Can Devs And The Second-Hand Market Coexist?

Can Devs And The Second-Hand Market Coexist?

As long as I can remember, I have been shopping at second-hand game retailers, and I never really thought about where my money was going.

I mean, when I was a kid and I saw a new game for $5 to $10 cheaper, because someone had played it before, I jumped at the chance to buy it. Plus, there was the added bonus that I could use my games as currency. This worked out well, because I did not have a job, so I could always say to mom “But I’ll trade in games and it will be cheaper.” In hindsight, I am sure my mom cringed at the thought of what I was getting, but at the same time I am sure she was happy to save some money.

As I got older, I started to understand that my trades were not worth as much as they should be, however, I began to see a different advantage: the return policy. I first ran into this issue with a copy of Evil Dead: Hail to the King. I had bought the game new from a big box store a few days earlier and I just did not enjoy it at all. I tried to take it back to the store only to be told that since it was open I was stuck with it. So I went over to a video game retailer and wanted to trade it in; the guy told me I would only get about 20 dollars for the game in trade, but I really did not care; I just did not like the game at all. Then, he did something I did not expect him to do, and I am sure would have gotten him in trouble if anyone had found out. He returned the game for me at full value; like I had bought it there, and then he told me about the stores return policy. He told me I had 7 days if I did not like the game I could bring it back for full value. This sounded like a great idea to me; I had by this point bought my share of crap games; so I jumped on board. On that one purchase alone I returned the game 3 times before finally settling on a game I liked. This set me on the mindset of “if a game was available used, I would buy it used, because no matter what happened, I never felt like my money was wasted,” and that mindset still exists today.

Can Devs And The Second-Hand Market Coexist?

Later in life, I would land a dream job for me, an assistant manager position with a major game store chain. This, to me, was the ultimate job; I would be paid to talk about games. The reality of the dream soon changed however.

I want to start off being very clear on this, before I started; I loved my job at this company. I did not always agree with the way things were done or the pressure applied to its employees; however, I am very thankful I had this job and would be happy to go back; I really did enjoy it.

Ok, that being said, I started to see things from the other side of the counter and it really started to change the way I thought of used games. I started to see the margin on used games, and a few times, I felt really bad taking in trades for as low as they were; only to turn around and sell it for some lavish price. I think the most memorable used video game trade is was “Final Fantasy” for the NES. The company was just about to get out of the NES business, but one night I had a customer bring me a stack of games. In that stack, was the first “Final Fantasy” and I thought “Oh cool, he should get a good value on that.” I mean, I know how valuable that game is to people so I was ready to give him some good news. That was short lived, however, because when I input the title it came back as trading at $0.75. The guy did not care he just wanted his stuff to be unloaded; so I took his trade thanked him for coming in and began to process the games. When I got to “Final Fantasy”, I thought, “Well, since it traded so low, it has to be really cheap right? Wrong!” We would sell the game for $39.99. My jaw dropped! I could not believe it and even more staggering we sold it the next day.

Can Devs And The Second-Hand Market Coexist?

Now, I tell you that and you must be thinking “what an evil bunch of bastards those are,” and for the most part, you are correct. I do want to try and give you their side of the story because it is a valid one. New games, first party accessories and new systems have next to a zero profit margin. That is to say, the new game that cost you $59.99 cost the store $52.99. So, even a store that does gang busters on a game like, “Call of Duty” would only see about $6,000 dollars of profit on that one title (I used 1000 copies sold for my math. I know a store that did that in my area). Titles like that are few and far between and if you factor in cost of operation you begin to see why used is such a big push for them. On new games, if traded in within the first week or two, the average price I would see was $30-$35 maybe more if we had a trade promotion going on. So this meant that, the same new game could now net the store $20 of profit and that profit “kept the lights on.” This is how I slept at night while working there; I knew it was cutthroat; however, it had to be done if I wanted to have a job the next day.

