In the wake of Cory Ledesma’s comments regarding used video games, the Internet has been ablaze with talk on the subject. Kotaku, Ars Technica, Penny Arcade…if a website even remotely deals with gaming, they have at least one article up stating their opinion.
Here’s mine.
Let me start off by saying this: Mr. Ledesma is 100% correct. Used game sales do nothing to financially benefit publishers or developers, and, as Jerry Holkins of Penny Arcade pointed out, to publishers/developers, used games are the same thing as piracy. Developers and Publishers work their butts off to create games, and when you buy a game used, you are essentially “stealing” the game (note: I don’t consider piracy to be theft. Morally wrong, yes; but not theft.) From the perspective of a developer or a publisher, I completely understand why they feel this way…but I’m neither a developer or a publisher; I’m a gamer who buys a mix of new and used games.
The most common argument in favor of used game sales I’ve seen the past few days is also one of the most compelling: every single industry that involves tangible goods has a second-hand market. Carmax, eBay, flea markets…every object that is sold can potentially be resold. Why should video games be any different? Why is it ok to go to Carmax and buy a used Chrysler, but it ISN’T ok to go into a Gamestop and buy a used copy of Halo 3? Why do game designers and publishers feel that they should be immune to the second-hand market? I know, I know…car makers still make money off parts and such. I have two phrases for you: in-game advertising, and DLC.
Jerry Holkins of Penny Arcade had also mentioned that gamers shouldn’t expect used games to be as intact as a new game…after all, people don’t expect a used car to be in the same shape as a new car, right? Well, here’s the problem with that logic, Jerry…games don’t degrade. A piece of software burned onto a disc doesn’t change over the years. It doesn’t wear out, it doesn’t run sloppier as it gets older, it stays exactly the same. Granted, the physical disc might be scratched, or the case might be messed up, or you may be missing the manual…but the game itself doesn’t degrade. It’s code. That’s all.
That being said, I think offering up multiplayer (or, as previously mentioned yesterday, DLC) as an incentive to buy a game new isn’t necessarily a bad idea…after all, it costs money to run multiplayer servers and maintain balance via patches, right? There’s only one problem with this theory, though: when someone sells their game, that means they are no longer playing the game online. A new owner of a game utilizing the multiplayer infrastructure has replaced the original owner utilizing the same infrastructure; there is no additional stress or balance required, as the number of players using the multiplayer service hasn’t changed.
Gamestop has been the bane of the gaming industry for a while, due to their profits relying on the sale of used games. Many gaming companies would LOVE to see Gamestop go away. But what about new games? Have those publishers and developers forgotten how many of their new game sales come from Gamestop? Granted, full-blown digital distribution will eventually become the norm, but for now, brick-and-mortar stores bring in a huge amount of money for game companies.
I think what bothers me the most about this subject isn’t the gaming industry’s points, because they make excellent ones. Again, used game sales don’t contribute anything to a developer or publisher, and because of that I do try to buy games new as much as possible. No, what bothers me the most about this is that the gaming industry thinks it is somehow immune to the second hand market…something that affects literally every single industry in the world. Just like cars, phones, stereo equipment, or anything else…the second-hand market is something that exists, whether you like it or not.
Until we switch over strictly to a digital distribution model, the used game market is here to stay.
I find it odd that no one is addressing the residual effect of this.
Imagine you buy a used car, and you love everything about it. This would impact your decision when the time came to buy a new car. Same thing with games. If I buy a used game because I can’t justify the $60 price tag and there is a market for it, then I will. If I like the game and the developers work, I’d that much more inclined to buy the new merchandise. No one likes the “used” feeling that comes with used objects (by comparison to something new anyway.) but for the crowd who purchases new games it’s either this or nothing. Which would the publishers prefer? Buying used games is in essence no different than a glorified gamefly subscription. If someone really likes the game they will sooner or later buy a copy of their own so that the sense of ownership becomes tangible.
