An open discussion on solutions to used game market

[Aerozord]

This is something I have wanted to do for awhile, but mostly fear of flaming stopped me. So I hope people will follow the rules and we can get an actual dialogue going here.

First is the point, used game market is hurting the industry and I hope we can discuss a compromise between developers and consumers to atleast lessen the impact. Next are the rules for this discussion

1. No talk about pirating: while similar arguments they are not the same. You can argue good pirating does by giving access to third world countries, those that cant afford games, or people to try before they buy. If someone gets a used game, they definitely can afford games (just less) and definitely will not be buying the full version.

2. You have a right to sell: No potential solution can deny the owner of a game from selling their copy. The copy must also be functional, but can be diminished. Something like codes for unlocking bonus items is still ok as long as the person can play through the game proper just fine. But must be possible to sell/share your copy

3. Developer has a right to profit: On the other end developer has a right to get profit from those that play their game, or to be more exact some option. Either a motivation to buy the game new, or some way to still get money post-retail.

4. Compromise: Not going to lie, this will hurt anyone whose preference is to buy most games used. We are looking for compromise, if someone can find a win-win great, but as a consumer you have to be willing to make a few concessions for the sake of the medium.

5. No outsider intervention: Could all these issues be fixed if re-sellers just kicked a few bucks to the developer for each sale? Of course, but thats not going to happen. Any solution must be something the developer/producer can do that the consumer feels is fair.

There is a 6th rule, thats in abit of a quasi state. It would be nice to have something that keeps retailers happy, but anything that cuts into their ability to resell they will be against so I simply doubt that is possible.

To help get things started here is a good video on the matter (http://penny-arcade.com/patv/episode/project-ten-dollar)

Though I do not personally think their idea would work. Most gamers I think, despite it being cheaper, would still be upset that entire play modes weren't available. People are rather vain though, maybe if it was purely cosmetic features like the hats in TF2 it might work better.

[Meister]

It's not much of an open discussion if your ground rules (which, incidentally, no one's going to be held to follow in any official way here) exclude several options that many people feel are a legitimate compromise right from the start, is it?

[Jagos]

Used game market is hurting the industry? Are you sure? The fact that I can resell my version of Gears of War 1 as credit for Gears of War 2 is hurting a developer who can make updates to the older game? Or use that older game as a means to signal a game series you enjoy and put money down on the newest game?

[Kim]

If developers are actually interested in getting me to buy new, they'll has digital versions available on release for a price that is less than the price at a store.

That is all. Problem solved.

[Aerozord]

It's not much of an open discussion if your ground rules (which, incidentally, no one's going to be held to follow in any official way here) exclude several options that many people feel are a legitimate compromise right from the start, is it?
No I dont see how those exclude compromise options. Since the rules that eliminate options are the ones about completely denying developer revenue and completely removing the option of resale. Those aren't compromises
Used game market is hurting the industry? Are you sure? The fact that I can resell my version of Gears of War 1 as credit for Gears of War 2 is hurting a developer who can make updates to the older game? Or use that older game as a means to signal a game series you enjoy and put money down on the newest game?
because someone is choosing to buy that old version over a new one. In addition the issue are not those that wait for years to pick up a new game. The big threat are those that buy a game launch day, play for a week, then sell it. Even then that wouldn't be too big of a deal, but second hand places actively push the 5-10 dollar cheaper version of the game which people often get because, hey it is 10 dollars cheaper. I dont blame the consumer for making that choice, its the reasonable one, but it also completely undercuts the developer. The used version only grows cheaper as early adopters sell their versions and thus used version becomes steadily the better buy.
If developers are actually interested in getting me to buy new, they'll has digital versions available on release for a price that is less than the price at a store.

That is all. Problem solved.

I believe the issue with this method is the resulting price war. The reason prices are set is that even at current levels you need to sell about a million copies to break even. If they offer a cheaper digital version retailers will have to go cheaper to compete, thus digital version will have to go lower to match it. Even if that doesn't happen it would likely be the death of video game retailers. Of course to some that might not even matter, but to others it will.

The main problem being it doesn't help sales of the physical brand new discs. So while it is a valid new model, not one if you want to maintain the physical one. Might be where we are heading anyways though *shrugs*

[Kim]

The end of used games sales IS the death of video game retailers. There's a reason they push the used game sales thing so hard. It's how they actually make enough of a profit to keep going.

If you're going to have a discussion about the used games market, you have to recognized that it very much means the death of many if not most of these stores.

[Doc ock rokc]

The entire "Used game markets=no benefits" thing is bullshit In order for there to be a used game in the first place some one bought it new. IF we are talking a online game where they have to maintain servers, Someone has already payed for the server slot I just bought it from them.
The BS like In Mortal Kombat reboot where if i rent it/buy used I have to pay to play online just seems like money grubbing to me (specifically since they don't go on servers they go on P2P networks). I almost didn't buy Arkham city because of the catwoman nonsense (thankfully Rocksteady revealed they will release her for free later)
I am not rich I can't buy every game I come across new. I shouldn't have to have a shelf of games I hate to play sitting around somewhere. It's WELL within my rights to sell peace of shit/old games to get newer ones. and it's well within my rights to keep those old games for nostalgic purposes.

[The Artist Formerly Known as Hawk]

Do second hand bookstores hurt writers/publishers? Does buying used cars hurt the automative industry? How about cheap second hand dvds and the movie industry? There are many industries that have second hand markets, why is gamings any worse?

Hell, I've seen people push this arguement before now that even selling or lending games to friends is tentamount to piracy, because only one of those people bought the thing, which by that logic means that nobody should ever take a dvd around to somebody elses house and watch a movie with a group of friends because none of them bought that movie either. It's ridiculous to think this logic applies to one form of media and not another.

[Ramary]

The issue here is not really used games in themselves. There is is absoutely nothing wrong with it. The problem is Gamestop. Gamestop is the biggest chain of retailers in the largest game market. And it is a glorified pawn shop.

They push used games down your throat so hard if you go there, since all they have to do is bump the used game's price down a bit and bingo, more profit then selling it new. And since they are the largest retailer for games, not playing ball with them because of their practices is shooting yourself in the foot sale wise. If it was not for their business model, used games would not be such a big issue.

But even THEN publishers still blow used games out of proportions, it is basically the publishers and Gamestop trying to out greed the other.

[Betty Elms]

The retailers are the ones who choose to exploit the second hand market the way they do, they manufacture the problem. The practices of Barnes & Noble don't line up very neatly with the practices of Gamestop.

I know relatively little about this whole scenario, so this is less me offering my idea of a solution so much as me trying to figure out an idea of a solution, but I'd have few qualms with game developers utilizing their ability to prioritize downloads over hard copies as a means of establishing leverage over major retailers. They can assert their dominance, and from that position reach a compromise. They could go for Not-Allowed-Thing Number 5 (give us a percentage of your profits on used shit) and relegate the unregulated second hand market to independent stores. There's no reason for physical retailers of digital information in the 21st century to not live under the constant threat of death.

Ever since one guy in Olduvai figured "hey if I use a rock to cut up this animal, I won't need to ask Bob for help" we've been finding new and innovative ways to put people out of work, we just need to keep restructuring society around that fact.

[Krylo]

The end of used games sales IS the death of video game retailers. There's a reason they push the used game sales thing so hard. It's how they actually make enough of a profit to keep going.

If you're going to have a discussion about the used games market, you have to recognized that it very much means the death of many if not most of these stores.This is basically entirely true.

The mark up on a new video game that you buy at a store, whether Wal-mart or Gamestop or Amazon.com is around a buck or so. Might be under. It's been awhile since I looked into it, but there was a time awhile back I thought about opening my own store and I was looking into buying wholesale and the mark-ups for retail are teeny tiny.

But it's important to understand why it is this way, which EC already covered in the video Aero linked. Games cost millions upon millions of dollars to create and making a return on that is not an easy thing to do. Even at current prices they have to sell a shit ton of copies new just to break even, and if retailers increased their mark ups on new games it would cause even more issues with the used game markets etc.

The entire "Used game markets=no benefits" thing is bullshit In order for there to be a used game in the first place some one bought it new.Let's pretend you are a developer for a minute.

Let's say you make a triple A game. You've dropped about 30-40 million dollars into the development of this game.

Now, let's say you manage to sell 500,000 copies within the first month or two. That's a lot of copies right? Well, no, not really. You haven't even quite broken even. You're actually in the red for development as you've made back a little under thirty million, and you spent over thirty million.

Now, let's say half of those sales were used games, you've now made a little under 15 million on your 30-40 million dollar enterprise. You are 15 million dollars in the red.

Basically, the problem is that the game industry isn't super rich. It really really really isn't. Like, EA does okay, and a few other big companies, but do you think Bioware WANTED to be sold to EA? Fuck no. They wanted the money. They wanted the bigger development budgets. And they wanted some kind of job security. But they would not have done that if they were making enough money from their titles as an independent company.

And the reason companies like EA stay afloat is because of games like Cabella's Dangerous Hunts and other trash titles that are so cheap to make that getting a profit on them is basically assured.

