Quantic Dream: We Lost Millions to Used Games Market

September 12, 2011 -

In a recent interview with GameIndustry.biz, Quantic Dream co-founder Guillaume de Fondaumiere claims that his studio lost anywhere from €5 ($6.8 million *) €10 million ($13.6 million *) due to the used games market. He softened the blow by saying that many consumers bought Heavy Rain used because of the recession and because the AAA was just too expensive.

"I would say that the impact that the recession had, especially on AAA games on console, was the rise of second hand gaming. And I think this is one of the number one problems right now in the industry," he told GameIndustry.biz in an exclusive interview. "I can take just one example of Heavy Rain - we basically sold to date approximately two million units, we know from the trophy system that probably more than three million people bought this game and played it. On my small level it's a million people playing my game without giving me one cent. And my calculation is, as Quantic Dream, I lost between €5 and €10 million worth of royalties because of second hand gaming."

de Fondaumiere says that, while he feels bad for consumers who are feeling the full effects of the extended economic downturn, he also thinks that the used games market is making it so that developers will simply have to stop making games.

"Now I know the arguments, you know, without second hand gaming people will buy probably less games because they buy certain games full price, and then they trade them in," he continued. "Well I'm not so sure this is the right approach and I think that developers and certainly publishers and distributors should sit together and try to find a way to address this. Because we're basically all shooting ourselves in the foot here. Because when developers and publishers alike are going to see that they can't make a living out of producing games that are sold through retail channels, because of second hand gaming, they will simply stop making these games. And we'll all, one say to the other, simply go online and to direct distribution. So I don't think that in the long run this is a good thing for retail distribution either."

Of course worst-case scenario, most publishers simply migrate to the cloud or other means of digital distribution to sell their games.

de Fondaumiere goes on to say that a big part of the problem is game pricing and retailers, publishers and developers should get together to address alternate pricing models that work for everyone.

Source: GameIndustry.biz

* figure based on the exchange rate of 1.00 EUR = 1.36 USD from XE - Universal Currency Converter


Comments

Re: Quantic Dream: We Lost Millions to Used Games Market

Please stop making games then.   It will open up space in the industry for a company that does not seek to 'fix' this imaginary problem.

Re: Quantic Dream: We Lost Millions to Used Games Market

It's not an imaginary problem, it's just not an unexpected or unfair problem.  There are certainly better solutions than "stop making games."  Publishers just have to find them and that's what we're seeing now (with varying levels of success).

 

Andrew Eisen

Re: Quantic Dream: We Lost Millions to Used Games Market

My issue with calling it a 'problem' in the first place.... calling it a problem just shows simplistic and direct thinking, and using the '2 million new copies were sold, 3 million people have played our game, so we lost 50%!' math makes it even worse.  People have real trouble leaping from "A=>B" logic to "A=>B=>C".. all people like this see is they are not getting "A=>C" and missing the intermediate steps that benifit them...

Re: Quantic Dream: We Lost Millions to Used Games Market

Publishers are making less money then they would otherwise.  That's a problem.

"using the '2 million new copies were sold, 3 million people have played our game, so we lost 50%!' math makes it even worse."

It would if anyone had actually said that.

 

Andrew Eisen

Re: Quantic Dream: We Lost Millions to Used Games Market

It's not a problem, though. It's a reality.

They went in to the market knowing with absolute certainty that Gamestop exists, that people rent and sell their games. If it was a problem, then they totally failed to even approach it with a solution.

This is very clearly a studio who is realizing that if their game NEEDED to be purchased to be played "would have" earned more money. I put that 'would have' in quotes, because the chances are good that only a portion of those who bought the game used would have ever bothered if they had to purchase it new at full cost.

In fact, you may question the number of people who DID purchase the game new if it had no secondary market value; I'm sure there's no small number of frugal gamers who trade in many of their games after beating them once or twice in order to get discounts on something they haven't played yet.

Re: Quantic Dream: We Lost Millions to Used Games Market

"It's not a problem, though. It's a reality."

It's both.

 

Andrew Eisen

Re: Quantic Dream: We Lost Millions to Used Games Market

That's a matter of opinion. I don't see a problem in the secondary market, and I'm sure I'm not alone. I think you've got to be a fool to expect people to only buy your product new -- it's short sighted and, frankly, delusional. 

Re: Quantic Dream: We Lost Millions to Used Games Market

No, it's a matter of the word's definition.

Just because it's not a problem for you, doesn't mean it's not a problem for someone else.

 

Andrew Eisen

Re: Quantic Dream: We Lost Millions to Used Games Market

Speaking as someone who spent many years in the game industry... it is no more a 'problem' then used cars, used books, or used CDs.  

When you take away the used market the ability to charge high prices decreases because you have just decreased the value of your own product.  It also makes the market more rigid, money does not flow nearly as freely since the volume of transactions drops drastically AND the smaller number of price points creates a situation where people go in with 'all or nothing' purchasing, which meany people will simply choose 'nothing.

The industry on the whole, and individual studios/publishers would be in much worse shape if not for the used market.  Their complaining is similar to whining about having to put gas in a car.. all they see the the surface cost and not think about how once you take away that lifeblood it doesn't work as well.  

