2nd hand games market

loki · 27-10-2008, 14:10

Following on from Malc's thread about GameStation (Good luck btw matey

) I'd like to get your thoughts on the second hand game market and if it actually stifles development within the games industry. Just for the record I am completely ambivalent to companies like GameStation and the second hand games market.

So on one side of the fence you have markets stalls, private traders eBay and now retail outlets who seem to prosper in second hand games and games exchanges. But what do they actually add to the games industry ?. None of their revenue goes into any development of games. For example, you could go into your local Game, GameStop, Cex or whatever and see one of the latest releases.

Let's use Call of Duty 5 as an example. £39.99 on release. Now if you wait a week you can go into one of the stores and either pay £39.99 for the brand new one or you could pay £35.00 or £29.99 for the traded version. Then go on a few months and for that one £39.99 piece of software, Game, GameStop etc etc have probably seen that traded 5-10 maybe 20 times. So given the maths of that and dumbing it down a £30.00 wholesale and making possibly £200-£300 maybe more of it's future resale value. You can see why second hand is very lucrative and the game developers are nervous about this market.

It's almost like they are leaching off others creativity. The difference in price on pre owned compared to new is negligble. Yet how much do they offer you when you trade a new title in, still peanuts.

Good article from Escapist Magazine

Now on the other hand Game Developers cry fowl saying that all of the costs of marketing, development & distribution go into a one time sale. As they still license the product they should enjoy continued revenues or royalties that could be used to develop better titles that are either longer, more diverse or varied. They also argue that snd hand games don't and never will go into the overall sales figures of a title. So Crysis or COD 4 or GTA IV could potentially have sold hundreds of thousands more copies than they know about. Are they just crying wolf and being too greedy ?? Why should they be any different to the Film & Music industry.

So where do you stand on this given there is an obvious trade off for the money going to the developers and what a game is capable of making. Does the money lost to 2nd hand games and exchanges stifle creativity.

Personally I don't have much of an issue with it. I have had some good deals recently but I can certainly have some sympathy for some of the bigger developers. The irony is that some of the smaller guys always opt for smaller games and go for digital distribution as their main method of supply. For example Introversion sold a bucketfull of Defcon and Darwinia via their own digital distribution and Steam compared to traditional hard media.

Answers on a post card................

Davey_Pitch · 27-10-2008, 14:36

It's not really a topic I've spent a whole lot of time thinking about to be honest, so I'm not really sure of how I feel about it. Two things instantly spring to mind though. Firstly, you are correct that the 2nd hand market can mean the games companies don't instantly see the money. For example, I was able to pick up Saints Row 2 and Mercenaries 2 for only a few quid after vouchers etc from Computer Exchange (purely a 2nd hand store), so no game company will see any revenue from that.

However, there is a flipside. Having a shop like Computer Exchange means I was able to sell a lot of old games I had no use for any more. That in turn gave me the cash to go out and pre-order 4 brand new games. These were games I would never have been able to afford otherwise. Having a 2nd hand market allowed me to give the game companies some more money.

I'm glad there is a 2nd hand market though. It's all about choice and we should be able to decide whether we want to buy new or wait until it's cheaper. If the game is good enough, people will generally buy it brand new when it's released, so that alone should be more incentive for game companies to make their games better.

Matblack · 27-10-2008, 14:39

I think Microsoft are on to a bloody good thing with the 360. They've managed to create a platform which is pretty much free of piracy, if someone wants to play the game they have to have an orriginal disc. compare this to the PC market where most games can and will be pirated and moved across the internet with ease.

The games developers have no reason to profit from the resale of the games they produce and I honestly don't believe that if they made more profit from the product they would develop better longer games, in fact as far as length goes it will be a a positive disincentive as the shorter the game the sooner muggins is going to go and buy another.

Most of the time the hardware is going to limit the range of development and tech so theres little extra to put the money into and mmy suspicion is it would end up in the hands of shareholders not in R&D

If a game is resold it retains value, if it is pirated to has none eventually games reach such a low value that they sit on bookshelves and no longer take an active part in the market as people can't be bothered to trade them developers drop the prices to £9.99 and make another tranch of money off them before they become history.

Any argument that any player after the purchaser should contribute to the publisher just won't wash, if they want more money in the games industry then the solution is to spend the money they have got releasing better games and get the public to buy more copies, for a really good game people won't wait for the resale market they will want it NOW.

