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Spiral’s Soapbox: Second-hand sales are a “critical situation?”

An interview with Jens Uwe Intat, senior VP and general manager for European publishing at EA, was recently published on gamesindustry.biz. In the interview, Intat made some comments that annoyed me a bit as a consumer of the product his company produces (i.e. video games).

I’d actually make the point that for us second-hand sales is a very critical situation, because people are selling multiple times intellectual property.

Okay, you’ve just gotta know I’ve got something to say about this. My comments, and more quotes, after the break…

The first part of his statement could be true. Retail video games can cost millions to produce, and the developer/publisher does not see a dime from the used market. However, the whole quote comes off as a bit melodramatic. More concerning is that it smacks of the same type of statement software companies use when discussing piracy. Replace “second-hand sales” with piracy and “selling” with “stealing” and you’ve got an anti-piracy rant. I don’t know if this was intentional or not, but I doubt a VP would provide such a soundbite without realizing the connotation.

What we’re trying to do is build business models that are more and more online-supported with additional services and additional content that you get online. So people will see the value in not just getting that physical disc to play at home alone, but actually playing those games online and paying for them.

So what they’re trying to do is create a business model where you buy the game and then keep buying downloadable content for said game. Nice. I wish I could develop a business model where I could get someone to keep paying me for the same thing over and over again.

In our understanding of the business model we are actually giving away the rights to play, and if you just pass it on, pass it on, pass it on, that is not comparable to second-hand sales in the normal physical goods area where you have physical wear-out – second-hand cars, second-hand clothes, second-hand books… they’re all physically wearing out, so you have an inferior quality product.

Just so consumer’s aren’t confused, when you shell out your $60 you’re not actually buying the piece of physical media on which the game resides, you’re buying the “rights to play” the game. Apparently the publisher still owns the media.

As for not being comparable to other second-hand sales, I call bulls**t. Yes, some products (like clothing and cars) do wear out over time. However, while a book can become dog-eared and torn, as long as the contents are complete and legible it provides every bit of the intellectual property as the day it was printed. Also notice how he conveniently omitted CDs and DVDs from his little rant. Those industries have learned to cope with a second-hand market. For years the gaming industry has wanted to be respected and treated like other entertainment industries (like music and movies), and now that it is they don’t like it so much.

It’s clear the ’solution’, as viewed by the industry, is to move towards digital distribution. The problem with that solution is that it is, in my opinion, pro-industry and anti-consumer. It’s the easy fix. If people are buying and selling the product in the aftermarket, simply get rid of the physical media. Problem solved, right! If you buy something via download and you tire of it or don’t like it, tough, we’ve got our money.

It would be nice if the industry really questioned why second-hand sales is such a burgeoning market. Here are some thoughts…

In an era where gas is $4.00 a gallon and food prices have risen over 20% in some cases (milk is up 26% over a year ago), a $60 luxury item like a video game isn’t high on the priority list. I make decent money, but I try to watch what I spend. I got GTA:IV for $30 off eBay three months after it was released. If I can wait two or three months and get two used games for the price of one new one, heck yeah I’m gonna do that.

The video game industry seems to be reaching a point of saturation. The average age of gamers is going up. That means people who have jobs, families, and other hobbies. I’m lucky if I find four or five hours a week to play games, and I don’t have any kids. I’ve got probably 40 or 50 hours worth of unplayed games sitting around. If I had kept the games I was finished with, what would I do with them? As much as I’d like to play through Ratchet & Clank again, when am I going to find the time with Mass Effect, GTA:IV, Lego Star Wars, and Saints Row sitting there unfinished? I simply don’t have time to go back to them and play them again, so why not generate some income so I can buy new games in the future? Maybe the industry should actually think about cutting back on the amount of product they’re pumping out.

I’ve ranted long enough. What do you think?