The same is not true of triple A titles like Assassin's Creed, Final Fantasy, Red Dead Redemption, Dragon Age, Mass Effect, etc. These games need to sell a shit ton of copies new just to break even.

Modern Warfare 2 had a fifty million dollar development. That means they had to sell over 833,000 copies brand new.
Do second hand bookstores hurt writers/publishers? Does buying used cars hurt the automative industry? How about cheap second hand dvds and the movie industry? There are many industries that have second hand markets, why is gamings any worse?What's the cost of publishing a book? Googling gives me around 5 dollars per copy of the book, but I'm guessing most large publishers also don't publish a small number of copies. And the development cost of a book is... the cost of paper and ink to print out a manuscript. Like... twenty bucks?

Either way, it's much much much less expensive than developing a video game...

And, the fact of the matter is that these practices DO hurt books quite a bit as well, as that most books lose money and never turn a profit with the author never seeing a red cent.

So why don't we care about it as much with books as video games? Because a book can be developed by one person. You don't need a multimillion dollar team to produce a new york times best seller. You just need one talented author, and we aren't going to run out of those just because the last thing a company published didn't make a lot of cash. Though it does have wider sweeping consequences than I'm going to go into here (it's hard to get published by a major publisher due to the nature of risk in book publishing), the basic point that books as we know them aren't going to die if they don't sell a majillion new copies or whatever is completely true for books, but not completely true for video games.

The automotive industry falls into the same paradigm. That is to say that they need to sell far fewer vehicles to make profit, and they can control their costs. In the automotive industry the primary cost is factories and production, not development. Why is this important? Development is a fixed cost.

If Development costs you X dollars you need to sell enough cars to make back that much money plus some. However, vehicle R&D is much much different than game R&D and doesn't cost as much per vehicle.

Production costs, on the other hand, are completely variable and controllable. If a vehicle isn't selling you cut back production, and move that line to produce a different type of vehicle that is selling, cutting losses and increasing revenue.

You can't do that with video games, because the production cost of video games is such a miniscule part of their overall cost that it would be completely worthless to a developer to do so. With video games once you've got the code your costs are fixed and that's it you need to sell this many copies or you are fucked.

As for the movie industry and DVDs: The movie industry is actually much closer to the video game industry in how it operates, but again this is a completely false comparison to make because movies figure their profit primarily through Box Office sales. Most movies make back their costs before it ever goes to DVD/Video and those sales are just cheddar.

As that video games generally aren't played in theaters by a bunch of people at the same time while eating milk duds and popcorn before they're released for home ownership, it's just a completely invalid comparison.

All types of media are not equal in cost to produce nor in how profit is generated. And certainly all goods aren't. This should be obvious.

I know relatively little about this whole scenario, so this is less me offering my idea of a solution so much as me trying to figure out an idea of a solution, but I'd have few qualms with game developers utilizing their ability to prioritize downloads over hard copies as a means of establishing leverage over major retailers. They can assert their dominance, and from that position reach a compromise. They could go for Not-Allowed-Thing Number 5 (give us a percentage of your profits on used shit) and relegate the unregulated second hand market to independent stores. There's no reason for physical retailers of digital information in the 21st century to not live under the constant threat of death.

I think Nintendo used to do this back in the day when there were "Nintendo Authorized Dealerships" that sold used games. It's really the way used games should run and would be the best way over all to fix this mess.

That said, I really don't mind the DLC thing the EC guys were bitching about, especially how I've run into it the last few times I have: Which is to say that you also get post release DLC for free, just not ALL the post release DLC. It's a good strategy because getting post release DLC makes you feel like you're ACTUALLY getting something, and the day 1 DLC is probably a necessary component to that as well so you can get some of that immediately.

Either option is fine with me. But the best option would probably just be people not buying games from Gamestop anymore new or used because Gamestop is basically video game Wal-Mart + Coke in so far as being over all evil fucks goes.

There's other places to get used games.

[Aerozord]

I agree with Krylo that ideally people would just not go to Game Stop, but I dont think its a solution. Especially thanks to their "get X item exclusively at Game Stop" deals which they strong arm from developers in the first place. You need a way to entice people to choose the new version because Americans care more about getting a product cheap then the morality of the business they are supporting.

[Meister]

No I dont see how those exclude compromise options. Since the rules that eliminate options are the ones about completely denying developer revenue and completely removing the option of resale. Those aren't compromises
Yeah compromise was entirely the wrong word to use there. Still flat out removing options that a lot of people see as valid, still not open.

For example there's a lot to be said about
Something like codes for unlocking bonus items is still ok as long as the person can play through the game proper just fine. But must be possible to sell/share your copy
in regards to how it's the publisher who defines what's a bonus item and what's the game proper and how much you can cut from a game and offer separately and still have it be, technically, a start-to-finish playable game, and at what point the removal of content might in fact become a complete denial of the option of resale, not by making it actually impossible but by making used games valueless, but you shut that angle right down.

[Nique]

The mark up on a new video game that you buy at a store, whether Wal-mart or Gamestop or Amazon.com is around a buck or so. Might be under. It's been awhile since I looked into it, but there was a time awhile back I thought about opening my own store and I was looking into buying wholesale and the mark-ups for retail are teeny tiny.

It varies but it could be as much as $5 depending on the game and, of course, if you can unload your whole inventory.

But yeah the only way new games get more action is for the prices of new and used to be closer or to, I dunno, impose some limits on when used items can be sold to give new games their own version of a 'theater release'. But then the profit margins need to be better for retailers without there being a price hike, which I guess could work if more games were being bought new.

[Jagos]

No I dont see how those exclude compromise options. Since the rules that eliminate options are the ones about completely denying developer revenue and completely removing the option of resale. Those aren't compromises

And you don't make up the rules of engagement in an attempt to obscure the issue. If you can't talk about how piracy increases the value of content, or allows people access to older games and files, you're being intellectually dishonest. Piracy is more a service issue as Gabe Newell has iterated for years (http://www.geekwire.com/2011/experiments-video-game-economics-valves-gabe-newell):

It’s interesting to touch on a number of pricing and service issues, because it will help convey the complexity of what we’re seeing in the entertainment space, and there’s probably also going to be lessons in it for other people trying to create value on the Internet.

One thing that we have learned is that piracy is not a pricing issue. It’s a service issue. The easiest way to stop piracy is not by putting antipiracy technology to work. It’s by giving those people a service that’s better than what they’re receiving from the pirates. For example, Russia. You say, oh, we’re going to enter Russia, people say, you’re doomed, they’ll pirate everything in Russia. Russia now outside of Germany is our largest continental European market.

If you can't answer that, then explain why one of the most successful companies continues to make larger numbers than say... Ubisoft.


because someone is choosing to buy that old version over a new one. In addition the issue are not those that wait for years to pick up a new game. The big threat are those that buy a game launch day, play for a week, then sell it.
... So I buy with my paycheck Pokemon Red, Baten Kaitos, and Fat Princess on the day that Madden 2013 comes out, and I'm a threat to the industry. Good to know.

Even then that wouldn't be too big of a deal, but second hand places actively push the 5-10 dollar cheaper version of the game which people often get because, hey it is 10 dollars cheaper. I dont blame the consumer for making that choice, its the reasonable one, but it also completely undercuts the developer. The used version only grows cheaper as early adopters sell their versions and thus used version becomes steadily the better buy.

So how does a secondhand market in the gaming industry differ so greatly from the publishing industry?


I believe the issue with this method is the resulting price war. The reason prices are set is that even at current levels you need to sell about a million copies to break even. If they offer a cheaper digital version retailers will have to go cheaper to compete, thus digital version will have to go lower to match it. Even if that doesn't happen it would likely be the death of video game retailers. Of course to some that might not even matter, but to others it will.

Hence, why a ton of people have chosen digital distribution. People have been bitching about prices on games since the 80s. Capcom's the only one to my knowledge that has dropped the price of their games and enjoyed success in gross revenue. They've also allowed add-ons to either be free or made money with cosmetic changes to their games. You don't need to sell a million copies, you need to sell a better service. That's the problem of the industry. They see service is secondary, and that's why people aren't buying games new. Hell, the only reason I bought Portal 2 new was because Valve made it fun with the Portal Sack. Why can't EA or Ubisoft do something like that? No, they give me a "You're a damn commie criminal" tax with their DRM or ignore me wanting to play their games on other systems (Scott Pilgrim on PSP, HELLO UBISOFT?!).

The main problem being it doesn't help sales of the physical brand new discs. So while it is a valid new model, not one if you want to maintain the physical one. Might be where we are heading anyways though *shrugs*

I know people love to see those nice shiny new discs but let's realize the pricing war means the price is too high. Every last one of us on this site should recognize there's a reason we play on Steam, Gog, or whatever else is because for us, it's convenient to do so. I personally won't sit through a long upload unless I'm absolutely enticed to go to the Gamestop to get a PC game. They better throw in a statue, a second controller, and an automatic cake and blowjob machine so I can spend more than $100 for a game. Barring that, I'm poor. I do not have the luxury of spending $60 for a game every month. If I can find more games conveniently online for the grand price of free (DFO, TF2, Memoir Online) then you can bet I'll go and use those instead of an overpriced game that's trying to bankrupt me.

