Tobold's Blog
Friday, January 27, 2012
 
The death of the used game

The current generation of consoles is getting long in the tooth, and the next generation is starting to get announced. But some of the features of the next generation consoles are likely not to please gamers very much: The XBox 720 reportedly will have a system that makes it impossible to play used games.

Of course on a MMORPG blog that is kind of non-news. Or would you like to buy my used copy of World of Warcraft (without the account, which isn't transferable)? Basically a MMORPG client these days is free, and you pay an initial fee to open an account, plus a monthly fee to keep it going. Or the game is even Free2Play and you only pay for what you buy in the item store.

Most of the PC single-player games I bought over the past 2 years I couldn't possibly sell either, because I bought them on Steam. Steam has a trading market, but you can't trade used games there, only stuff like Team Fortress hats. Other PC games now frequently come incomplete, with a coupon for a free day zero DLC for the other half of the game: People buying the game used will end up having to pay for that DLC.

All of these anti used games measures rely on the internet, and work reasonably well because there aren't many game PCs left that aren't connected to that. Consoles are catching up in connectivity, and thus the system which will enable the XBox 720 to tell a new game from a used game will presumably be based on some online registration. If that is true, that could possibly lead to an even bigger piece of news, because it would mean that you can't play anything on your next XBox if that console isn't connected to the internet. I do believe there is still a rather strong demand for offline game consoles, and thus that move could backfire badly. Even on the PC there are lots of people complaining about "always online" DRM systems. It will be hard to convince people to buy a game console that doesn't work when offline.
Comments:
Just the next salvo in the war against pirates.

Predictably, most of the damage will be collateral damage on consumers.
 
Also, I hate to imagine what these people think of libraries. How much book-burning do you think they advocate?
 
@Cam

You do know that libraries pay a small royalty to the publishers/authors of books that they lend?

The publisher/author is not losing out on the proceeds of a sale, so they're happy. Games, DVDs, CDs etc. can also be rented in some libraries (in the UK at least) using exactly the same system.

So I'm not really sure what your point about libraries is about - it's a poor analogy if it was supposed to be an analogy.
 
@ Roble,

While that may be true in the UK - that has never been true in the U.S. - The court system and common law over here are not just on the side of the librarian - they are one sided, and I struggle to find even examples that *glance* in the other direction.

In the U.S. once you buy a physical product - you can do what you want with it - that includes lend it - destroy it - even *sell* it - even at a *profit*.

You can't re-publish the work as your own - but your physical copy is yours to do what you want with.

That is how a Library works - typical town libraries over here spend over 1/5 of the operating budget on buying books. A significant amount is also spent on book clubs, advertisement and basically getting people to read.

Despite cries (over 100 years ago) by the publishers about how this would destroy the industry - it actually increased readership and drove book sales.

History repeats itself again and again if you do a little research into each new 'tech' that the publishing (and recording) industry said would kill them.

And the same arguments about how piracy is killing the business were made to congress prior to the invention of the record player - about the production of *sheet* music of all things.

Don't let the tail wag the dog on this issue. Used sales still mean the publisher made money - thinking that they starve because the product is resold opens yourself into a bad place. You don't want to have to pay the carpenter, and plumber when you sell your house because they helped build it. Why is it different?
 
I wonder what this will do to the rental market.

If I can't rent games, my kids will not be getting any of these systems.
 
The only "always online" games are ones that sort of require it like BF3 or MW3 etc. In other words multiplayer games. Other games like Skyrim, ME series etc only require an initial connection during installation.

Not sure of a single player game that requires you to be "always online".
 
@Delurm

I realised after I posted that not every country had the same library royalty system, but a large number do, and it works very well.

People who wouldn't otherwise have bought a book, are happy to borrow it from the library, and the author/publisher gets a small royalty. Admittedly it's not the same amount they'd get from a sale, but it's something.

The house analogy isn't quite right. When you resell your house, you cease to benefit from it, and there is only ever one party that has benefit at any one time. That analogy would match selling a physical book or game (i.e. a single copy which transfers hands so only one copy still exists).

I'm all for being able to resell a physical item.

For lending physical books, there are always at least two beneficiaries, the library which owns the book, and the customer who reads the book and gets full benefit for no cost. Both parties have full benefit at all times.