  • Steven Artlip

    I don't mean to be come off as negative but most publishers and developers see 2nd hand sales just as bad as they see piracy, and the reason for this is because they make the same amount off of every resold game as they do off of a pirated game, nothing. Now who is to blame for this? Is anyone really to blame for buying 2nd hand games? I think not, when games are 60 dollars a pop and the dollar doesn't go as far as it used to. Not only do we not have the disposable income that we used to have but more and more games are coming out that seem to be must haves so most "average gamers" have to essentially "recycle" their games. This will continue to happen till something changes. Personally I see 2 things that can change this current issue. The first way I see (and my favorite) is drop the price of games. Yes I understand that the profit margin won't be as large as it currently is, yes there is a great chance you won't make as much but this most likely would actually open more doors for a couple reasons, first your game sells would be larger due to the fact your game would be more affordable and then because of the more copies of your game on the market you then would be able to compensate the lower price with DLC (not horse armor). If you make a great game and offer more of your great game through more characters, levels, maps, etc you can easily make up for the loss of profit from the lowered profit of your games. I would love to see all games cost 20 dollars. I know my library would be at least 3 times bigger and it wouldn't just make us buy more games but it would also kill the resale market (who is going to buy the game used for 15-17 dollars when they could get the game for 20). This idea of 20 dollar games would also help to combat piracy I believe. Take iTunes as an example, if you make the games affordable and with easy access (like songs off of iTunes) to get them most people would actually take the honest route. And the other thing that you can do is make all games downloadable (my hated option). Then there is NO physical media to have, there is nothing to trade in and nothing to sell on ebay. My only issue with this is when you run into issues like the RRoD and the drm off of XBLA games, currently it still doesn't work. Not the right way. In addition to that, while they might lower the price now to do not owning any physical media whats to say a few years down the road they don't once again charge a "next gen tax". Then we could be paying 60 dollars a game for games we don't even own, only licensing.

  • Gemini Ace

    I agree that there are too many games coming out. Especially now that we're headed into the holidays. We had a summer of nothing, and now there are too many games for one human with a job to play and/or afford.

  • Scott

    I have never traded or sold one of my games to one of the retailers that do that and the one reason is if I pay $60 for a game I should get a better offer than what they give. Yes I am cheap and no I dont expect to get what I paid for the game and no I dont want a store credit so I have to use on one of their overpriced used games. So I just hang on to all of my games even if I didnt like them the first time and probaly will never play them again. A price cut would be real nice so when the Holiday season rolls around we could buy more games and not have to pick and choose what game and or games we want the most.

  • TheL1T1G4T0R

    Thank you. I just want to say thank you for saying something all gamers should listen to. There are WAY too many games coming out. Gui J was just arguing about how he doesn't want to wait until Year 3 of a console's life for a lot of good games to come out, yet, he ….like myself and many others have very little time and little money to dedicate to actual gaming due to real world responsibilities. There are too many titles out right now! After we finish them, we feel inclined to sell it off because there's just too much to play! The last half of 2008 is the perfect example. How the heck am I going to buy Star Wars Unleashed, TNA Impact, WWE Smackdown vs Raw, NHL 2009, Pro Evolution 2009, LittleBigPlanet, Socom, Resistance 2, and still have enough money left for Christmas gifts? That's why owning both consoles to me is a no go! I have to choose carefully which titles I want and which ones I can wait on. Right now it's cheaper for me to game on the PS3 and cover all my needs. IF…I could afford to buy Gears of War 2 and Xbox Live, I'd probably have a 360 too right now. In the long run, developers and publishers are only hurting themselves and the consoles. The price points are way too high for us to indulge in multiple games. I never pay full price for any game unless it's digital. I got a discount on MGS4 from Circuit City, I buy several games through Craigslist and Gamestop, and then I buy a lot of PSN titles. I hate digital distribution, but it's cheaper most of the time. I like the hard copy here with me, but lately, I find the cheap downloadable titles are enough to whet my gaming appetite for the brief periods of time I do get to play. I appreciated when 2K released their NFL 2k series for only $19.99. I applaud Sony for marking down their first party titles to $39.99 and giving consumers the option to buy the Blu Ray or just download. I bet these publishers hate rental places like Blockbuster or even Gamefly. But that's their own fault. Lower the price of the games to $40 for hard copies. Make digital copies $5 dollars cheaper. Spread out the dates for your game launches!!! That will take care of your problems and people will actually go back to collecting games instead of selling them to pay their rent!