Friday, April 13, 2012

Debunking the Real Cost of Used Games

  Since the rumors have been surfacing about the next generation consoles, It seems that many developers have been on the bandwagon about a potential means of ending the used game market, particularly a means of stopping retailers like Gamestop from amassing large sums of money for used versions of their games. This can be seen in 's article  The Real cost of used games , which seems to go in depth to the extent of how bad used gaming is for the industry at large.On first glance, the information seems like it could be a valid threat for anyone who seems to have an interest in wanting to develop games, but once you delve deeper into what's being said, you tend to find an incredible amount of inconsistencies present.

Let's take a look at some of what is said in this article, and how ass-backwards the logic surrounding these points are.

You probably think that was rather harsh of me to state that someones opinions are "ass backwards". If you've been a reader of this blog for a while, you know that I don't make such bold proclamations without having some shred of evidence to defend my own views. That's just how I roll (Logic is my shield, Sarcasm is my Sword ).  In this case, I find the article itself sounds very emotionally driven and heavy handed in it's own bias. Before I get deeper into that, let's actually post the points of the article I had qualms with, with my own personal commentary.

Over the past few weeks there have been a number of articles appearing on websites across the globe fearing the concept that Sony and Microsoft are going to use, as GamesIndustry International itself put it, "the Nuclear Option" by blocking the ability to play used games on their next generation of hardware. Without fail, each and every one of these articles seems to take a damning view of this concept; even industry "analysts" like Michael Pachter have weighed in on what cost this would have to first party and third parties alike and how it would damage the industry, going as far as labeling the concept "evil". In truth it is nothing of the sort and what each and every article fails to account for is the REAL cost of used games.

XXSP:  Do keep in mind the term "Nuclear Option" is used because the end result is an end to opposition in favor of a scorched earth policy of sorts. Sure, peace is achieved, but at what cost?  If destroying the used game market is a means of achieving peace, then the end result could possibly account for a loss of countless sales. If there is no safeguard to defend the public from what they feel is being "gyped" then why would people even bother to purchase anything? Retailers usually back their products up with a "money back guarantee", but Developers would be hard pressed to do anything of that nature. The reality is some developers, and to a grander extent, publishers really think that what they're delivering is the end all be all of entertainment products. The reality is most likely not the case at all.

I've been in this industry for 25 years, I've run development (internal and external) for seven different publishers. Used games were never, have never, been an issue to any of them. Today that actually still holds true; publishers don't hate used games, but they do hate the practices of GameStop and those that followed to force used games upon their customers - if you want to hear about nuclear options, GameStop fired theirs first. A colleague of mine brought to light how bad this has become just the other week. He went into his local GameStop and was point blank REFUSED the option of buying the game he went to get new. After pressuring the sales assistant for a few minutes he finally got his new game - but only after the assistant got his manager's approval to sell it to him. That's the state of retail today, and it's not healthy for the consumer at all.

XXSP:  Publishers don't hate used games at all.. except for the fact that buying games new does help provide a record for sales figures, increases chances of retailers ordering more copies of an out-of-stock title, and in some cases provides the publisher with royalties. Gaming Blend's article "Top Misconceptions of the Gaming Industry" also states that new game sales are just better for the bottom line, here's the blurb on that

"The other reason publishers want gamers to buy new has more to do with strengthening their portfolio, since new sales help with both post-launch marketing and annual profit margins, and used sales don't. However, there are programs from some used game outlets that help send money from used game sales directly to developers, such as Switch Games. So it's not as evil as most industry folk would lead you to believe."
 In terms of Gamestop removing the games from new cases, thus making them instantly used. It's a well known issue, and I'm not saying that Gamestop isn't at fault for such shady dealings. The practice itself raises the risk of scratches, and other issues. As a former employee of Gamestop, I can tell you that's not the case with every game. Preorder releases are virtually untouched, and in many cases the gamers recieve the games brand new and in it's original wrapping. If it's really that big of a deal, you can go to other retail chains like Wal-Mart, Best Buy (who also sells their games used), Target and the like and get the games without having to worry. The reality is that this clearly isn't the issue. The real issue is the fact that people are going to Gamestop, Gamers and other used game retailers to get the games they want, but at a far more reasonable price, than what it's being offered new. At least, that's the reason for me shopping used for certain games.

