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Games retailers concerned about moves to hurt pre-owned sales

Written by James Delahunty (Google+) @ 20 Feb 2010 6:54 User comments (17)

Games retailers concerned about moves to hurt pre-owned sales GamesIndustry.biz has spoken to some games retailers about moves made lately by game publishers that could potentially hurt the sale of pre-owned games, or preempt further measures that could have the same effect. Electronic Arts is experimenting with "Project Ten Dollar", which provides downloadable content with titles to buyers of new games, but requires consumers who buy a second hand copy to pay for the DLC content.
Just this week, Sony also made a discouraging decision to include a voucher with the latest SOCOM title for the PSP that can be used online to unlock online content for the game. However, if a game is sold back to a store and bought pre-owned, the new owner would have to pay $20 for a new voucher to unlock the same features. Unsurprisingly, Sony describes it as an anti-piracy move.

The broad consensus among those who spoke to GamesIndustry.biz (link requires registration) about the two new systems is that it they hurt consumers. "The person you're pissing off the most is the consumer," Chipsworld MD Don McCabe told GI.biz. "This affects [them] directly - they pay the same amount of money and yet the resale value is much reduced. From a retailer's point of view, they'll just readjust [the price] bearing in mind you have to buy the voucher."

McCabe made an excellent point that applies to EA especially. He stated that because of EA' popular franchises such as FIFA and Madden, the market for pre-owned games actually drives sales of new games for EA.

"They are effectively what I call a franchise software house in that they upgrade their titles; FIFA, Madden all of these are effectively the same title upgraded each year. And people trade in last year's for this year's. You go anywhere and you'll always find second hand copies of FIFA 07, 08, 09 - it's one of the ones we get the most of."

SwapGame CEO Marc Day has the same opinion as McCabe, and believes that publishers don't fully understand the potential consequences of such moves. "At SwapGame, the majority of customers who trade in for cash or credit do so to acquire new games they could otherwise not afford. Through trading in, we aim to help the customer make gaming more affordable, providing them with a way to buy new games," Day said.

"The move to DLC exclusive content is an interesting step, and this obviously provides the publisher with another revenue stream. This move will definitely make the game less valuable on the pre-owned market, so it will be sold cheaper, meaning customers will get less value when trading in."

McCabe also warned that retailers are becoming increasingly wary about other moves made by games publishers that could lead to them taking customers away from the stores. Games that require online activation, for example, result in the publisher receiving the personal details of customers which they can then use to contact the customer directly and attempt cut out the "middle man".

"From a retailer's point of view, you're always going to have that in mind. Why should you give your customers over to an organization that's going to compete with you? You're going to be less likely to want to promote that game," McCabe said.

More opinions: GamesIndustry.biz (requires registration)

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17 user comments

120.2.2010 9:35

Lol, this is something else! Typical BS propoganda from Sony, oh I'm sorry we'll loose our profits if we don't sell pre-owned games and sell add-on DLC updates instead! Boo hoo! Sounds almost like Apple-hoarding thinking to me. ;) - BLUEBOY

220.2.2010 11:51

Hey retailers simply do not carry the game new......

320.2.2010 12:47

Their just trying to cash in on the shovelware again.the whole PSP go thing flopped so now its time to stick it to the used game market.Can we please buy this BS and trade it in as we plese doing this will hurt the preowned market and make consumers jump ship.This is just a bad move and its in poor tast.if this work they will try it on the PS3 or PS4.

420.2.2010 15:34

if this becomes the norm then i will just buy whatever console can be hacked easiest and not buy any games at all rather than the few i do actually buy now

521.2.2010 9:25

Sometimes the only way you can get a game that is no longer available new, is to buy second hand. Change consoles, and try to fill your library, only way to get some games is by buying second hand, as they are no longer available and no longer supported, unless it is available second hand.

621.2.2010 12:06

Personally I think selling used games hurts the consumer, especially when its done on the broad scale that most game retailers do. It cuts out sales from the developers and drives the costs of games up. There are a few good essays out there talking about the economics of it.

