Preowned - It's Killing The Industry!!!

[emjay2kay]

I've always wondered why we don't have specific, company related shops. It applies more to NintendoI think, and Sega when they were still knocking out consoles. Why have they never had thier own stores in a similar way to Ford dealerships, that kind of thing.

If Nintendo were to have The Nintendo Store, you'd be able to find all of thier old games for all of thier old formats surely? Any money made from pre-owned Nintendo games would be going back to Nintendo themselves.

I don't see it as a solution, and I have never properly thought it through ("No shit", I hear you say).

I just always wondered why it had never worked out like that. Obviously, with the discussion of downloading or buying the games direct from the developer's/publisher's website, that's what we'd be getting regardless, just without the brick and mortor buildings to walk into.

[Rev]

The only difference is scale. The fact a copy of Rocky can be bought and sold 7 times with the game studio only getting the money once, and a Nissan Micra can be bought and sold 7 times with Nissan only getting the money once is exactly the same.

The thing with the car industry is that they often sell their own car's preowned don't they? An Official Nissan Dealer is a very good place to pick up a preowned Micra, so presumably some money goes to Nissan. Not to mention parts, servicing etc.

Whereas in the games industry Rage couldn't buy back Rocky for 50% of the price and sell it for 75% of the original price because they don't have a store.

Of course there are cars sold at other garages, and there are games sold at bootsales and ebay. But compared to the amount of preowned games that travel through the doors of every Game and GameStation in the country every day thats a small amount really.

Banning preowned doesn't make sense obviously - I should be able to sell a game I don't want - why should I not be able to sell a game that is utterly awful? Ten day returns reduces the problem of buying a duffer - but if you couldn't trade games back in then many more would 10 day rent it...which makes Rage just as much money. Plus its the only way of getting rarer games that had small print runs.

The obvious suggestion is that games companies could offer a buy back scheme - but might not be worth the effort.

The biggest of the big could set up their own stores - EA could probably do it, then it'd be all going back to them. But the smaller companies would have even less hope then.

Reducing prices might work - the saving 25% of £39.99 to £29.99 becomes £19.99 to £14.99, which is still a reduction but a smaller one - but to a 10 year old £5 is a hell of a lot of money - which will they buy? You've got to wonder at people who buy games for £29.99 second hand when they can get it new a few weeks before for the same price online, but there just aren't enough people buying online yet. Yes its probably millions now but it is nowhere near the majority.

Perhaps a royalty scheme? Every copy a game sells preowned the developer gets 50p? Then paid as one lump sum at the end of the month.

Personally I've bought loads of second hand games, usually at the £9.99 price level. The only £29.99 one I've bought was PGR2 which I wanted straight away rather than waiting. Ironically that was brand new as it had been traded in straight away from an Xbox bundle. I've only ever traded one game in - Ultimate Mortal Kombat 3 on the Saturn.

Most games I buy though are either really cheap second hand -games I only wanted a bit, such as Eternal Darkness, or brand new from Amazon for games I know I'll want - such as PoP. Is this the same for everyone else on here?

Basically I don't think theres a soloution. Sad but true.

[nohsa]

Forgive me if I'm wrong but when buying software, i.e. games you buy a license don't you and hence a store should not be allowed to buy and resell you licence but the producer holds the rights to do so.

[Rev]

I know what you meant. I don't think the price makes it less likely to be traded IN I think the low price makes it less likely for the buyer to NEED to trade in another game.

But you'd get less money trading in Metaphorical Pillage than you would for any other game, so its less tempting to get rid of isn't it?

If less get rid, less preowned available, more new copies sold. Sounds logical to a point.

[dumpster]

Couple of points I should have made clearer in the original post:

No other industry has the major high street retailers focussing on preowned. you don't get used CDs at HMV, or second hand books at Waterstones.

If all games sold were new, and not second hand, then there would be higher sales. Higher sales equates to possible lower prices, and therefore more people willing to take up games, and a bigger market.

