Amazon does video game trade-ins Amazon.com has wandered into the long-standing cold war between video game publishers and retailers dealing in used video-game trade-ins. The online vendor on Thursday launched a new pilot program where customers can receive store credit in exchange for wide selection of popular hand-me-down games. It's presently accepting …
I'd say within 5 years almost all game sales will be digital. I would expect the next generation of consoles will put a massive emphasis on downloadable games, as it gives both Microsoft/Sony/Nintendo more money as well as the publishers.
Rentals and trade-ins do damage the industry, unless you consider that 'mindshare' (for a sequel) is more important than actual sales. Shops make considerably more profit from trade-ins than they do from new copies - and they hardly discount second-hand copies - maybe £2-5 off.
I work in the games industry for a large publisher, and there's certainly a lot of talk both within the company and through the rest of the industry about releasing digital-only versions, downloadable content and so on. In the end I think this benefits the consumer - we move away from a the single release thrown out there, selling for 3 months then dying to a more long term thing.
Downloadable content can be sold multiple times for each retail copy, which offsets the loss from rentals, to some extent. The chance of there being retail copies (in their current for at least) in 10 years is slim - maybe you'll just buy a single account license for each game...
@James
True, but since Amazon is choosing which titles you can send in, it could simply steer away from PC games with troublesome DRM and verification systems.
Which is...by last count, all of them.
OK, you make a good point.
Besides, selectively opting out DRM-laden PC titles from the program could only encourage game publishers to add more hoops since don't like game trade-ins in the first place.
@Anon
I'm not entirely convinced digital downloads befit the consumer in the end. I'm all for giving game makers their proper due, but as my library of downloaded games grows, I become increasingly concerned I won't be able to play these games purchased online in -- say -- five years time. But that particular problem goes much further than just the video game industry.
Publishers hate it but preowned does keep retail alive; the reason why there's a specialist games retail sector at all is down to preowned. Sure, publishers don't get a cut, but they're hardly going to worry about GAME/Gamestop (and now HMV) when the shoe is on the other foot with digital downloads, are they? And there is a benefit to publishers; trade-ins encourage footfall and additional sales (at least in retail, not sure how that's going to pan out in ecommerce).
My biggest beef with preowned is that trade-in prices are a bit of a ripoff (from all the retailers), but that's a whole other story.
NB. GAME and Gamestop haven't accepted PC trade-ins for a very long time (at least a decade) because of EULAs and activation keys. As I recall, CeX got in quite a bit of trouble for trading in used PC games.
"In the end I think this benefits the consumer " <-- how does making the item non resellable help the consumer? unless you are going to drop the price for the online goods (which generally isn't done)
In the end it benefits you, not the consumer, businesses that don't do what the consumer wants fail.
Every industry will suffer from resale. What's your point? Sure as hell General Motors would not be asking for another $n billion in bail-outs (update 'n' as necessary) if we never bought used cars?
I can understand that it dents sales, but pushing the view that resales should be outlawed rather undermines the campaign against piracy, which is easier to agree with. The public will now realise that if the war against piracy is ever won then reselling will be next in line; and that's not cool.
Digital downloads benefit the publisher, they don't benefit the consumer. The industry wants rid of 2nd hand sale because it's not getting a cut and would rather control what can an cannot be done with its products, not for any noble reason of benefitting the consumer.
It allows the publisher to totally control the retail lines, keeping prices artificially high (just look at XBLA and it's lack of discounting), and ties consumers into unreasonable conditions (such as "there are no refunds for this item").
Whilst digital might be fine for small cost throwaway games, I want something physical for my money at full retail, and have the option to be able to trade it in or get my money back on should I so desire, thereby allowing me to buy further games. I want the discounted bargains on older retail games I can find in the shops and online, I want something that looks nice as a collection on my shelf. I want to be able to play my collection on any machine - not the one the software is locked to. I want to be able to play my collection in ten years time, long after any publisher has stopped supporting or selling it.
I want to own the reasonably expensive (£40) products I buy - so the day gaming goes digital downloads only, is the day I stop buying games.
There is another problem with this: Pricing.
Take Dawn of War 2 for example. Download via Steam: £35. Buy new from Play.com: £23. THQ and Relic will most likely not be getting a higher proportion of the sale from Steam - it seems to be Valve price jacking. (I would be interested to find out if anyone has any facts regarding this?) Also, I WANT a physical copy of my games, and I suspect many people will feel the same.
