting WWII. Most big budget movies are essentially up in the air about whether they will make back their cost to produce until right up to the point where they make that money back. No game company has enough wizards on staff to predict whether their game will flop or whether it will succeed. Not making stupid choices will lessen the chances, but that doesn't mean they shouldn't make big budget games.
Wasn't random, or arbitrary. It was something that was a hallmark of Bioware games, and had brought them great success above and beyond the mechanics of their games. If you look at Mass Effect it was another samey Shooter/Adventure title that shouldn't have succeeded based on gameplay mechanics, but had excellent narrative and good story mechanics. It's quite easy to point out that the biggest outcry over the entire series was over a failing of narrative and not the samey mechanics.
SWTOR was actively praised for it's voice acting and the fact that Bioware kept with it's traditional theme of great storytelling brought in a lot of people that otherwise would have avoided the MMO. Their failing wasn't voice acting it was that they decided to make their mechanics exactly like WoW.
Also the idea that the MMO genre never used voice actors up to that point, or never used them in story elements, is an outright lie. SWTOR only used them more often, more extensively, and more of them, but not differently.
I bought Doom Rails from Steam and it completely failed to launch. I contacted Steam support and the heavily implied it was a fault on my side. I performed all the hoop jumping they suggested, but the game still failed to work.
I googled the problem and all I learnt is that it's an issue that can never be resolved.
Here's the problem: you want digital to work exactly like real world objects, but it doesn't, so why is that any less insane?
Digital resales are a pain, so because it is a pain, they shouldn't exist, right?
But you don't like that solution much at all.
As far as SWTOR goes, you are, quite simply, completely, totally, and utterly wrong. The Secret World is fully voice acted - every NPC you can speak to is fully voice acted, and the voice acting is mostly quite good. I don't know who the VAs are, but the actual acting is quite good and enjoyable. And it makes a HUGE difference. Guild Wars 2 has significant (though not full) voice acting, and GW2 felt much less like a living world because a lot of the dialogue isn't voiced and doesn't feel important at all, possibly partially as a result of exactly that (though the repetitive voice acting of NPCs doesn't help much either). SWTOR didn't do that voice acting for shits and giggles - they did it because they thought it would help sell their game, make it better, make it more gripping to players. I will tell you that Guild Wars 2 was nowhere near as gripping as The Secret World, and the differences in characterization, especially of random NPCs populating the world, is a big part of that. In the Secret World, there are CHARACTERS in the world; in Guild Wars 2, there are just a bunch of random NPCs you don't care about at all.
Just because people didn't do it before doesn't mean that they don't do it now, or don't want it.
Now, this isn't to say that you can just throw budgets out the window, and it is not as if SWTOR is resellable. But just because companies do things like this doesn't mean that they're doing it for no reason, no matter how much you wish it to be true.
The fact that it was fully voice-acted was a selling point, and it really does help with immersion.
The guesses aren't completely arbitrary. Firstly, you are far more likely to hear about bad estimates than good ones for obvious reasons. Secondly, and perhaps more importantly, just because someone makes a bad estimate doesn't mean that it was arbitrary. Sometimes market conditions change, possibly rapidly. Sometimes markets just aren't what they seem to be, or don't match historical trends.
Do they make up numbers sometimes? Probably. But not very often (you tend to get fired if you do). They usually have reasons behind their calculations. But in reality, the quality of the game and its marketing makes a very large impact on the final sales numbers, and they have no way of predicting that ahead of time - a big budget merely means that it is possible to achieve a certain level of quality, it isn't a guarantee.
Indeed, this is why companies tend to make sequels - less risk there. You can much better predict how well a sequel will do than new IP. And that's a bad thing, especially as new IP is what very often ends up breaking new ground and making really great games.
I made a game, it has penguins in it. It's pay what you like on Gumroad.
Currently Ebaying Nothing at all but I might do in the future.
Guild Wars 2 had less voice work and was easily the best crafted game of the three. Game being the operative word.
Rare vaccines are loss leaders. Money is made back with drugs that treat symptoms instead of curing diseases (sequels or rare gems in game terms).
NASA is a not for profit.
I'm sure IBM has used some Watson tech in their server architecture at some point.
WWII is not a product.
Big budget movies, like big budget games have risk associated with them. See Green Lantern.
My point is that if your AAA movies or games consistently fail to recoup their money, you need to reduce the scope and budget of your future titles. Scale back to A or AA, and sustain the industry at that plateau.
IMO, big publishers also need to understand that if all they do is release AAA games, none of them are special, and none differentiate themselves in the market (if everyone is Super, nobody is). Effectively, they become standard fare, with the budget being the only AAA thing about them.
We need a steady output of A and AA games that are well crafted (and perhaps priced a little lower) and fill the time gap between major AAA titles. This would allow time for people to miss the AAA experience, at which point they would sell huge numbers because the market isn't saturated with them.
It's really that simple.
http://www.escapistmagazine.com/videos/view/jimquisition/7586-Why-PC-Gaming-Gets-Away-With-It
That's why.