721.2.2010 12:13

Personally I think selling used games hurts the consumer, especially when its done on the broad scale that most game retailers do. It cuts out sales from the developers and drives the costs of games up. There are a few good essays out there talking about the economics of it.

822.2.2010 0:12

Originally posted by elbald90:
If this becomes the norm I will just buy whatever console can be hacked easiest and not buy any games at all.

I second this...
Losing the ability to resell games is a gigantic pain in the ass for the modern gamer. I don't want a future in which I can't play my favorite games from previous (Now current) systems.
My NES is still kicking just fine, and every single game for it I can buy and sell as I please with no restrictions.
For the sake of keeping both the nostalgia factor and the ability to actually physically PURCHASE games as opposed to digitally LEASING them intact, Digital Sales and loopholes like these simply cannot be allowed to succeed.

Originally posted by DarkJello:
Personally I think selling used games hurts the consumer, especially when its done on the broad scale that most game retailers do. It cuts out sales from the developers and drives the costs of games up. There are a few good essays out there talking about the economics of it.

But I also agree with this.

I stopped buying used games from Gamestop two years ago and never looked back. Only games I buy used are out of print, but not from Gamestop.
I wonder why publishers keep handing them exclusive DLC pre-order bonuses on silver platters, it just doesn't make a lick of sense...

922.2.2010 10:58

Originally posted by nintenut:
I stopped buying used games from Gamestop two years ago and never looked back. Only games I buy used are out of print, but not from Gamestop.
I wonder why publishers keep handing them exclusive DLC pre-order bonuses on silver platters, it just doesn't make a lick of sense...
Yea me too. I don't think that you shouldn't be able to sell or buy used games at all, I just think that gamestop and the like are really hurting the industry by doing it in the manner they do, frequently offering incentives if you buy from there and sell back by a certain date.

And I have no idea what publishers are thinking with offering exclusive DLC for certain retailers.

1022.2.2010 12:40

selling used games dont hurt anyone,infact it help some people who cant afford to spend 60.00 bucks on a game please dont feel sorry for the game dev they get paid in more ways then one they charge you us 60.00 plus dollars for this unfinished crap and then charge us through the azz for DLC that should have been part of the game to begin with.Now dont get me wrong i do understand where you guys are coming from i just feel where you are coming from.Also think of all the people companies like gamestop employ so hurt who or what.you guys make it seem like saving a buck or 2 is hurting the gaming public to me it help save gaming for alot of people That dont have alot of money.as far as gamestop goes i dont like them for trading in but i do buy from time to time when they have buy two get one used,talk about a deal.

1122.2.2010 13:55

Originally posted by Se7ven:
selling used games dont hurt anyone,infact it help some people who cant afford to spend 60.00 bucks on a game please dont feel sorry for the game dev they get paid in more ways then one they charge you us 60.00 plus dollars for this unfinished crap and then charge us through the azz for DLC that should have been part of the game to begin with.Now dont get me wrong i do understand where you guys are coming from i just feel where you are coming from.Also think of all the people companies like gamestop employ so hurt who or what.you guys make it seem like saving a buck or 2 is hurting the gaming public to me it help save gaming for alot of people That dont have alot of money.as far as gamestop goes i dont like them for trading in but i do buy from time to time when they have buy two get one used,talk about a deal.
You're misunderstanding us. I'm not worried about the devs making their buck or not, I'm worried about them not making enough and forcing them to charge $60 for each title. There is no way to really know, but if the used game market wasn't so commercialized maybe games would cost less.

Not to mention Gamestop makes a huge amount of profit on used games. They give you what like $15 for a game that just came out a week ago if its used and then they sell it for $55.99. Thats 40 dollars that goes into nothing but Gamestop and the overhead to run the store. Thats a lot of money when you look at the volume of used games they push through.