I don't necessarily agree that trade-in titles affect the industry as much as is claimed. For example, in my local Game store recently they were selling COD4 GotY (360) new for £40, and preowned for £37. I'm not going to save £3 and NOT have the downloadable map packs - It's pointless.
if I am not prepared to buy a game new for £40 because I don't believe it's worth £40, then if the preowened market does not exist I will never buy that game. If however the preowned market exists, I may buy the game for say, £20-£30 (depending on the title) enjoy it and fork out £40 a go for new copies of it's sequels.
Just my 2 cents.
@AC: How do rentals "harm the industry"? Someone has already BOUGHT a copy. You might as well say customers lending games to their mates is harming the industry. The rentals/re-sale industry is just as valid as the games industry.
Everyone has the RIGHT to resell whatever they want and lend it to whoever they want, whenever they want, as many times as they want. End of.
Customers make those decisions... not you or any games company, and dirty tricks to prevent that won't be tolerated, much the same way DRM wasn't tolerated. Stop trying to shaft the customer, you greedy, greedy bastards.
"'I'd say within 5 years almost all game sales will be digital"
Not a chance. Empire Total War is the big PC release this week (well this year) you can buy a physical copy from an online retailer for £24.99 including postage. This gives you a box, some instructions how to play the game, and a DVD. Alternatively you can purchase it off Steam for £39.99 which installs it on your hard drive and urm thats it. In all fairness thats all you want really but to pay £15 more and get less is crazy.
Then of course there is the EA system, where you still pay more than a boxed version but can only download what you have bought for a couple of months, you can pay extra to extend this to a couple of years but once thats up if you get a new pc and want to play that game again you have to pay for the game again
This is all good for the consumer you say?
I can understand the comments regarding it undermining publishers profits but I don't think the problem here is any different to the car markets or the music industry. The car industry hasn't gone kaput because of the second hand car market undermining its profits; it's gone kaput because it has burned more money producing more cars, than it has received through sales. And that is as a result of bad business management. See - it's not rocket science is it?
The games industry will continue to be be successful to those who produce both original games and quality versions on existing themes. I am happy to pay £40 for games like COD4, GTA4, Fallout3 or the Total War series etc. but would not pay £40 for Vampire Rain for example.
So the answer is simple -
1. Produce quality games that have a lasting appeal and that do not end after only 10hrs of play.
2. Produce quality games that have a lasting appeal and that do not end after only 10hrs of play.
3. Produce quality games that have a lasting appeal and that do not end after only 10hrs of play.
So rather than blaming the consumer or retailer, the blame, as with the movie industy - lies squarely with the publishers and the part cause is the volume of crap that they shovel out every year with a premium price tag.
The second hand market isn't going away soon. Well done Amazon - keep up the good work, wonder how long it will be before you start receiving threats from the publishers.
I'll still be trading in games at my local retailer however.
@ Dave:
"How do rentals "harm the industry"? Someone has already BOUGHT a copy. You might as well say customers lending games to their mates is harming the industry. The rentals/re-sale industry is just as valid as the games industry.
Everyone has the RIGHT to resell whatever they want and lend it to whoever they want, whenever they want, as many times as they want. End of."
What? Rentals DO harm the industry. That is why Movie DVD rental copies cost approx £80-£100 each, when the retail DVD movie costs £9.99. The rental store is paying lots more to cover the lost sales of the publisher. If the game rentals do not cost more then the retail then OF COURSE it is harming the industry. It is very VERY simple maths.
1 person buys a game for £40. They lend it to 5 people. That is 5*£40 that the publisher DOES NOT GET. (I know that the shop gets there cut etc, it is just an example).
And NO, everyone DOES NOT have the right to sell and lend whatever they want to. You are confusing your fiction with reality.
Re: "trade-ins have been a point of contention for publishers lately, who feel they're losing out on sales." & "Rentals and trade-ins do damage the industry"
Awww, diddums.
I've not heard Ikea complaining about the resale of their tables and chairs.
I've not heard VW complaining about the resale of their vehicles.
In the case of the latter (and other car manufacturers), they've taken the initiative and decided to try and exert some control over the used market by offering added value (guarantees and finance on 2nd hand vehicles etc).
