Preowned - It's Killing The Industry!!!

[Karzee]

Was it the reason the PSP Go flopped?

[Sprite Machine]

Won't the PSP2 be the first big test of this brave new world. With no optical drive it has to be all download, we shall see what the future has in store for us via PSN.

PSP2 games will be available on proprietry memory cards in shops.

[Dudley]

Was it the reason the PSP Go flopped?

I think trying to charge 30% more for a product with less, while still selling the old PSP didn't help.

[SweatyTravolta]

Developers get Steam and other download services now. Seriously.

That's an alternative method of distribution rather than complimentary like my film and music examples. No one is going to buy a PC game in Game and then go buy it on Steam as well. I mean no one in their right mind would buy a game they already own on Steam just because it's on some sort of offer and oh god if I don't buy it I'm losing money!

[MK-1601]

Yep, which is why SNES games were so cheap before we really had preownOH WAIT A MINUTE.

SNES games were on cartridges.

[zuum]

Some industry commentators reckon that up to 50% of new game purchases in Game stores involve some element of trade in. 50%! The only thing keeping up sales of all those endless sequels and remakes is the very thing the developers want to do away with.

[Stanley]

SNES games were on cartridges.

Yeah but the reason they were so extortionately expensive was due to Nintendo's licensing model - compare the cost of first and third party releases. And when the first systems supporting optical media came out games didn't cost any less despite there being no pre-owned sections in shops.

[Plissken]

*ah, fuck it*

[ScouserInExile]

Not really relevant, but my local Game(station? the one in Blockbusters) is selling UFC2010, preowned, for £22.99. Tesco are selling it new for a tenner.

[Unofficial Who]

Yeah but the reason they were so extortionately expensive was due to Nintendo's licensing model - compare the cost of first and third party releases. And when the first systems supporting optical media came out games didn't cost any less despite there being no pre-owned sections in shops.

And wasn't it Sony with it's Platnium range the first to really push the selling at a lower price point thing? I remember back at the time the rest of the industry saying it wouldn't work.

[Padlocked]

Some industry commentators reckon that up to 50% of new game purchases in Game stores involve some element of trade in. 50%! The only thing keeping up sales of all those endless sequels and remakes is the very thing the developers want to do away with.

But that only effects Game's bottom line, the publisher still gets their cut from the wholesale. The issue is when people don't buy a new game at all, surely, and jump straight to the second hand "bargains"?

[Dudley]

^^ Yes but most of the preowned only gets there as part of a new sale, a significant number of which would never have happened without trade in. Also "affects" damnit.

And wasn't it Sony with it's Platnium range the first to really push the selling at a lower price point thing? I remember back at the time the rest of the industry saying it wouldn't work.

Given budget ranges existed for about a decade before Sony ever thought of games. No.

[Unofficial Who]

^^ Yes but most of the preowned only gets there as part of a new sale, a significant number of which would never have happened without trade in. Also "affects" damnit.

Given budget ranges existed for about a decade before Sony ever thought of games. No.

Oh I'm old enough to remember Mastertronic and the rest. But the industry around the mid 90's had this whole thing that they'd gotten away from that and that consumers were going to get used to a 70pound price point for the likes of Street Fighter 2 and Turok. Even if they did start coming on shiny discs.

[Hawkeye]

Preowned isn't killing the industry. The industry not being able to make games and sell them at a price point that more people think is value is killing the industry. Face facts many do not see £40/45/50 as value for money for a game.

[moosegrinder]

Just as a point of reference, if Killzone 3 is sold at a £39.99 price point you make 42p on it.

[Strangelite]

Preowned isn't killing the industry. The industry not being able to make games and sell them at a price point that more people think is value is killing the industry. Face facts many do not see £40/45/50 as value for money for a game.

+1

Certainly not games like Enslaved.. (Which I happened to like, but once you've 100%'d it - why can't we sell it back to the shop? Instead of collecting dust on a shelf?)

Maybe digital distribution should have a "sell-back" system too... So you're effectively hiring a game..

1) you buy game X

2) Some "credits" are removed from your account...

3) you download it

4) you play it to your hearts content

5) you finish it and decide it was "meh"

6) you click on the "sell back" option, and get a small % of your credits back (mostly as a goodwill gesture - I'm talking like a tiny % of the current RRP - which decreases over time)

7) your DRM rights to play the game are revoked...