1223.2.2010 17:53

Quote:
Originally posted by Se7ven:
selling used games dont hurt anyone,infact it help some people who cant afford to spend 60.00 bucks on a game please dont feel sorry for the game dev they get paid in more ways then one they charge you us 60.00 plus dollars for this unfinished crap and then charge us through the azz for DLC that should have been part of the game to begin with.Now dont get me wrong i do understand where you guys are coming from i just feel where you are coming from.Also think of all the people companies like gamestop employ so hurt who or what.you guys make it seem like saving a buck or 2 is hurting the gaming public to me it help save gaming for alot of people That dont have alot of money.as far as gamestop goes i dont like them for trading in but i do buy from time to time when they have buy two get one used,talk about a deal.
You're misunderstanding us. I'm not worried about the devs making their buck or not, I'm worried about them not making enough and forcing them to charge $60 for each title. There is no way to really know, but if the used game market wasn't so commercialized maybe games would cost less.

Not to mention Gamestop makes a huge amount of profit on used games. They give you what like $15 for a game that just came out a week ago if its used and then they sell it for $55.99. Thats 40 dollars that goes into nothing but Gamestop and the overhead to run the store. Thats a lot of money when you look at the volume of used games they push through.

Not to mention the fact that they sell the Used games for only about 5-10 dollars less than the New. Parents Christmas or birthday shopping probably won't care about, or won't know, the difference between the two, and bargain hunters will more likely than not go the cheaper route.
It's just sniping the sales of the new ones, pure and simple.

1325.2.2010 10:52

I could give two craps about companies that sell used games. I agree that stores that sell used games pay too little and charge too much...so I don't buy games there.

On principle, I have a problem with a company's move to remove my ability to sell my old games or keep me from buying a game from someone off places like Craigslist or Ebay. Charging fees to play used games that make them cost the same as buying new removes any economic incentive to buy used games. So we're stuck with just paying what Sony tells Best Buy to charge us (for example). I believe competition keeps the free market fairer...this borders on companies' using their monopoly of a particular product to artificially force high prices.

No thank you.

1425.2.2010 15:19

It all depends... If a used game is cheap and i haven't play it yet, i buy it. If a game i like and it's recently released, i buy it new. If i finished a game i bought and decided not to keep it anymore, i sell/trade it provided that the value is reasonable. You got to penny pinch a bit here and there, it's an expensive hobby after all.

1528.2.2010 7:12

Originally posted by DarkJello:
Personally I think selling used games hurts the consumer, especially when its done on the broad scale that most game retailers do. It cuts out sales from the developers and drives the costs of games up. There are a few good essays out there talking about the economics of it.
Yeah well good for you Mr Moneybags if you can afford the new price of every game you'd like to play. Some of us operate on somewhat limited budgets and either have to buy a used one or wait until it comes out as a "classic" version.

1628.2.2010 11:00

Quote:
Yeah well good for you Mr Moneybags if you can afford the new price of every game you'd like to play. Some of us operate on somewhat limited budgets and either have to buy a used one or wait until it comes out as a "classic" version.
I'm just upset with the economics of the whole thing. I buy used games too, I hardly own any games to be honest because they cost too much.

I'm not preaching to only buy games new. I think new games are too expensive. I think a possible avenue in which they've gotten this way is the ripoff that is used games at chains like GameStop. They advertised with the release of Modern Warfare 2 that if you bought it there you could return it in 3 months and get $20 for it. Guess what used copies of MW2 are selling for? 54.99 Undercut the developers by 5 dollars. And GameStop just made 35 dollars of nearly pure profit. Those are HUGE margins.

174.3.2010 22:42

Quote:
Originally posted by DarkJello:
Personally I think selling used games hurts the consumer, especially when its done on the broad scale that most game retailers do. It cuts out sales from the developers and drives the costs of games up. There are a few good essays out there talking about the economics of it.
Yeah well good for you Mr Moneybags if you can afford the new price of every game you'd like to play. Some of us operate on somewhat limited budgets and either have to buy a used one or wait until it comes out as a "classic" version.

Like I said before, the difference between used and new prices at Gamestop is almost always only $5. If you can't afford the difference it doesn't make him Mr. Moneybags, it means you're in horrible friggin' shape financially... And if you are, it doesn't excuse keeping this industry-killing practice in running conditions.

Waiting for the price to drop is fiscally responsible, not necessarily a bad thing at all, but it often only takes a few months for the price of a game to go down, with little exception.

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