Why should I not be allowed to sell a tangible product that I've paid good money for?
Game publishers need to realise that a vast amount of their custom is based on the desire of a certain demographic to go chasing "The Shiny". Otherwise known as... The Latest Essential Must-Have Technology™.
Even though the the reseller buys low and sells comparatively high, there is a strong resale market due to the fact that a sufficiently large demographic recognises that FIFA 09 is perhaps not worth paying the full RRP for when FIFA 08, 07, & 06 can be had for less, less & even less.
Lets's take a look at prices on Amazon for FIFA on the Xbox360:
FIFA 09: £22.96 new, from £19.00+1.94 P&P used, RRP £49.99(!)
FIFA 08: £12.99 new, from £2.50+1.94 P&P used, RRP £24.99
FIFA 08 ("Classic" packaging - identical game to '08) : £17.99 new(!), from £6.93+1.94 P&P used, RRP £24.99
FIFA 07: £10.02 new, from £1.18+1.94 P&P used, RRP £29.99
FIFA 06 (Road to the World Cup): £39.13 new(!), from £2.39+1.94 P&P used, RRP £49.99(!)
Or you can rent the game and garner the desired utility from the product for a couple of quid per night. Rentals add a further element to the mix. That of keeping the publishers "honest". It's an opportunity to playtest the game and see if you want to purchase it for keeps rather than just hire it for a while.
Imagine if car showrooms didn't let you testdrive vehicle before purchasing it. It'd be seen as utter madness. And I know that if a showroom wouldn't let me testdrive their vehicle, I'd spend £20 a day to someone who is willing to rent it to me while I make up my mind.
Or how about if Ikea put all their furniture behind glass screens and wouldn't let you get hands on with their furniture before committing to a purchase. They're not quite identical analogies (when are they ever), but it illustrates my point.
And as long as the ability to rip a console game and sell the original disc is not as it is for CDs and DVDs, the bouyant second hand games industry only goes to prove provides unequivocal support for the allegation that the games producers are pumping out too far much generic filler. Filler that only a select few are willing to pay for because they value the perceived caché of owning The Latest Essential Must-Have Technology™.
But The Latest Essential Must-Have Technology™ element of gaming has become marginalised of late. This is evident in sales of the Wii compared to the PS3. Essentially the Wii is GameCube v1.5, but with some wavy sticks. And it's a lot of fun. For a while. But there's limited mileage in it. Just like there'll be ever more limited mileage in punting out FIFA 10, 11, 12...
Put simply, Supply is outstripping demand. It's not difficult to understand.
Second hand and rental goods helps keep the economy churning when people can't afford full price. Any attempt to stop this market or hike the prices by forcing a cut to grab a second bite of the cherry, is a selfish act that does nothing to keep money changing hands in times of recession; especially in a market place linked to entertainment and has an effect on morale.
Music doesn't do it; DVD's don't do it; the clothing industry doesn't do it; the second hand car industry doesn't do it; even the food industry doesn't do it (for what little that's worth) so why does the gaming industry think it should be so special? Eh?
At least Steam does allow the transfer of product codes between people. One licence, one player at any one time.
The only thing that stops me from buying new games is that they don't run on Linux; I spend good money on Windows games; have done for years, and I now have a collection of games that don't work under XP - even with emulators. I'd love to take Decent 2 for another inner-planet head wrenching spin with the benefit of faster pocessors than I could afford at the time ... but I can't.
If I go to my DVD collection, I can get ten year old DVD's and sling them in the drive and they will play. Games cost much more and they last as long as the operating system lasts; or if you're lucky it is compatible with the new OS version.
Don't tell me that the games industry can't do it ... UT 2004 came with a Linux installer as well as Windows on the DVD for the same price - I loaded it on to my Ibex installation the other week and played it. Give me games that are worth the investment and I'll make the investment. Treat me like I'm some kind of one-OS loving moron and I'll vote with my feet.
Yeh, that's right ... ignore OpenGL, tie yourself in to Direct X and as far as I'm concerned it can sit on the shelf and rot.
"1 person buys a game for £40. They lend it to 5 people. That is 5*£40 that the publisher DOES NOT GET. (I know that the shop gets there cut etc, it is just an example)."