Furthermore, I feel like this is no different than an argument that the RIAA would use. It boils down to this: make a quality product and you will see the results of your labor come back to you many times over. Don’t make a shit quality product and complain that people are finding a way around being screwed into paying full price for what would be perceived as a $10 value.
Remember before digital purchases and downloads when you heard a song from a band you liked, so you bought the CD and everything else sucked?
Same deal.
I was actually talking to my buddy Bryan about this last night, and he brought up a really good point: there is a huge price gap in gaming.
You have your $5-$15 games, which range from worthless to amazing (Shadow Complex and Limbo, although both short, were easily worth twice their $15 cost) Then, you have your $40 games (but this is a pretty rare price point), which are usually rereleases of older games or something like Super Street Fighter IV. Then, you have your standard $50-$60 new releases.
Where are the $30-$40 new releases? Maybe I want something a bit higher budget than Deathspank or ‘Splosion Man, but not quite as big budget as GTA 4 or LittleBigPlanet. Bryan had a really good point, in that there isn’t any middle-of-the-road price point, which leaves a lot of cash-strapped gamers out when it comes to buying new, boxed video games.
You also have games such as Halo:ODST which come with an inflated price tag of $60.
The game made many wonder why short campaign + the firefight mode = price of blockbuster game such as Starcraft 2(both retailed for $60 at launch).
Services like Gamestop and Gamefly bring a game like ODST come down to their proper price point(around $30-40), not the inflated $60.
Are game developers/publishers trying to find things to bitch about?
Kind of seems that way…
There are a few issues at play here that people don’t bring up much.
I personally don’t think the used-car metaphor is a good one at all, for the same reason piracy of a game != theft of a game. A used copy of a game, unlike a car, is not worn out by people using it; the disc works or it doesn’t. (Note this only really applies to releases from the last 5-10 years or so; many cart games can and do deteriorate and rare ones go for a lot of money, but that’s a collector issue, not a publisher/reseller one.) In game advertising and DLC don’t count; in game ads are not widespread and I’d like to keep it that way and DLC is digital (unless it’s sold at retail, but still locked to specific content and not resell-able, typically).
The other issue both sides seem to ignore is that developers make zero direct money off of retail sales. Best Buy doesn’t pay a 25% commission to Blizzard for each copy of Starcraft 2 it sells at retail, nor do their employees get royalty checks. In fact, Blizzard never comes into the equation in the retailer/customer equation. For physical media, it goes like this:
Publisher has or gets money from Investors.
Publisher gives Developer a fat check to start development on a game.
Developer makes the game while Publisher shops the game around to Retailers.
Retailers pre-order large numbers of copies, typically tens or hundreds of thousands at once at wholesale cost depending on the size of the retailer, and either pay or promise to pay wholesale cost at this time. (Gamestop for reference, probably orders a very small number, likely only enough to cover their own pre-orders thus keeping a low investment to inventory ratio, allowing them to operate with less cash on hand – the root of the issue, really.)
Publisher continues to pay Developer as production progresses and milestones are met, according to their contract.
Game reaches Gold status, Developer delivers final copy to Publisher and gets whatever remaining pay is left on the contract. (Note: Developer is now fully paid barring any additional bonuses in the contract – time to get a new game in the works.)
Publisher presses number of copies pre-ordered by Retailers, delivers said copies to Retailers.
Retailers pay whatever amount was still owed (on wholesale cost) of copies ordered.
Publisher pays Investors dividends on investments with money from Retailers.
Retailer sells copies at full retail price to Customers until inventory gets low.
When inventory is depleted we get to the current debate: do Retailers order new copies from the Publisher, or do they ask Customers for used copies (at less than wholesale cost) and resell them for slightly less than retail price?
There are a couple exceptions still: digital distribution where the Developer sells directly to Customers, and self-published/indie titles. Support indie developers? Don’t buy their games used.