80% of a games sales occur within 2 weeks of its release. Take PGR2 for example - itsa not an old game, yet theres no way it sells new any more, because I can get it anywhere, preowned for 20 to 30 quid.

Take a game like Guitaroo Man, the main reason you cant buy it new is because i

t didnt sell well in the first 2 weeks. Because 80% of a games entire lifetime of sales comes from that period, which is why a small game like Guitaroo Man all but disappears, because no major retailer will re-order it, because they know that even the biggest name games wont sell well after a few weeks. Another self fulfilling prophecy!

If all games were, say £20, then they would sell more copies - and then you would not need preowned anyway.

[ChrisN]

Why would the 'played it trade it' mentality suddenly change just because the prices do? If I buy a game for £40 and trade it for £20, why wouldn't I buy a game for £20 and trade it for £10? Some people trade games because they can't afford to get new titles without trading, but I'm not sure thats a very large group. Since the marketing of the PSX the majority of games are aimed squarely at the 18 - 25 age group. These people have money. Much more so than children, or older adults with responsibilities and stuff. I trade in games because I don't want them any more, and because I don't see the point in hoarding loads of titles.

For people like me a price drop would just mean the entire industry would lose a load of cash. I doubt I'd buy more games, and I wouldn't stop trading them in either.

Maybe I'm unusual though.

[emjay2kay]

If all games sold were new, and not second hand, then there would be higher sales. Higher sales equates to possible lower prices, and therefore more people willing to take up games, and a bigger market.

That's not what would happen though, unfortunately.

Why would the RRP of a game drop from £40 when we are apparantly so happy paying that £40? While we're paying it, they will be quite happy to charge that.

The only way the RRP of games will come down is when Game et al start seeing thier profits drop dramatically because everyoe has buggered off and realised the joy of Internet shopping.

[Beertiger]

I've always wondered why we don't have specific, company related shops. It applies more to NintendoI think, and Sega when they were still knocking out consoles. Why have they never had thier own stores in a similar way to Ford dealerships, that kind of thing.

If Nintendo were to have The Nintendo Store, you'd be able to find all of thier old games for all of thier old formats surely? Any money made from pre-owned Nintendo games would be going back to Nintendo themselves.

I don't see it as a solution, and I have never properly thought it through ("No shit", I hear you say).

I just always wondered why it had never worked out like that. Obviously, with the discussion of downloading or buying the games direct from the developer's/publisher's website, that's what we'd be getting regardless, just without the brick and mortor buildings to walk into.

i think SEGA used to have a store in the Trocadero when there was SEGAWORLD but it's not there anymore and it was pretty rubbish as the games were still high street prices. although obviously great for them as they got a lot more than the would if they were sold in EB.

i don't think Game would let Nintendo have there own stores, they could threaten to not stock Nintendo games if Nintendo set up a store in, say Oxford Street and charge a lot less for the games.

although it would be ace to go into a Nintendo store and pick up loads of cool Nintendo gear old, new and of course keyrings.

[emjay2kay]

i think SEGA used to have a store in the Trocadero when there was SEGAWORLD but it's not there anymore and it was pretty rubbish as the games were still high street prices. although obviously great for them as they got a lot more than the would if they were sold in EB.

i don't think Game would let Nintendo have there own stores, they could threaten to not stock Nintendo games if Nintendo set up a store in, say Oxford Street and charge a lot less for the games.

although it would be ace to go into a Nintendo store and pick up loads of cool Nintendo gear old, new and of course keyrings.

Heh, that's all I really want.

And when Miyamoto retires, he can get a little Saturday job in The Nintendo Store, helping out little youngsters who can't decide which Mario game to get. Or giving them hints about how to get past the Water Temple.

I'm gonna stop typing, because I know that will never happen, and it's just making me sad

[Liquid Myth]

Higher sales equates to possible lower prices, and therefore more people willing to take up games, and a bigger market.