Sorry, but that's just utter tosh - it's the same drivel spouted out about the industry losing £X billion money to piracy - it just doesn't hold water.
People are buying 2nd hand titles or renting game because they've no interest in paying £40 - so if they can't rent or buy 2nd hand, they're not going to buy.
2nd hand sales move the new game purchase: People who trade games in do so so that they can self-discount the purchase of new titles - cut this off and you reduce the number of new purchases.
The games/music/movie industry seem to think there's some hitherto unspent pile of cash hidden away that people will suddenly dig into - clearly the cocaine parties are addling brains.
"Why should I not be allowed to sell a tangible product that I've paid good money for?"
Because you haven't paid for the product. All you have paid for is a single licence to play the game on 1 machine. Just as if you work for a big company, you cannot go an buy a single copy of MW Office, then install it on 4000 machines. You need separate licences. (Flawed analogy I know, because with games you are no longer playing them, but it is about licences).
When you 'buy' a game or piece of software, you are not actually paying for anything more then a licence to use it. The fact that the publisher gives it to you on a CD/DVD is neither here nor there.
Regarding the subject in general: What if the new bestseller book comes out: Murder Mystery 5.
But they only sell one copy. To me. I bought it, read it, and leant it to someone else, who read it and leant it to someone else, etc etc etc. Are you guys SERIOUSLY saying that it doesn't hurt the industry?
"But they only sell one copy. To me. I bought it, read it, and leant it to someone else, who read it and leant it to someone else, etc etc etc." - there are differences between loaning, selling, pirating and having one copy against using 4000 copies of the same licence.
This discussion, as far as I am aware and am treating it, is the purchase of one licence and selling that single licence on.
I've said it before and I'll say it again ... why should the games industry be treated so special?
The old tradition of hand me down clothes, the wonderful bargains of the second hand music store (as against the pain-in-the-arse poor quality knock offs sold on market stalls) has a place in any economy and in this current failing economy, the legitimate resale of genuine product and licences serves to bring product in to the hands of others would would otherwise not have bought it in the first place.
Also, we get to try on clothes before we buy them; why not music, movies and games? We've got to unfairly make do with other peoples reviews and critics, most of whom I never agree with. What happened to the demo game?
I'm one of the honest twits who watches films on-line and if I like the movie, I'll go out and buy it; odds on I won't actually watch the DVD - but I'll tell you straight that I recently started to watch Pink Panther 2; I didn't get to 20 minutes of the thing before giving up. That would have been a waste of money. The day that cinemas allow give refunds to those walking out of a film in the first half ot it, or to people returning games because they don't live up to the hype ... that is when people might buy more first generation copies and keep them.
Steam allows the transfer of the licence key; the key has been bought and only one person can use it at one time. That gets great applause from me. If their products came out on Linux, I'd be kissing Valve's feet in appreciation.
What the games houses need to be doing is winning customers in the first place ... for me that means, forgetting the copy protection nonsense; it doesn't bother the pirates but annoys the he** out of legit customers like me. They need to make it work on Linux and they need to put some commitment behind giving it longevity and involving the community ... for crying out loud you can get Quake 2 to play on my mobile phone.
If a game is good it sells well. If a book is good, it sells well. If a movie is good, it sells well ... bad boks just get passed around and no one wants to keep it ... why should it be different for games?
This is not hurting the industry we're talking about ... it is the industry getting a bite of the cherry that no one else gets.
When you 'buy' a game or piece of software, you are not actually paying for anything more then a licence to use it. The fact that the publisher gives it to you on a CD/DVD is neither here nor there.
Seems like you either work for the industry or have bought into their bullshit. If I buy a single copy of something Then I am entitled to install it on a machine of my choosing. If I decide to uninstall it from one machine and put it on another then that is my right. If I want to sell it, that is also my right as long as I remove the product.
Just like buying anything - I buy it, I use it as I see fit, I sell it and can no longer use it. the courts have already ruled that by buying software you purchase it - not a license saying you are allowed to use it.
If software is licensed, then basically the publisher is renting it to me. If my original install media gets damaged they are obligated to provide me with another as they own it, not me. Instead, if my media get damaged I have to go and PURCHASE a full retail copy. No replacement media, no discount. That is my property - not the publishers.
