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[Starchasing]

No two markets are going to be absolutely identical.

That's why people are giving so many examples. Let me continue: used jewelry. Used books. Used firearms. Used CDs. Used Cars. Used movies. Used houses. Used electronics (TVs, etc).

In all of these cases -- every single one -- the producer does not see a cut of the used sale. You are essentially arguing that video games are special, unlike any other market on earth. What specifically is so special about them?

its his dear hobby

 

[Mario]

This is an honest question: what is it about video games that makes them special, and distinct from every other market in the US?

I think there are a couple of issues using other industries or product categories as analogies -

1. with a lot of other products, there is physical degradation, degradation of the experience, loss of warranty, etc

2. with a lot of other products, the used products are not sold alongside the new products, and the retailer is not proactively trying to shift a consumer who has elected to purchase a new product towards a used product


The above may not apply to all, but it does tend to put videogames into a very much reduced group.

 

[RazzleDazzleRB]

According to Jaffe logic, you have not read my tweets or watched my video. Used books degrade in the value of the experience over time. A used game sold the next DAY that the new game hit the store does not.

Come on, you can still read a book and get the same experience even if it is 50 years old. Or you can go buy Harry Potter, read it in 2 days, and then let a family member borrow it. Your argument sucks.

 

[davidjaffe]

Wrong, DVD release windows are constantly being moved closer to release/broadcast date by the studios, with same-day releases being actively considered. Movie studios are not hanging on to those release windows for their own benefit.

No it's not wrong. The theaters would go nuts with day and date releases. Short of arty experiments from Soderberg and that ilk, there is still 1-3 months between theater and DVD and that is getting shorter so capitalize on mindshare and marketing budgets, I thought.

 

[Segata Sanshiro]

According to Jaffe logic, you have not read my tweets or watched my video. Used books degrade in the value of the experience over time. A used game sold the next DAY that the new game hit the store does not.

I think what you and Vic said about used cars is convincing, but what you said about used books in your video really isn't at all. You just mentioned broken spines or gunk on the book, which are pretty much akin to case wear or gunk on the manual or scuffs on the disc. If the story is legible, then you are getting the same experience from a used book that you are from a new one.

 

[Raist]

Zep albums and LotR are considered masterpieces of their medium; and those mediums are appreciated for their depth, whether it be Plant's voice or the epicness of Mordor. Guess what, most people don't find the same depth in combat mechanics or pretty rendered graphics or the animation of an untucked shirt. More people in this world will get more enjoyment out of a game of tetris then they ever will out of a game like Uncharted or Galaxy; figure it out.

YOU think "X" blockbuster game is worth replaying. What the hell makes you think most people agree with you?

Oh god, these were random examples to illustrate the fact that there is no added content at all. I'm not saying that Uncharted is the LotR of video games... Tell me why (without sliping in some lame trolling arguments) a good game doesn't have any replay value at all. It's like "I've beaten it once, there is no reason to play through it again". It's silly. If you enjoyed playing through it once, why wouldn't you enjoy it again X months down the road? Just like you can enjoy reading a good book multiple times.

 

[Mutagenic]

I clearly don't see how you can compare both markets, because both have specific issues and characteristics. And when people defend this point of view with a "but what if it is a rare car" argument, I don't see how this applies to the used games market, sorry. I'm not the one getting into extremely specific examples. I'm talking about a whole picture thing.

Which you have failed at explaining to any length. It's always 'the big picture, man'. You can't be more specific because you have nowhere to go with your argument. Fine, throw out cars. There are thousands of other examples I could use. You have yet to provide a semblance of reasoning to back up your thought process.

 

[davidjaffe]

Ladies and gentlemen of the jury: Exhibit A.

Too bad too because you always seem to be a pretty cool guy until you let your ego (and mouth) get in the way.

Exhibit A? Dude, you literally called me an asshole in your last post. How is my response to you one born out of ego? What am I supposed to do? Go, "sir , yes sir! I sure am an asshole! You got it, buddy!" ?!?

 

[Starchasing]

I think there are a couple of issues using other industries or product categories as analogies -

1. with a lot of other products, there is physical degradation, degradation of the experience, loss of warranty, etc

2. with a lot of other products, the used products are not sold alongside the new products, and the retailer is not proactively trying to shift a consumer who has elected to purchase a new product towards a used product


The above may not apply to all, but it does tend to put videogames into a very much reduced group.

so ? you get the same product for a cheaper price?

where is the problem???

this is how capitalism works... and it helps both sides

 

[Raist]

Which you have failed at explaining to any length. It's always 'the big picture, man'. You can't be more specific because you have nowhere to go with your argument. Fine, throw out cars. There are thousands of other examples I could use. You have yet to provide a semblance of reasoning to back up your thought process.

Read through the thread, I've given a couple of points explaning why comparing the used games market to cars or houses is silly.