Why? It would work out the other way around, but there's no way that higher sales would result in lower prices. I mean, has it ever happened in any other market?

[whohe]

What we need is a campaign to alert the consumer as to what a complete rip-off games are at £40 a pop.

[Venice Cull]

What we need is a campaign to alert the consumer as to what a complete rip-off games are at £40 a pop.

Nah, rich idiots with hidden agendas would wade in calling everyone pathetic.

WINKY SMILE!

[JPickford (retired mod)]

Nah, rich idiots with hidden agendas would wade in calling everyone pathetic.

Serious.

[whohe]

Nah, rich idiots with hidden agendas would wade in calling everyone pathetic.

WINKY SMILE!

Damn those rich idiots with their hidden agendas!

[Hitcher]

If all games sold were new, and not second hand, then there would be higher sales.  Higher sales equates to possible lower prices, and therefore more people willing to take up games, and a bigger market.

And your proof is?

[Hitcher]

If all games sold were new, and not second hand, then there would be lower sales. Lower sales equates to possible higher prices, and therefore less people willing to take up games, and a smaller market.

[whohe]

Nah, rich idiots with hidden agendas would wade in calling everyone pathetic.

Serious.

Oh I don't think there was any "calling everyone pathetic" from the rich idiots side. More like "go fuck a pig" coming from those people who didn't understand how to run a successful consumer campaign and who had not even the most basic understanding of fundamental consumer driven economics.

[Salsa Party Animal]

Nintendo shop would be an excellent idea providing their is no region restriction. Imagine going to a shop and buy say Mario Tennis for US Nintendo 64 in Nintendo shop in the Bull Ring for a tenner. It will work for me

I think Microsoft can do that as well. How about them team up and set up a shop together, then cut out middleman.

[JPickford (retired mod)]

Oh I don't think there was any "calling everyone pathetic" from the rich idiots side. More like "go fuck a pig" coming from those people who didn't understand how to run a successful consumer campaign and who had not even the most basic understanding of fundamental consumer driven economics.

Well I though the reaction was a knee-jerk one from many.

[Halo]

Forgive me if I'm wrong but when buying software, i.e. games you buy a license don't you and hence a store should not be allowed to buy and resell you licence but the producer holds the rights to do so.

No.. you buy a physical item, not a license. You can legally sell licenses either way - CEX sell second hand licenses for Windows for example.

If all games sold were new, and not second hand, then there would be higher sales.  Higher sales equates to possible lower prices, and therefore more people willing to take up games, and a bigger market.

Erm, generally it works the other way round. As prices lower, more people buy them as more people can afford them.

[Ebisumaru]

Although I heartily commend the stance of lowering new game prices from their £40 ivory tower to a more humble footing, (with a good chance of counter-acting 2nd hand rates,) I cannot help but think that this will cut the current three-way pie of devcos/publishers, retailers and (in the instance of console manafacturers,) the omnipresent Nintendo/Sony/Microsoft rather thin. In essence, it is going to take the efforts of all three not to capsize the boat.

Sony, Microsoft and (in particular,) Nintendo would be loath to reduce revenue from their third-party fees and media pressing monopolies, but that is an issue that I don't see being resolved until the majority of the business' big players take task with it. (Although there are lessons to be learnt on this from the EA-Nintendo spat of some 10 years ago, which evidently gave a boost to Sega in the West.)

Anyways, it is clear that despite the foot-dragging and tantrums of the first-parties, retailers are the weakest link in this chain, and they ultimatley face the gravest threat of all, with the boom in online retail, which takes advantage of it's smaller overheads and the economies of scale with gusto. While it would be churlish to say that this is the death-knell of the high-street retailer, the dent the likes of DVD BO etc have had on us, the (for want of a better word,) enlightened consumer, but it could well be a matter of time before others twig onto the benifits. (Perhaps dealing a knockout blow to 2nd hand games, save for Ebaying and collectors?)