[Nikose Tyris]

What's the cost of publishing a book? Googling gives me around 5 dollars per copy of the book, but I'm guessing most large publishers also don't publish a small number of copies. And the development cost of a book is... the cost of paper and ink to print out a manuscript. Like... twenty bucks?


Only part of your post I'm going to address, because it's the only part that stands out as incorrect- Writers can be contracted to write a book for a lump sum initially, and there's the cost of the cover artists, and any artwork within a book. [Romance Novels follow this practice].

But it's still a factor of $5-10K versus millions, so this is just a nitpick detail.

[Osterbaum]

This (http://www.escapistmagazine.com/videos/view/jimquisition/4720-Used-Games-Have-A-Right-To-Exist) and this (http://www.escapistmagazine.com/videos/view/jimquisition/4745-Fighting-The-Problem-Of-Used-Games) mostly sum up my opinions on the issue. If you don´t like this guy, as Im sure at least a few of you dont, try to get past your initial style over substance reaction. You can obviosly disagree with these points, Im just saying I agree with them and am pre-responding to any possible "I dont like that guy, he is annoying".

[Azisien]

I know I am a little late to this thread but I am the manager at a game store so I could probably provide some cold, hard facts about the economics of the situation if anyone has questions.

If we are talking strictly New Game vs. Used Game sales, it goes something like this:

New game comes out with retail price set at $59.99. Average cost for the store is about $53. Rarely as low as $50, sometimes as high as $57. The profit margins are very low, and our store at BEST breaks even on new game sales, and that's if we predict with perfect accuracy how many copies we will sell so we don't over order.

Used games go something like Gamestop I suppose. Our standard is $10 knocked off the price versus New, sometimes $15 but only if it's a shitty game. Our trade in value for a brand new game is, at maximum, $20 cash or $35 store credit. That's the maximum, with ideal customer deals in effect, and those are only periodical. So someone trades Batman: Arkham City for $20 cash, and someone snatches it right up for $49.99. The profit margin is much bigger, but the system is also a lot safer. We can afford to over-buy more used copies, and we would still profit for a while even if a game price dropped.

Retro used games are where it's at though. Some people won't even blink paying $9.99 or $14.99 each for 3 or 4 PS2/GC/Xbox/SNES games. Guaranteed we bought those for $1. Which is a trade point I would defend, frankly. Most retro shit is dime a dozen in terms of rarity, and requires more upkeep, and we get more of.

tl;dr
Profit Margin on New Game sale: $2-9
Profit Margin on a Used Game sale: $10-30

[Aerozord]

tl;dr
Profit Margin on New Game sale: $2-9
Profit Margin on a Used Game sale: $10-30

Issue is for the developer its
Profit Margin on New Game sale: $20
Profit Margin on a Used Game sale: $0

I just wish things weren't so adversarial. It would be so easy to just give, the developer like 10% of the profit. Still make more money off of the sale, but developer still gets a something for it. What video stores do.

Over all its why I think EA's idea, while not handled the best way is fundamentally good. Buy new, you get something extra with the game. Buy used you still get the game, but have to give up a few extra dollars for the extra stuff.

I imagine its why DLC is such a big thing for developers because its a way to get income post retail. But just straight up using DLC I dont think is the best idea because then even if I buy new I feel like things are being kept from me despite paying full retail.

[Jagos]

But it's important to understand why it is this way, which EC already covered in the video Aero linked. Games cost millions upon millions of dollars to create and making a return on that is not an easy thing to do. Even at current prices they have to sell a shit ton of copies new just to break even, and if retailers increased their mark ups on new games it would cause even more issues with the used game markets etc.

The EC guys already remarked on this, but it ignores "tricks" that the gaming industry uses in order to make up the cost and put the developer at a disadvantage. Franchising helps to make money and secure a steady paycheck, but it has its risks. The issue of IP ownership comes up and it's used as a leverage tool against developers. Think about it, I know the videogame world is cutthroat, but taking away someone's unique idea of how a franchise should or should not work in a contract and using it as a carrot for further game marks is not a healthy relationship.


Let's say you make a triple A game. You've dropped about 30-40 million dollars into the development of this game.

Now, let's say you manage to sell 500,000 copies within the first month or two. That's a lot of copies right? Well, no, not really. You haven't even quite broken even. You're actually in the red for development as you've made back a little under thirty million, and you spent over thirty million.

You have to factor in how many people want it digital, and how do you entice them to buy a game? Besides that, if the HIB and Indievania are any indication, more avenues for legal games are helping developers stay out of the red.

Basically, the problem is that the game industry isn't super rich. It really really really isn't. Like, EA does okay, and a few other big companies, but do you think Bioware WANTED to be sold to EA? Fuck no. They wanted the money. They wanted the bigger development budgets. And they wanted some kind of job security. But they would not have done that if they were making enough money from their titles as an independent company.

Yes, but look at who's successful this generation. Rovio (Angry Birds), Valve (TF2), Nexus (DFO), and even a few console games are gaining momentum over established large scale game makers such as EA.

And the reason companies like EA stay afloat is because of games like Cabella's Dangerous Hunts and other trash titles that are so cheap to make that getting a profit on them is basically assured.

I think it has to do with the economies of scale for their AAA titles. That's a known sinkhole and has been for quite some time. With the money invested in those games, you could have two or three lower budget titles of the same quality that developers could be more passionate about. Think about how much people enjoy Atlus games. They sell less than the amounts you've stated, but now their games are collector's items. And they are still VERY successful.

Modern Warfare 2 had a fifty million dollar development. That means they had to sell over 833,000 copies brand new.

I don't think that MW2 is a good example. It's part of a franchise that Activision has whored out, Infinity Ward had a solid game starting out, and it speaks volumes to the fact that if people preferred the first game, they may have traded it in to play the second.

What's the cost of publishing a book? Googling gives me around 5 dollars per copy of the book, but I'm guessing most large publishers also don't publish a small number of copies. And the development cost of a book is... the cost of paper and ink to print out a manuscript. Like... twenty bucks?

Amazon is creating a platform and driving the costs down on books. Further, digital pdfs lead the way into more book sales nowadays.


And, the fact of the matter is that these practices DO hurt books quite a bit as well, as that most books lose money and never turn a profit with the author never seeing a red cent.

No... (http://www.nytimes.com/2011/08/09/books/survey-shows-publishing-expanded-since-2008.html?_r=2) They're increasing as well.

So why don't we care about it as much with books as video games? Because a book can be developed by one person. You don't need a multimillion dollar team to produce a new york times best seller. You just need one talented author, and we aren't going to run out of those just because the last thing a company published didn't make a lot of cash. Though it does have wider sweeping consequences than I'm going to go into here (it's hard to get published by a major publisher due to the nature of risk in book publishing), the basic point that books as we know them aren't going to die if they don't sell a majillion new copies or whatever is completely true for books, but not completely true for video games.

Team Meat is run by two guys and they've won acclaim for one of the hardest platformers out there. Honestly, there's been a ton of experiments in the digital world, and I would think that if Green Man Gaming takes off, you might actually have a viable place to trade games digitally. That may be really interesting.


You can't do that with video games, because the production cost of video games is such a miniscule part of their overall cost that it would be completely worthless to a developer to do so. With video games once you've got the code your costs are fixed and that's it you need to sell this many copies or you are fucked.

But I think this ignores the ongoing relationships that gamers have with publishers and developers. when you buy a Mercedes, you don't HAVE to go back to them for your car upkeep. You choose to. But I would be going to EA for a Madden game, even if I just gave them $10 for one of their older franchises. There's no third party servers for most of their products where they can sell other scarcities and make even more money.

As for the movie industry and DVDs: The movie industry is actually much closer to the video game industry in how it operates, but again this is a completely false comparison to make because movies figure their profit primarily through Box Office sales. Most movies make back their costs before it ever goes to DVD/Video and those sales are just cheddar.

Small note: Look into Hollywood Accounting. They have a hard time paying residuals to actors that aren't AAA. I think the industry has taken the bad parts of the movie industry business model and implemented them into the gaming industry.

I think Nintendo used to do this back in the day when there were "Nintendo Authorized Dealerships" that sold used games. It's really the way used games should run and would be the best way over all to fix this mess.

Or, if the industry really wants to do something about it, they could always set up their own stores. Then buy back the games and keep the money themselves.

[Betty Elms]

This (http://www.escapistmagazine.com/videos/view/jimquisition/4720-Used-Games-Have-A-Right-To-Exist) and this (http://www.escapistmagazine.com/videos/view/jimquisition/4745-Fighting-The-Problem-Of-Used-Games) mostly sum up my opinions on the issue.
Oh my, that's a hell of an aesthetic he's got going.

Tempting (so very tempting) ad hominems aside, much of the populist bullshit he's spouting seems to depend upon the idea that game developers are by some, presumably magical, means all EA. And really, unless I get arrested when I try to trade in my copy of Super Paper Mario, I couldn't care less about whether or not the used game market has the right to exist. Developers have the right to try to make that market unsustainable.