 

[Cday]

What do you call purchasing the initial shipment of say Bionic Commando or any of the other many bombs this industry puts out?

I'd call it even when it gets traded in (it's a fairly short game) and people see more incentive to buy it when it's $20 used than $60/40 new. The developer will never see another cent out of it. Used games give Gamestop a cushion at least.

 

[vireland]

This is an honest question: what is it about video games that makes them special, and distinct from every other market in the US?

Games are portable and relatively valuable. The value to portability is higher than almost any other used medium, so it's WAY more lucrative than music or games. A used book will retain maybe 50% of its value, but because a new hardback is only $20, you're only selling the used for $10, and of that only maybe $5 is profit. Music is even WORSE. You have to sell a LOT of CDs or books to make it work, and you have to STORE the books which are more unwieldy than games.

As Gamestop, sell a used game and you're getting 80%-90% of the value in the release window, and making north of $15-20 per sale. It's TREMENDOUSLY more lucrative than CDs or Books, and that's why there's an infrastructure that's grown to harvest that where used books and music is more of a niche because they just aren't as profitable. Also, the STAFF required to make a CD or book is miniscule compared to a game.

The comparison to movies is not valid, either, because most movies (ie not direct to video) have a protected window of release at the theatres where they make a large portion of their profits. The DVD sales come after and are usually gravy. Game releases have no such protected release window. The staff required to make a AAA game and AAA movie are becoming comparable, so this is the closest comparison in terms of invested value, but again, because the movie enjoys protected release in movie theatres to make a large portion of its revenues and games don't enjoy this, the comparison is not valid.

 

[Pureauthor]

Read through the thread, I've given a couple of points explaning why comparing the used games market to cars or houses is silly.

Then compare it to books. Jewelry. Household tools. DVDs. Toys.

Why is the video game market unique?

 

[DCharlie]

I like the idea that games prices will be more flexible when there is no choice of going to a retailer when we go DD only....

... but given half of the rant is "bu bu bu we are losing all this moeny on second hand sales" i simply can't see DD downloads all rifling in at significantly cheaper price points -especially- when our consumer choice will be "download now? Y/N/wait with fingers crossed for price cut". I appreciate that manufacturing costs will go down, but to the extent of knocking the good $20 or of a game ? It'll be on a case by case basis per game, but i wouldn't expect much (if any) price difference between a big name DD only game and what it would have been at retail.

Although i appreciate that games take a lot to make etc etc, the price point on games (especially here in Japan) are rediculous. There's games i want to try but i just don't value them at their 6800-8800 yen price points so i'll pick them up 2nd hand. Also , now i have added responsibilities including a new mouth to feed/clothe/put through school/etc, i'm suddenly significantly more picky about what i'm going to drop $60 on.

The second hand market exists for many reasons, shutting it down as pointed out by Les will back fire. If i buy a $60 lemon i can at least take that lemon back somewhere and get a good $40-50 back IF i realise it's a lemon quickly enough! (here in Japan, not sure what return rates are like in the US though i assume you can return stuff within X days and simply say "no, do not want" like the UK? which you can't do with any ease in Japan...)

Anyways, I hope when we go full DD that it really does bring this new price point everyone expects because if doesn't the industry can go suck. If all DD brings is downloadable games at pretty much the same price point then <imanexpert> games pubs just shot themselves in the foot.... </imanexpert>

 

[BocoDragon]

I think consumers need to call out this industry-driven talk... it's not in line with our interests or the way the rest of the world works. I can understand why devs/publishers want a cut of used games.. money is nice. But it has no precedent in the history of reselling property. There is nothing special about used video games when compared to any other product.

If you devs/pubs want to get around this with first-buyer DLC or digital distribution, more power to you.. the digital format of games means you have more tricks up your sleeve to milk money out of consumers who would have normally bought a product used.... but don't act like these are some sort of corrective measures to get what is rightfully yours. They're new tactics to ensure revenue, like a more effective version of points cards at the grocery store to secure traffic..

The Tolkien estate and their publisher don't get a cut of used copies of Lord of the Rings... and sorry to Vic, but the words in a used book function exactly the same as the words in a new book, just like the digital information on a game disc. The condition never degrades. The pages and spine might wear out... but so might the cover art, DVD case and disc art of a game. The user experience is exactly the same.

I don't see why a product diminishing in function over time has anything to do with it anyway... it has nothing to do with a consumer's right to resell. eBay prices will vary due to condition, and that's where the variation between old and new comes into play: how much a reseller can charge. Not whether something is correct to resell at all.

There is no exception in the videogames industry. If publishers should get a cut of used games, than likewise book publishers should get a cut of used books, painters should get a cut every time their paintings are resold, car manufacturers.... you get the idea. You've heard it before in this thread. That's because it's obvious to all consumers that this "videogame exceptionalism" comes only from the desires of those who make money off videogames, and not based on a sound moral or legal argument. I understand your position, but it's not our interest, and it's not backed up by historical precident. We say no.

