Over at kombo, Nick Michetti has penned a thoughtful article titled How Barack Obama Can Bring the Change the Video Game Industry Needs.
While some of his ideas have merit, a suggestion that Obama regulate the used game market marred the piece for me. Michetti writes:
We also need to rein in the used games market and not with DRM. It is fundamentally unfair that developers are being robbed of profits for work that they've done. If the ESA will not offer a mandate, then we'll need the government to do so. Publishers and developers should be entitled to at least half of the price from the sale of every used game.
However, we need for there to be caps on used game prices and a Blue Book system for video games to prevent price gouging. We also need for developers to respect our tradition of the second hand market and have part of the mandate state that developers cannot use DRM to inhibit used sales.
Ignoring the fact that the ESA, which represents game publishers, has no wherewithal to issue any type of mandate to game retailers, I just don't get Michetti's point. Actually, I don't get the point of anyone who is whining about used game sales (like Epic's Michael Capps).
The reason is simple. Industry types - capitalists, all - who seek to restrict used game sales would interfere with the way markets work. And they want to interfere in a way that is purely for their own benefit and decidely anti-consumer. In this case, anti-gamer.
By way of example, let's say that a carpenter builds a table under contract from a furniture manufacturer. The carpenter gets paid and the manufacturer in turn wholesales the table to a furniture store. The furniture store adds their markup and sells the table to a homeowner. Later, the homeowner remodels and picks up a few bucks by peddling the table through an ad on Craigslist.
Now, replace "table" with "video game." The game developer is the carpenter. The game publisher is the furniture manufacturer. The game retailer is the furniture store. The gamer is the homeowner.
In both cases, there was an economic chain. Everyone got paid for the services. Are we now going to allow the carpenter and the furniture manufacturer to say to the homeowner, "Hey, you can't sell that table. We want everyone to be forced to buy a new table."
Of course not.
Along this line, I was impressed with a recent blog post by veteran game developer Soren Johnson (Spore, Civ series), who writes:
Many factors come into play when a consumer decides if a specific game purchase is worth the money, and one of those factors is the perceived value from selling it back as a used game. In other words, people will pay more for a new game because they know they can get some of that money back when they trade it in at the local Gamestop.
Importantly, this perceived value exists whether the consumer actually sells the game or keeps it. Wizards of the Coast has long admitted that the existence of the secondary market for Magic cards has long helped buoy the primary market because buyers perceive that the cards have monetary value.
UPDATE: Kudos to Nick Michetti, who dropped by to discuss his article in comments. I see that Kotaku also picked up the story.




Comments
Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
Bill Weasley: To a goblin, the rightful and true master of any object is the maker, not the purchaser. All goblin-made objects are, in goblin eyes, rightfully theirs.
Harry Potter: But if it was bought—
Bill Weasley: —then they would consider it rented by the one who had paid the money. They have, however, great difficulty with the idea of goblin-made objects passing from wizard to wizard. … They consider our habit of keeping goblin-made objects, passing them from wizard to wizard without further payment, little more than theft.
—J.K. Rowling, HARRY POTTER AND THE DEATHLY HALLOWS 517 (2007).
TOTH: Electronic Frontier Foundation brief in Universal Music Group v. Augusto (dealing with the right of a recipient of promotional CDs to resell them.)
Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
so the devs are to be considered goblins?
Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
Why don't they just place a greater emphasis on Digital Distribution on consoles?
You know, sell full 360 games over Live, let the Wii use a Hard Drive so they can sell games over the Wii Shop, and have the PS3 sell full games over the Playstation Network.
Honestly, they need to realize that the majority of people will not go to the trouble of making their consoles play pirated games, and recognize that Gamestop's price gouging scheme is a far bigger threat, NOT used game sales and embrace digital distribution accordingly; they need to shut the hell up about piracy, since piracy is usually a sign of the market having a need that the industry will not fill, such as Hollywood not giving people movies online until they realize that about a million people downloaded their movie off Bittorrent.
