Anyone familiar with gaming is familiar with the methods of acquiring games today, but to get people up to speed on how it used to be done, indulge me a moment. It’s 2 decades ago; you enter a game store and scan aisle after aisle of empty game boxes trying to determine whether a certain game is going to be worth your time based solely on the cover art and description on the back of the box. This usually was a difficult process, as there are people hired by the gaming companies to make that box as visually appealing as possible to make you pick their game. Graphics were often screen shots of CGI cutscenes and not the actual gameplay, and if you didn’t do any research ahead of time (which back in the day consisted of word of mouth, BBS forum posts, or gaming magazines – all of which were usually after the fact and didn’t give insight to newly released games), you often made poor choices that you were stuck with. Until you dumped the game off on a friend for a trade of something you might have liked.
Fast forward a few years, and the entry of both game rentals and used game buy backs and sales. Rentals allowed gamers to check a game out before making the purchase, which usually amounted to beating the game in a weekend and returning the game with no further interaction needed. Rental still was a small portion of the overall business, which was still being driven by new game sales (but now if you purchased a dog, you were given an out by selling the game back to some companies for store credit towards another game). This led to a more disposable mentality towards games: pick one up, and swap it and a few others for another new one, or perhaps another used one. Gaming companies were cut out of the monetary equation, however, because they only made money on the initial sale (which the game stores made little on), and not on repeated used game sales (which the game stores made a ton on). Game stores move from being filled with gamers to being staffed by kids who called themselves gamers but are forced by the company to be salespeople (which is fine, it IS a business after all). There wasn’t anything the game companies could do on the buy and trade level, and they certainly didn’t want to cut the gaming stores out, as there wasn’t another method of distribution, so the used game sale became the cost of entry for gaming companies to do business. This is ironic, since game stores were only around because the game companies continued to put out games, which customers came to the store to purchase.
So now we fast forward to present day. Overarching history lesson over, where do we stand? The gaming companies are starting to figure out how to make money on properties that are theirs in the first place. The abundance of online connectivity has allowed for gaming companies to release products over the internet in a digital format, completely eliminating the ability to sell copies to the game stores for credit. Of course, this means we’re back to square one on having to guess how good a game is based on graphics presented to us and descriptions, right? Not exactly. The boom of demos has allowed gamers the ability to sample a game before they commit to purchasing it. This often comes in the form of a playable level or function for the game, and allows people to make a more educated decision before committing to a purchase.
Demos are a double edged sword, though. Word of mouth is still a very viable sales tactic, and a demo that doesn’t show the game in the best light (or a game that just isn’t very good) will result in a very quick denouncement from the gaming masses. This is something that will impact sales, as no amount of box art or fancy description will save the game from certain failure. So a game company must now spend more money to put together a playable sample of their game, on top of box art and presentation, all with the hope of hooking customers into their game.
So how can gaming companies start recouping the money they are putting out and losing to game stores or customer apathy? Enter digital downloads. While this distribution method is hardly new for services such as Steam, it still hasn’t been fully embraced by the larger gaming masses via consoles. Most gamers have just begun to accept the concept of downloadable content, and as gaming companies get smarter about how to handle DLC (horse armor=bad, song packs=good), that means they are keeping more money internally. Game stores can’t resell DLC, and as a result, start missing out on features of games that gamers want. What’s more, game companies are now starting to require codes to access online content, giving the gamers the option to purchase online access. This is a clear attack on the used game market, and will require game stores to either reduce what they charge gamers as a way of compensating for the online access costs, or suffer market loss through gamers shifting to purchasing more new games for the online codes.
So gamers have already largely embraced the concept of paying for something that they will never actually physically own. They purchase DLC, or download games from Steam, and the only way they can validate that they own the game is to see it on a list on their computer or console. So we are ready for just downloading out games and eschewing the entire disc based media, right?
Almost. There are a couple of problems inherent with this in regards particularly with console gamers. The most obvious is disc capacity. While consoles now run upwards of 350 GB of hard drive space, games continue to push the envelope on space requirements. A disc-based game means that users will not have to update the space requirements of their hard drive to play the game; it is always immediately accessible to the gamer on demand. A user that has deleted the game and needs to redownload it via a digital distribution method will need to reaccess the server, which means making space for the game, not to mention running the risk of the game server not supporting their game anymore (as is the case with some of the first generation Xbox LIVE arcade downloads). Let’s not forget that this storage space to host the game download isn’t free, nor is the bandwidth, so everything has a limit.
But the tide seems to be turning, even if its slight. Gaming companies have found a way to ensure that customers purchase new copies of their games, via it digitally or through incentives included only with new copies of the game, and charging used game purchasers for content that would have been included with a new copy. This is a direct attack on the used game market, and looks to shift the money back into the gaming company’s pocket. Game stores will still be around, since the games need to be sold in stores for as long as disc-based consoles exist, they just won’t make as much money on some of the smarter game companies. I still think there will be a vibrant used game market for some of the smaller, or single player only games, particularly those that have no intention of utilizing DLC. Of course, these are often smaller game companies that could use the revenue of having more new game sales, not less, but it’s a vicious cycle.
Short of an agreement with companies like Game Stop and the gaming companies in which Game Stop gives back a certain percentage of the used game sale to the game company, expect more and more of a push for digital distribution and giveaways to new game purchasers. Game stores had their time making money off the backs of desperate gamers and frustrated game companies; the time is ripe for a shift back to the gaming companies that are slaving away at producing the quality games in the first place.
But how does this affect the gamer? My thoughts on that another week…
What do you think? Will used games ever go away? Do you prefer used games to new? Do you prefer purchasing a physical object versus a digital download? Do you prefer to support game stores or game companies?