 

[Mario]

so ? you get the same product for a cheaper price?

where is the problem???

this is how capitalism works... and it helps both sides

I didn't say there was a problem in my post. I was merely pointing out what some issues were with using analogies in that the products and/or business practises are not necessarily the same.

I should have added a third point that the economics for a lot of other product categories don't map easily to the games industry either which also makes straight comparisons difficult.

 

[Opiate]

Yes but the second part of my stance is that if Gamestop and others do not want to cut pubs/devs in (and they are NOT legally required to and this is fine) then gamers should not get pissy when game makers adjust to try to make the business models work for them (i.e. digital distribution where DD copies are priced for less, having parts of the game not unlock unless it's a new copy until 6 months after the game has shipped;etc)...I mean gamers can get pissy if they like but if Gamestop gets to play hardball, then we do as well...and so we should. As many of you like to point out- as if I am not aware- it's a capitalist society in which we live...evolve or die. Sounds good to me. All I was saying is, Gamestop and the like should play ball with us now and we all do well together versus forcing us to cut them out of the picture down the road....

David

Oh, I definitely do not fault you for this on any legal level. This can be an effective corporate strategy.

However, what you have described above is an explicitly anti-consumer policy. You are restricting parts of the game for those who buy it used, and you are deliberately reducing the resale value for me (since I can't offer that person part of the game, as it won't play for them as a used copy).

This is anti-consumerist. You are being anti-consumerist: you are reducing the value of the game for me so that you can earn more money. I do not fault you for this, as Gamestop is also being anti-consumerist with their high resale prices and low trade in values. The difference is that you're an individual, not a corporate entity, and you have actually specifically said that you are pro-consumer.

For example, it's a telling point that you would be in even more trouble if Gamestop were actually pro-consumer. What if they bought their used games for 30 dollars, and resold the for 40? That would be an incredibly consumer-friendly choice, and I can almost garauntee that you would hate it.

 

[ksamedi]

Opiate already said it wonderfully. There really is nothing special about the games industry that pubs should get special treatment and make money from used sales.

 

[GSG Flash]

Game prices will be more flexible when retail is gone.

Hopefully this dark day will never come. If it does, the day the retail market for games dies is the day I stop gaming because, especially with the ridiculous monopolies ISPs here in Canada have, the cost of gaming will go up tenfold for myself. Not to mention the hassle of hard disk space, atleast with a physical CD I have basically an infinite amount of space to store them.

Another problem I have with DD is that it's not very practical when it comes to big MGS4 size games. I would rather spend 10 mins to go to a store and buy the game than wait for a week for the download to finish.

 

[RazzleDazzleRB]

The gaming industry has always manage to be profitable with used game sales. If the cost to create games is becoming higher and higher and game companies are struggling to make money, then I would rather them raise the price of new games to adjust to the higher production costs over trying to destroy the used game industry.

 

[vireland]

The Tolkien estate and their publisher don't get a cut of used copies of Lord of the Rings... and sorry to Vic, but the words in a used book function exactly the same as the words in a new book. The condition never degrades. The pages and spine might wear out... but so might the cover art, DVD case and disc art of a game. The user experience is exactly the same.

You don't PLAY the game cover art and DVD case. The book experience absolutely degrades. The game experience does not.

And, just for the ADD crowd that doesn't keep up with the thread, I'm FOR physical media. For what I do and the way I do it, it works for us very well. I'm just saying some of these comparisons to used cars and whatever just don't hold water.

 

[davidjaffe]

Oh, I definitely do not fault you for this on any legal level. This can be an effective corporate strategy.

However, what you have described above is an explicitly anti-consumer policy. You are restricting parts of the game for those who buy it used, and you are deliberately reducing the resale value for me (since I can't offer that person part of the game, as it won't play for them as a used copy).

This is anti-consumerist. You are being anti-consumerist: you are reducing the value of the game for me so that you can earn more money. I do not fault you for this, as Gamestop is also being anti-consumerist with their high resale prices and low trade in values. The difference is that you're an individual, not a corporate entity, and you have actually specifically said that you are pro-consumer.

For example, it's a telling point that you would be in even more trouble if Gamestop were actually pro-consumer. What if they bought their used games for 30 dollars, and resold the for 40? That would be an incredibly consumer-friendly choice, and I can almost garauntee that you would hate it.

I am totally pro consumer but I am more pro fairness. If someone pays 60 bucks to the person who made the damn thing they are enjoying, it is ok for me to give them a better experience. Just like if you pay 250 bucks, you get a better experience sitting front row at a concert than you do paying 50 bucks and sitting at the back in the nose bleeds...I'm ok if the 50 dollar seats exist and those people who only pay 50 deserve a damn good show...but not AS GOOD as the people who pay 250....