MB

Pumpkinstew · 27-10-2008, 14:43

There are lots of things software houses can do. And lets be clear it's the distribution giants such as EA which are losing most from this. Indirectly this means less funding for development studios perhaps.

The obvious solutions are
- to lower the cost of the new releases thus making pre-owned trading less attractive.
- supply additional content to titles after release to encourage players to hang on to their copy
- make games good enough that people won't want to sell them on

In the end the pre-owned trade will probably encourage innovation rather than stifle it as software houses will have to change their buisness models and invest in novel ideas to try and stand out from the crowd.

From where I am the industry seems to be in the best shape it's ever been in. Loads of great titles, an ever growing number of gamers and plenty of competition to keep prices reasonable.

Wyrdo · 27-10-2008, 14:57

Quote:

Originally Posted by Matblack

I think Microsoft are on to a bloody good thing with the 360. They've managed to create a platform which is pretty much free of piracy, if someone wants to play the game they have to have an orriginal disc. compare this to the PC market where most games can and will be pirated and moved across the internet with ease.

Piracy is rife on the 360.

Streeteh · 27-10-2008, 14:57

Quote:

Originally Posted by Matblack

I think Microsoft are on to a bloody good thing with the 360. They've managed to create a platform which is pretty much free of piracy, if someone wants to play the game they have to have an orriginal disc. compare this to the PC market where most games can and will be pirated and moved across the internet with ease.

Slightly puzzled by this comment, while as a platform the PC is undoubtedly the most pirated, the 360 scene is rife with piracy. All a user needs to do is crack open their console, change the firmware on the DVD drive and hey presto, unhindered piracy with full access to xbox live (for now?). You only have to look at other forums (overclockers forum is a perfect example) and glance at the huge number of people with unreleased games in their gamertag signature (Fallout 3, Gears of War 2 and Fable 2 were all leaked well before release) to see how many people are actually pirating all of their games on the 360. At least with the PC you need a legitimate copy of the game to play online due to CD Keys so even pirates will buy the occasional game, on the 360 even online access is unhindered by piracy, giving modded 360 owners no incentive to buy any games ever. To top it all off it's apparently rather easy to remove the warranty tag and reattach it without damaging it, thus allowing people to mod their 360 as soon as they purchase it without voiding the warranty.

The only platform in this 'generation' that has managed to completely stave off piracy so far is the PS3.

Sorry for the huge off-topicness, now i'll jump right on to the issue. Second hand sales are a good thing in my eyes, mostly for the consumer but also for developers and publishers. I'll use myself as an example when i explain this. If a new game comes out and i'm not completely sure i'll like it, i sometimes still buy the game, the reason for this is i know i can typically sell it on elsewhere without making a huge loss if i don't like it. Other examples include games like Resistance: Fall of Man, with the sequel coming out soon and looking very promising i decided to buy it second hand for £10 to get a look at the franchise, I am now very much enjoying it and will certainly invest in the sequel; in this case me buying a second hand title has encouraged me to buy its sequel first hand when I normally might not have.

divine · 27-10-2008, 14:58

The second hand games market is just as damaging to the games industry as piracy is, if not more so because it is a legitimate practice. They both result in the same thing for the publishers, someone is playing their game without giving them any money.

The only advantage it carries is perhaps propping up a higher rate of new game buying because getting back £20 each time, allows you to buy another new game sooner, however personally I don't believe this promotes a significantly higher number of sales than people pirating to try games out.

Desmo · 27-10-2008, 15:10

Somebody mentioned the second hand market on another forum and I asked them if they felt the same about second hand cars. Should we all be forced to buy new cars?

Matblack · 27-10-2008, 15:20

Quote:

Originally Posted by Desmo

Somebody mentioned the second hand market on another forum and I asked them if they felt the same about second hand cars. Should we all be forced to buy new cars?

I was going to make this point too, if I buy a DVD or CD or car or in fact pretty much anything then I have the right to sell it on for as much as someone will pay for it, I don't see any reason why this shouldn't be the same for games.

As far as piracy is concerned I think that rife is a little OTT, it might be riife in the geek community but the 360 covers a lot more demographic bases than PC gaming and I doubt its as common in the mainstays of the 360s market. Its not something I for example have got involved in where I used to nab the odd game for the PC and bought a DSTT for my DS.

