Tobold's Blog
Monday, June 03, 2013
 
A response to Azuriel

First of all, it's "et al." (note the point after "al.", because that is an abbreviation of alii, but et is a full word), and not "et tal".

Second, I accept (without necessarily agreeing) your arguments in defense of used games. But I think you are wrong in your prediction of a change of law that will force game companies to facilitate the sales of digital licenses. I think exactly the opposite will happen.

I am not a lawyer, but neither are you, so let's collect the data we have from the internet. It is true, as you mentioned, that courts frequently have invoked the first sale doctrine, stating that "Once the work is lawfully sold or even transferred gratuitously, the copyright owner's interest in the material object in which the copyrighted work is embodied is exhausted. The owner of the material object can then dispose of it as he sees fit. Thus, one who buys a copy of a book is entitled to resell it, rent it, give it away, or destroy it.". But note that such cases always involved games on physical media, where the "material object" part of the first sale doctrine applies.

The first sale doctrine has been ruled as not applying to digital sales in the US. And in Europe a high court decided that while you can't prevent your customers from reselling their physical discs, you are legally allowed to make that resold copy practically useless, for example by having it bound with a non-transferable online account to the original buyer.

So what is basically the most likely scenario to happen is that your legal right to resell games will be hollowed out to the point of uselessness by selling you only games that come in some sort of bundle with an online service and won't work without it. You can then legally sell the game, but not transfer the service, so what you are selling is a game that won't be playable. That is already current practice for MMORPGs (you can sell your WoW disc, but nobody will want to buy it), and there will be changes in the hardware of consoles and the software of every single-player game which makes this completely legal method the standard protection for every game.

While you are correct that used games are important as being games sold at a lower price, I do not accept your notion that Steam somehow doesn't count. In fact I'm pretty sure that Steam is the general model for the future: Games cannot be resold, and thus game companies capture the market of people not willing to pay full price for a game themselves by lowering price over time on digital distribution platforms. The buyers still get the option to buy games for cheaper, but the money from those sales goes into the pockets of the game companies, which didn't earn anything from used game sales previously.

Console makers and game companies will lose some sales from people who refuse to buy those consoles and games if they can't resell them. But I am pretty certain that they are very much aware of that, and did all the surveys and calculations to find out what the overall result would be. And the fact that these online account locks are becoming more and more prevalent, and will most probably be part of the next console generation, tells me that the companies concluded that they will make more money by reducing used game sales and piracy than they will lose from the protesters.

So game companies have the legal right, technical means, and the business plan for killing used game sales. That makes it extremely likely that it will happen, whether you like it or not.

Comments:
I absolutely agree that non-resale of games is the future. Quite honestly, the only reason I like used games is because the price is lower. Recently, I've been waiting for a $40 Nintendo 3DS game to go on sale, and it just did!

$30 is much more likely to get bought by me.

The issue is that many Nintendo first party games will not drop in price. Or they sell older games at too high a cost ($6 for a 20 year old black and white game?).

I just hope that these companies either make their portals decent, or they get onto good portals (Steam, GOG, etc).

As for hard copy games, there is no reason why they can't start high, and then slowly make their way down to a lower price point to get more people to buy it.

Used games is a crutch, but game companies must realize that they will need to do their own sales of hard copy media as well as downloadable games, if they wish to negate used games.
 
I agree wholeheartedly. Whether everyone likes it or not, this is the road we're going down. Myself, I know I won't miss it. I have not bought a used game or sold a game (the prices the stores will pay simply isn't worth my time) in the entire time I've owned my 360 and Wii.

I have bought several digital downloads from Microsoft directly, and a few from Nintendo... and a lot more from Steam. I greatly prefer this to going to a store or ordering a game from Amazon and waiting for it to arrive.

The people upset about this are a minority, and likely the majority of that group are upset simply over the principle, and won't be materially affected by this.

People have been highly critical of Steam for similar reasons, but most have come around because it has proven to be an excellent service. We get convenience and value, and they are selling tons of games many of which would NEVER be available in a world where there were only physical media sold.