It was not until the end of my stint, with the game retailer, that I even began to think about what used games did to the developers. EA began to adopt an online pass strategy. Basically, what that entailed was, every game you bought that played online came with a onetime use code. If you did not have this code, you could not play the game online. At first, I did not get why they were doing this, it just seemed like a way for EA to make a quick $10 off of someone who was buying a used game (if you are curious those games with codes traded in for less and started at $47.99 used, instead of $54.99). As I talked with customers, I started to understand why and for the first time it really sunk in, the developers of these wonderful games were getting exactly zero dollars from those used games I was selling. I know it seems weird that it took that long to come to that epiphany, but honestly, I never thought about it from that side. I always just saw that I was getting something cheaper. As time went on I started to hear developers actually talking about used games and how it was affecting them and in some cases developers were saying it lead to the closure of their studios.

Can Devs And The Second-Hand Market Coexist?

This brings us up to today, when this topic is widely talked about. The Xbox One was going to be the first system that would really punish the player for used game. I am sure there are a lot more developers out there that are mad that Xbox went back on its plans; I am sure they were looking forward to more new game sales on that system or at the very least seeing revenue from the used game program. Recently, Ru Weerasuriya of Ready at Dawn Studios was quoted saying, “I think the problem is right now there are retail outlets that are really taking everybody for a ride.” He even recounts a recent visit to this retailer where the clerk tried to slip in a used copy of his game instead of the new one, needless to say, that did not end well.

So why has this become such a big issue all of a sudden? I never remember reading anything about this growing up. Well, the simple answer to that is, cost. The average cost of making a video game back in 2000 was between $1-4million, today for a mega triple A game that cost can be over $40 million and even the average game now will cost you over $20 million to make. This is a huge difference and you can begin to see why developers are more vocal about used games now. As every dollar is needed to, not only make a profit, but just to break even.

So this leads to the question can second hand game retailers and developers ever truly live in harmony? The answer is most likely, no; however here are a few thoughts on what can be done.

Can Devs And The Second-Hand Market Coexist?

Adopting a shared profit plan: this is something that, to be honest, the game retailer that I worked for had been talking about for a while. A system where every used game sold was tied to a developer. Then at some pre-determined time the funds that were accrued in that company’s account would be dispersed. I personally thought that this was a good idea, it would, in the end have been disadvantageous for the gamer. I am pretty sure that the retailer would not want to simply “give away” profit, so I am sure this would have led to lower trade values and games staying at higher selling points for a longer period of time. That being said as far as a true “living together method”, I think this one has the most merit.

Can Devs And The Second-Hand Market Coexist?

Developers enacting a DRM plan: I understood what the developers were trying to accomplish with the online pass. Hell I even think that honestly, it is a good idea, a way for them to get at least some money for the game they made. If they can block one part of their game with a code, however, I see little standing in their way of blocking the whole game. This may sound like what Xbox One was proposing, but there is one difference. With Xbox’s plan, this would cover every single game made. I am talking about the developer, just doing this by themselves. As soon as you put in the game, you must log into a profile that can access the online feature of whatever system you are on. Then you input a one-time use code and you can play your game. Without the code the game would be junk and simply put the used games stores would not accept it for trade. This would, of course, cause the developers to do extra work. They would have to make some kind of log in system and it would also mean the game would have to always be online. Now, if developers are serious about what used games are doing to their business then this seems like the logical path of them to take. So why not do it? Backlash; I think is the easy answer. If you are that first developer to stand your ground and do this then you risk being the target of every angry gamer out there. Sure you will have your supporters, but let’s face it, people bitch much louder than they praise. There is another risk as highlighted by the launch of the new Sim City earlier this year. If you are not on point and ready for your launch, and that, in turn, makes it where people cannot play the new game they just bought, prepare for hell. EA and Blizzard two of the biggest game companies out there have both run into this issue; so I am guessing smaller companies are more fearful of this path because in the end they know it could lead to even greater damage then a used game.

Can Devs And The Second-Hand Market Coexist?

Going Digital: I truly believe this is going to be the way the developers eventually beat and ultimately kill the second hand gaming market. By going digital, you make it so there is no possibility of reselling the game. It must be bought new and, even better, you can cut down on production cost since you no longer have to produce game discs or boxes. My prediction is that this next generation (the PS4 and Xbox One) will see a significant increase in the sale of day one digital games, and that by the time the next run of systems come out some developers may completely abandon physical sales all together. There are plenty of gamers out there that do this already, and are evident by the success of Steam on PC. I have bought a lot of games as downloads simply because I find it convenient not to have to get up and change a disc. I think this is the future and it cannot be stopped. Soon all of our entertainment will be contained inside of one box and I really don’t think we are going to miss those boxes on our shelves as much as we think we are.