Yes, I know that publishers would probably scoff at giving customers their money back, but if it was some sort of crazy credits situation, it's actually just imaginary money (which will drive up inflation a bit)

[Halo]

Green Man Gaming already does exactly that.

Direct2Drive are attempting to get $5 5-hour trials off the ground, where if you end up buying you get the $5 taken off as a discount.

[Dudley]

^^ 5 hours from first launch presumably?

Oh I'm old enough to remember Mastertronic and the rest. But the industry around the mid 90's had this whole thing that they'd gotten away from that and that consumers were going to get used to a 70pound price point for the likes of Street Fighter 2 and Turok. Even if they did start coming on shiny discs.

In console land maybe, to a degree, but Nintendo DID have a budget range for the SNES with different packaging (I think I remember re boxes) and EA reissued Megadrive games and possibly others in light blue ones. Certainly in PC,Amiga land the budget label was alive and well.

[TheSlugFormerlyKnownAsNap]

Yep, which is why SNES games were so cheap before we really had preownOH WAIT A MINUTE.

Yeah, and why games-on-demand are so much cheaper than their retail counterparts. Or why games in a market like the Netherlands where second hand trade is almost non-existent are much cheaper than in the UK. Or that the platforms with less piracy have more expensive games than systems broken wide open.

If only...

[Dimahoo]

Nintendo's SNES Budget Range was Players Choice....incidentally.

[Monkichi 3.0]

And wasn't it Sony with it's Platnium range the first to really push the selling at a lower price point thing? I remember back at the time the rest of the industry saying it wouldn't work.

But Platinum is not simply a price cut. You need to first reach a certain number of sales before being eligible, and then there is a change to the royalties paid to Sony. It's not the same as releasing at a lower price point.

[user removed]

The problem lies not with second hand trade, most every other domestic supplier/appliance/retailer manages to keep things ticking over even though fridges last for 15 years and see 2 to 3 owners over their life span. Second hand trade is demonised SOLELY because of publishers. Software dev, especially modern games are somehow viewed as completely separate from every other industry, like publishers and developers need all our help and generosity. It irritates me because everyone else in the world has to accommodate and prepare not just for the second hand trade, but end user purchases depreciating (such as cars).

I want everyone to get their dues, but if you want to compete in an open capitalist market, then second hand sales are inevitable and instead of constantly trying to battle that (with the current slew of first time purchase content and mp modes, which is good and bad in equal measure imo), companies should be developing games to a different model. The episodic content is surely the best approach I've seen, encouraging and rewarding players for keeping hold of their original purchases. Half Life 2 episodes, Starcraft 2 episodes, continuing storylines and saved games through the Mass Effect series. Publishers are too quick to administer the stick (to cut costs in the short term) than offer the carrot (longer term sales, less immediate return). Which returns to my original point, how it is the publishers who demonise second hand sales and we all nod our heads and say what a disgusting situation it is.

[McCoy]

Just as a point of reference, if Killzone 3 is sold at a £39.99 price point you make 42p on it.

http://www.base.com/buy/product/killzone-3-move-compatible-ps3/dgc-killzone3ps3.htm?awc=2694_1296823149_fa3083379dfb66ff5b8d64427f6af8ab

[moosegrinder]

I'm not entirely sure what you're getting at? Someone selling it less than cost online, yes?

[McCoy]

Which returns to my original point, how it is the publishers who demonise second hand sales and we all nod our heads and say what a disgusting situation it is.

I'm not sure we do that at all. I believe that most of us are in agreement that actually the second hand market exists as a direct result of publishers decisions, be it pricing games too highly, not making games worth keeping or not adopting digital distribution.

There are very few people in this thread who don't view the publishers as turkeys voting for Christmas with the decisions that they continue to make.

[McCoy]

I'm not entirely sure what you're getting at? Someone selling it less than cost online, yes?

Well I'm unconvinced that you are speaking the truth as there are multiple places online selling the game at less than cost. Add on postage costs which are paid for by the retailers in the case of at least Bee.com and Shopto.net and it is unreasonable to assume that these places are simply making a loss of £4+ on every unit they sell. Whilst Supermarkets might be able to afford loss leaders based on the hope that people will buy other products whilst they are in store (and frankly the amount of items which are genuine loss leaders is overrated, supermarkets just negotiate good deals with their suppliers), there would be no reasonable for an established retailer such as Shopto.net to adopt such an attitude.