It's pretty undeniably dandy that I, the consumer, can get some of my money back when I don't enjoy the product. But I don't send my food back and not pay for it when I dislike a meal at a restaurant, I don't ask for refunds at the cinema when I see a shitty movie. Obviously the analogies aren't perfect (you don't own a product when you go to the cinema), but I'm not talking about rights so much as my experience as a consumer. I'd be fine with receiving what I pay for.

I try to avoid complaining about people's sense of entitlement, but the whole outrage at game developers reeks of it. I want a product, but I just really want to get out of paying the standard price, even if that means potentially preventing the product's creators from making more stuff that I'd like? Again, that would be entirely within my rights, but forgive me for shedding no tears if the system that enables that mentality is destroyed.

[Krylo]

The EC guys already remarked on this, but it ignores "tricks" that the gaming industry uses in order to make up the cost and put the developer at a disadvantage. Franchising helps to make money and secure a steady paycheck, but it has its risks. The issue of IP ownership comes up and it's used as a leverage tool against developers. Think about it, I know the videogame world is cutthroat, but taking away someone's unique idea of how a franchise should or should not work in a contract and using it as a carrot for further game marks is not a healthy relationship.Yeah, except that developers that are independent of publishers are getting more and more rare as time goes on. EA publishes their own shit, Valve publishes their own shit, Squeenix publishes their own shit, etc. etc.


You have to factor in how many people want it digital, and how do you entice them to buy a game?No I don't because that has nothing to do with any of that. I have absolutely no reason to go into advertising costs and other such shit for a simple example of how many copies you have to move to make a profit on your investment.

Especially considering that it doesn't matter how many of those copies were digital and how many were retail in that exmaple.

Besides that, if the HIB and Indievania are any indication, more avenues for legal games are helping developers stay out of the red.If by helping developers stay out of the red you mean helping indie developers have a chance of being recognized, then I guess? But indie development really doesn't have anything to do with used game sales either, as indie games don't usually end up as used games due to the fact that digital publishing and distribution is a much easier, less expensive, and less invasive method for them to sell.

Digitial distribution isn't really an option for many triple A games, however, as that they are generally multi-disk console games that would use far more HD space on a console than is acceptable with current console hardware configurations.

Yes, but look at who's successful this generation. Rovio (Angry Birds),Valve (TF2), Nexus (DFO), and even a few console games are gaining momentum over established large scale game makers such as EA.First off: Having one successful game does not a successful developer make. Rovio is making money and in the black, but getting stupid lucky on a simple phone game happening to resonate with a large fanbase is really... it's not a thing you want to base anything off of. If they manage to release more wildly successful games then you'd have a point, as it stands, however, they are no more a 'successful developer' than Soft Cell is a 'world acclaimed pop band'. They're both one hit wonders.

Secondly: Valve is magic and always has been and that really doesn't have all that much to do with TF2. It has to do with the Steam Platform, Portal 1/2, all the Half-Life games, a good relationship with their customer base, good business practices, and being, for all intents and purpose, fucking magical.

Also, Valve mostly does digital distro on its games and has nothing to do with used game sales as a result. In fact, it's entirely impossible to resell something you buy off of Steam.



I think it has to do with the economies of scale for their AAA titles. That's a known sinkhole and has been for quite some time. With the money invested in those games, you could have two or three lower budget titles of the same quality that developers could be more passionate about. I do not think you understand how developing works. If they could make games of the same quality for 1/3rd the budget they would. They can't, so they don't.

Think about how much people enjoy Atlus games. They sell less than the amounts you've stated, but now their games are collector's items. And they are still VERY successful.Atlus games use sprites. They don't render everything in 3D, and that's great for Atlus games but Drakes Fortune, God of War, Heavenly Sword, Devil May Cry, Mass Effect, Saint's Row, etc. etc. on and on would not work that way.



I don't think that MW2 is a good example. It's part of a franchise that Activision has whored out, Infinity Ward had a solid game starting out, and it speaks volumes to the fact that if people preferred the first game, they may have traded it in to play the second.I don't think you understand the point of the example.

MW2 sold enough games to make a profit. The point of the example was to show that I wasn't just blowing it out my ass when I was talking about development costs. It's a well known game that's easy to look up the dev costs for, and you can divide those by sixty (or 55 bucks or whatever the developer actually sees from those costs) yourself to get a number of around 833,000 copies to break even.



Amazon is creating a platform and driving the costs down on books. Further, digital pdfs lead the way into more book sales nowadays.




No... (http://www.nytimes.com/2011/08/09/books/survey-shows-publishing-expanded-since-2008.html?_r=2) They're increasing as well.Again, I think you are missing the point. Used book sales have been around since... well, shit, forever.

Digital PDFs and Digital distribution of books have been around since... what, 2008ish? Which are, oddly enough, copies that can't be sold second hand.

So hurting the second hand market for books increases the profitability of publishing books? And this... disproves my point that the second hand market hurts books?


Team Meat is run by two guys and they've won acclaim for one of the hardest platformers out there. This will matter, at all, to the discussion, when a team of two people designs the next God of War, Halo, Modern Warfare, Final Fantasy, or anything of that scope.

As that this is not going to happen in the forseeable future, however, this has no pertinence to the discussion at hand.

But I think this ignores the ongoing relationships that gamers have with publishers and developers. when you buy a Mercedes, you don't HAVE to go back to them for your car upkeep. You choose to. But I would be going to EA for a Madden game, even if I just gave them $10 for one of their older franchises. There's no third party servers for most of their products where they can sell other scarcities and make even more money.This is so apples to oranges there is literally no discernible point to be gotten here.



Small note: Look into Hollywood Accounting. They have a hard time paying residuals to actors that aren't AAA.I think YOU should look into Hollywood Accounting. It's not that they have a hard time paying residuals, it's that they find whatever method they can to jack up the 'production costs' enough to be able to write into their accounting book that they ended up in the red, even when it is obvious bullshit, so that they don't, legally, have to pay their actors.

But even disregarding that, it doesn't pertain to the discussion at hand. Whether a movie is profitable or not is decided mostly through box office sales, not DVD sales. And if you're seriously going to argue that movies don't make back their monies for realsies instead of just shady accounting, then I'm just going to have to point out that this really does nothing but further 'demonizes' the second hand market.

Which is pretty ridic.

Or, if the industry really wants to do something about it, they could always set up their own stores. Then buy back the games and keep the money themselves.I don't think you know what actually goes into running a retail chain and the costs involved if you think this is actually a valid method of dealing with the problem.

[Kim]

My favorite thing about Krylo posting in this thread is that it makes it so I don't have to, and he makes the points better than I would anyways.

[Jagos]

Yeah, except that developers that are independent of publishers are getting more and more rare as time goes on. EA publishes their own shit, Valve publishes their own shit, Squeenix publishes their own shit, etc. etc.

I'm under the impression that developers are coming up independent of the main guys. Sure they use Steam because it's a juggernaut, but the digital distribution model is eclipsing game sales and hurting Gamestop in the interim.

Especially considering that it doesn't matter how many of those copies were digital and how many were retail in that exmaple.

Thing is, the profits on digital actually make a lot of money for the distribution channels. Far more than trying to harm the used game market it seems if Valve's sales numbers (http://www.techdirt.com/articles/20090219/1124433835.shtml) are any indication. What I notice from those in the gaming industry, they're trying to monetize on the used game market and it seems to arbitrarily gimp the market, such as Batman AC's Catwoman codes or the Online Pass for Ratchet and Clank. Basically, if you rent the game or play it third party, you're getting a raw deal on the game. I'm pointing out that there are ways to make the games profitable without attacking the used sales market. If someone wants to play GoW 1 versus GoW 3, everything they need should come on the game and not held back.

If by helping developers stay out of the red you mean helping indie developers have a chance of being recognized, then I guess?

That's one aspect.

But indie development really doesn't have anything to do with used game sales either, as indie games don't usually end up as used games due to the fact that digital publishing and distribution is a much easier, less expensive, and less invasive method for them to sell.

That might be the next thing if the trade in value pricing of Green Man Gaming takes off.

I do not think you understand how developing works. If they could make games of the same quality for 1/3rd the budget they would. They can't, so they don't.

As I've seen it, the AAA title market is pretty unsustainable. The game companies like EA, Activision, and Ubisoft spend ungodly amounts of money for a game that makes or breaks a series and can pretty much screw over a developer if the series flops at any moment.


Digital PDFs and Digital distribution of books have been around since... what, 2008ish? Which are, oddly enough, copies that can't be sold second hand.

So hurting the second hand market for books increases the profitability of publishing books? And this... disproves my point that the second hand market hurts books?

Actually, you can trade eBooks. But the used game market helps new game sales. People are more willing to pay a higher price for a series they like (be it game or book). Second, being able to sell a $60 game back lowers the real cost to the consumer. Other benefits include hooking someone onto a particular series as well as preventing game publishers from artificially inflating the price of their game.

This is so apples to oranges there is literally no discernible point to be gotten here.
The point is that they have an ongoing relationship with their customers, far more than any other company. Yet through a want to harm parts of their business, they harm consumers that pick up their games. The problem with the DLC issue is that it harms renters. The problem with the used game market is how some publishers choose to use the $10 deal to put a limit on their game. No other industry has that kind of relationship.