The real cost of used games is the damage that is being wrought on the creativity and variety of games available to the consumer, and it's directly a result of these practices. Developers and publishers alike now spend many hours working on constructs, systems and game design elements to try and eliminate the churn of a game. Whether this be online passes, copious amounts of DLC, or gating mechanisms, one thing is for sure - it doesn't benefit the consumer. Do I really want to have to type in a token code when I buy a game? No, you've just added annoyance and friction to my experience. But more to the point - do I really want talented studios spending their time designing and implementing this rather than polishing the game? No, I really don't. But there's a much bigger, much more expensive way of trying to stop churn and it's the one that everyone has flooded to.

XXSP:  Let's not even go there with DLC.  In most cases, DLC is considered used for primarily "Cash grab" purposes. To me that seems like there's some group of men sitting in a room thinking "hey, how can we get as much money out of this game post production as possible", and usually this seems like it's the case. Super Street Fighter IV Arcade comes to mind here (to a greater degree Street Fighter X Tekken can fall into this example as well); I purchase the game new from Wal-Mart, download the patches that were asked of me by the game developers,  and find out that for $16.00 more,  I can have the last four characters that were thrown in to justify a patch that fixes balance issues. Factor in the various useless costumes that Capcom thinks that i'm interested in and will buy for the sake of getting every trophy in the game, and you apparently got rich off of every sucker who bought into the deal. That has nothing to do with used games, so don't even try to throw that in as incentive to push for a fully digital future. The reality is that developers, and publishers want as much money from the consumer as possible, and that has more to do with the fact that now they can get away with it, as opposed to previous generations.

 Opposed to Cliff Bleszinski's statement,  I seriously doubt the trend of DLC in games would ever go away on a fully digital landscape. That would be like saying piracy would go away if this were to happen, and any savvy person knows that'll never happen.
The real cost of used games is the death of single player gaming. How do I stop churn? I implement multiplayer and attempt to keep my disc with my consumer playing online against their friends. It works wonderfully for Call of Duty - no doubt it can work wonderfully for me. The problem is, at what cost? Countless millions of dollars would be the answer. Let's take a great example, one of my favorite game series released on this generation - Uncharted. What on Earth was the point of taking the completely single player experience of Uncharted 1 and bolting on an entirely new game to Nathan Drake's second adventure? The multiplayer game (brilliantly executed as one would expect of the Naughty Dog team) had absolutely nothing to do with the single player experience, and from my perspective had absolutely zero interest from me as a consumer, and I'm not alone in that. I hate to think what it cost to make, refine, balance and tune - but I can guarantee it added a whole lot of zeroes to the budget, and made the P&L look a lot more challenging. And it's all aimed at stopping the game churn. Now a lot of people probably derived a lot of enjoyment out of it, and in Uncharted's case it seemed to have no material effect on the quality of the single player experience - but I'd say Uncharted is most certainly the outlier in this because few people have the resources of Sony and Naughty Dog.
The real cost of used games? Take a look at the most recent Ninja Gaiden game. Why does that multiplayer mode exist? What effect did having to build it have on the single player experience? There is no reason for the multiplayer game to exist; it makes no sense in NG's universe. No doubt, the budget and resources for the team weren't massively extended when the request for multiplayer was added, so it absolutely must have materially impacted the people building the core game. I'm not singling out Ninja Gaiden here, as the number of games that have gone the same route over the past couple of years is substantial. But is it good for the consumer? Absolutely not - in general they're getting a poorer single player game. But again that's the tip of the iceberg.

 In all seriousness, let me say that I find that statement to be incredibly bizarre in logic and in rationality. The advent of online based multiplayer and matchmaking is what pushed developers to produce more games that feature this. The result is a push for more multiplayer based gaming and less single player based games. Used gaming has little to do with this. So yes Uncharted having a multiplayer mode might not seem right, but it extends the playtime of your game, and keeps the consumers entertained while finding value with the game itself. If there is no value in a game, obviously you're going to feel like the game is either too short or lacking and want to get rid of it. Let's continue to connect the dots here; So if i were to get rid of a game, and i wanted to possibly use the money to get another possibly better game what would i do? Sell it to a used game retailer, obviously.