 

[Gestahl]

I like the idea that games prices will be more flexible when there is no choice of going to a retailer when we go DD only....

... but given half of the rant is "bu bu bu we are losing all this moeny on second hand sales" i simply can't see DD downloads all rifling in at significantly cheaper price points -especially- when our consumer choice will be "download now? Y/N/wait with fingers crossed for price cut". I appreciate that manufacturing costs will go down, but to the extent of knocking the good $20 or of a game ? It'll be on a case by case basis per game, but i wouldn't expect much (if any) price difference between a big name DD only game and what it would have been at retail.

Although i appreciate that games take a lot to make etc etc, the price point on games (especially here in Japan) are rediculous. There's games i want to try but i just don't value them at their 6800-8800 yen price points so i'll pick them up 2nd hand. Also , now i have added responsibilities including a new mouth to feed/clothe/put through school/etc, i'm suddenly significantly more picky about what i'm going to drop $60 on.

The second hand market exists for many reasons, shutting it down as pointed out by Les will back fire. If i buy a $60 lemon i can at least take that lemon back somewhere and get a good $40-50 back IF i realise it's a lemon quickly enough! (here in Japan, not sure what return rates are like in the US though i assume you can return stuff within X days and simply say "no, do not want" like the UK? which you can't do with any ease in Japan...)

Anyways, I hope when we go full DD that it really does bring this new price point everyone expects because if doesn't the industry can go suck. If all DD brings is downloadable games at pretty much the same price point then <imanexpert> games pubs just shot themselves in the foot.... </imanexpert>

I agree, I make it a point never to buy anything on Steam at full retail price because it simply isn't worth that much when it's just a digital copy. I can imagine 60 dollar downloadable games on the consoles haha.

 

[Night_Trekker]

Stating opinion on something = crying :lol? I love childish remarks like that.

How's this for childish: "I don't like that people can legally buy my games used for less than the price of a new game. People who do that are killing the industry. They can do it with other products, but it's not fair that they can do it with my games. The free market is unfair. You might as well be pirating!"

Boo-hoo.

Nobody is talking about making used game sales illegal, we're talking about giving pubs a cut(particularly in cases like GS where they push used hard). Which is nothing that will affect the consumer much anyway, so you shouldn't have a problem.

Except that the publishers aren't in any way entitled to it.

Correct me if I'm wrong, but the idea of devs fully using DD is evolving, no?

In a sense. But the problem is...

It just seems like instead of expanding the market, various entities are trying to find ways to shrink it in their favor.

Developers would rather you get less for your money than drop the price or lower their budgets.

Okay, but see, your hardball is going to hit the customers as well as your intended target. And since we are the customers, we're perfectly within our rights to get pissy about that. Naturally, you guys can do whatever you feel is best, but when your response to your customers getting upset is "fuck you, don't let the door hit you on the way out", surely you have to see a problem?

Exactly.

 

[Starchasing]

Games are portable and relatively valuable. The value to portability is higher than almost any other used medium, so it's WAY more lucrative than music or games. A used book will retain maybe 50% of its value, but because a new hardback is only $20, you're only selling the used for $10, and of that only maybe $5 is profit. Music is even WORSE. You have to sell a LOT of CDs or books to make it work, and you have to STORE the books which are more unwieldy than games.

As Gamestop, sell a used game and you're getting 80%-90% of the value in the release window, and making north of $15-20 per sale. It's TREMENDOUSLY more lucrative than CDs or Books, and that's why there's an infrastructure that's grown to harvest that where used books and music is more of a niche because they just aren't as profitable. Also, the STAFF required to make a CD or book is miniscule compared to a game.

The comparison to movies is not valid, either, because most movies (ie not direct to video) have a protected window of release at the theatres where they make a large portion of their profits. The DVD sales come after and are usually gravy. Game releases have no such protected release window. The staff required to make a AAA game and AAA movie are becoming comparable, so this is the closest comparison in terms of invested value, but again, because the movie enjoys protected release in movie theatres to make a large portion of its revenues and games don't enjoy this, the comparison is not valid.

Sorry, as a consumer i dont care for anything you say...

i dont care if a game takes 2 o 200 people to make...

as a consumer all i care is

price

and what do i get in return

You don't PLAY the game cover art and DVD case. The book experience absolutely degrades. The game experience does not.

not my problem as a consumer


edit:

Gamestop is helping the industry in the long term, by forcing them to make better products at better prices...

 

[DCharlie]

then gamers should not get pissy when game makers adjust to try to make the business models work for them (i.e. digital distribution where DD copies are priced for less, having parts of the game not unlock unless it's a new copy until 6 months after the game has shipped;etc)...I mean gamers can get pissy if they like but if Gamestop gets to play hardball, then we do as well

what you REALLY have to be careful with here is putting gamers in the middle whilst you two play hardball.

