Red Dead DLC Was Released to Slow Used Game Sales

September 15, 2011 -

Here's something you don't want to hear from developers: we didn't make DLC to give fans new content, we did it to combat used game sales. I'm paraphrasing, but that's sort of what a top Take-Two Interactive executive told a gathering at ThinkEquity's 8th Annual Growth Conference in New York City earlier this week. Concerning the first batch of downloadable content released for its hit game Red Dead Redemption, he said:

"Once we do the core development, which takes a long time and is pretty hard, doing the development related to the DLC in a high-quality way is a lot easier and a lot quicker," Zelnick said, as noted in this GameSpot article. "And we can be very responsive to what the market wants. So at the time we put out Red Dead Redemption in May, we didn't even have a fantasy that we'd be putting out a zombie title for Halloween. But we were."

Zelnick's position is that DLC gives consumers who have already bought the game a reason to hold on to it.

"The theory was, let consumers know there's a reason to hold onto your games because the bulk of impact of used game sales on front line sales is in the first six weeks," Zelnick said. "So if we can get people to hold onto their game for the first six weeks, the titles aren't in the stores in the used game section, which means people have to buy the front line title from us."

It's certainly a less nefarious way to combat used game sales; they could have simply charged used game owners some extra cash to have access to certain features like EA and THQ are fond of doing.

Source: GameSpot


Comments

Re: Red Dead DLC Was Released to Slow Used Game Sales

I have no problem with this mentality honestly, and I also like the fact that they released a disc-based version of Undead Nightmare so that even those who traded in RDR could play it without having to buy the core game again.

Re: Red Dead DLC Was Released to Slow Used Game Sales

I thought that this tactic was known about a long time ago? I'm sure other execs have said very similar things about prolonging a game's life through DLC to prevent trade-in.

In many ways the comments do promote free DLC too, as any additional content will prevent people from trading-in, thus reducing the amount of second-hand games on the market meaning that people are more likely to buy the new copy.

If anything I think retail has become more aggressive in attempting to push the trade-in market, which ends up in becoming a dangerous circle for consumers; high prices on new games make people buy the slightly cheaper used copies which in turns pushes up the price of new titles and so on.

Re: Red Dead DLC Was Released to Slow Used Game Sales

Fine by me, so long as you're not yanking out content to sell to me later.  Although, if I know DLC is coming, I'm want to hold off for a year or two until the inevitable cheaper edition with the game and all the DLC comes out.

 

Andrew Eisen

Re: Red Dead DLC Was Released to Slow Used Game Sales

I thought Red Dead Redemption was good already, now he just made me want to trade it in out of spite.

Re: Red Dead DLC Was Released to Slow Used Game Sales

Yeah, that's going to go over like a fart in a space suit. You don't win customers by treating them like they're your enemy. Doing that will just make them your enemy. You don't want that. Just make a game that's worth paying $60 and people will pay $60. Or, you could just lower the price to what will bring in even the used buyers to buy new instead of trying to force customers to do what you want, because it will fail hard. Supply and demand; you supply what we demand. If you don't, someone else will (like GameStop).

-Greevar

"Paste superficially profound, but utterly meaningless quotation here."

Re: Red Dead DLC Was Released to Slow Used Game Sales

Wondering if you read the article... because I don't see anything here that paints the consumer as an enemy. They made DLC in hopes that consumers will keep the title longer... seems completely reasonable to me, especially since they are not forcing you to buy it.

Re: Red Dead DLC Was Released to Slow Used Game Sales

It's one thing to put up DLC after a game's release to add value, it's quite another to require that you have a new copy of the game to access that content. EA has instituted the "project ten dollar" that forces people to buy new, or you can't access all the content.  I'm not sure it was applied to RDR, but that's likely the case and that's punishing people for not buying new. Nevertheless, the quotations in the article make it clear that their goal is to force people to buy new by trying to create a shortage of used copies through DLC incentives. That's not a good way to get business.

"So if we can get people to hold onto their game for the first six weeks, the titles aren't in the stores in the used game section, which means people have to buy the front line title from us." (emphasis mine)

That pretty much says all I need to know right there. If you want people to buy new, don't force them to buy new, give them a good reason to buy it new. Extra content is great, but they're missing the writing on the wall here. The games cost too much for a lot of consumers. They buy used to save money. If they just lower the price to what they would pay for a used copy, there would be less of a market for used games simply because the price is in line with what people are willing to pay. You might lose a bit on the profit margin, but I think you'll make up the loss through sheer volume of sales. As an added bonus, it cuts down the profits for competitors like GameStop, because they don't need that secondary market as much as they do now.

-Greevar

"Paste superficially profound, but utterly meaningless quotation here."