Basically I believe that the price to retailers is significantly lower than £39 that you led us to believe it was.

[moosegrinder]

Ah, right. Ok. That's what I thought you were alluding to. Believe what you want, man I don't give a fuck. I'm only telling you the prices as we are getting them. Games cost a lot more than people think, and the new VAT rise has helped precisely no-one.

But, y'know, I'm making it up of course. I have every fucking reason to, don't I?

EDIT: Just as a comparison:

Bee.com £37.99

Shop To £37.85

The Hut £39.85

Amazon £39.89

Game £39.99

HMV £39.99

£39.99

Loss leaders. You know something is wrong when Amazon aren't the cheapest.

[Harsin]

Eurogamer did an article on the breakdown of the cost of games recently.

http://www.eurogamer.net/articles/2011-01-10-where-does-my-money-go-article

If you bought a game in the run-up to Christmas and it cost £39.99 to buy, approximately £7 (17.5 per cent) went on VAT (that figure increased to 20 per cent as of 4th January), while £10.50 (27 per cent) went to the shop and £12 (30 per cent) to the publisher.

The rest goes on what's called cost of goods: the nuts and bolts of videogame publishing. 65 pence (two per cent) goes on distribution, £1.75 (four to five per cent) on marketing, and an £8 (20 per cent) licence fee goes to the platform holder (Microsoft, Nintendo or Sony). All these costs are paid for by the game's publisher. If a third-party is behind the game, approximately £3 goes to the developer, or 25 per cent of the publisher's revenue after deductibles, although developers are often paid in a series of advances as they meet milestones.

[Clipper]

there are a scant few defenders of publishers here and they should be ashamed of themselves (unless they are indeed a publisher).

Publishers spin you and us lies at every turn.

Games cost £40 and have done since the Playstation came out (pretty much)... But publishers say that games cost more to make so why havent they gone up in price? why are they actually decreasing in price in real terms? Because that is what they can get away with charging in a capitalist market. Otherwise you have to go with the theory that they are living on the breadline now and they were taking the piss with high profits and prices in 95.

So we can start from the point they are lying to us or at least have been 15 years ago

We are told prices are high because of Piracy? If that is the case how come the PS3 games werent cheaper when that system had no piracy until very recently? How come the unpiratable (until recently) PS3 didnt have a massive lead in attach rate over the piracy hit 360 and Wii? Surely all those filthy wouldbe pirates had to buy their games on PS3 boosting sales markedly?

So thats another lie...

Oh as a publisher we get a small percentage of that retail price.. the evil distributors and shops take big cuts. So how come if you sell me the game direct via download I have to pay the same as in the shop (or more)?? (no physical production costs and vastly lower distribution hit)

So thats another lie...

Now we are told prices are high because of the 2nd hand market. What a load of rot when EVERY other market has or could have a 2nd hand market. OH but look the difference is that for games the High street stores and supermarkets are all doing a 2nd hand market.

No shit sherlock ... you know why? because the price of games is too fucking high. The average joe does not see that £40 is good value for money... How many on here (inc me) often say "when its £20 I buy it"... so if the games industry wants to take £40 a game off the early adopters who have to have the latest inthing thats fine.. but you have to accept that a 2nd hand market will exist for the 2nd string consumer to pick up their sub £20 game either new (due to poor sales) or 2nd hand.

[Down by Law]

I've got Moosegrinders back here. I worked for 8 years in the games retail business and the figure he's quoting is pretty much spot on. I remember back in the day when we had to charge more for Driver 3 because the cost price Atari wanted per unit was more than we sold any other new release for back then.

There's a pittence in new games and hardware sales, the money is made in preowned and accesories.

If you went into a shop today and bought a Wii console and an additional Wireless controller the shop makes considerably more profit on the extra controller than the hardware. That's why whenever a new release come out, they badger you with the "would you like a Strategy Guide/Play and Charge Kit/Branded Headset/T-Shirt/Mouse Mat/Memory Unit to go with that sir". That's where they make the money nowadays, it's not so much an add-on sale, but the whole purpose of the sale itself.

Edit: Terrible grammar