Also of interest is the online stratergies of Nintendo for the past 20 years and Microsoft with Live. A recent article by NSider highlghted how Nintendo, through Hiroshi Yamauchi, hoped to move videogames into the area of a subscription industry, with Nintendo dealing a mortal blow to retailers with new games being downloaded from Nintendo onto Nintendo hardware. While a canny business model, it is self-evident that technology was lagging too far behind what Yamauchi hoped for it, and Nintendo has learnt it's lesson through such semi-vapourware as the 64 DD, but Microsoft has certainly made a great go of online gaming and distribution methods. While it is still not clear if Live is a commercial success for MS, it does pose the intriguing question of whether Yamauchi's dream is obtainable perhaps within the next decade, although broadband infastructure, public appettite for online gaming and the sheer scale of downloading gigabytes of raw code are still major factors in deciding the fate of retailers, (and 2nd hand games by proxy,) in addition to the personal preference of owning the physical product, it does show that retailers are either going to have to be on the offensive or the back foot.

In regard to profits from 2nd hand games profits being divided between retailers and devcos/publishers: It is entirley feasible, but it would need to be backed up by appropriate legislature, which is, to be blunt, not going to be forthcoming from as narrow minded and ignorant establishment as the one we are all lumbered with in Britain.

Oh, and the PC gaming scene is on perhaps the most steady line on this issue, for the time being at least.

[McCoy]

A few points, probably already made but bear repeating are:

1. Since Gmaes can be prohibitively expenses for many people espacially casual gamers then trading in copies of old games is quite often the only way people can afford to buy new games. This encourges people to buy more games since they know they can get money back for it once they are finished. WIthout this, then more people would turn to piracy becuase of the cost of games.

2. Pircay is a much bigger threat to the industry than pre-owned games, one copy of a game can be distributed to hundreds and thousands of people though piracy without the developer getting a thing, with pre-owed game at least the developer has got something for each copy of the game.

3. Although I have no figures to back this up I would suggest that most games brought are never traded in or even sold. I say this becuase even with stacks of pre-owned games in game or looking at them on ebay looking at stats of how many games are sold each year this still suggests that most games are kept.

4. Pre-owned really is only down to the fact that games are so expensive. DVD's are not sold as pre-owned because they are in the impulse buy zone for most people and that is because they are chepaer. If the industry really does feel that second hand games are taking too much out of thie rprofit then they should reduce their games prices.

5. Finnally unlike with other industry's games have many more specfic stores devoted to games. Go on to any high street and you are unlikely to see just CD or just DVD shops in prominant positions. However you are likely to see a Game or an Gamestation in a prominant position. From what I have heard pre-owned game sales make up for a large proportion of prfot for these stores which keep them operating. Without pre-owned sales I expect the multiples like HMV and Virgin would take over quite quickly.

[zuum]

People hate buying games. People hate having to shell out £45 for something that is intangible, especially when a huge proportion of games aren't actually bought for the people that are going to be playing them. It doesn't matter how often or how loudly people insist that the industry would not be able to support a lower price-point for games when it's plain to see that the consumer will pay less when given the opportunity to do so, even if it's only £5.

It's not surprising that games are particularly susceptible to having an attractive second-hand market because, unlike the examples of clothes and cars used earlier on in the thread, they don't get consumed by repeated use (accidental damage to the media itself not withstanding).

[Alex W.]

Preowned games are simply a formalised version of the second-hand trade which exists anyway. They key to making it dissapear is to ensure your games are good and/or cheap enough for people to want to keep. The number of second-rate Bond cash-ins and pre-PES copies of PES2 suggest that if a gamer doesn't think they're recieving value for money (simply because a game is poor or about to be minimally updated for some £40 fee), they'll vote with their wallet.

[Alex W.]