Both MS and Sony have figured out to some extent how to offer some of the convenience that Steam does in their current offerings. Day and date digital releases across the board is something that I think will come in this next generation. I think they're both struggling with the value portion, but I can tell you I'd drop $699 on a new console on release day if they had a store with the value of Steam.
 
a.) there are already some decisions regarding the resale of licenses happening in the EU: http://www.zdnet.com/oracle-cannot-block-the-resale-of-its-software-in-europe-7000000189/

b.) in my experience, marketing departments usually stop their surveys and research as soon as the management position on a topic has been found. Post-release research is usually skipped to prevent proving themselves wrong.
 
I think the end of used game sales is inevitable as is the move to all digital distribution. However I think that if MSoft and Sony get their pricing right (generally much lower than today) then it could be a win for consumers and a win for producers. If they get pricing wrong then everybody will lose.

Did you see the Ishihara paper discussed on Wired about the impact of used game sales on profitabilty? The link seems to be broken today but the gist was that if MSoft and Sony get rid of used game sales they will need to lower their prices substantially to compensate in order to remain in profit. We know this already from Valves experiments in pricing but will MSoft and Sony learn those lessons?
 
Disallowing used sales is a lesser evil than the kind of intrusiveness necessary for allowing them. If you don't actually need the disc to play a game, you can just install to the console hard drive, then you don't lose the ability to play when you sell the discs on. That's making an illegal copy, not a used sale.

To have a real used game sale, not just a copy, the console has to actively prevent you from being able to play games you've sold the discs to. Which will mean that every game will require an internet connection, to look up whether or not you're supposed to be able to play it, and if you're not, to delete it. That strikes me as too intrusive.
 
I dunno, people have miscalculated before. This wouldn't be the first time console gaming has crashed because game companies overestimated the strength of their position.

I just don't see much point to consoles if this happens. PC gaming is no longer the super expensive hobby it once was. You don't need to upgrade constantly, and what with Steam in place it's substantially cheaper and more convenient. And unlike previous generations, it can generally be assumed that any household with a console already has a computer. A $30 console style controller and bam, your PC is better than the console.

So while I agree that they have the legal and technical ability to kill used games, I don't think they're going to like the result very much if they go that way with it. You can ask the music industry what happens when the client base you've been squeezing gets an escape hatch. What I see here is a real arrogance; they don't realize the world is covered with escape hatches; iPads, PC's, the Wii, whatever. Consoles are no longer the inexpensive gaming option. The exact opposite actually. Making it a even worse economic proposition is probably not a great idea.

They do this, there's basically no reason to have a console except habit. That's why they want to turn it into a all in one Roku/Bluray/video game unit.

Guess we'll see.

 
I dunno, people have miscalculated before. This wouldn't be the first time console gaming has crashed because game companies overestimated the strength of their position.

I just don't see much point to consoles if this happens. PC gaming is no longer the super expensive hobby it once was. You don't need to upgrade constantly, and what with Steam in place it's substantially cheaper and more convenient. And unlike previous generations, it can generally be assumed that any household with a console already has a computer. A $30 console style controller and bam, your PC is better than the console.

So while I agree that they have the legal and technical ability to kill used games, I don't think they're going to like the result very much if they go that way with it. You can ask the music industry what happens when the client base you've been squeezing gets an escape hatch. What I see here is a real arrogance; they don't realize the world is covered with escape hatches; iPads, PC's, the Wii, whatever. Consoles are no longer the inexpensive gaming option. The exact opposite actually. Making it a even worse economic proposition is probably not a great idea.

They do this, there's basically no reason to have a console except habit. That's why they want to turn it into a all in one Roku/Bluray/video game unit.

Guess we'll see.

 
I agree with what Long String of Random Characters said. Consoles don't realize that a key strength they have right now is actually the fact that you can do any of the following, all of which are being phased out slowly or permanently:

1. buy new and trade in your games when you're done with them...or buy used and return them if you don't like the games (at Gamestop, anyway)

2. Buy a game and play it into perpetuity until either the disc cracks or the console dies.

3. lend the game to a friend with no multi-step process involved beside handing him the game.