The Game Developers should have seen this coming and done digital distribution; sadly, the first DD was steam and it was in 2004; they were content to just leave things as they are and not react to market changes such as piracy.
Hey Developers; embrace DD and stop whining about piracy if Gamestop's price gouging is a bigger threat to you!
Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
Not everyone has internet and not everyone has a great enough connection to receive such titles within a reasonable timeframe especially if their internet connection has caps (which many do).
DD will be a sad day for many consumers that prefer the reliability an actual copy with possibility of resale.
Game sizes are likely going to be huge next gen, we already have PC titles pushing 14~18GBs, some people only get a monthly cap of 20 in some countries. It'd be a bad business model to focus on it currently, as much as they'd like it, that perceived value of resale being gone would likely have customers demanding the price for a game drop to the $30~40 range, and publishers are extremely stingy about selling at $60 currently b/c of their huge expenses on developing titles they feel they need to spend in order to feel they have a AAA title.
Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
OK fine, let's do this.
Right of First Sale is one of the compromises because of copyright. Control second hand sale, no copyright.
Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
1) Good counterexample. I would have gone with used car sales myself, but the point's the same.
2) Is the used video game market really the economic scourge that we need the Obama presidency to tackle? Seriously?
Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
Why video games? Why not target the entire second hand market?
Mr. Michetti obviously doesn't realize the right of first sale, and that once a product has been purchased (not a service), the consumer is legally free to do whatver they want so long as they abide the law (unless a contract stating otherwise has been signed).
A video game Kelley Blue Book is a stupid idea for numerous reasons:
Who would decide what a game is worth?
How often would this be updated?
How would condition factor into the value?
Let's look at a particularily rare game like Marvel vs. Capcom 2 for the Playstation 2. The going rate on eBay and Amazon is about $60-90 depending on condition. GameStop sells the game used for $79.99. According to Michetti:
"Publishers and developers should be entitled to at least half of the price from the sale of every used game."
Does that mean that GameStop should give Capcom $40 every time they sell a used copy of Marvel vs. Capcom 2? Capcom might make more money from this particular sale than they did when the game was sold new for $49.99 (wholesale price is about $42). Not only that, but what if the game is resold multiple times? Should developers and publishers profit for doing nothing? I'm all for the developers and publishers, but getting money for doing nothing is not a good plan.
Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
The car industry does it well... Pretty much used games become negotiable on price...
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Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
But you have to admit that the auto industry releases a limit range of models on a yearly basis as opposed to the games industry that releases dozens of titles every week.
E. Zachary Knight
Oklahoma City Chapter of the ECA
MySpace Page: http://www.myspace.com/okceca
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E. Zachary Knight
Divine Knight Gaming
OK Game Devs
Random Tower
Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
True, and they are rather consistence in value...
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Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
Yeah, I agree it is a silly notion that they be given money for nothing. If that ever does happen, then they won't bother making many new sales and create unneeded scarcity; they basically become similar to the beast that gamestop is. When you create scarcity, you get worse piracy...
They probably wouldn't have it that high, they did claim "caps" but if someone was allowed to choose that cap, it'd be insane if they raise it really high b/c of "high demand and "little supply." Then, you have more piracy.
You also have problems with one time only codes that developers are doing now in order to gather more sales, or that talk about them making it where you spend $20 to see your finalboss fight/game's ending because you bought it used.
Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
This is exactly my concern as outlined above.
If publishers want to keep making money off their games they would continue to offer those games for sale. But no, they would rather release a limited supply and try to rape the used market.
E. Zachary Knight
Oklahoma City Chapter of the ECA
MySpace Page: http://www.myspace.com/okceca
Facebook Page: http://www.facebook.com/profile.php?id=1325674091
E. Zachary Knight
Divine Knight Gaming
OK Game Devs
Random Tower
Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
This is a bad idea. If certain video game companies wanted to they could make a killing selling their old dated games as new. Examples include Wii Virtual Console, Xbox Live Arcade, Steam, Gametap, etc
--- Official Protector of Videoland!
Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
The Wii VC and similiar services are actually an example of why the game industry fights both the second hand market and the abandonware piracy... so that demand can build over time and if they so choose they can re-release thier IP years later like this.
Kinda a mixed bag for consumers but it does explain why they care so much about games they don't even publish anymore.
Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
Masturbation is killing the prostitution industry.
"There is no sin except stupidity." - Oscar Wilde
Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
Having kids is killing the adoption industry.
---You are likely to be eaten by a Grue.
Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
Technically, adoption is the child birth secondhand market.
E. Zachary Knight
Oklahoma City Chapter of the ECA
MySpace Page: http://www.myspace.com/okceca
Facebook Page: http://www.facebook.com/profile.php?id=1325674091
E. Zachary Knight
Divine Knight Gaming
OK Game Devs
Random Tower
Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
Plan B, condoms, and birth control are killing the abortion market...
Higher education is killing the religious market...
PeTA is killing the vegan market...
Taxes are just killing everyone and thing...
---
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Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
Coveting your neighbor's wife is killing the porn industry (unless your neighbor's wife is a porn star).
Diet and excersize is killing those 'miracle' diet drugs (and good riddance).
cliffnotes is killing the book market.
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"What for you bury me in the cold cold ground?" - Tasmanian devil
Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
And living is killing the funeral industry.
---You are likely to be eaten by a Grue.
Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
That is an industry that will never die (Pardon the pun)
Hunting the shadows of the troubled dreams.
Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
Cliffnotes has saved me from having to read so much crap...
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Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
Best description of adoption ever.
Re: Writer: Obama Should Regulate Sales of Used Games... GP: No
Do that and the amount of copies on eBay goes up at least ten fold... hell, it's a better bet anyways, gamer to gamer, goes on what we feel the value of a second hand game is, or are willing to pay, not some corporate fat cat. I only buy second hand games off eBay even when I worked for gamestation (like Gamestop over in the states)
Re: Writer: Obama Should Regulate Sales of Used Games
I got a copy of Zone of the Enders 2 used the other day. You can't find Zone of the Enders 2 new anymore.
---You are likely to be eaten by a Grue.
Re: Writer: Obama Should Regulate Sales of Used Games
Why don't they get it?, most used games are bought long after devs have stoped publishing a title.
Re: Writer: Obama Should Regulate Sales of Used Games
I don't see this as anti-consumer. It seems that he wants companies that sell used games to have give a percetage of their profit back to the industry instead of just keeping it. A blue book value would help keep people from getting screwed in prices too. Like when you trade in a game for a dollar store credit that is sold for $15. Helluva mark-up and regulation would keep that from happening. I don't think that stores should be regulated personally, and the man never said that he wanted the average joe to pay others for a product he had, however I do think that something needs to be done to prevent the consumer from being screwed and some kind of universal price point given on the used value for games.
Re: Writer: Obama Should Regulate Sales of Used Games
The companies already got their profit from the original though. Here, let me explain why this is not logical.
Someone buys their game, so the company who made it got the money for that copy of the game, and all is good. Then they sell the game, therefore they no longer own or use that game. Then someone else buys the game. If the company gets profit off of that too, then they are getting income because of it being sold a second time, when they already got profit from that item with no additional items on the street.
If the company that made it actually got money taken away from them because of someone selling the game to EB or GS, then that would be logical, but no one did and no additional copies of that game are on the street by it being sold to a second person, legally. (if that is the case, then they have legal actions they can pursue)
So I bought my 2009 Corolla for $16,000 (rounding) from Toyota back in March or April. Now if I turn around and sell my car to someone, Toyota has no right to take a percentage of that money from me that I get from selling it to another person, and if I sell it to a dealership for $12,000, and they turn around and sell it to someone else for $14,000, then Toyota asked them for a percentage of the money they profited, that is not fair to the dealership.