The reality, of course, makes me a little sad. I enjoy going to my local game store and just “talking shop” with the owner. I don’t know how I would feel knowing that the store I, not only once worked at but, shop at frequently, is gone. That is a sad fact we must face. As technology grows and changes so too is the way we interact with it. Music has already seen this age come to be and movies and games are not that far behind. So, to the developers, I say just hold out a few more years soon there will be no used games and you will get every dollar for every copy sold of your game. To the retailer, I am sorry but your time is coming, however I can tell that you already see this as many of them have started branching out in what they sell. To the gamer, I think the end of game sharing and trading is coming. I know that some of us will go kicking and screaming as it happens but in time we will adapt. We made it through the change from cartridge to disc I think we will also survive the trip into the digital age.

– Graham Barras aka “GLCORP”

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10 Responses to “Can Devs And The Second-Hand Market Coexist?”

  1. Noah says:

    I’m a collector, so you’re damn right I’ll go kicking and screaming. That being said, I don’t think digital will be the death nail for people like me. Music is still sold on CDs, and vinyl has been making a comeback. We have a local music store in my town that is owned and ran by one person, open everyday, and the man rarely takes time off. Now we are very lucky to have Groamy and his wonderful store, lots of towns don’t have that anymore, but even if you don’t have a music store and have to buy them online, you can still get physical copies of music. So, even with digital downloads in existence for consoles, I don’t see game discs going away anytime soon.

    The biggest thing I don’t like about digital games is that your ownership of a downloaded item is limited to how long a company will support your system. Xbox has a terrible track record of supporting their previous console. As soon as the Xbox 360 released the original Xbox was practically dead. Sony does continue to support their last gen console for awhile, but how long will it be before Sony finally shuts down the PS3’s online support and you can no longer download anything you bought on the PSN store?

    To counter that though I’m planning on buying, at some point, a 12GB system and replacing it’s HDD with a 1TB hard drive, and then copying all of my saves and downloading everything I ever bought on the store. Games, DLC, videos, everything that’s under my download list. Won’t be able to play Final Fight Double Impact though when the servers are shut off. It can only be played while online.

  2. Lordredek says:

    This is a big deal. Going digital will literally cut out the middle man. But I can see digital hard case’s being sold in store’s. Like a hard drive in a case. It would cost more but it would be quicker to install then downloading. Hell you wouldn’t even have to install it you just plug it into your port and you can play it. And it would be more compact for collecting. It would be a smart thing for developer’s to do since they can make more money from people buying the “Super special edition” that comes with all sort’s of bonuses.

  3. DevilSugar says:

    I hadn’t ever considered the retailer’s side in the used games debate. You opened my eyes to a new facet of the issue.
    And I agree with Noah, mostly because I enjoy talking shop with my GameStop managers, that they’re not allowed to go under, dammit. Who else am I going to talk with about how puzzling it is Gearbox released Borderlands, then a crap game, then Borderlands 2, then another crap game? My girl is more than happy to listen, but she’s a little short on “getting it.” So I will definitely be one of those saying “YOUCANTTAKEMYGAMESTOPTHOSEGUYSARETOOAWESOME!” with a bunch of frothy nerd rage spewing out of me.

    Damn good article, GL. Enjoyed seeing your take on the issue, and Cliff Blezinski apparently shares your sentiment that the push for digital will be stronger this gen. I have almost no doubt that you and he have called it.

  4. glcorp says:

    Thanks for the responses guys it is something that had been on my mind a while. I think I may fuss for a while over the digital push but in the end it means I never have to get up to change a disc again and damn it I am a fat American and like anything that makes me lazier.