4. Play a game with friends in your living room, on the couch, using just your copy. No one in the room has to digitally buy it just to play, too, or go through a multistep process to set up some local guest accounts.

These are all consumer rights, and may not benefit Microsft or Sony, but they are "value added" features of consoles. Until now, it seems. People who've accepted the loss of these perks exist, sure...and they're called the PC market. But the PC market has very modest crossover with the console market, and as such Sony and Microsoft are counting on console gamers to bend over and take it. I think this would be a great time for a third party to pop up on scene with a console that does it the consumer-friendly way. A dark horse like that could do very well. It's a shame Nintendo, who is the best poised to do this, saddled themselves with the odd and confusing Wii U....although all things said and done, if that console looked like it might survive another year or three I might be tempted to pick it up just as an act of defiance.
 
I agree with almost everything you said, including your predictions, except for one part:

"Console makers and game companies will lose some sales from people who refuse to buy those consoles and games if they can't resell them. But I am pretty certain that they are very much aware of that, and did all the surveys and calculations to find out what the overall result would be."

I do not think the vast majority of these game companies did any surveys or calculations. Nearly every interview with a game company executive indicates they truly believe that every single used game sale or piracy stopped would mean a $60 sale for them. I see no indication from ANY game company that they have done ANY research of any kind. And in fact, are totally oblivious to the research that HAS been done outside of game companies.

This is why it is taking console games so long to catch up with Steam sales for older games. They will have to learn for themselves that a 2 year old game needs to sell for under $10-20, and not the full $60 still, to bring in the highest total revenue. That was obvious 10 years ago, and they still clearly haven't figured it out yet.
 
I did buy a few used games when I played consoles a lot but not anymore. I do have a Wii U, but I'm mainly a PC gamer. The used prices ($10 off) are not enough to outweigh the possibility of the disc not working in the future. I buy games that I will play again and again for a decade or more. I want them to last.

I think used digital games will not happen unless games become more popular. The wealthy, influential people would have to be involved for it to get media attention. Those kinds of people don't play video games, at least not this generation.

Maybe when the Gen Xers or Millennials get into those positions of power (Presidents, CEOs, members of Congress, judges).
 
In response to [GUID] in reference to the need to have a console:

I almost agree, however, the big problem I have today is my PC isn't easily hooked up to my 60" TV that my console is.

There are games I want to flop on the couch and play, and games I want to play at a desk. Sports games definitely fall in the the former category, as do RPG type games where I am more interested in the story than gameplay.

Now, once someone sells me a device that I can use to easily move my display and controls to any monitor in the house without noticeable lag consoles won't have much value to me. First party games will be the only thing that would hold my interest.

I can't imagine this is too far off. But until then consoles still have a place for me.
 
@Coop. You mean a laptop + HDMI cable?

I've been using that setup + steam for a while. Wifi mouse, keyboard and gamepad. I honestly see no reason for a console today, other than the proprietary ecosystem.
 
@asmiroth

That works for a lot of people, but I run a high-end desktop, not a laptop. HDMI cables are out of the picture for me, as the run is too long.

What I really want is something like a slingbox which would have HDMI and USB connections. You would have a transmitter attached to your PC and could use multiple recievers throughout your home. Wireless or over ethernet. Unfortunately as far as I know this doesn't exist today.
 
If your intent is to buy a game, and then resell it, then couldn't you just make a new account for each game? Then you can sell the account info on ebay or some other service. This would be annoying to do for every game you buy, but if your intent is to turnover the game (play and resell) it is more than worth it. There is no law about transfering account info. The company may try to ban the account if they find out, but that could backfire into turning off their customers.
 