Most stores aimed for a preowned target of 20%, that is to say, for every £1000, £200 is preowned. When you sell a full range of hardware, accessories etc, and your game sales maybe are 60-70% of your business and 20% of that is preowned, thats 1 in 3 games being sold are preowned.

That's nonsense. How can 20% of games sales and a third of games sales be preowned? 20% of game sales is 20%, whether games sales are all of your business or half of it.

HOWEVER, you're talking about sale value or profit, not units sold. It's therefore illogical to draw figures for unit sales from these targets.

[ChrisN]

People hate buying games. People hate having to shell out £45 for something that is intangible, especially when a huge proportion of games aren't actually bought for the people that are going to be playing them. It doesn't matter how often or how loudly people insist that the industry would not be able to support a lower price-point for games when it's plain to see that the consumer will pay less when given the opportunity to do so, even if it's only £5.

The fact people will buy the cheapest possible option doesn't immediately mean that if games were cheaper then people would buy more. In fact, as you stated, "a huge proportion of games aren't actually bought for the people that are going to be playing them", its not like cheaper games are going to mean you suddenly get 2 birthdays a year and an extra Christmas. If you lower game prices by £10 then little Johnny's mum is still only going to buy one for his birthday, and the shop/publisher/developer just end up with £10 less money.

Then theres the 'casual' market who buy FIFA once a year. Well they're not suddenly going to buy 2 copies of FIFA a year just because it's £10 less, are they? Theres only 1 football season a year. Its impossible. Ok, maybe they'll buy a basketball game they wouldn't have previously bought, but thats a big maybe considering it's only £10 difference.

Equally, people with a high disposable income wouldn't necessarily buy more either, coz they're already buying the ones they actually want for the current price. They might impulse buy a few, but that's not guaranteed, especially if the games are still £20.

In fact, the only group who would definitely buy more are the people who are 'hardcore gamers' who already spend practically all their money on games now. Thats not a vast number of games consumers. Certainly not enough of a group to warrant such a huge risk by the games studios.

[Alex W.]

Retail is the only branch of gaming to actually make a year-on-year profit. I wonder how different games sales would be if GAME's prices were closer to Amazon's prices (just what are the wholesale prices on games? If Amazon/Play.com/everyone else can sell them for £30 and still make a healthy profit, it can't be much more than £25).

Whatever the cause of more expensive games, I imagine that the bottom would drop out of the preowned market pretty quickly if prices dropped: "Hmm, well I can buy this pre-owned for £15, or new for £25... new it is!".

[ChrisN]

Whatever the cause of more expensive games, I imagine that the bottom would drop out of the preowned market pretty quickly if prices dropped: "Hmm, well I can buy this pre-owned for £15, or new for £25... new it is!".

Do you really think so? I'd buy the £15 one considering its £10 less and is exactly the same thing with the same warranties, guarantees, etc. The only time I'll buy new is on a game I *really* want on the release date.

Even if games were £10, I'd still buy the £5 pre-owned copy. Theres no difference aside from 2 pints down the pub.

[Alex W.]

They don't have the same warranties, guarantees etc.- GAME give you their 10-day return thingie, but I doubt you could return it to Sony with your reciept in its dog-eared, half-scratched state for a refund on the basis that it was "Faulty at the time of purchase". The rights for sales of second-hand goods are very different from the rights for sales of new goods.

[dumpster]

That's nonsense. How can 20% of games sales and a third of games sales be preowned? 20% of game sales is 20%, whether games sales are all of your business or half of it.

HOWEVER, you're talking about sale value or profit, not units sold. It's therefore illogical to draw figures for unit sales from these targets.

Bear with me. (Growl!)

Say your store sells £1000 of goods, with a 20% hit rate on preowned.

You sold games, hardware, accessories etc all day.

Lets be generous and say

20% of the days sales, in £££s, were consoles.

20% of the days sales came from peripherals

60% came from games.

that means, because all your preowned items are games, that although the preowned games contributed to 20% of the cash, they made up about 45% of your software sales.