It's still not ideal for the author/publisher but at least copies aren't being made, and if waiting lists are long, many people will just go and buy the book.

Digital distribution for no cost (i.e. piracy) is not even in the same league, as multiple copies are made, which otherwise would not have been, and large numbers of parties are benefitting at the same time, with no ability for the publisher to control it.

Stopping resale of digital copies - well I guess that's annoying, and could be overcome by Steam etc. removing the game from your account and transferring it to another, but ultimatelty you've only got a license to use the software, you've never bought a physical product, so tough, that's what you signed up for.
 
@Cam,

Comparing game development to writing a book is not an apt comparison. A book does not cost $50 million to develop. Developers don't recoup a penny on their investment when a game is resold, so it's entirely possible that a game that does too much trade in the used market and not enough in the new market will fail to make back what it cost to develop. This results in the developer going out of business and ceasing to make games.

In contrast, the up-front development cost of a book is relatively minimal as authors don't get paid for their labor, they get paid for their result -- typically through royalties. Thus it is much easier for a publisher to recoup their cost of investment on a book as they don't need to sell so many copies at full retail. Library use then entails more a loss of additional profit than a loss of life sustaining revenue.

Finally, there's the matter of scale. The number of sales lost to the library use of a single book is miniscule compared to the number of sales lost due to used game sales.

Used book sales would have been a more apt comparison, though even then most of my arguments would still apply.

I'm all for getting rid of the used game market, it's NOT as beneficial for the consumer as many like to think. It's really only beneficial to companies like Gamestop that make a huge margin by selling used games for $5-$10 less than a new one. Gamers save very little money, developers get starved for income, and innovation in development ends up being starved.

Also, although I doubt this will happen, it's entirely possible the retail price of games could come down if the ability to resell them at no profit to the developer was removed. Yeah, crazy talk I know, but it could happen :P
 
Delurm has the right of it.

And @Warsyde... completely wrong in so many ways.

1)"Comparing game development to writing a book is not an apt comparison. A book does not cost $50 million to develop."

And in Australia at least, a game costs $110 to buy new (usually around $80-90 used from EB and similar), but a hardcover book only costs about $30-40 new (about $2-5 at a used book store). I don't know how US prices compare, but since the pricing difference here isn't tax-based, I'd assume it wouldn't translate too differently. Who's suffering the worse mark-down here? Sell even a few thousand copies (a commercial failure which is unlikely to have had megabucks investment) and you're going to really start noticing the difference between $40 and $110.
And most authors - until they've sold well and can pick up a contract from a publisher - have to work OTHER jobs while they write, because they don't see a dime until they sell, either.

2) "Finally, there's the matter of scale. The number of sales lost to the library use of a single book is miniscule compared to the number of sales lost due to used game sales."

Wait... what? I think you have that one back to front. How many people check out the one library book that sits on a shelf for ten years, compared to the number of people who continually re-sell that one DVD? Are you serious?

You can test this one for yourself by going out retail shopping and asking for some assistance:

I asked a friend at EB to pull up a game for me I wanted to buy 2nd hand. It had only been turned in once. Apparently this is the norm. Used games aren't actually returned quite as often as new games, usually because they don't give the same trade-in value and because they have a lower price, the 2nd-hand seller doesn't feel like they've wasted as much money (and a desire to recover that money) if the game was a dud. The highest resale she'd ever seen of one individual item was 5 times returned.

As opposed to a library which might lend the one book out several times a month, let alone over the life of the product.

By this logic, libraries are causing TENFOLD the loss of sales, every year!
Libraries are an even greater evil than used game sales!

Also, books tend to survive multiple owners a little better than scratchable DVDs - a few stains and dog-eared pages, they're still readable. Unlike that DVD which cops one scratch and kills your game when you try to load a certain level.
 
> The Xbox 720 will reportedly feature a system preventing used games

Another part of the entertainment industry is strangling its own market by treating their customers as enemies, instead of creating intelligent solutions. Assuming our legislation survives these suicidal industries' attempts to browbeat or corrupt our law makers (see SOPA, ACTA etc.), let them kill themselves. They deserve the Darwin Award they have coming up (http://www.darwinawards.com), and I am positive that the millions of creative people whose work you see each day on public platforms will create something new and better.
 
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