"I do not accept your notion that Steam somehow doesn't count. In fact I'm pretty sure that Steam is the general model for the future: Games cannot be resold, and thus game companies capture the market of people not willing to pay full price for a game themselves by lowering price over time on digital distribution platforms. "

EA's Origin is an attempt to avoid this potential future. If you look at prices on comparatively closed digital platforms - PSN is the one I'm most familiar with - prices stay closer to MSRP for far longer than they do in retail channels. Moreover, post-launch DLC prices, which face no retail competition, are almost never discounted.

Steam, on the other hand, is an open platform where publishers are forced to offer discounts to compete for players' attention. Publishers hate this model because it is having a real effect on peoples' willingness to pay full price. (Consumers may also be suffering longterm in that sequel decisions are based on early, full-priced sales.) If studios can stop this they will.
 
@Coop I run a high end gaming laptop just for that reason. Plenty of places that build custom rigs. I got an HDMI cable from walmart, 30feet, for 20$. I got a 50 foot one on ebay for a bit more. I tried wifi TV and didn't like the lag.

The worst part is the cooling. BY far. Had to jimmy some things together to not start a fire.
 
The one "law" I would like to see is to explicitely forbid companies to use the term "sale" or "buy" when instead you "rent" or "lease".

In fact, as long as companies say I buy something I expect the courts to force them to allow me to re-sale.

That's all I want. Plain and simple language. Because buying a game for 40 Euros and renting a game fpr 40 Euros are different things.
 
Hrm, I think if you "buy" a game (hard copy) then technically it is your property and you can do what you want with it. Just like furniture.

If I want to sell my chair I shouldn't need to go ask IKEA if it's ok.

If they just change the terminology to "rent" or "lease" as the person above said then that would work better. Ofcourse I wouldn't want to rent or lease anything because I want to -own- it, so that I can do whatever the hell I like with it.
 
First, thanks for the correction. I remembered (or imagined) seeing it written "et tal" once, and never really questioned it thereafter. Post corrected.

Second, if Microsoft and Sony do indeed go the Steam pricing route, then everyone wins.

That said, I lack the extraordinary faith it requires to believe that Microsoft or Sony actually would, especially when they would no longer have to. What is stopping them from just... you know, continuing to sell games at $59.99 like they have for the last 10+ years? In the meantime, game prices for console users will effectively spike since there wouldn't be any sort of "used game reimbursement."

Finally, in terms of the game license future, I know it certainly looks inevitable right now; we certainly have not see much consumer (and thus politician) pushback thus far. But I think things will turn around eventually, especially once consumers start seeing themselves boxed into tighter, and more restrictive licenses. Because, ultimately, I don't think it is a game company's business who is using the controller in our own home. If you ask the average person whether letting their younger brother play Madden 2015 is piracy, they would say "of course not." And yet companies like Blizzard would up and ban you if they knew he played your WoW character. What's the difference? Not contractually, but literally?

@amuz

That is a brilliantly simple solution.
 
You can get a glimpse of the future by comparing the xbox 360 store with the Steam store.

Judging by the 360 store, building a library of XBone games will be a expensive proposition. More than anything, this console generation will be a negotiation. Do we as consumers have the backbone to force Microsoft to sell old games for less?

That's literally the million dollar question.
 
What is stopping them from just... you know, continuing to sell games at $59.99 like they have for the last 10+ years?

Because of Camels and Rubber Duckies. If you control the retail outlet and can easily change prices (which isn't as obvious with physical boxes), you make more money by lowering prices at some point. Those who already wanted the game at $59.99 already got it, and you capture a whole new segment of the market.

Do you really believe Steam is doing all those sales out of the goodness of their hearts? They know they make more money out of them than leaving the prices high forever!
 
As someone in the software industry, I can not recall ever seeing the word "sold" near any sort of legal document; it is always license. It is a license agreement.

A lot of this seems to me a console thing born out of physical cartridges. Most people copy PC software because it is cheaper to steal not because they think it is legal.

Do people who think digital games will be able to be resold think the laws and trend will extend to music and movies? If I can sell the copy of World of Warcraft the games, should I also be allowed to sell the copy of World of Warcraft the movie (filming should begin next year for 2015 release) that I downloaded from Amazon or iTunes store? Digitally purchased music CDs?