“I personally don’t think the used-car metaphor is a good one at all, for the same reason piracy of a game != theft of a game.”
Often times, people will mention that piracy is somehow the same thing as stealing and that it has a negative impact on the developer(s) that created the product that is being pirated. Soon, I will explain why both of those statements are incorrect.
Before I do so, however, let me state a few things that may or may not be obvious already. I’m sure you’ve heard about and/or looked at those statistics that claim to know how many pirates pirated certain products, how many pirates there are, or how many sales were “lost” to pirates. Those are very likely incorrect. Why? It would be an impossible task to scour every torrent and website in existence in an attempt to count how many pirates there truly are. It’s simply not plausable due to the sheer amount of websites and torrents. I’m also sure that you’ve probably heard of and/or come across something known as DRM (digital rights management). You’re probably already aware that it was designed to stop (or at least reduce) piracy. What some fail to realize, however, is that it fails to do even that, and instead, it just causes harm to the actual customers themselves due to the fact that the DRM limits what the customers can do with their legally acquired product while the pirates crack or remove the DRM from the product, and, consequently, can use it restriction free. This makes DRM effectively useless against piracy, and ultimately only harms the buying customer.
One very small reason that piracy doesn’t actually harm anyone is the fact that you can’t consider every instance where something is pirated as a lost sale. It’s simply not logical to do so, as you have no idea if the pirate would have bought the product if they had been unable to pirate it. It is more likely to assume that they would not have bought the product. Reasons for which include: the company which made the product has bad policies or treats its customers badly, the pirate lacks the money needed to buy the product, the product contains DRM, or the pirate simply felt that he/she would rather spend his/her money on more important things. Assuming that every instance of piracy is a lost sale (as many people seem to do) is simply illogical.
Next, you have to ask yourself what it is that pirates are actually stealing. Are they stealing the product itself? That can’t be true, as they are simply making a copy of it. To steal something means to take something away, and the pirates aren’t doing that. So, what are they stealing, then? The next conclusion that would likely be drawn is that the pirates are stealing future/potential profit. However, logically, this holds no ground for a few reasons.
First of all, if stealing future/potential profit was illegal, then competition in general would also be illegal. Why? If a customer decided to buy a product from one business instead of buying it from another business, under the “potential profit” rule, that would mean that the first business actually stole future/potential profit away from the second business.
Secondly, if stealing future/potential profit was illegal, then warning people about a company/product would also be illegal. Why? The people who were informed not to buy the product/buy from the company might be scared away from future purchases, which, under the “potential profit” rule, would mean that the informant actually stole future/potential profit away from said company.
Finally, there’s really not much difference between a person who pirated a product and a person who just didn’t buy the product at all (yet also didn’t pirate it), except for the fact that one is enjoying a product for free while the other is not. Neither of them granted the creator of the product any profit at all, so under the “potential profit” rule, that would mean that they actually somehow stole potential profit from the creator(s) of the product for not granting them their money. There are many, many more examples of how the “potential profit” argument is illogical and holds no actual ground. That was but a few.
Despite there logically being no negative aspects to piracy, there are some positive aspects to it. The pirate could eventually grant the author(s) money if they liked the product, they could inform people who are not pirates of the product if it is good (resulting in free word of mouth advertising), and, though it doesn’t directly benefit the author, it will save the pirate money for use on more important things (food, water, and shelter).
“But, what about the artists? If everyone pirated everything, there would be no one to create anything good!”
If you read the above with an open mind, you will see that this is not actually the fault of the pirate itself, but the fault of the capitalistic ways of our society. The flaws of which are becoming more and more apparent as each day passes. It is highly unfortunate that many good artists will likely have to suffer due to our capitalistic practices until they are changed. It is not the fault of piracy.
I fully agree about the indie developer thing…for example, I plunked down a full $50 on the Humble Indie Bundle, even though I technically could have downloaded it for a penny.
Thanks for providing some insider insight on the process!