Now if I or the dealership had the ability to duplicate the car at no cost to us, then sell 2 cars, I could see them taking a profit, but if these games are sticking with the original disc, then no one other than the people directly involved with the transaction has no right for any money to be transferred to them other than the government who is going to rape us on taxes no matter what.
Consumers are taking at least some form of risk of getting a used game through any location, may it be online or EB/GameStop. The game could be scratched and you not be able to play a side quest or section of the game. It could smell like smoke because of the past owner being a smoker, it could not have the booklet, and plenty of other things that encourage people to buy a new copy instead. If the original price wouldn't have gotten so ass raping high, then people would still be buying new copies instead of used ones. There are extremely few games worth $60, and even more if it is a PC game that has an expansion pack.
I am okay with the blue book idea, but it needs to go into such detail that it would have to figure in condition of the disc and case, if the booklet is included, and so on. So it would have to be exactly like edmunds uses to figure out car values given the car condition, what features it has and so on. I don't see all that labor paying off for anyone though, and Ebay would be better still for anyone unless they dont want to deal with it. You only get ripped off as much as your laziness lets you.
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Re: Writer: Obama Should Regulate Sales of Used Games
The first sale of the game, in its brand new state, is the final product. Game companies only deserve the final product sales, and in terms of GDP the product has reached the end of its sales pipeline, even if it can be resold again and again. GDP counts the sales of the new games only.
Re: Writer: Obama Should Regulate Sales of Used Games
THere is already a way for customers to prevent being screwed like that. It is called ebay and Craigslist. Honestly. The only reason customers are willing to seel their games to Gamestop for the meager price they get is that they find it easier than dealing with online services or other means of selling it themselves. If more people sold their games themselves, GS would be forced to alter their used game market to look more appealing to customers who want unload a bunch of games.
I also don't like the idea of a bluebook system. Will such a system actually represent the value of the game or will it only deal in depreciation. THere are many games out there that are selling for much more than MSRP now due to the fac they are so rare and sought after. Will a Bluebook system honestly represent that. Also, who would be in charge of managing bluebook prices? It can't be the industry as they would be in the position to directly control the game market. It can't be the retailers as they would directly benefit from it. So it would have to be an independent group. But who?
My next concern, why do we even need a bluebook system? The only other industry I know of that has one is the auto industry. They have one because cars are large investments and calculating depreciation of a car is a lot tougher than most low priced products such as games. The price of games would make a bluebook system almost worthless. $60 is not something that needs regulated as much as $10,000.
E. Zachary Knight
Oklahoma City Chapter of the ECA
MySpace Page: http://www.myspace.com/okceca
Facebook Page: http://www.facebook.com/profile.php?id=1325674091
E. Zachary Knight
Divine Knight Gaming
OK Game Devs
Random Tower
Re: Writer: Obama Should Regulate Sales of Used Games
Us being screwed is exactly why me and my brother don't sell our games used. That's why we have such a large amount of games we rarely play. Seriously we once got a couple of brand new games we all ready had, still wrapped in plastic and everything, we tried to sell them to gamespot and what they offered was just insulting. So they just sit in a drawer collecting dust, although still wrapped in plastic.
I never considered ebay or craigslist though. My parents tried to sell a car through craigslist and they couldn't find a buyer (although just as well because later they decided not to sell it), and none of us know how to use ebay so yeah...
And I can just imagine some numbskull setting the bluebook value of Marvel vs. Capcom 2 to be $20 or something like that (and for those of you who don't know, that game is going for around $80 on ebay, because it's rare and it's quite popular).
----------------------------------------------------
"What for you bury me in the cold cold ground?" - Tasmanian devil
Re: Writer: Obama Should Regulate Sales of Used Games
"Like when you trade in a game for a dollar store credit that is sold for $15. Helluva mark-up and regulation would keep that from happening."