MB

divine · 27-10-2008, 15:30

The car industry however, is not one that is complaining of lost revenue and financial troubles because people are cloning their cars for free

Whilst as an individual you have every right to sell on something that you no longer want, be that a car, a game, a cd or a sofa, it doesn't change the fact it is still damaging to the industry. Just as the second hand car market is damaging to the car industry, you can bet that Ford, GM, Toyota, VW, et al. would be a damn sight better off and much happier if everyone was buying new cars.

However, it is something both industries have grown up with and so by now, businesses are probably operating taking it into account, much as the game industry should be taking into account piracy, as it has always been and will always be a prevalent issue in the games industry.

27-10-2008, 14:10	#1
loki Vodka Martini Join Date: Sep 2007 Location: Manchester UK Posts: 871	2nd hand games market Following on from Malc's thread about GameStation (Good luck btw matey ) I'd like to get your thoughts on the second hand game market and if it actually stifles development within the games industry. Just for the record I am completely ambivalent to companies like GameStation and the second hand games market. So on one side of the fence you have markets stalls, private traders eBay and now retail outlets who seem to prosper in second hand games and games exchanges. But what do they actually add to the games industry ?. None of their revenue goes into any development of games. For example, you could go into your local Game, GameStop, Cex or whatever and see one of the latest releases. Let's use Call of Duty 5 as an example. £39.99 on release. Now if you wait a week you can go into one of the stores and either pay £39.99 for the brand new one or you could pay £35.00 or £29.99 for the traded version. Then go on a few months and for that one £39.99 piece of software, Game, GameStop etc etc have probably seen that traded 5-10 maybe 20 times. So given the maths of that and dumbing it down a £30.00 wholesale and making possibly £200-£300 maybe more of it's future resale value. You can see why second hand is very lucrative and the game developers are nervous about this market. It's almost like they are leaching off others creativity. The difference in price on pre owned compared to new is negligble. Yet how much do they offer you when you trade a new title in, still peanuts. Good article from Escapist Magazine Now on the other hand Game Developers cry fowl saying that all of the costs of marketing, development & distribution go into a one time sale. As they still license the product they should enjoy continued revenues or royalties that could be used to develop better titles that are either longer, more diverse or varied. They also argue that snd hand games don't and never will go into the overall sales figures of a title. So Crysis or COD 4 or GTA IV could potentially have sold hundreds of thousands more copies than they know about. Are they just crying wolf and being too greedy ?? Why should they be any different to the Film & Music industry. So where do you stand on this given there is an obvious trade off for the money going to the developers and what a game is capable of making. Does the money lost to 2nd hand games and exchanges stifle creativity. Personally I don't have much of an issue with it. I have had some good deals recently but I can certainly have some sympathy for some of the bigger developers. The irony is that some of the smaller guys always opt for smaller games and go for digital distribution as their main method of supply. For example Introversion sold a bucketfull of Defcon and Darwinia via their own digital distribution and Steam compared to traditional hard media. Answers on a post card................ __________________ PC & Console LAN 9th-11th July

27-10-2008, 14:36	#2
Davey_Pitch I iz speshul Join Date: Jun 2006 Location: Liverpool Posts: 6,296	It's not really a topic I've spent a whole lot of time thinking about to be honest, so I'm not really sure of how I feel about it. Two things instantly spring to mind though. Firstly, you are correct that the 2nd hand market can mean the games companies don't instantly see the money. For example, I was able to pick up Saints Row 2 and Mercenaries 2 for only a few quid after vouchers etc from Computer Exchange (purely a 2nd hand store), so no game company will see any revenue from that. However, there is a flipside. Having a shop like Computer Exchange means I was able to sell a lot of old games I had no use for any more. That in turn gave me the cash to go out and pre-order 4 brand new games. These were games I would never have been able to afford otherwise. Having a 2nd hand market allowed me to give the game companies some more money. I'm glad there is a 2nd hand market though. It's all about choice and we should be able to decide whether we want to buy new or wait until it's cheaper. If the game is good enough, people will generally buy it brand new when it's released, so that alone should be more incentive for game companies to make their games better. __________________ Our deepest fear is not that we are inadequate. Our deepest fear is that we are powerful beyond measure. It is our light, not our darkness, that most frightens us. Your playing small does not serve the world. There is nothing enlightened about shrinking so that other people won't feel insecure around you. We are all meant to shine as children do. It's not just in some of us; it is in everyone. And as we let our own lights shine, we unconsciously give other people permission to do the same. As we are liberated from our own fear, our presence automatically liberates others.