And if you're seriously going to argue that movies don't make back their monies for realsies instead of just shady accounting, then I'm just going to have to point out that this really does nothing but further 'demonizes' the second hand market.

That's not what I was saying at all. Yes, Hollywood does't want to pay anyone if they can get away with it. They use shady business dealings to screw over those that aren't studio execs. It's similar to how game publishers (Activision comes to mind) push for franchises (safe bets), crunch time, and a bad relationship between developer and publisher that can affect how revenue is split.

I don't think you know what actually goes into running a retail chain and the costs involved if you think this is actually a valid method of dealing with the problem.

The entire point here is if a publisher wants to complain about the used game market, they should go into it on their own and figure it out for themselves. Otherwise, the benefits of a used market far outweigh having to buy every game new or gimping new games to punish other people that like to play a game below the asking price.

[Magus]

Like Meister pointed out in the second post, I disagree with the basic premises you have put forward.

In fact I would like to put forward the premise that there isn't even a "problem" to be "solved". Games companies will simply have to evolve in order to sell their games, either spending less on developing them if they are a smaller company or studio (like Telltale Games) or selling them digitally (like...Telltale Games), or selling them for less (like...TELLTALE GAMES).

There's basically no reason that a games company spends the same amount of budget on a game as your average Hollywood movie but needs to be mollycoddled when it comes to used copies of the game. If they want the same kind of revenue as is begotten from say, the theater industry, digital advance sales at a lower price are a perfect solution that many, many people would buy into, or even digital advance "rental" prices (kind of like how you see a movie once for ten dollars, the game is locked after, oh, a week, until the "regular" launch date of actual disc copies, and you can get this week of gameplay for ten dollars in advance, with the disc mailed to you a month later if you pay an additional 60 dollars, or something along those lines, similar to TellTale Games model but with them making more money since apparently the huge amounts they're making are not enough).

It's kind of like how OnLive looks like it makes GameFly pretty pointless for the vast majority of people who have access to broadband internet. Game industry just has to change how they release the games, not be "petty" towards used buyers.

In the case of "independent" games, they will face the same challenges as independent movies. Which are always looking for nontraditional ways to release their films, build hype, lower prices, etc.

[Krylo]

In fact I would like to put forward the premise that there isn't even a "problem" to be "solved". Games companies will simply have to evolve in order to sell their games either spending less on developing themDid you like the God of War series? Final Fantasy? Mass Effect Games? Oblivion? Skyrim? The Fallout Games? If your answer to any of these is "Yes" then this is simply not an option.

Would you like all of those games to be replaced with games with the depth of Super Meatboy and Angry Birds, which are both quite good games on their own merits, but would you like if EVERY game was as shallow as they are? If you answer no to this, then this is not an option.

Game budgets are where they are for a reason. It's because it's much more expensive to develop a game than any other form of media.

if they are a smaller company or studio (like Telltale Games) or selling them digitally (like...Telltale Games)Most used game sales are console games. With console games at this current generation this is also not an option. Would you like to put FFXIII or the GoW trilogy on your PS3 HD? Or... would you like to have room for save files? Or more than a handful of games?

In future generations this is probably exactly what is going to happen, however. We'll see consoles released with multiple TB sized harddrives with early release digital options available.

This will, more than likely, completely kill the retail store model of game distribution, which will also kill the used game market entirely, but oh wells.

or selling them for less (like...TELLTALE GAMES).And then used game stores will sell them for less yet, but make less profit. The only three ways this pans out is things staying almost exactly as they are, the developers ending up with even less revenue due to lower returns on each product sold, or the retail market crashing if the price drop is enough to kill used game sales (I can pretty much guarantee the profit margin will stay the same, so retailers won't even be making the 2-5 dollars per new game sale that they are now).

Edit: Also, games have remained roughly the same price for over thirty years now. New NES games ran 40-50 dollars in the eighties. New PS3 and 360 games run about 50-60 dollars. That's through 30 years of inflation all while video game budgets have been increasing far FASTER than inflation. Think about what that actually means as far as game prices goes.

There's basically no reason that a games company spends the same amount of budget on a game as your average Hollywood movie but needs to be mollycoddled when it comes to used copies of the game. If they want the same kind of revenue as is begotten from say, the theater industry, digital advance sales at a lower price are a perfect solution that many, many people would buy into, or even digital advance "rental" prices (kind of like how you see a movie once for ten dollars, the game is locked after, oh, a week, until the "regular" launch date of actual disc copies, and you can get this week of gameplay for ten dollars in advance, with the disc mailed to you a month later if you pay an additional 60 dollars, or something along those lines, similar to TellTale Games model but with them making more money since apparently the huge amounts they're making are not enough).I already pointed out why none of this is actually an option for console games, which is the only place that used game sales are really that big of an issue.

Digital distribution has already done a ton of damage to used game sales for PC games, and will continue to do so.

In the case of "independent" games, they will face the same challenges as independent movies. Which are always looking for nontraditional ways to release their films, build hype, lower prices, etc.Indie games are generally small enough to work as a digital distribution type of thing even on consoles, and are done almost entirely this way.

They don't really belong in this conversation as a result, because you can't second hand a digital copy. It's just not possible, and never will be as long as you aren't playing the game entirely from the internet for all kinds of reasons.

[Magus]

Did you like the God of War series? Final Fantasy? Mass Effect Games? Oblivion? Skyrim? The Fallout Games? If your answer to any of these is "Yes" then this is simply not an option.

Those games make absolutely tons of money that have and will continue to easily justify the amount put into them. Those are not the studios that will be cutting back on spending.

Game budgets are where they are for a reason. It's because it's much more expensive to develop a game than any other form of media.

Uh, no. The original Gears of War cost only 10 million dollars to make. I'm presuming the second and third couldn't have cost more than 30-40 a piece, if they really upped the ante. The first two installments sold 13 million new copies combined at this point, which assuming that they were only 50 dollars a piece is 650 million dollars. Even presuming many of the new copies were sold after a price drop, it's still a hefty profit at I dunno, 300 million dollars? So how are they not making enough money given the budget going into them? If a movie studio invested 50 million dollars into a movie and made 300 million, they would call that a wonderful investment. But for some reason video game companies aren't making enough?

Basically, to make a game for a single platform costs about ten million dollars on the lower end, 20 million on the upper end. To develop simultaneously for all platforms costs, on average, 40-50 million. This is just an average but if a games company spends a lot more than that, right now, then they are just making an investment mistake, really. BUT basically if they have that sort of money to invest in the first place, it's probably far more likely they are not actually being affected by used sales to the extent they are saying.

Those aren't the companies that need coddling by any measure. It would be more independent studios or smaller games companies.


Most used game sales are console games. With console games at this current generation this is also not an option. Would you like to put FFXIII or the GoW trilogy on your PS3 HD? Or... would you like to have room for save files? Or more than a handful of games?

Good point. I think I was thinking more of "streaming" the game to the console via the internet, but I dunno how feasible that would be...how about if you pre-order the game for 70 dollars, you get a copy two weeks before everyone else? Tons of gamers would jump on board for that, and bam, they just made ten dollars more on the price at the beginning of the launch, which can help make up for used game sales later.

Anyway, as you said, indie sales are almost always digital anyway, so yeah, they don't really belong in the conversation...EXCEPT it's kind of a good point, in the sense that some companies don't even bother to make a PC version of the game at this point, so an entire market is left unexploited, one that is much easier to sell digital copies through, as well. There were lots of people who only play PC games who would have loved to lay down their cash for Red Dead Redemption, for example, or Dark Souls, but it was not to be, despite that being an entire group of gamers, no matter how small, who you are missing out on selling your game to.

[Magus]

Oh, and in all that I forgot to make my most basic point: you know what was probably a lot bigger incentive to buy Arkham City new? Arkham Asylum was to be included (last I heard, maybe they welched on that). That seems like a much more interesting thing to try to do, additional content, as opposed to the threat of removing things from the game. Plus, if you haven't already got Arkham Asylum, why would you buy a used copy when you can get the sequel AND the original in new condition?

[Jagos]

Something else I would say helps... Lower the price on the games. Capcom sells some of their newer series for $40 in comparison to the $60 price tag on a newer series. They make up for it in gross revenue. It worked well for SSF4 and I'm sure it'll work for UMvC3.

[Marc v4.0]

I've been paying 40-60 dollars for Video Games since I first had a Nintendo. That was the 80's. That is almost 30 years of the same price range, and rising.


edit: christ..I feel old...

[Magus]

I've been paying 40-60 dollars for Video Games since I first had a Nintendo. That was the 80's. That is 30 years of the same price range, and rising.

Or they were overpriced back then...although then again cartridges cost more to make than CDs. But probably by today's standards we are actually getting far better games that legitimately cost more money for a similar price. So maybe they are making less profit, only it's actually probably closer to what they should have been making all along.

[akaSM]

For me, prices have been rising though. I remember I got Pokémon Sapphire recently after it's release for 400 MXN; Pokémon Black and White cost 699 MXN each. Also Wii games from pretty much any Nintendo known franchise cost around 1,000 MXN. I got Super Smash Bros. for around 400-500 MXN, Super Smash Bros. Melee for around 600 MXN and Super Smash Bros. Brawl costs 1,000 MXN.