Stuff like "having parts of the game not unlock unless it's a new copy until 6 months after the game has shipped"... people aren't going to take kindly to that are they?

I dunno, both your customers are gamers and if you get into some over blown spat and forget about us they you're BOTH fucked.

 

[NeoUltima]

When you think about it, this discussion about publisher royalty on used games is a waste of time...cause it will not happen.


What will happen is what is already starting to happen: Digital Downloads will be offered at a lower price than retail, pre-order bonuses, and DLC and multiplayer to keep people from trading games in, etc etc. Eventually DD will kick into overdrive, with all games being offered digitally. It's inevitable, this is what will happen. My guess would be in the next gen of consoles.

 

[BeEatNU]

personally I agree, pubs/devs should be getting a portion of used sales.

 

[PataHikari]

Game prices will be more flexible when retail is gone.

This is funny for two reasons.

A) Retail will never be gone.

B) In some magic world where retail does somehow fail, game prices won't change a bit.

 

[vireland]

Sorry, as a consumer i dont care for anything you say...

i dont care if a game takes 2 o 200 people to make...

as a consumer all i care is

price

and what do i get in return

Thank you for sharing, but I was refuting invalid arguments, not stating a case for the industry. The number of people required to make whatever was a small portion of my response.

 

[Sneds]

Yes, this is my point. Let the game do what it's gonna do for the first 1-3 months at retail, then let rental markets have it. Game makers get 2 release windows, gamers who want to pay more get the game sooner, and gamers on a budget still dig the games but they have to wait a bit longer (just like movie rentals). I see no issue with this.

People are throwing around a lot of examples. Some of which, like this one, aren't really relevant.

Of course the consumer wants to rent the game the day it comes out because the only alternative is spending £40 on a product that they may end up hating.

There's a huge difference between me spending £5 to watch a movie at the box office, to spending £40 on a video game.

 

[michaelpachter]

I would be fine with game rentals if there were a waiting period of 1-3 months from when game hits retail to when it can be rented. As is, I can't stand them. But would be fine with them if we had the waiting period, like movies do.

The only way that would work is if the physical discs were held back for three months. The fair use doctrine says that once a physical product is sold at retail, anyone can buy it and rent it out for a profit. So when the game is released as a packaged product, it can (and will) be rented right away. The solution, I suppose, is to offer digital downloads first, then offer physical media after a waiting period, and the pre-release of DD might allow the price to hold up, but that practice would upset retailers, as it would accelerate the move by consumers to digital.

The analogy to car sales is not quite fair, since cars are sold to be consumed over a multi-year period, and the car maker is indifferent if the original purchaser drives it for ten years, or if he resells it after two. Games are more like other intellectual property, intended to be consumed only once (at least, that's the idea behind books and movies--music is different). In other settings, there is not much of a resale market, likely because the initial price is relatively low (movies and books are typically priced at $20 or less, and are widely available under $10 after a few years), and the products have a very long life. A book isn't "stale" when the sequel comes out, and a movie doesn't become irrelevant because a new hardware format launches.

Games are intended for single use, and are priced very high. Because of that, there is a great deal of demand for the game at lower price points. The used market is bigger as a percentage of overall demand than for any other intellectual property, with GameStop selling approximately 1.5 - 2x as many used games as it sells new. Since GameStop has 25% of the new game market, this means that used games represent around 1/3 of all games sold. That's a crazy big number, and it's part of what drives Jaffe crazy.

I don't think that Jaffe or the publishers would be upset if used game prices were limited to 50% of the price of a new game. In that case, GameStop could only make its 50% profit if it paid $15 for a trade-in and charged $30 for a game that was originally sold for $60. If GameStop only paid $15, most gamers would hold off trading games in for several months, and 75 - 90% of lifetime game sales for the new game would be in the books by the time the used game was offered for sale. As it stands now, GameStop offers huge trade in credits beginning just a few weeks after a game is released, and typically sells these games for a $5 or $10 discount to the new price. They compound matters by recommending the used game to people who approach the counter with a new game.

Interestingly, GameStop apparently ended the practice of recommending a used game for the first 60 days after launch. The new policy took effect around the same time that Activision announced that CODMW2 would be the biggest game launch in history. I have no information about whether this is a coincidence, but it's possible that Activision used its power over allocation of new games to coerce some modification to the GameStop policy.

Digital distribution is a foregone conclusion once hard drives are big enough to accommodate a lot of content and once high speed Internet is ubiquitous. The publishers make more money on a download (70% of retail vs. 60%), and pricing will likely be the same. People who prefer a physical disc will still be offered one, but some of the lazy folks will take the convenience route and download. Over time, digital content will grow to over 50% of the market, and demand for used games will outgrow supply. My guess is that GameStop will try to raise used game prices to take advantage, which will attract increased competition from Amazon and Best Buy. Competition should serve to drive used game prices back down.