Re: Red Dead DLC Was Released to Slow Used Game Sales

I would imagine that nothing would please you in regards to combating the used market. So you're saying that you don't like it that companies are making games that people actually want to hold on to? You would prefer companies to make poor games instead as people are likely to trade them in quicker?

If they did make games cheaper (which is what the consumers wants of course) wouldn't they just make the used games cheaper still?

Re: Red Dead DLC Was Released to Slow Used Game Sales

I would imagine that no factual or logical argument would ever change your mind. You would prefer to create straw men and argue against that, rather the actual message of my comment?

I would prefer that game companies leave the secondary market alone and just make due with it like every other industry does (autos, electronics, furniture) and not try to block it by treating customers like pawns in a juvenile war.

Of course cheaper games would make used games even cheaper, but at some point it's just more reasonable and convenient to buy at the new-release price rather than buy a used one that's only marginally cheaper. It would also be practical to just drastically drop the price on the game after the peak sales period to bring in more sales so people don't have to buy used to get cheaper games. It's a fools errand to try to prevent a legal secondary market from existing. It's really just a pricing game that game companies continually ignore, pretending that used game outlets like GameStop are the enemy.

-Greevar

"Paste superficially profound, but utterly meaningless quotation here."

Re: Red Dead DLC Was Released to Slow Used Game Sales

The user market when concerning cars and electronics is about buying a product of inferior quality to the new version. With games that isn't a case because they can't deteriorate.

But like with the used-car market the companies that produce games are seeing ways to make money out of it, through downloadable content (as opposed to new parts for used cars) as people will want to buy the content that wasn't on the disc. It's naive to think that say car manufacturers don't make money out of the used market, whereas games companies are only starting to make money from that market through the rise of DLC.

You seem confused whether you want the secondary market or not. You want cheaper prices but can't decide on whether that comes from new sales or through the secondary market (which helps drive up the price of new content).

Re: Red Dead DLC Was Released to Slow Used Game Sales

"With games that isn't a case because they can't deteriorate."

Obviously, you've never bought a game with a scratched, scuffed, worn, or otherwise damaged disc.

You continue to fail to see that their goal isn't to provide more value to the customer, but to reduce the supply to the secondary market so as to force more first buyer sales. That's just backwards logic. You're going to get more sales of new copies by removing the supply of used games even though those people were either unable or unwilling to buy used in the first place? How does that make sense? This is the typical stupid logic of the publishing industry. "If we take away the alternatives, they'll just buy ours!" No! Just no! All you're doing is making the new game less valuable to first buyers because the people who buy used will see less value in buying at all, used or new alike.

Yeah, car makers can take advantage of used cars through parts, but they aren't doing it by making the parts in the car break when you sell the car to another party. DLC is fine, but it shouldn't be a tool to reduce the value of used games. I shouldn't have to buy a new computer module for my car to replace the one that automatically bricked itself because I bought the car used instead of new. As well, I shouldn't be forced to buy a special code to restore access to content that was intended to be part of the game or buy access to the DLC store. The fact remains that what they are doing is a thinly veiled attempt to reduce the used market rather than giving used buyers a good reason to buy new. You can try to nit-pick my analogies all you like, but it's not going to change the fact they're looking to kill the used market by choking the supply of used games. Nobody else does that, just game publishers. They aren't special and they don't deserve special treatment. It's a business model problem they have to solve, it's not GameStop's nor the customers' fault.

-Greevar

"Paste superficially profound, but utterly meaningless quotation here."

Re: Red Dead DLC Was Released to Slow Used Game Sales

So what does it matter to them if the people who would've only bought the used copy then can't due to low supply? They're not losing out if that consumer doesn't buy the new copy because he had no intention to in the first place.

Whether it's due to the promise of more DLC or that a game takes a long time to complete, there will be a shortage of used copies available. But you seem to take issue with developers adding more content to a game to prevent the used market.

Are we to assume that used copies are always worse than new copies? If the disc can be read then what exactly is the problem? Second-hand cars have suffered from wear and tear, there is a clear difference between a second-hand game and a second-hand car. Used DVDs would be a better comparison, but because new DVDs are so cheap it's pointless to make a used DVD market.

Really the used-games market can't be compared to any other used market. It is quite unique and a unique problem.

Re: Red Dead DLC Was Released to Slow Used Game Sales

"Really the used-games market can't be compared to any other used market. It is quite unique and a unique problem."

No, that's just a cop-out. Stop trying to pretend that used games are special somehow. They're not. They fixed the games to a physical disc that is sellable and tradable. They have to accept that.

"So what does it matter to them if the people who would've only bought the used copy then can't due to low supply? They're not losing out if that consumer doesn't buy the new copy because he had no intention to in the first place."