27-10-2008, 14:39	#3
Matblack Baby Bore Join Date: Jun 2006 Location: Svalbard Posts: 9,770	I think Microsoft are on to a bloody good thing with the 360. They've managed to create a platform which is pretty much free of piracy, if someone wants to play the game they have to have an orriginal disc. compare this to the PC market where most games can and will be pirated and moved across the internet with ease. The games developers have no reason to profit from the resale of the games they produce and I honestly don't believe that if they made more profit from the product they would develop better longer games, in fact as far as length goes it will be a a positive disincentive as the shorter the game the sooner muggins is going to go and buy another. Most of the time the hardware is going to limit the range of development and tech so theres little extra to put the money into and mmy suspicion is it would end up in the hands of shareholders not in R&D If a game is resold it retains value, if it is pirated to has none eventually games reach such a low value that they sit on bookshelves and no longer take an active part in the market as people can't be bothered to trade them developers drop the prices to £9.99 and make another tranch of money off them before they become history. Any argument that any player after the purchaser should contribute to the publisher just won't wash, if they want more money in the games industry then the solution is to spend the money they have got releasing better games and get the public to buy more copies, for a really good game people won't wait for the resale market they will want it NOW. MB __________________ "we had roots that grew towards each other underground, and when all the pretty blossom had fallen from our branches we found that we were one tree and not two"

27-10-2008, 14:43	#4
Pumpkinstew Absinthe Join Date: Oct 2007 Location: Mostly Oxford, Sometimes Bristol Posts: 1,156	There are lots of things software houses can do. And lets be clear it's the distribution giants such as EA which are losing most from this. Indirectly this means less funding for development studios perhaps. The obvious solutions are - to lower the cost of the new releases thus making pre-owned trading less attractive. - supply additional content to titles after release to encourage players to hang on to their copy - make games good enough that people won't want to sell them on In the end the pre-owned trade will probably encourage innovation rather than stifle it as software houses will have to change their buisness models and invest in novel ideas to try and stand out from the crowd. From where I am the industry seems to be in the best shape it's ever been in. Loads of great titles, an ever growing number of gamers and plenty of competition to keep prices reasonable. __________________ Get old, or die tryin' PSTEWREVIEWS - Chunks of Meaty Reviews, Mixed with Your Five a Day of News, Comment and Opinion, Floating in a Broth of Suspect Grammar and Seasoned Liberally with Mixed Metaphor. Tasty.

27-10-2008, 14:58	#7
divine Moonshine Join Date: Sep 2007 Location: Southampton Posts: 3,201	The second hand games market is just as damaging to the games industry as piracy is, if not more so because it is a legitimate practice. They both result in the same thing for the publishers, someone is playing their game without giving them any money. The only advantage it carries is perhaps propping up a higher rate of new game buying because getting back £20 each time, allows you to buy another new game sooner, however personally I don't believe this promotes a significantly higher number of sales than people pirating to try games out. __________________

27-10-2008, 15:10	#8
Desmo The Last Airbender Join Date: Jun 2006 Location: Pigmopad Posts: 11,915	Somebody mentioned the second hand market on another forum and I asked them if they felt the same about second hand cars. Should we all be forced to buy new cars? __________________

27-10-2008, 15:30	#10
divine Moonshine Join Date: Sep 2007 Location: Southampton Posts: 3,201	The car industry however, is not one that is complaining of lost revenue and financial troubles because people are cloning their cars for free Whilst as an individual you have every right to sell on something that you no longer want, be that a car, a game, a cd or a sofa, it doesn't change the fact it is still damaging to the industry. Just as the second hand car market is damaging to the car industry, you can bet that Ford, GM, Toyota, VW, et al. would be a damn sight better off and much happier if everyone was buying new cars. However, it is something both industries have grown up with and so by now, businesses are probably operating taking it into account, much as the game industry should be taking into account piracy, as it has always been and will always be a prevalent issue in the games industry. __________________