Umm. Why? If people want to trade in their games for a dollar when it's no secret that the store will mark it up like that, shouldn't they be allowed to? If they think it's a bad deal, wouldn't they just, you know, not sell the game, or try to find a better price elsewhere?
Re: Writer: Obama Should Regulate Sales of Used Games
Movie rentals and the movie channels are killing the movie theaters as well. ONLY let people see movies ONCE in a movie theatere. :P
Re: Writer: Obama Should Regulate Sales of Used Games
Home cooking is killing the restaurant industry.
Re: Writer: Obama Should Regulate Sales of Used Games
It's no fun when someone comes in and wins the thread with the first comment.
Next time let us think we have a chance before dropping the bomb.
Re: Writer: Obama Should Regulate Sales of Used Games
Scary thing is, there have been laws passed that speak like that. I can recall reading a case study of a national law that limited what farmers could grow, including what you grew for your own family, partly under the idea that if you were self suffient then you hurt the industry.
There have been plenty of examples of industries that got powerful enough make life difficult for people doing it for themselves. Healthcare is another example.. it wasn't all that long ago that having your baby without a doctor was basicly illegal.... so one of the most basic human activites was religated to 'you can't do that yourself'
Re: Writer: Obama Should Regulate Sales of Used Games
Agreed, amazing logic of some people... I am guessing he didn't think that all the way through. How that will rape consumers, like our gas prices that seriously should have been regulated. If the gas wasn't regulated though, they can not regulate these games being sold second hand. They have absolutely no right to do so, even if it is their intellectual property.
Once an item is sold, everything of it is the buyer's to do what they want with, without making profit or giving away a duplicated item based off of the original that could have not been created without the original said item. If said owner sells that item, they will be giving up all ownership physically and else wise of that item by doing so. If said owner takes product during ownership and changes it in extreme ways to make it into something new, then they can make profit however they wish.
Isn't that how it is suppose to be? I was reading over the law that was passed in October, and I saw they are making an IP section of the government that is going to get $25 million a year to go after people over illegal activities involving IP stuff. Then if I read it right, it says the people in the IP department are actually allowed to get gifts from publishers to "aid them" in their work. (I took it as paying them off to screw over people harder than they should...)
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Re: Writer: Obama Should Regulate Sales of Used Games
You can too make a profit off of something you own. You are well within your right to buy something for $60 and sell it for $80 if you wish. You don't have to alter it or anything. AS long as it is the original product you purchased, you can make as much profit as the market is willing to pay.
That is why it is not illegal to buy stuff at garagesales for dirt cheap prices and then to take them to other places you know will get you a massive mark-up and sell them there.
E. Zachary Knight
Oklahoma City Chapter of the ECA
MySpace Page: http://www.myspace.com/okceca
Facebook Page: http://www.facebook.com/profile.php?id=1325674091
E. Zachary Knight
Divine Knight Gaming
OK Game Devs
Random Tower
Re: Writer: Obama Should Regulate Sales of Used Games
That is due to supply and demand, I am talking more about if a market with plenty of supply.
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How to set Xbox 360 Parental Controls
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Re: Writer: Obama Should Regulate Sales of Used Games
It doesn't matter. You are legally capable of selling something you bought at a profit if you want to. It doesn't matter if it is a good idea due to supply and demand. The market could be saturated with a product selling at $20. If I want to sell that product for $30 or even $300 dollars, I am legally capable. It may not be smart, but it is legal.
E. Zachary Knight
Oklahoma City Chapter of the ECA
MySpace Page: http://www.myspace.com/okceca
Facebook Page: http://www.facebook.com/profile.php?id=1325674091
E. Zachary Knight
Divine Knight Gaming
OK Game Devs
Random Tower
Re: Writer: Obama Should Regulate Sales of Used Games
True, you must be a hell of a sales man then...
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How to set Xbox 360 Parental Controls
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Re: Writer: Obama Should Regulate Sales of Used Games
LOL...