I see, once again, you miss the point entirely. Let me make it clear to you. If people are buying used copies, then your prices are too high for those people. If you want to get them to buy new, then you need to price it somewhere they will consider the new copy a better value over the used copy. Trying to suffocate the used market isn't going to gain you any more customers; if they won't buy new now, taking away the used option won't change their minds. You're just wasting time and effort. The problem is, game companies over-value their games.

Not every game is worth $60 and the used market makes that explicitly clear. If they want more people to buy new, then they have to adjust the price to align with what the market will bear. You can't pry open people's wallets by cutting the supply of a good they want at a price they're happy to pay. If they won't buy new at $60, maybe they'll buy at 50, 40, 30, or 20 instead? You just have to find that out.

"But you seem to take issue with developers adding more content to a game to prevent the used market."

Yes, I do. They're trying to convince you that they're adding value to the game, when the truth is they're foolishly trying to force more sales of new copies without really addressing what the customers want. It completely fails on its face. It's not for the customers at all, it's for them.

"but because new DVDs are so cheap it's pointless to make a used DVD market."

Exactly! That's what they need to do with games. Make it pointless based on price vs. convenience. You're not scoring points by fighting what people want.

Bottom line: Sell the game at a price that used buyers will skip used copies for and you'll get more customers. Try to kill off the used market and you'll just spend time and money on customers you'll never have. What's more, you might even lose customers if the method you use is abusive (e.g. "project ten dollar").

They're making the game worth less to used buyers when they should be making new worth more to them than buying used. The DLC is being used for the wrong purpose. Instead of attracting more sales, they're trying to prevent sales in another market that they're not serving. You don't fight the used market, you must make new more attractive to people who normally buy used.

-Greevar

"Paste superficially profound, but utterly meaningless quotation here."

Re: Red Dead DLC Was Released to Slow Used Game Sales

"They're making the game worth less to used buyers when they should be making new worth more to them than buying used. The DLC is being used for the wrong purpose. Instead of attracting more sales, they're trying to prevent sales in another market that they're not serving. You don't fight the used market, you must make new more attractive to people who normally buy used."

That's exactly what Rockstar are doing, so you actually agree with them then?

Exactly! That's what they need to do with games. Make it pointless based on price vs. convenience. You're not scoring points by fighting what people want.

You're living in bizarro world if you really believe that games are going to come down 75% in price just to get a few more sales. They'll need to sell three times as much just to make up on the price drop. Not going to happen. Everyone wants games to become cheaper, and yes they are becoming more expensive all the time (which also means that used-titles are going up in price too).

Not every game is worth $60 and the used market makes that explicitly clear.

No, and the fact that new titles seem to drop very quickly in price confirms that. If people keep buying the new copies at full price only to trade them in afterwards so that the used market can sell the titles at minutely lower prices, then you're keeping to price of games high. The used market is helping to inflate the price of new copies.

If you want to get them to buy new, then you need to price it somewhere they will consider the new copy a better value over the used copy.

You drop the price of new copies, then the price of used titles drops. The used titles will always be cheaper. It's only when you get down to the prices of DVDs that the price difference becomes negliable (but again that's not going to happen).

Trying to suffocate the used market isn't going to gain you any more customers; if they won't buy new now, taking away the used option won't change their minds.

So they're not losing any customers through this means then, are they?

I do love your arguments, because you go to great lengths to make points against them and then later your points essentially agree with what I've posted.

Re: Red Dead DLC Was Released to Slow Used Game Sales

"That's exactly what Rockstar are doing, so you actually agree with them then?"

No, not one bit. They are not making new more attractive, they're trying to force customers to buy new by finding ways to decrease the supply of used games. That's just wrong. They're trying to get their customers to choke off the supply of used games so they can supposedly make more money. You don't do better in the market by being anti-competitive. Used buyers want to buy cheaper games, but Rockstar, and their ilk, is ignoring that and going with the "if they can't buy used, they have to buy new, right?", which is nothing but a lie and completely irrational. If it's not what they want for the price they want, they're just not going to buy it. People are not just lemmings. They don't just divert to another path blindly. If it's not meeting their price, they just won't buy it. They just spend their money on something else they find to be worth it. All that effort goes for naught.

"You're living in bizarro world if you really believe that games are going to come down 75% in price just to get a few more sales."

Who said they have to come down 75%? I said they need to come down to where people who buy used will buy new instead. If you drop the price below what the volume of sales will provide, you're just being stupid. Nevertheless, Steam sells games at huge discounts frequently and it makes everybody lots of money because it accesses an untapped market. If you want to keep the prices where they are and ignore millions of people who might open their wallets to you for the right price, then I guess nobody can stop you.

"You drop the price of new copies, then the price of used titles drops. The used titles will always be cheaper. It's only when you get down to the prices of DVDs that the price difference becomes negliable (but again that's not going to happen)."