This isn't happening overnight. Console HDDs are barely 120Gb, and then, only 10% or so of the installed base will have them by year end. Next year, we'll probably see a 500Gb Xbox 360 plus, and I'd bet that all games are offered digitally day and date with the packaged product release. Sony will follow suit (no clue when Nintendo will figure this out), and ultimately, a lot of gamers will have big hard drives and high speed Internet.

Just in time for Twisted Metal Black II.

 

[StuBurns]

A little off-topic I guess, but I want to comment on it, one thing that annoys me in Jaffe's blog video (and I actually agree with him on the rest of it pretty much), is something lots of people bring up when they talk about message boards, the idea that just because he calls himself DavidJaffe, or that cock hole Dyack uses his name, does not mean message boards are anonymous, and everyone else is hiding behind their usernames. People don't typically user their name because they want to use a reference of something, to say something by default with every post. I would imagine if someone really wanted to know a users name, 99+% of GAF would post their name without question.

Stupid complaint I know, but people always say it, and it always irritates me.

 

[Pureauthor]

What will happen is what is already starting to happen: Digital Downloads will be offered at a lower price than retail, pre-order bonuses, and DLC and multiplayer to keep people from trading games in, etc etc. Eventually DD will kick into overdrive, with all games being offered digitally. It's inevitable, this is what will happen. My guess would be in the next gen of consoles.

All games DD? Within a decade? Do you know how many consumers are going to have to be dragged, kicking and screaming, into the world of the internet, to make that happen?

 

[Opiate]

I think there are a couple of issues using other industries or product categories as analogies -

1. with a lot of other products, there is physical degradation, degradation of the experience, loss of warranty, etc

2. with a lot of other products, the used products are not sold alongside the new products, and the retailer is not proactively trying to shift a consumer who has elected to purchase a new product towards a used product


The above may not apply to all, but it does tend to put videogames into a very much reduced group.

Absolutely -- reduced, but not unique. Which is really what it would take. For example, consider used DVDs as an obvious one. This experience is not reduced. CDs as well. Jewelry has virtually no degradation. In ma cases, these products are indeed sold right alongside the new ones (I can buy used DVDs at Blockbuster, for example).

Moreover, some of these other markets -- which you have discarded as "too different" -- actually experience problems that would presumably be even worse than the ones the video game industry experiences.

Consider used cars again. Used cars have dramatically lower resale values than new cars do. This is extremely bad for the new car market: If a new car model is, say, 20,000 dollars, I can often buy a similar used car for 15,000 or even lower -- even if the car is in excellent condition. A savings of 5,000 dollars just for waiting a year! This would presumably be a very big issue for automobile manufacturers that video game publishers would never have to deal with. And yet, car manufacturers found a way.

So just as you and others might argue that the video game industry has it particularly bad in some respects, so too do the car markets and others you have attempted to discard.

 

[lowlylowlycook]

For example, it's a telling point that you would be in even more trouble if Gamestop were actually pro-consumer. What if they bought their used games for 30 dollars, and resold the for 40? That would be an incredibly consumer-friendly choice, and I can almost garauntee that you would hate it.

He might hate that but he'd probably be wrong. Competitive used game pricing would 1)Probably increase overall spending on games 2)Let game publishers effectively price discriminate. Neither of this things happen to any big degree in the current case where GS chops $5 off the price.

 

[ksamedi]

Yes but the second part of my stance is that if Gamestop and others do not want to cut pubs/devs in (and they are NOT legally required to and this is fine) then gamers should not get pissy when game makers adjust to try to make the business models work for them (i.e. digital distribution where DD copies are priced for less, having parts of the game not unlock unless it's a new copy until 6 months after the game has shipped;etc)...I mean gamers can get pissy if they like but if Gamestop gets to play hardball, then we do as well...and so we should. As many of you like to point out- as if I am not aware- it's a capitalist society in which we live...evolve or die. Sounds good to me. All I was saying is, Gamestop and the like should play ball with us now and we all do well together versus forcing us to cut them out of the picture down the road....

David

Uuh, the market finds ways of eliminating things. So if pubs choose this road, they will get eliminated by market forces. Basically what will happen is that other companies will take over (by being more consumer friendly). Its incredibly arrogant for a publisher to think they can control the market with practices like you described. Thats not how stuff works.

 

[davidjaffe]

what you REALLY have to be careful with here is putting gamers in the middle whilst you two play hardball.

Stuff like "having parts of the game not unlock unless it's a new copy until 6 months after the game has shipped"... people aren't going to take kindly to that are they?

I dunno, both your customers are gamers and if you get into some over blown spat and forget about us they you're BOTH fucked.

I agree, the customer can not get fucked. But it's been an unfair playing field for us game makers for too long and so something has to give. The customer will have to win in the end, or the whole thing goes to hell. Which is as it should be.