If the software is merely licensed, then the price I pay is for a lifetime unless they specify a timescale. As such the publisher is legally required to support me for the life of the license. How many publishers do? After a set period of time they stop supporting it and my 'license' means nothing to them, so it really isn't a 'license' is it, it is a purchase and as such I am entitled to do whatever I like with it including reverse engineering the code. As long as I don't do anything to make that code available to anyone else I have acted perfectly legally as the law gives me the right to do whatever I like with whatever I have bought, including shoving it up the arse of the first publisher who tells me I don't 'own' the software I have just shelled out £40 for.
As other people have pointed out, but you being so short-sighted you can't see it, the resale market helps to DRIVE the new release market and so helping to keep it healthy. Kill one, cripple the other.
" All you have paid for is a single licence to play the game on 1 machine."
essentially this is correct, however as long as it is only running on one machine at a time, it can be run on any machine by any person (you did read that licence didn't you?). And this is exactly what the publishers are being paid for! They are paid once for every person who wants to be able to run the game at the same time. That the individual people are changing has no effect on them at all, only the number increasing affects them, which they do get paid for.
Console games are much easier to view as a product in themselves as they are irrevocably tied to the media. You buy a physical object that contains the game, that object can be passed on at will, if you don't possess the object you can't play the game.
Buying one MS Office disc & licence but installing it on more than one machine is entirely different to buying one game, playing it and then selling it (same goes for a CD or DVD or book). The other is legitimate supply and demand.
Which is why I made the point that copying games and selling on the disc is far less rampant than happens with CDs (and, to a lesser extent, DVDs). Yes there might be a problem with folk copying CDs DVDs (as CDR burns or mp3 rips). But as far as books go, no-one buys a book, photocopies it for keepsies, then sells the original on.
So the second hand market in games (and books) is a fairly genuine reflection of supply versus demand.
Your example of the book that sells one copy and then gets variously lent around and sold on is an analogy of p2p (something which infringes copyright). It does not describe the second hand games/books resale market (which is fairly overwhelmingly the legitimate resale and reuse of goods) where the "licence" is sold on with the disc/book itself so that someone might take some utility from the product in question.
I almost see what you're getting at by saying that in the situation where a book is bought and read by more than one person, one after another, then original sales of the book will stagnate. But that's how media entertainment works. It's not a once-only thing. It is a reusable copy of the original, for enjoyment by one person at any one point time (books - more at a push, if you're reading aloud!) or by one household at any one time time (CDs / DVDs / games) for personal consumption and non-profit purposes.
<what follows gently drifts away from the discussion in question and towards more theoretical territories where someone may well see fit to correct me>
Media exists because the original artist can't be in more than one place at once. Copyable formats are a medium for their distributing a copy of someone's talents. The author can't read to us all at once. The artist can't paint a picture for us all at once. The musician can't play for us all at once. Which brings us to DVDs. Most aren't exactly a filming of a theatrical production, are they? Things aren't so clear cut there. What of games? Well they never really existed in the first place. Which is why the dabate rages over whether they're actually art, or just toys. Whatever. They're (mostly) distributed on the basis of being intrinsically tied to the format that carries them. You buy "a game" rather than entry to the game. Though even that's not so clear cut when you consider the internet. MMORPGs (as I understand 'em - I have little experience) are much reliant on the characters and players. You don't so much buy the game, you buy into the creation the the game environment. And so the interactive nature of these games means that the role of creator leans back to the participants somewhat. Am I right in saying that in WoW you could sell the game disc+licence on but your character could be worth more than the game itself, so you could choose to (or not to) sell that on, too, for probably more than the game+licence itself? ... ... ...
we will not lose physical media any time soon because:
* emerging markets need phsical media. india, eastern europe and south america are potentially huge markets but dont have the infrastructure for digital distribution.
* some people move residence often (eg students) making download only very unatractive
* many people have chaotic finances that do not allow for the monthly contracts broadband requires (look how popular PAYG mobiles are)
* gifting is a huge part of the games market. people want somthing to wrap up.
Secondhand is arguably helpful to the industry because:
* many people who buy full price games only because they know they can sell them on.
* many people who buy full price games relied on second hand when younger and poorer
* people will take risks on less mainstream games if they know they can trade them in.
* without second hand there would be few specialist game shops. leaving supermarkets selling just a smll range, very unhealthy.
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