All this seems to have begun after the N64/GBC era, using the main series Pokémon games again; Red, Silver and Sapphire costed me 400 MXN each, they got more expensive from the DS games onward.

[Jagos]

I've been paying 40-60 dollars for Video Games since I first had a Nintendo. That was the 80's. That is almost 30 years of the same price range, and rising.


edit: christ..I feel old...

Actually, the price on games was higher than that. Link (http://arstechnica.com/gaming/news/2010/10/an-inconvenient-truth-game-prices-have-come-down-with-time.ars)

"Yes, some N64 games retailed for as high as $80, but it was also the high end of a 60 to 80 dollar range," he told Ars. "Retailers had more flexibility with pricing back then—though they've consistently maintained that the Suggested Retail Price was/is just a guide. Adjusted for inflation, we're generally paying less now than we have historically. But to be fair, DLC isn't factored in." He also points out all the different ways that we can now access games: you can buy a game used, rent a game, or play certain online games for free. There are multiple ways to sell your old console games, and the competition in the market causes prices to fall quickly

[Marc v4.0]

I've never bought a game for over 60 until I had reached a point that I could buy my own collector packs and things like that.

Never heard of an 80 dollar N64 game, and I damn sure never bought one.

[Krylo]

Uh, no. The original Gears of War cost only 10 million dollars to make. I'm presuming the second and third couldn't have cost more than 30-40 a piece, if they really upped the ante. The first two installments sold 13 million new copies combined at this point, which assuming that they were only 50 dollars a piece is 650 million dollars. Even presuming many of the new copies were sold after a price drop, it's still a hefty profit at I dunno, 300 million dollars? So how are they not making enough money given the budget going into them? If a movie studio invested 50 million dollars into a movie and made 300 million, they would call that a wonderful investment. But for some reason video game companies aren't making enough?Uh, yes.

The Gears of War series is something of an oddity, as that the epic crew is incredibly small and dedicated.

Max Payne 3 cost roughly 105 million dollars (http://www.computerandvideogames.com/318429/max-payne-3-development-cost-105m-estimates-analyst/).

Again, MW2 cost about 50 million.

God of War 3 cost 44 Million.

Etc. etc.

And while, yes, these games sell enough to make a return, the risk factor is huge. This is why we don't see many new and interesting triple A titles, and why almost all innovation happens in the indie scene, which until the current generation was nearly non-existent. This is why we see so many repeating franchises. This is why we don't see new Baldur's Gate style games. This is why Dragon Age 2 had its budget and development time hacked down to a year, the top down view removed, and the commercial media all geared toward shooter fans.

I'm going to politely request that you do a lot more research on the industry before continuing in this vein of discussion.

Basically, to make a game for a single platform costs about ten million dollars on the lower end, 20 million on the upper end.Except this is completely wrong. The average game has more than 27 people in the core creation and takes more than two years to develop.

Which adds up to a lot more than that.

Namely about 8 million more than your estimate. The actual numbers are $18-28 million. (http://www.develop-online.net/news/33625/Study-Average-dev-cost-as-high-as-28m) Closer to 20-30 million than 10-20 million.

Those aren't the companies that need coddling by any measure. It would be more independent studios or smaller games companies.You mean like BioWare, which recently allowed itself to be bought out by EA because they weren't making enough money to keep their employees fed between game releases? Or like Maxis which was in the same boat despite having franchises like the Sims? Or like Squaresoft which has been on the verge of bankruptcy multiple times in its history? Or maybe like Enix?

Good point. I think I was thinking more of "streaming" the game to the console via the internet, but I dunno how feasible that would be...how about if you pre-order the game for 70 dollars, you get a copy two weeks before everyone else? Tons of gamers would jump on board for that, and bam, they just made ten dollars more on the price at the beginning of the launch, which can help make up for used game sales later.Might work for console games, I suppose. Though I don't know how many people who buy used games would be willing to pay an extra ten dollars.

EXCEPT it's kind of a good point, in the sense that some companies don't even bother to make a PC version of the game at this point, so an entire market is left unexploited, one that is much easier to sell digital copies through, as well.One which also underperforms compared to the home console market as well. It's a financial choice not to cross develop onto the PC in most cases. This is also why games like Dragon Age, which really have no business being on a console, are ported to them.

There were lots of people who only play PC games who would have loved to lay down their cash for Red Dead Redemption, for example, or Dark Souls, but it was not to be, despite that being an entire group of gamers, no matter how small, who you are missing out on selling your game to.Aside from the fact that this group is much much smaller than the group which either doesn't play games on their PC or can't afford to have a high end gaming PC and continue upgrading it, both of those games would have been completely horrible with PC controls, and would have suffered a lot as a whole trying to design them around keyboard and mouse.

'But PCs can use pads' is the natural rebuke to this point, but lowering your market to people who play PC games, don't play console games, AND have pads for playing PC games is going to make it even harder to justify the port.

Edit@akaSM: That's because the video game market in general doesn't give two shits about Central and South America. Doesn't everyone just pirate shit and sell bootleg copies, anyway, due to the ridiculous prices down there? Or is that just SA? Which, of course, makes publishers less likely to care because they see it as a place where piracy is too pervasive, and blah blah cycle down the toilet until Valve decides to give it a shot with superior service and prices and shows the industry how it is done (like they did with Russia).

[Jagos]

I've never bought a game for over 60 until I had reached a point that I could buy my own collector packs and things like that.

Never heard of an 80 dollar N64 game, and I damn sure never bought one.

What I mean is, the price of games by the 90 prices was much more expensive.

[Aerozord]

I think the point on prices remaining the same is that with inflation and rising development cost whats kept the industry afloat is the fact the game market has expanded. Though we have reached abit of a saturation point. Most of my generation are gamers, and of course our children are introduced to them now. It will spread more, but I see the rate of growth slowing down alot.

As for people that somehow think studios are overcharging, remember the failure rate for studios (not games, the entire development studio) is 95%. Ask anyone in the industry and they will tell you how volatile it is. They cant even guarantee they will have a job in 5 years unless they are lucky enough to be employed by a developer attached to strong producer like EA or Square.

Oh and pretty much all of those failures? Because the company tried something new. More we mitigate risk, the more profit they make over all, the more willing they are to try something new instead of pumping out sequel after sequel.

PS as OP I just want to thank everyone for being civil and maintaining a discussion. I was worried this would degenerate fast and am happy we can talk seriously about such a heated topic

[Jagos]

Oh and pretty much all of those failures? Because the company tried something new. More we mitigate risk, the more profit they make over all, the more willing they are to try something new instead of pumping out sequel after sequel.

[citation needed]

[Magus]

Uh, yes.

The Gears of War series is something of an oddity, as that the epic crew is incredibly small and dedicated.

Max Payne 3 cost roughly 105 million dollars (http://www.computerandvideogames.com/318429/max-payne-3-development-cost-105m-estimates-analyst/).

Again, MW2 cost about 50 million.

God of War 3 cost 44 Million.

Etc. etc.

And while, yes, these games sell enough to make a return, the risk factor is huge. This is why we don't see many new and interesting triple A titles, and why almost all innovation happens in the indie scene, which until the current generation was nearly non-existent. This is why we see so many repeating franchises. This is why we don't see new Baldur's Gate style games. This is why Dragon Age 2 had its budget and development time hacked down to a year, the top down view removed, and the commercial media all geared toward shooter fans.

I'm going to politely request that you do a lot more research on the industry before continuing in this vein of discussion.

Except this is completely wrong. The average game has more than 27 people in the core creation and takes more than two years to develop.

Which adds up to a lot more than that.

Namely about 8 million more than your estimate. The actual numbers are $18-28 million. (http://www.develop-online.net/news/33625/Study-Average-dev-cost-as-high-as-28m) Closer to 20-30 million than 10-20 million.

You mean like BioWare, which recently allowed itself to be bought out by EA because they weren't making enough money to keep their employees fed between game releases? Or like Maxis which was in the same boat despite having franchises like the Sims? Or like Squaresoft which has been on the verge of bankruptcy multiple times in its history? Or maybe like Enix?

Might work for console games, I suppose. Though I don't know how many people who buy used games would be willing to pay an extra ten dollars.

One which also underperforms compared to the home console market as well. It's a financial choice not to cross develop onto the PC in most cases. This is also why games like Dragon Age, which really have no business being on a console, are ported to them.

Aside from the fact that this group is much much smaller than the group which either doesn't play games on their PC or can't afford to have a high end gaming PC and continue upgrading it, both of those games would have been completely horrible with PC controls, and would have suffered a lot as a whole trying to design them around keyboard and mouse.

'But PCs can use pads' is the natural rebuke to this point, but lowering your market to people who play PC games, don't play console games, AND have pads for playing PC games is going to make it even harder to justify the port.

Edit@akaSM: That's because the video game market in general doesn't give two shits about Central and South America. Doesn't everyone just pirate shit and sell bootleg copies, anyway, due to the ridiculous prices down there? Or is that just SA? Which, of course, makes publishers less likely to care because they see it as a place where piracy is too pervasive, and blah blah cycle down the toilet until Valve decides to give it a shot with superior service and prices and shows the industry how it is done (like they did with Russia).

