Developers Respond to GameStop's Used Games Market Comments

August 23, 2011 -

GameStop's executive vice president Michael Mauler recently told Edge Magazine that the sale of second hand video games benefits the entire industry - not just retailers. The benefit, he claims, is that these second-hand sales keep customers engaged with yearly franchises. Mauler said that without the opportunity to cash in on older titles, many gamers wouldn't be buying as many new ones.

"I can understand the feelings [but] we've sat down with developers and publishers and really gone through the data," Mauler told the magazine's website. "I personally think there's a lot of benefit to the publisher. "A great example is sequels, where there's a large percentage of people who are just not going to spend $60 every single year without being able to do something. They'll look at their shelf and see ten FIFAs, Pro Evos or Maddens. “

"Being able to take the older one and do something with it in order to buy the next version is really important to consumers. That drives new sales quite a bit."

Mauler believes that getting new customers involved with a series which they may not have invested in at full price also pushes DLC sales and that services such as EA's Online Pass aren't particularly effective.

"Our data says that used customers play a lot less online than new customers. The number's very low - like 15, 20 per cent."

"We the industry have done it to ourselves," Mauler says of the second hand market. "We take all the great releases and put them all in a two-month period. "If you're an FPS fan, you look at all the games that are coming out this fall, and you'd have to be pretty wealthy to buy all of them. There are going to be people who buy Battlefield 3, and they're not going to have €60 for at least another month or two...they're all coming out so close together."

Of course, developers responding to the story on GameIndustry.biz sounded like they wanted to ride Mauler out of town on a rail. Below is a sample of the responses from individuals working in the industry.

Jason Lee Ried- Producer, Walt Disney Company:
"Freeing up money for new games sales is one thing. Releasing a second hand version almost to the day of launch is another - all this does is give 97% of the profit to the retailer while the Publisher/Developer receives nothing.

I would listen to his opinion on data more closely if there was a window where second hand games couldn't be sold. That then gives new games enough time to make money before being pushed to the back. But that will never happen... "

James Steele - Software Engineer, Nintendo of Europe:
"It's not the older titles being sold second hand that are the real issue here.

It's the price gouging that that the retailers are doing by selling a second hand copy of a new title in its first few months of release. If Mr Mauler were serious about helping to drive sales new games sales which lead to increased profits for the industry as a whole, he would first commit to stopping the price gouging activities which take money away from the publisher , developers and platform holders."

Chris Taylor - Gas Powered Games:
"Well, it's all going to be moot in the coming years, so we can analyze this all day long, but it doesn't matter. I agree with the comments about being offered used, when you walked into the store to buy new... that's where Gamestop's arguments fall down. Take that sales pitch out of the equation, and they'll gain some ground with me."

Brynley Gibson - Executive Producer, Headstrong Games:
"I believe (this may now have changed) the film industry model provides far greater protection and improved sales.

It is to not allowed for you to sell second hand films in a place that retails full price films. Second hand films can be bought from a rental establishments only. Rental is another beast to handle. Rental copies of movies are a special version, a license that cost the rental companies a great deal. Rental games on the other hand are just normal retail copies.

If anyone a bit more legally minded can let me know if this is correct I would appreciate it."

Tom Pickard - Art Lead, The Creative Assembly:

"Gamestop's argument is only relevant for casual gamers who buy series of games, and even then it's a stretch.

How is selling used copies of week old games at £3 discounts right next to new games beneficial to the developers or publishers? maybe a year into their lifecycle selling very cheap second hand games raises awareness of sequels to new players. Oh well money talks. "

Dave Knudson - Sr. Technology Manager, Electronic Arts:
"I sort of wonder how much Gamestop's used success might be overstated. I'm not an analyst, but I believe the accounting they are allowed to use for used sales might make things appear a little more rosy than they actually are. From a used games inventory perspective they could sell the last unit in (presumably always the cheapest for them to buy), which would make their margins look very good. At some point they would have to write down the older more expensive inventory, but I presume they have some control over when they choose to do that. I don't think this method can be used in a lot of countries, and even in the US it can't be used for tax purposes.

Again I am not an expert in this field, but it seems like accounting and inventory management would create some opportunities for Gamestop to overstate the success of their used business a bit. "

Source: GI.biz


Comments

Re: Developers Respond to GameStop's Used Games Market Comments

Something that publishers and developers don't seem to understand is that a large part of retailers don't give a crap about them.

Retailers care about publishers/developers to the extent that it makes them money, anything after that is merely some faux form of "respect".

I honestly don't think most retailers are really going to pay any heed to the bitching made of publishers/developers over used games. They're not doing anything illegal, so they have no reason to stop what makes them money.

Re: Developers Respond to GameStop's Used Games Market Comments

The day we go download only, is the day I steal games.

Re: Developers Respond to GameStop's Used Games Market Comments

James Steele - Software Engineer, Nintendo of Europe talks about price gouging? Really? $60 for a game and then DLC it to death with $15 map packs? The so-called "industry" had better look in the mirror when it starts flinging words like "price gouging" around.

Re: Developers Respond to GameStop's Used Games Market Comments

Even I agree that that's a bit high for something that you can't use unless you already bought the game.

