The Used Game Conundrum

untitledEver since my days with the Nintendo 64 I can remember buying and selling used games at Blockbuster, Hollywood Video and GameStop. Being young I never had a great deal of money so it was nice to be able to take games I did not play anymore and apply them to new games. On birthdays and Christmas my parents and relatives would buy me new games (used games do not make very good gifts), but I was always the purchaser of the pre-owned. This habit expanded exponentially when I got an XBOX and has continued with every console or handheld I have owned. I still buy the occasional used game for my 360 or DS from time to time, and honestly I have never once felt that I was hurting the games industry.

With current rumors of the XBOX 720 and PS4 restricting pre-owned compatibility I have been thinking a lot about the issue. Used game sales are a huge industry and millions of gamers depend on the ability to buy their games at a discount. Used games are also very much a green industry and prevent the need to continue printing more and more copies of a game. Used games also encourage trying new titles that many people would not normally have access to due to a lack of proper backlogging at big box stores. Used games seem like such a great thing and on the surface they are, but there are a few issues with the idea.

Don’t get all “crazy ex-girlfriend” about it.
http://imgur.com/a/WgVhV#0

The first big issue with buying a game used is that neither the publisher or the developer see any of the money from the purchase. When I worked at GameStop we sold the typical used copy of a recent game for $50-55, which after us buying it from the customer for $35-30 gave us a profit of $20-25 dollars. In comparison the average revenue from selling a new game was between $10 and $15 dollars because a majority of the sale went to the publisher and developer. Used games may be cheaper, but they do not benefit the creators of the game whatsoever.

While this may not seem like a huge issue, a big part of developers staying in business has to do with the basic profits of the title. New games like Dead Space 3 are rumored to require massive profits in order to keep the series going. If only half a million people buy Dead Space 3 new, but three million buy it used EA will only see the profits of the new copies, thus the game will not be seen as popular or successful, even though three and a half million people played the game. Low sales mean the publisher may have to sell off the IP or even close the studio. This of course is the worst case scenario but with budgets getting huge and profits dropping sometimes publishers live and die on the basic sales.

As BMB and myself are designing our game we are often hit with the question of how much we are going to charge for it. This game will not be released through retail so we have really no worries about our game being passed around used, but someday we might have a retail release and that game could be resold. How would we feel if our profits were diminished by people simply buying and selling our game among themselves and we barely saw a dime? I would love that people wanted to buy and play our game, but not being able to make any more because there was no money would be a travesty.

A HUGE travesty.

The awareness that used sales bring though might help avoid tragedy. A report done internally from GameStop said that 70 percent of trade credit given out through pre-owned trades is then used on purchasing a new game. It would make sense that someone would trade in their old games once a new game came out, and it is easy to believe that used sales actually spur the sale of new titles. I personally know that I would not have bought Just Cause 2, Mass Effect 2/3, Black Ops 2 or the new Halo titles if I had not first played the original games that I purchased used.

Because of my childhood filled with used games I have grown into an adult consumer who often buys a product new whenever possible. I love tearing off the plastic and smelling a new game. I love knowing that I am showing financial support to a game company I believe in. I buy a game new because I want to, but if it was because I had to it would be a different story. If the rumors of used-blocking consoles turn out to be true we are looking at a very different gaming future.

At least it is a pretty future.

What might end up working out best for Microsoft, Sony and Nintendo if the pursue the used game lock is to do what they have been doing with multiplayer codes. Games like Battlefield 3 had an activation code for multiplayer access that could only be applied once. Purchasers of said used game were then left out in the cold unless they wanted to drop another ten dollars on the game. While I absolutely dread the idea of it- activation codes will probably be the way to go with the next generation consoles.

The used game market is a lucrative one that provides nothing but benefits for the consumers and a constant source of questions for the publishers. If activation codes will be required for used games it will probably force a drop in used game prices just to remain competitive, which will in turn drop the value of trades. These may be the final years of having used games with new consoles and honestly it might not be a bad thing. In a decade or so I can see us having nothing but digital downloads that prevent resale at all. When that happens we can all sit back and remember the “good times” we used to have getting only six bucks for a game we spent fifty on.

Ahh… the good times…

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3 thoughts on “The Used Game Conundrum

  1. I agree with you on keeping the “online passes,” activation codes in play when selling titles new. If more titles do this (especially if they have sought-after multiplayer components) then more people will have to buy the game new, and second-hand retailers will have to lower the prices of used games in order to stay competitive. I’m actually a big supporter of digital downloads since profits go directly to the developers and publishers and we don’t have to deal with the retail middle. This is quite helpful for indie developers who now have multiple platforms to reach bigger audiences.

  2. I think another solution is to give gamers another outlet to trade/sell games to other people using a xbox/sony/publishers means. This would work very well with digital purchases. Example: i buy Skyrim from the xbox market place, play it get bored and want to get Boarderlands 2. It would be great to be able to post on an xbox trade/sell site that I want to trade someone. If I find someone maybe we each pay xbox $5-$10 (or just sale it this way and get a credit back) and get to swap the digital copies into our names or mail off the disks to each other (more risky but an option). This would keep some revenue going to the company’s and give me a cheaper means to play other games. I know my math in this may be off but I think this would be a great way to make everyone a bit happy all the way around. Thoughts?

    • Digital trades is something that is constantly under consideration by the big 3. I am not sure how it could be monitored or even done correctly. Sony so far has the best deal with their subscription service that includes complimentary access to many titles. Imagine a tier system where for 200 dollars a year you could play a new game every month, or for 1000 a year a new game every week. Seems silly but people would pay for these things.

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