Next gen games sound like they are going to be more expensive to develop, customers want lower prices and Microsoft is starting to lock down a bit more. There is potential for many involved to be disappointed.

Of course, if there is too much pushback, then a logical next step is subscription. If you don't "buy" Call of Duty 14 but instead subscribe to the Microsoft Twitch and Violence channel for $11.95/month, then there is nothing to sell.





 
"If you control the retail outlet and can easily change prices (which isn't as obvious with physical boxes), you make more money by lowering prices at some point."

This is "the Steam argument".

It is undermined by:

1) MS' historic pricing strategy for markets in which it is the dominant force.

2) The consideration that MS' online store is competing with other channels such as bricks-and-mortar retailers, which are also selling its console.
 
@TheeNickster

I think that convincing MS and Sony (or publishers in general) to sell older games at a discount is a much more winnable fight, and actually much more appealing than clinging to a used game model that I don't think anyone really likes much anyway.

What's the shelf life of a AAA title today? 6 months? 3? With a few exceptions even the best titles are eclipsed by a new game after a few months. Why buy Q1's awesome FPS when you can buy Q2's even more hyped FPS for the same price? I don't think steams model of discounting games hurts initial sales much, but it definitely keeps titles alive much longer.
 
As someone in the software industry, I can not recall ever seeing the word "sold" near any sort of legal document; it is always license. It is a license agreement.
I am from a country that sharply distinguishes between contracts done by businesses and contracts between a business and a consumer.

What words there are in legal documents is not relevant to the average (and even above average) consumer. We don't have lawyers around to analyse every transaction we do.

We apply simple logic to everyday things. Like for example: When I click a link on Amazon that is labeled "buy this", than that logic tells me, the stuff I bought is mine. And I can resell ot freely wether it is a CD, a book, a washing machine or a piece of software.

If I just get a license, than the link should read "license this" and Amazon should then make very clear what exactly that license includes. Not in lawyer speak, but in words that make it clear to every 14 old you is allowed to shop there, what it is, he is giving his pocket money for.
 
License agreement?

Legal bullshit. If I bought a game, read the EULA, disagreed with it, and tried to take it back to the store, they wouldn't let me do it. Once I open the box it's mine unless the disc is defective.

A contract you don't get to read until it's too late is not a contract. And unless EA provides a low cost replacement disc if mine gets stolen or broken (since I licensed the software, not the disc, the license is still valid) I don't think video game companies don't believe it either, except when it's useful.
 
I understand the frustration, and you both describe a reasonable definition of what a contract should be. As a practical matter, a contract is whatever the police powers of your country will enforce.
---
If we assume that almost all games, books, music and movies will be digital in the future, then isn't arguing for legal used game sales also arguing for DRM? There is no cartridge or disc to sell, just bits. Without DRM there is no way to insure you only sell it once and that you no longer use it after it is sold. Personally, used games are not worth more DRM.

People's attitudes and the law have not caught up with many aspects of a digital future.



 
I'm just wondering out loud here, but why not just use a single, cross-platform license with all games? I currently have a PS3, and a PC with a Steam account, and I only ever buy a single copy of a game, even though sometimes I'd like to have a copy on the other platform.

IMHO developers cannot continue to use the resale of games/pirating issues as the impetus for shifting the market paradigm, especially when they continue charging full price for a port of a game where the majority of assets and code are already produced. Unless someone is going to argue that porting costs are near those of actual content creation, then all the rhetoric in the world about piracy, used game sales and whatnot is going to increasingly fall on the deaf ears of a growing number of gamers.

I'd be more than willing to pay a one-time licensing fee for any game so long as I could play it on any platform that I own. I'd even be willing to shell out a small fee to cover bandwidth where a digital download was concerned, or for a physical disk which could then be mailed to me for a particular platform.

*disclaimer*

I realize that not all games are currently intended for multiple-platform release, but I'd be willing to bet that singular licensing would go a long way in negating resale/piracy issues if gamers had greater "ease of access" to the games they wanted to play.
 
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