I fail to see how my 40-50 million dollar average, arrived upon by five minutes of research (i.e. Googling for an article on "how much does it cost to make games these days" from 2009), is that far off of what you quoted there for MW2 or God of War 3 or what have you (neither of which was ever in danger of not making a gigantic, massive profit). Or why 28 million is that much more than 20 million when it still doesn't change my basic point that there is no actual apparent lack of revenue for the games industry. You point out the exceptions to the rule. Maxis has probably been going underwater because they flooded the market with nine-hundred zillion Sims expansions for about six or seven years after the Sims were popular enough to sell copies. Squaresoft has continually embarked on poor investments into new IPs or deviations from the norm, many of which were terrible, full well knowing they were taking a huge risk.

If the consumer doesn't want to buy the game you make, it's difficult to blame the consumer. Either enough market research wasn't done to determine the game would sell, it plays poorly, the reviews are bad, you didn't advertise it properly, whatever. Sometimes true gems are overlooked by consumers, it's true, but I fail to see how alienating consumers further by locking things out of used games is going to make them want to buy more of your products.

I'm confused as to how we don't see any new Baldur's Gate style games. Do you mean 2D isometric RPGs? I think there are other reasons. There have been plenty of open-world 3D RPGs since Baldur's Gate, but not a lot of isometric ones, that's true...or are you talking about the size of them or the amount of dialogue or what?

EDIT: Forgot to mention this before: you know what my real problem with the "lockouts" on used games is? That I'll probably be trying to play some of these games five or six years from now. For example, when I was younger I played most NES games about five or six years after they originally came out. It would have been extremely annoying to have to pay ten dollars to fight all eight robot masters in Mega Man 2, for instance, when there was no legitimate way to buy Megaman 2 new. Another recent example is that I couldn't get my PC version of Hitman: Blood Money to play on my PC (because my PC is ancient), so I tracked down a used PS2 version. Because frankly there is no way to buy Hitman: Blood Money for PS2 new, as far as I could tell. I remember seeing a 3-Pack of Hitman 2, Contracts, and Blood Money at Wal-Mart a while ago but they don't still retain it, nor do I feel like paying twenty dollars AGAIN just to play the PS2 version of Blood Money (as I already got the Hitman pack for PC). So basically I'm thinking in five years or so I'm going to want to play this or that PS3 game and I'm going to be hitting paywalls that no longer serve any purpose whatsoever, as all new copies of games no longer exist and I'm paying ten dollars to play as Catwoman in a game that's five years old.

ANOTHER EDIT: Oh, and yeah, sorry if I come off as ignorant as to what constitutes a AAA title for other people. Like you said 50 million for Modern Warfare 2 and while I can totally believe that, to me it was like they just completely wasted 50 million dollars because I never planned on buying Modern Warfare 2, ever. Same with God of War 3, which I might buy eventually in some kind of, 3-pack of God of War games, MAYBE. I just never plan on doing it but I never planned on getting into Hitman either, years after it was first really popular. I'm just not objective enough to figure out what it is the market is buying used in comparison to what the market is buying new and so on that is costing them all their profit margin...

[Krylo]

I fail to see how my 40-50 million dollar average, arrived upon by five minutes of research (i.e. Googling for an article on "how much does it cost to make games these days" from 2009), is that far off of what you quoted there for MW2 or God of War 3 or what have you (neither of which was ever in danger of not making a gigantic, massive profit).Because your entire first paragraph was how Gears of War made so much money with its fifteen million dollar budget. Which is coming from completely the wrong point of view.

Or why 28 million is that much more than 20 millionWell, I guess you ARE an English teacher. You should go discuss this with the math department.

But to be serious, 28 million is almost half again the budget. That's a 140% increase in cost compared to what you were saying at the high end of average and a 180% increase compared to the low end. That's not a small thing. I mean, this is like if you go out for dinner and do the math in your head for everything everyone ordered and it's about 40 dollars, but when the check comes back it's 72 dollars, and the waiter's explanation is that it's ONLY an 80% mark up. Only a lot more zeroes.

when it still doesn't change my basic point that there is no actual apparent lack of revenue for the games industry. You point out the exceptions to the rule. No, that'd be you. I can only think of a few VG producers/developers that haven't gone under and had to allow themselves to be bought out.

Ubisoft's net income was a negative 89.8 million in 2010 and that's with the Assassin's Creed games... so that only leaves... what EA and Activision/Blizzard and probably Valve as actually MAKING money in the big names?

And they've only managed to do so by buying up as many flagging companies as possible, diversifying, selling shovelware to keep profits up... and ActiBliz has WoW.

Those there? Those are the exceptions. Not turning a profit, failing as a video game company? That's the norm. That's what happens to almost every developer eventually. You don't become a video game developer to get rich, you become one because you're willing to deal with the fact that you probably won't make it to retirement because you want to make video games.

That's the reality of the industry, and it is comments like this that make me say you need to research more.

If the consumer doesn't want to buy the game you make, it's difficult to blame the consumer. Either enough market research wasn't done to determine the game would sell, it plays poorly, the reviews are bad, you didn't advertise it properly, whatever. Sometimes true gems are overlooked by consumers, it's true, but I fail to see how alienating consumers further by locking things out of used games is going to make them want to buy more of your products.You realize that this is what games do and this is why SquareEnix announced a while back that they couldn't make any games like Nier anymore, right?

Regardless of how much you like or don't like games like Nier you have to understand that while this is probably a good thing for Squeenix, it's a terrible thing for the consumer. It stagnates the market and moves experimentation fully and completely into the hands of indie developers, with big companies only picking up what has already worked elsewhere.

That's fine for automobiles, or tables, or utilitarian objects, but it's terrible for the consumers of entertainment products.

I'm confused as to how we don't see any new Baldur's Gate style games. Do you mean 2D isometric RPGs? I think there are other reasons. There have been plenty of open-world 3D RPGs since Baldur's Gate, but not a lot of isometric ones, that's true...or are you talking about the size of them or the amount of dialogue or what?I'm talking about every aspect of games like Baldur Gate, from the depth of the system to the level of storytelling, to the depth of control in battle.

3D open-world RPGs aren't usually as deep in their combat or character building mechanics, they certainly don't allow as much strategy in combat, relying more on twitch gaming skills, and they just aren't as 'intelligent' games over all. They're more actiony.

Actiony games sell better than slower ones.

But we haven't had a good RPG in that vein from KotoR 2 until Dragon Age, and other than the KotoR and DA series we haven't had any for how long? Neverwinter Nights?

It's an entire genre that is dying (and most people would have said was dead just a few years ago) because it's considered risky to publish. Despite the fact that there is a huge market for it: Just look at Dragon Age's sales.

Not creating and publishing games there is a market for because they are risky, because the market might not be big enough? That's what the current situation is doing to the industry, and you know what? It's not hurting EA or Activision or Ubisoft to do that. In fact, it's helping them.

You know who it is hurting? Consumers. Consumers who want to play the kinds of games that are seen as too risky. Consumers who want to see new and interesting mechanics developed. Consumers who don't want the market to degenerate into Modern Warfare clones forever because those sell the best.

Speaking of: You know why almost every shooter game is set in brown ass battlefields with 'real' soldiers, instead of in fantastical environs with awesome guns? Because market research says those have a better chance of selling better. More 'fun' games have a chance to outsell them from time to time, but no one is willing to take a risk.

If you can't see why this is bad for the CONSUMER, for US, then I don't even know where to go with this anymore.

Forgot to mention this before: you know what my real problem with the "lockouts" on used games is? That I'll probably be trying to play some of these games five or six years from now. For example, when I was younger I played most NES games about five or six years after they originally came out. It would have been extremely annoying to have to pay ten dollars to fight all eight robot masters in Mega Man 2, for instance, when there was no legitimate way to buy Megaman 2 new.
Except that's not what they're doing.

It'd be more like if Megaman 2 had multiplayer set up on a server run by Capcom, which is probably going to be shut down in six years anyway so no one can play multiplayer, which you can't unlock.

Or you can't immediately unlock your chance to play as Roll.

Or you can't immediately unlock the secret ninth robot master whose power kind of unbalances the game and shits things up anyway.

I mean, have you actually looked into what project 10 dollar is? Or what other companies have locked out on used game sales?

Project 10 dollar is useless and mostly shitty Day 1 DLC (the only exceptions being Shale and Zaeed, which were still pointless to the plot but pretty fun, but the DA2 ones were all terrible), and other companies are locking out multiplayer that runs on THEIR servers. Multiplayer that actually costs them money to let you play.

Neither of these are anything like the situation you are describing.

And even then no one is saying this is the ideal situation. In fact a lot of people are saying it isn't. For myself I don't really mind this particular strategy so long as they limit their lock outs and DLCs to what they've done so far (extra characters, online multiplayer running on the company's servers), and even I'm a little iffy on the locking out multiplayer thing and can only really see it as justifiable because it is not only giving them zero revenue when someone buys a used game and plays it on their servers, but actually costs them money by artificially increasing/extending server loads.