But I also think customers will need to get used to some new ways. Customers don't bitch about having to way 3 whole months from when a movie hits DVD from when it was in the theater. They don't act all enraged if- as I said before- a 50 dollar concert ticket doesn't give them as good an experience as a 250 dollar ticket. These are just things they have come to expect as the nature of the businesses they choose to support. With games so far, that has not been the case. And so as those things start to change (i.e. you didn't buy the game new? Sorry, you're missing the coupon to unlock the 3 extra MP levels), customers will at first get annoyed and then learn to adjust. At least that is my thinking on it. But we'll see.

End of the day, I am on the fence because sure, as a customer of products myself (including games) I want the best, cheapest, easiest, and closest to free stuff I can get...but as someone who makes the stuff and knows the effort and time and money that goes into it, I also understand the rightful need of folks to be able to make a great living if they provide a great service.

 

[Mutagenic]

This is funny for two reasons.

A) Retail will never be gone.

B) In some magic world where retail does somehow fail, game prices won't change a bit.

What's funny is how he thinks prices will decline with lack of competition.

 

[Tellaerin]

You don't PLAY the game cover art and DVD case. The book experience absolutely degrades. The game experience does not.

As long as the all the pages are there and the words are still legible, Vic, the book experience absolutely does not degrade. Just like minor scratches on the DVD that don't interfere with the audio and video when you actually play the game don't degrade its performance. The 'performance' of a book is in the act of reading it.

Now, that kind of damage might lessen the object in the eyes of a collector, but collecting books and reading them are two different things, just like collecting games and playing them are different things.

 

[Starchasing]

Digital distribution is a foregone conclusion once hard drives are big enough to accommodate a lot of content and once high speed Internet is ubiquitous. The publishers make more money on a download (70% of retail vs. 60%), and pricing will likely be the same. People who prefer a physical disc will still be offered one, but some of the lazy folks will take the convenience route and download. Over time, digital content will grow to over 50% of the market, and demand for used games will outgrow supply. My guess is that GameStop will try to raise used game prices to take advantage, which will attract increased competition from Amazon and Best Buy. Competition should serve to drive used game prices back down.

as storage gets bigger so will the games.. nothing will change in that respect

 

[Woodsy]

I'm no fan of Gamestop, but even someone like Jaffe can't deny their reach in getting the game into the most number of gamers possible - the side effect of getting more games out there at launch (i.e. money in the publisher's pockets) is that they are going to get second hand sales on the backend. What they do is no different than being a second hand seller on ebay - it's just that for many consumers the convenience of going to Gamestop to drop off their games outweighs the depressed prices they pay on the true consumer-to-consumer second hand market (ebay).

If they really want to cut that out, they are going to have to abandon disc-based sales altogether - and when that happens, we'll see how many B&M stores want to even sell a $300 console at a paltry $10-15 dollar profit when they aren't also raking in sales on game sales.

I think we all agree that DD only is coming at some point, but it depends on how it is implemented. I can think of a few ways to make it viable to the consumer:

• Offer a subscription based model whereby the consumer pays a monthly fee (say $15) for access to the online network, which would have to come with some sort of content. On top of that, consumers can pay $10-15 per game that goes directly to the developer with no resales.
• Only sell download codes, similar to buying gift cards today that get activated at the register. With this would have to come some sort of second-hand online market place. After being done with a game, you would be able to specify a price for your game (or auction it) in the online marketplace. Once the game sold, it would be deauthorized on your system, a new code generated for the purchaser, and the developer would get an ebay/paypal like cut of your sale and you would get credit for future purchases or toward your monthly subscriber fee.

 

[kame-sennin]

The used market exists primarily because of two consumer-centric forces:

1) Limited use of the product to the consumer. When the gamer is bored/dissatisfied with the game, the value of that game drops to zero. That means they paid $50 or $60 dollars for something that is presently worthless.

2) Insurance against buyer's remorse. This is a driver of not only used game sales, but discounting in general. When a customer is fearful that they may be purchasing a product they will not be happy with, they attempt to lower the risk by buying it at a discounted rate.

The solution to both of these problems is simple. Games people love, and love to play, do not get resold. Games people love also have strong word of mouth and build confidence into the brand for future products. Word of mouth and brand confidence reduce consumer anxiety and thus, discounts are not as aggressively sought after because there is less fear of being ripped off.

If I were a developer, I would not be publicly advertising the fact that used game sales were killing my business. That is tantamount to saying that I put out a product that has no value to the original customer and limited value to the used buyer. Don't these people feel embarrassed? The solution to the second-hand market is to increase the value of the product in the consumer's mind. And that does not mean spending money to produce free content. Gaf may hate to admit it, but Nintendo's most popular games hardly get resold and they never drop in price - despite the fact that the budgets are lower. That means Nintendo's games are providing greater value for longer periods of time for their customers, and that Nintendo figured out a cost effective way to do so.