  5. Bloodfart says:

    I don’t think we’ll see physical copies of console games disappearing. Why? Storage. A PC can be built with any amount of storage you want. But the consoles are lacking. Current gen games can be 10-20gigs a whack. If you’re an avid gamer, you’d fill that baby up in 2 years. Especially with DLC added to the mix.

    I know digital is supposed to be the future, but look at how gimped mobile devices are. i-phones only have 15-30gigs. Well guess what a$$holes, I have 100gigs worth of music (so I still use a 160gig classic… but I think that’s the biggest one out there).

    I think eventually it’ll be a 50/50 market. Half the people will download, the other half will go to the local target or bestbuy, and grab a copy of the game. PC is a different animal, PC could easily go 100% digital, cause there is no attachment to the disc, you just download it, and then the disc is next to useless. It can’t be re-sold either.

    But yeah, this is more about used games. I buy classics used, I don’t buy new games used much at all. If I want a deal on a game I’ll wait a few months till there’s a sale (I hate buying a used game that looks like its been dragged on the pavement). I only use gamestop for pre-orders, mainly of collector edition versions of certain games. And I never sell them. You don’t even get enough for a burger back from it. I’ll keep it in my stack. That kid up there lamenting his return is bang on.

    Speaking of digital (on consoles) though, I miss my Sega Channel 😛

    But yeah, nice article. I will add this though, what they had in mind for the xboxone, wasn’t all bad… it was just the piss poor way in which they handled it. I am glad they did away with it though, cause despite it’s good intentions… it was still a little heavy handed.

  6. Lordredek says:

    Bloodfart you do technology is still improving right? Though I still think it will be a couple more generation’s before everything’s digital. Hell one day computers, consoles and controller’s as well as TV will be digital. But we’ll be long dead before that happens.

  7. Noah says:

    Hey, Bloodfart, love your work man! Anyways, I do agree that digital vs. hard copy will probably be 50/50. I can see the appeal of digital downloads, but it’s not for me. I enjoy going out to get a new game, getting out of the house for a bit to do something. Then coming home with my brand new, wrapped game, and unwrapping it, and maybe even take in the smell of the brand new plastic and instruction booklet. I enjoy the smell of the booklet, alright? Then popping it in and starting it up. Yeah, the install can be kinda lame, but it really doesn’t bother me. But yeah, digital would ruin that experience. And no more physical copies means no more midnight launches for games I want. I went to the midnight launch for GTA V, and I entered a drawing and managed to win one of the lithographs they had, and there were a lot of people. And in case you’re wondering, it is a different lithograph than what comes with the collector’s edition of the guide. I was so happy to get that. Digital only would take away that whole experience.

    Now, speaking of instruction booklets, I hate these digital instructions. It’s lame, and takes away from the enjoyment of collecting some. Games like Xenosaga, God of War, Onimusha, The Suffering, and pretty much every Rockstar game until GTA V and many others have had great booklets. Colorful, informative backstory, detail, just all kinds of great things that make a great guide. Now EA games and others have had crappy booklets, but for the ones that had great booklets it sucks to know that we may no longer have those anymore. Digital seems to be pissing me off all around.

    And like DevilSugar said, there’s only so much you can talk about to a girlfriend that doesn’t play games. We need brick and mortar stores.

  8. DevilSugar says:

    I just thought of the frightening fallout of digital-only: everyone will be pushing a collector’s edition, and none of them will be that great.
    This is a glimpse of a world I do not want to live in.

  9. Noah says:

    I do buy collector’s editions of games, and I have quite the collection. Digital CEs? Somehow I feel like it would be a lot of worthless items, like decent gear for a low level character in an RPG, but useless after level 5 or 10. But if they give you something really good, it might give you an unfair advantage against other players just because you spent extra. I don’t know, but this is one more reason I don’t like the idea of digital only. Now I don’t mind when a company gives you some downloadable content along with physical stuff with their CEs, but I don’t want JUST that, you know?

  10. yaz says:

    this was very good article…i for one would rather have the the physical game instead of having it in digital forme…many things could go wrong as having it digital only…you would have to only access the company servers…those can crash and data can get lost or corrupted…or what happened if the company went bankrupt and had to shut down…how would you get access to the content you had pay for then?…also lets not forget the thousands of updates lol