Oh, and yeah, sorry if I come off as ignorant as to what constitutes a AAA title for other people. Like you said 50 million for Modern Warfare 2 and while I can totally believe that, to me it was like they just completely wasted 50 million dollars because I never planned on buying Modern Warfare 2, ever. Same with God of War 3, which I might buy eventually in some kind of, 3-pack of God of War games, MAYBE. I just never plan on doing it but I never planned on getting into Hitman either, years after it was first really popular. I'm just not objective enough to figure out what it is the market is buying used in comparison to what the market is buying new and so on that is costing them all their profit margin...
Firstly: I don't like games like MW either. But it's a AAA title. Like, this isn't some kind of "Oh I think Final Fantasy is AAA because I like RPGS" "Well I think God of War is because I like third person slash fests". This is an actual industry understood title that just means it's a big budget game meant to generate a lot of hype and hopefully sell lots of copies. AAA titles are flagship titles, more or less.

Also, kinda unrelated, but there's already a GoW 3 pack out for the PS3. It's probably like thirty dollars now, it's been out for awhile.

[Magus]

28 million, 20 million, ain't no big diff. Inflation, that's all it is. :D

Alright yes it might be a big difference and not just inflationary BUT I thought the ten dollar difference in initial prices from last-gen was supposed to make up the difference. Maybe they should try another price increase? People might be more excepting of a 65 dollar cost on new games than a ten dollar cost to unlock parts of their used game...or something like that. Might not lead to higher profits for the developer, though...

Also I thought the Catwoman thing was, if you buy Arkham City used you can never ever play as Catwoman unless you pay ten dollars to the creators, even though it's on the disc. Obviously DLC costs money separately, but I thought that the Catwoman stuff was legitimately part of the game from the get-go? So if it works differently than that I guess I was wrong and it's not as bad as it sounds.

Multiplayer I personally could care less about, and maybe they are justified in charging you separately to open it up (but then again, the original owner sold his copy, so he technically wouldn't be playing on multiplayer anymore...I dunno).

And yeah I don't own a PS3 yet, I've been playing on my friend's who doesn't even do multiplayer stuff, so I don't know exactly how it works. I know it's "free", but as you mentioned this means that the game company is footing the server costs as opposed to XBOX where I'm assuming Microsoft foots part of the cost via XBOX Live subscriptions. So are most of these multiplayer lockouts occurring on PS3 copies of games or is it across the board?

[Krylo]

Alright yes it might be a big difference and not just inflationary BUT I thought the ten dollar difference in initial prices was supposed to make up the difference. Maybe they should try another price increase? People might be more excepting of a 65 dollar cost than a ten dollar cost to unlock parts of their used game...or something like that.Well it's actually meant as a quasi-attack on the used game market, and to reward first person purchases. The goal of the industry isn't JUST to get money from people that buy used, but also to reward people who buy first hand. Because those are the people that are actually supporting them. And it's the right thing to do (though maybe in the wrong way).

They're trying to incentivize with the carrot and not the whip. The trick is that they need to be careful about it, so that the consumer doesn't see it as used game players not getting something, instead of as first adopter getting it.

In other words, it's like they're handing out candy with their game to people who get it first hand, but if they give out too much or the wrong kind, then the people who didn't get candy (because they didn't get the game first hand) feel jilted, and even some of the first adopters who know they may buy further games second hand get worried. It's a balancing act.

And that's really why it's not an ideal situation, and moving to larger console hard drives and digital distribution systems is probably the better route.

Also I thought the Catwoman thing was, if you buy Arkham City used you can never ever play as Catwoman unless you pay ten dollars to the creators, even though it's on the disc. Obviously DLC costs money separately, but I thought that the Catwoman stuff was legitimately part of the game from the get-go? So if it works differently than that I guess I was wrong and it's not as bad as it sounds.See, I pretty much hated Arkham Asylum after about an hour or two of pressing the same couple buttons so I didn't look into Arkham City, so I can't say one way or another whether this Catwoman thing is terrible or not (on the disk or not). Or rather how integrated it is. If there are parts of the game that you just have to skip over because no Kitty Cat, then yeah that's shitty, but if it's more the equivalent of playing Knuckles in Sonic 2 when you plug in the double cartridge, then I'm not sure I have an issue with it.

so he technically wouldn't be playing on multiplayer anymore...I dunno).Yeah, but he's selling it, so he wouldn't have been playing on multiplayer any more either way. Companies tend to calculate in the fact that people no longer play anymore, and how long this takes, and how many people drop over what time frame, etc. when they calculate the costs of running a server.

Selling it used throws off those calculations by injecting a new player into it who will now take however long before they get bored, etc.

It's like... normally they might figure that after 2 years their server load will drop by 80%, which it probably will. However, if people are still buying used at that point, the server load doesn't drop, and the company has made no new money to account for this cost that they didn't calculate for and now they're losing money on the multiplayer.

Edit: It's really hard for me to research and I can't find numbers on what games have locked out multiplayer. I only KNOW of one that has done it and it caused a lot of waves. Mostly it's just been day 1 DLC stuff, to the best of my knowledge. Trying to research it just tells me that games are putting multiplayer into almost everything these days mostly because just HAVING multiplayer (even if you don't lock it out) causes more first hand purchases, because multiplayer heavy games tend to be the most fun immediately after release (more people on the servers, metagame hasn't developed yet so you're learning with everyone else instead of dying constantly, etc.)

[Marc v4.0]

I don't think the Catwoman stuff was on the disc, actually.

The Fable 2 special Halo stuff was already on the disc, and the Unlock download was only a couple of KBs. Clearly, just a key.

Catwoman DLC was 253MB in size.

To compare, Dead Money was 239 MB in size.

It was already on the disc too?

[Magus]

From what I understood someone did some digging and figured out that the Catwoman "DLC" was actually encoded on the disc. However, I now think I misremembered it, and it was actually the first Gears of War 3 "DLC" that was actually already on the disc (just behind some kind of delayed release coding or something), whereas I guess the Catwoman DLC was just same day DLC (which is still kind of a dumb idea in that they could have just put it on the disc, but hey, not as bad as actually encoding it and then putting up a paywall for stuff actually on the disc).

Maybe it was Street Fighter 4 where there were actual characters that had to be paid for to unlock, but then again maybe that was DLC that had to be paid for separately, too, which just kind of made sense (it would have to be downloaded separately anyway), but if its actually encoded on the disc it seems like a bad idea to put up a paywall.

Also I became somewhat less worried when someone I was talking with reminded me that there is usually a "Game of the Year" edition of most games nowadays, so presumably those would still have all the DLC available in the future, even if bought used. PRESUMABLY.

So if the issue is strictly having to pay for multiplayer it makes some sense, for the most part. Really things like Starcraft 2 being tied to a one-time only Battle.net name is somewhat worse, except there I believe there were also options to unlock the game (but still, making people pay fees to unlock single player is kind of annoying in my "what am I going to do in five years from now" scenarios of horror that play out in my head).

EDIT: I think the issue with the Catwoman DLC was apparently for many new buyers they screwed up the codes, either not including them or them not working (http://www.giantbomb.com/news/warner-bros-issues-statement-on-catwoman-dlc-issues/3755/), so the paywall against future used buyers ended up affecting many present new buyers inadvertently.

ANOTHER EDIT: Like most of my problems with this paywall stuff comes from the fact that I'm way behind on the current-gen. I was lucky enough to find a PS2 very cheap when they were first made, and really most of my PS2 games were bought new, even if at reduced price a few months later, they were still benefiting the games company. But now I foresee me probably having to get a lot of games used and so the paywall stuff scares me. But if Game of the Year editions function fully in the future then I probably don't have to be too scared...

ANOTHER ANOTHER EDIT: I dunno, a LOT of people are saying that the Catwoman stuff is indeed on the disc, it is not actually "DLC" in that it needs to be downloaded, but instead the code unlocks already encoded material, and that it is indeed a paywall regarding actual encoded content (which makes sense since apparently the Catwoman stuff, unlike the Robin stuff, is apparently pretty well intertwined into the main storyline), so if so I think it's pretty dumb, but still hold out hopes that the Game of the Year edition does not have such paywalls regarding encoded content.

ANOTHER ANOTHER ANOTHER EDIT: Biggest evidence towards this is this pirate website (bad pirates! Bad!) showing up on my Google search where they basically say that you just need a modded profile to get the Catwoman "DLC" off of the disc itself, not any kind of actual downloaded pirated file. So...unfortunately, pirates are apparently, in their nefarious ways, exposing the nefarious ways of Rocksteady! Or something like that...

Plus some people not hooked up to the internet having no problem playing Catwoman from the get-go. So I'd say it's indeed on the disc itself.

[Aerozord]

You know what might be part of the problem. I got to thinking about second hand book, music, movie, and even used video games years back, most are not conventional retail stores. The second hand shops are independent and seperate from retailers. This creates abit of a psychological change. The new stuff isn't readily available so people are more inclined to go there for stuff thats not in production anymore anyways. In addition it doesn't have the pressures of them trying to push the used stuff over buying it new.

Its really odd why its only with games. Best Buy for example is now accepting used games and to my knowledge ONLY used games. Not electronics, movies, CDs, appliances, only games. Makes me think either the used market for these items is vastly smaller, or compared to other industries retailers really have games over a barrel