 

[Opiate]

If someone pays 60 bucks to the person who made the damn thing they are enjoying, it is ok for me to give them a better experience.

That's not all you're doing, though. At this moment, I can sell my copy of most used games for, say, 20 dollars on eBay, if they are in decent or good condition. However, if one of these games had content that other users would never be able to unlock, that value would by definition be diminished. There is less game I can resell, and I may only get 15 dollars. You have reduced the value of the product I have purchased from you, free and clear, for 60 dollars. I'm the new purchaser here, and my value has been diminished.

Justt like if you pay 250 bucks, you get a better experience sitting front row at a concert than you do paying 50 bucks and sitting at the back in the nose bleeds...I'm ok if the 50 dollar seats exist and those people who only pay 50 deserve a damn good show...but not AS GOOD as the people who pay 250....

What if I bought a ticket to this concert, realized I couldn't go, then tried to resell it, only to find that the person gets a slightly less good seat because he isn't the initial buyer? Let's say he gets third row instead. Obviously, I can only resell it for 200 then (or whatever. It's all made up math). You have reduced my rights as a consumer.

 

[davidjaffe]

A little off-topic I guess, but I want to comment on it, one thing that annoys me in Jaffe's blog video (and I actually agree with him on the rest of it pretty much), is something lots of people bring up when they talk about message boards, the idea that just because he calls himself DavidJaffe, or that cock hole Dyack uses his name, does not mean message boards are anonymous, and everyone else is hiding behind their usernames. People don't typically user their name because they want to use a reference of something, to say something by default with every post. I would imagine if someone really wanted to know a users name, 99+% of GAF would post their name without question.

Stupid complaint I know, but people always say it, and it always irritates me.

Regarding this:

'People don't typically user their name because they want to use a reference of something, to say something by default with every post.'

I don't understand what you are saying.

 

[TheHeretic]

Companies like Gamestop and companies like the one Jaffe works for will always do whats best for themselves. I don't really see why I should care if Gamestop is screwing over developers because its not my problem. What I do know is that ultimately its consumers who stand to lose in all this. The games industry isn't going anywhere, it will just regress to the point where exchanging games on the second hand market will have penalties such as locked content or not be available at all, digital distribution.

 

[DCharlie]

heres an idea, why don't pubs offer to rebuy games back and then create their own "preplay" sales service

At least the threat of someone doing that (howver unrealistic it is!) might have the pro-consumer angle of getting Gamespot to drop the price of their second hand games?

(I'm assuming her Gamespot dont give much for trade in then throw games back out at $5 under the retail value too)

End of the day, I am on the fence because sure, as a customer of products myself (including games) I want the best, cheapest, easiest, and closest to free stuff I can get...but as someone who makes the stuff and knows the effort and time and money that goes into it, I also understand the rightful need of folks to be able to make a great living if they provide a great service.

you know what DID make a big difference in some of my previous games purchasing habits? Nintendo Points. For two reasons :

1) platinum rewards at the end of the year for having bought a certain number of nintendo games were cool enough to get me to spend the extra on a new game

2) the points racked up quickly and allowed the purchase of items unavailable anywhere else.

Perhaps a cross publisher alliance to make such a point scheme is what is needed?

 

[Starchasing]

If I were a developer, I would not be publicly advertising the fact that used game sales were killing my business. That is tantamount to saying that I put out a product that has no value to the original customer and limited value to the used buyer. Don't these people feel embarrassed? The solution to the second-hand market is to increase the value of the product in the consumer's mind. And that does not mean spending money to produce free content. Gaf may hate to admit it, but Nintendo's most popular games hardly get resold and they never drop in price - despite the fact that the budgets are lower. That means Nintendo's games are providing greater value for longer periods of time for their customers, and that Nintendo figured out a cost effective way to do so

i think you nailed it

 

[itxaka]

So everyone involved on the game should get money out of this too rigth? Like the cover printers, DVD duplicators and such. They are entitled to it rigth?

 

[vireland]

As long as the all the pages are there and the words are still legible, Vic, the book experience absolutely does not degrade. Just like minor scratches on the DVD that don't interfere with the audio and video when you actually play the game don't degrade its performance. The 'performance' of a book is in the act of reading it.

Now, that kind of damage might lessen the object in the eyes of a collector, but collecting books and reading them are two different things, just like collecting games and playing them are different things.

Mmmm, I disagree. With games, you don't interact with the medium (CD) except to insert it. With books, you interact with the medium on a minute by minute basis. Will some used books be better experiences than others? Yes. Will interacting with the medium degrade the book? A missing page or pages is a bigger problem than a scratch on a game CD. A stinky book will turn me off and affect my experience, unlike a scuffed CD which will deliver the same game as new.