No shit Sherlock? I thought we already covered this? Of course the used titles will get cheaper, but at some point the value of new at $X will be more attractive than the used title (which typically is missing the manual or other important items) for $Y. You have to experiment with the price and see what people will buy instead of waiting for used copies to appear.

"No, and the fact that new titles seem to drop very quickly in price confirms that."

Yet the used market still remains an issue (how odd?), so it must not be happening fast enough to satisfy those that just want cheaper games. So what do you do? Lower the price more aggressively! More people can buy new today at a price they consider fair instead of waiting for that used copy that's been beat on, missing the manual or other in-box items, and save a few bucks. Drop the price on new so it's not worth it to wait for a used copy that's potentially damaged and usually missing contents. If you don't want people buying used, make buying new today, instead of wait a few weeks (that's what most used buyers do, wait for used, cheaper copies to appear), more attractive with aggressive pricing.

"So they're not losing any customers through this means then, are they?"

No, they're just wasting resources fighting it without any substantial gain. Wait, this seems familiar to me. Oh, right! The RIAA has been fighting the same battle for year and they've done so well this way haven't they? Why would you waste your time and money fighting something that doesn't serve any benefit to you when you could just give people what they want and get *gasp* more  customers instead of refusing to supply the demand?! It makes no sense! What they're trying to accomplish makes no sense! Why would you try to prevent them from buying a copy altogether when you could just make them a better deal so that they will want to buy it?

"I do love your arguments, because you go to great lengths to make points against them and then later your points essentially agree with what I've posted."

Only in your mind and only because you're not paying attention.

There's nothing wrong with DLC and there's nothing wrong with selling it to add value to a game. There's just no reason to attempt to cut out a market segment because you don't like that they are buying and selling without you getting a cut. Every other industry (as I said before) has to compete with people who sell their goods second hand, game companies need to just shut up or make buying new copies more attractive to the more frugal gamers (which they are not doing).

Are you getting it now? Is it sinking in? People still have to wait for the more affordable copies to show up, but if you price them where they feel it's worth it, they'll buy new today! ZOMG!! That makes waaayy too much sense though! If you're going to be rigid with your price and get pissy when people buy used to save money on a game that's just not worth $60, then that's your own foolish fault.

Or, or, get this: You can move your games entirely to digital distribution and not have to worry about used games at all, because they can't sell them to someone else! Once you're there, you can provide much more attractive services than physical copies can provide (e.g. unlimited downloads, item trading, gifting, etc.). Just accept that you can't win against the secondary market, they're not your enemy. You are your own enemy, by being inflexible and over-valuing your goods.

-Greevar

"Paste superficially profound, but utterly meaningless quotation here."

Re: Red Dead DLC Was Released to Slow Used Game Sales

Greevar,

It seems like your argument is that they shouldn't be adding value to their games with the intention of making more money.  To me the fact that they're adding value (to both new and used btw) makes this a positive thing.  Yes, they hope that people will want to keep their product and then others will have to buy new copies.  They also want people to buy their DLC and to make money that way.

If publishers sell games at lower prices they need to either make games more cheaply, or sell more copies.  Likely there will be a mix of these strategies since there will always be people who will wait a little bit to buy the (even marginally) cheaper used version.  Given that, the quality of these cheaper new games will have to be lowered.  This will lead to consumers being willing to spend less on them.  Then the publishers need to sell them for less/make them more cheaply.  And so on.  Essentially this leads to the App Store.  A whole lot of not very good products at very low prices.

Instead they're opting to make hanging on to their game more attractive.  I think that's entirely a positive thing.  It's certainly better than cutting out features if you don't buy new.  Yes, they're trying to make money.  They're a business.  That is literally why they exist.

Your other argument is that they could go to digital distribution.  Which offers a number of positives in exchange for completely blocking the used market.  How is that different?  They still end up with no used copies available, therefor forcing people to buy new.  And in exchange they offer something positive (unlimited DLs, or cloud-based backups, or whatever).

At the end of the day sellers want to offer something that people are willing to pay for.  Producing DLC is one way of doing that.  So is producing high quality games.  I really have trouble seeing why you think this is a problem.

===============

Chris Kimberley

Re: Red Dead DLC Was Released to Slow Used Game Sales

Yeah, this seems to be exactly what we wanted them to do.  They're trying to add value so we'll hang on to the game instead of breaking it for people who buy it used and forcing them to pay more.  Isn't this a good way to go about it?

Re: Red Dead DLC Was Released to Slow Used Game Sales

Just as long as, like Andrew Eisen kinda said, they are ADDING value, like Undead Nightmare did.  Not giving us something that should have came with the game in the first place, like a lot of other titles are doing.

Having said that I will also often wait for boxed sets of DLC to come out cheaper, unless its a game I really love.

 
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