Re: Developers Respond to GameStop's Used Games Market Comments

They're not going to listen. They're job is to eliminate used game sales. Here's what the CEOs told them:

"Make as solid argument as you can against used game sales without making Gamestop look like a total douche."

Re: Developers Respond to GameStop's Used Games Market Comments

Well I don't know about everyone else, but when I see a used copy of a game I want that is priced at $55.99 or whatever within the first few weeks/months of it being out, I'll usually opt to pick up a new copy simply because I feel like the extra $5 is worth getting one that hasn't been opened yet. If I had to put a dollar value on that sweet new game smell, that'd probably be it.

Re: Developers Respond to GameStop's Used Games Market Comments

Personaly if it was a good game I probably would already have it and if it had only been out a  week I'd be wondering just how good the game really is.

Re: Developers Respond to GameStop's Used Games Market Comments

I sometimes wonder if these developers and publishers think used copies appear out of the ether. If a title shows up used within a few days, guess what? It means they made a game the original buyer didn't want to keep.

Most industries that involve selling products have a used market. The game industry already has a 'no-returns' policy, which most manufacturers in other industries don't have. If I buy a $60 electric mixer and don't like the way it performs, with most stores I can return it within 30 to 90 days and get a refund or exchange it for a different model. Try doing that with a $60 video game.

Now they're saying we shouldn't even be able to resell our games? If we buy a turd in a box by accident, we can't even get rid of it and try to get some of our money back? I have no sympathy with game manufacturers on this issue.

Re: Developers Respond to GameStop's Used Games Market Comments

I hear a lot about GameStop for this, but what about ebay and amazon?  They take a margin for allowing a consumer to free themselves of something they don't want anymore on a second hand market.

While second hand sales can be seen as negative like this, the initial buyer no longer has access to the product.  Part of the value of a product is that it can be re-sold, if your product cannot be re-sold it does not have as much value in the first place.  Take these concepts and compare with expected economic results.

A game available second hand on day one doesn't identify a problem with GameStop, it identifies a problem with your game.  And it also identifies that many people would like to trade your product in so that they can afford something else.

If only game developers and publishers would make their product in a way that the consumers would see value in keeping it, they wouldn't have to blame someone else for their problem.

Re: Developers Respond to GameStop's Used Games Market Comments

Yet instead of trying to improve things on their end they throw blame onto us, and seem to be happy with the idea of no one ever enjoying their product ever again once they stop printing new copies.

Re: Developers Respond to GameStop's Used Games Market Comments

True, the original owner no longer has access to the title, but they retain the game history. Reselling a game to a chain doesn't erase the Acheivements or Trophies for it, or the content saved to your console (and pretty much only console games, thanks to DRM on pretty much any and all PC titles these days).

Is it safe to assume you've heard of speed runs? In not wholly unsimilar fashion, there are a lot of people who will rush through a game from the moment they lay hands on it and then return it to get the greatest possible trade-in value, and maybe they do that in an afternoon (perhaps skipping any multiplayer) or maybe they take a few days. Further, there are GameStop employees who are given access to titles before their release dates, allowed to play titles and put them out on the shelves as used. Occasionally, a store (not even always a GameStop) will jump the gun, letting the general public buy a title before its release date. I'm not saying people don't return games on release day because they aren't satisfied, just that there are other sources.

DRM has by and large killed the trade-in value of PC games, but in those cases, it appears to be mostly aimed at piracy. Thanks to the closed nature of consoles, the more significant lost sales come from used games, so developers add value by adding DLC, by coming up with these schemes like Project $10, with online passes, season passes for future content.

There's nothing precluding an original owner from reselling a title, and they aren't trying to do that. While they still compete with each other, they aren't trying these programs to make their games more attractive than their competition, they're trying to find something effective at making more attractive new rather than used.

Re: Developers Respond to GameStop's Used Games Market Comments

Hmm, well, if a game is showing up on used game store shelves only months after release, well, maybe you need to put in more replay value

Re: Developers Respond to GameStop's Used Games Market Comments

Exactly.

If game companies are complaining about people trading their games in soon after buying them, maybe they should look at their product and ask what they could do to make customers NOT want to trade their game in so soon.

Also, if second-hand sales of video games were really bad for the industry, EA and Activision would have both gone under years ago.

Re: Developers Respond to GameStop's Used Games Market Comments

"It is to not allowed for you to sell second hand films in a place that retails full price films."

Uhh, Best Buy anyone?

"Rental copies of movies are a special version, a license that cost the rental companies a great deal."

Uhh, Red Box, where they buy some from local stores?

 

Re: Developers Respond to GameStop's Used Games Market Comments

I'm unsympathetic towards their plight simply because I like having the option to resell what I've paid for. I like to sell old games for quick cash when I need it, but with third-party software such as Steam becoming the norm for game distribution, it's almost impossible to resell the stuff I paid for.

That might sound rather greedy of me but consider for a moment that you rarely - if at all - hear furniture developers complain that their products are being resold by consumers when they're done using it. You don't hear Dell or Hewlett-Packard complain in large numbers because people are selling their old PCs off on sites like eBay or to pawn shops and other second-hand dealers.

I'm sure these companies don't like it to some degree, but they're not out bitching about it.

People wouldn't have to sell their games to buy developers new releases if they weren't completely overpriced to begin with.

Re: Developers Respond to GameStop's Used Games Market Comments

True that...

 
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