Re: Quantic Dream: We Lost Millions to Used Games Market

That's like saying the fact that I can't fly is a problem. I mean, it may not be a problem to you, but it is to me, right?

There's all sorts of annoyances and inconveniences in the world, but just because something gets in your way doesn't make it a problem. Again; they KNEW that this is how the world worked. Complaining about it is just silly. They're not being stolen from, they're not losing money on those sales. They're bothered that they didn't make $60+ on EVERY gamer who played their game.

That's a problem like not drowning in money is a problem.

Re: Quantic Dream: We Lost Millions to Used Games Market

No. The issue of used games affecting developers is like a medication that has bad side affects on 1% of its users. It doesn't necessarily cause them to die, but it does affect their day-to-day life.

The people who need the medicine are a specific population (aka game developers vs any other industry), and the amount of them who genuinely are endangered, or are bothered+vocal by it is relatively select.

Now tell me, is there any reason that people shouldn't come up with a way to help the 1% of those who are having a harder time? If your meds seriously made your hands shake all day, that's not a world-ending emergency, but who should have to live with that? There's nothing wrong with addressing the issue and being vocal about things that bother you, and asking for a solution. That's what the game companies are doing.

Are there some who are trying to over-emphasize their loss for personal gain? (aka those suing the medication company over something stupid) Yep. Those are the game stuidios that you should be watching for.

Re: Quantic Dream: We Lost Millions to Used Games Market

I'm sorry you don't like the definition of that word.  But, as I've said elsewhere, as long as you understand the specifics of what we're discussing (and I believe you do) I don't give a flying falafel what you call it.

 

Andrew Eisen

 
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MaskedPixelanteAnother round of Night Dive teasing and promising turns out to be stupid edutainment games. Thanks for wasting all our time, guys. See you never.04/17/2014 - 3:44pm
Matthew WilsonAgain the consequences were not only foreseeable, but very likely. anyone who understood supply demand curvs knew that was going to happen. SF has been a econ/trade hub for the last hundred years.04/17/2014 - 2:45pm
Andrew EisenMixedPixelante - Would you like to expand on that?04/17/2014 - 2:43pm
MaskedPixelanteWell, I am officially done with Night Dive Studios. Unless they can bring something worthwhile back, I'm never buying another game from them.04/17/2014 - 2:29pm
PHX Corphttp://www.msnbc.com/ronan-farrow/watch/video-games-continue-to-break-the-mold-229561923638 Ronan Farrow Daily on Video games breaking the mold04/17/2014 - 2:13pm
NeenekoAh yes, because by building something nice they were just asking for people to come push them out. Consequences are protested all the time when other people are implementing them.04/17/2014 - 2:06pm
Matthew Wilsonok than they should not protest when the consequences of that choice occur.04/17/2014 - 1:06pm
NeenekoIf people want tall buildings, plenty of other cities with them. Part of freedom and markets is communities deciding what they do and do not want built in their collective space.04/17/2014 - 12:55pm
Sora-ChanI realize that they have ways getting around it, but one reason might be due to earthquakes.04/17/2014 - 4:42am
Matthew WilsonSF is a tech/ economic/ trade center it should be mostly tail building. this whole problem is because of the lack of tail buildings. How would having tail apartment buildings destroy SF? having tail buildings has not runed other cities around the US/world04/16/2014 - 10:51pm
Matthew WilsonAgain the issue is you can not build upwards anywhere in SF at the moment, and no you would not. You would bring prices to where they should have been before the market distortion. those prices are not economic or socially healthy.04/16/2014 - 10:46pm
ZippyDSMleeYou still wind up pushing people out of the non high rise aeras but tis least damage you can do all things considered.04/16/2014 - 10:26pm
ZippyDSMleeANd by mindlessly building upward you make it like every place else hurting property prices,ect,ect. You'll have to slowly segment the region into aeras where you will never build upward then alow some aeras to build upward.04/16/2014 - 10:25pm
Matthew WilsonSF have to build upwards they have natural growth limits. they can not grow outwards. ps growing outwards is terable just look at Orlando or Austin for that.04/16/2014 - 4:15pm
ZippyDSMleeIf they built upward then it would becoem like every other place making it worthless, if they don't build upward they will price people out making it worthless, what they need to do is a mix of things not just one exstreme or another.04/16/2014 - 4:00pm
Matthew Wilsonyou know the problem in SF was not the free market going wrong right? it was government distortion. by not allowing tall buildings to be build they limited supply. that is not free market.04/16/2014 - 3:48pm
ZippyDSMleeOh gaaa the free market is a lie as its currently leading them to no one living there becuse they can not afford it makign it worthless.04/16/2014 - 3:24pm
Matthew WilsonIf you have not read http://arstechnica.com/gaming/2014/04/introducing-steam-gauge-ars-reveals-steams-most-popular-games/ you should. It is a bit stats heavy, but worth the read.04/16/2014 - 2:04pm
Matthew Wilsonthe issue is when is doesn't work it can screw over millions in new york city's case. more often than not it is better to let the free market run its course without market distortion.04/16/2014 - 9:36am
NeenekoTrue, and overdone stagnation is a problem. It is a tricky balance. It does not help that when it does work, no one notices. Most people here have benifited from rent controls and not even realized it.04/16/2014 - 9:23am
 

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