Blaming production costs on used games is clearly not the way to go, because in all honesty the tweaks and balance adjustments are solely for the end user, and if you can't satisfy them, then clearly they're not doing their job.
The real cost of used games? Let's take someone like Tim Schafer. Tim works his genius in the video game medium primarily through selling fantastic stories in fantastic worlds, and primarily these experiences are single player games. Tim walks into publisher X and puts his latest, greatest piece of work on the table with a decent mid-range budget. It doesn't stand a chance. What you'll hear in response to that is that publishers are too risk averse. This simply isn't the case; publishers have to deal with P&Ls in reality, and they know the minute that pitch has finished that Tim's game will sell a few hundred thousand copies and then get endlessly churned. In the end, Tim has gone on to write smaller games, digitally delivered and is now using Kickstarter to fund his latest and greatest product and I think that's fantastic. Do I think it's fantastic that I'll no longer be able to buy another Brutal Legend style Tim Schafer game? No I don't. Is that beneficial to the consumer? Absolutely not.
 XXSP: I've been following the whole Tim Schafer / Kickstarter case, and I found it to be fantastic. If he wants to create those games digitally and distribute them as such then fine. Brutal Legend for all it's awesomeness, failed to deliver (The same could be said for Psychonauts despite it's cult love and awesomeness), and that's a reason for why you might not see another console game of that caliber from Double Fine. Industry gaming is all about pleasing the publishers and in turn the investors, and if you can't make back your investment, then second chances are highly unlikely (not impossible, because for some reason someone is out there greenlighting them).
The real cost of used games? The variety of games out there is shrinking. Existing franchises that have been successful on a single player formula are being redesigned out of their element to introduce multiplayer features. Resident Evil is now a tactical shooter. Resident. Evil. Some single player games naturally have been launched with great

XXSP: Again, you're creating a trans-continental bridge of ignorance here. Used games have nothing to do with variety shrinkage. Success is mainly the cause of more like-themed games being produced. Think of the constant stream of  Plastic Guitar games the were produced because of the success of Guitar Hero, think of the outrageous number of shooters that exist because of the popularity of the FPS. Used games only helped in getting those games into more hands, to increase popularity. The existing games change genres in order to stay relevant to these changing tastes. So now trending can be attributed to used game sales? If that's the case then can I blame skinny jeans on used game sales? Cause if that's the case then yeah burn it down.
success in the past year or two; Rockstar have had such fortune with Red Dead Redemption and LA Noire. Both these games take a different tact to combat churn - they're absolutely huge and take weeks to complete. Guess what? Making those games was extraordinarily expensive. The risk for the publisher on such products is enormous. So we now have a situation where risk is being eliminated from a publisher's purview. You simply cannot afford risk, since the console business has become a complete hit or miss scenario where hits are well rewarded but misses are potentially crippling. Is less choice and less variety of software beneficial to the consumer? Absolutely not.
 XXSP: Risk aversion is common these days. The failure of a game can make or break a company depending on how much is invested, so to decrease risk aversion we tend to go the easy route, and make games we know are going to sell.  That's not even a used game related issue, but that is a cheap means of pleasing the customer and playing the safe route.
The real cost of used games has been the destruction of the mid-tier publisher and the elimination of many an independent development studio who in the past conducted work in that space. With next generation budgets leaping yet again only the 'mini-publishers' - such as Epic, Insomniac, Bungie - can possibly survive externally to an actual publisher. Beneficial to the customer? No.

XXSP:  I guess services like Steam aren't doing anything for the Indie developer, as well as the App Store, or even Nintendo's DS Ware, and Wiiware services, or even XBLA and PSN for that matter. Nintendo , from what i've been reading is developing an entire "App Store" - like service around Indie developers for the Wii U, so there are steps being taken to allow them room to grow and thrive. Unless I'm just incredibly dumb and completely lied to myself in doing the research.

The rebuttal of course is usually the same. Used games fuel new game sales; this is GameStop's response and some buy into it. Of course, in reality it's pure conjecture without any evidence. If used game trading fueled new game sales then when used game trade-ins became the new standard a few years ago new games sales should have spiked. Of course they didn't; in fact game sales have stayed mostly flat or actually declined. The causation of that is primarily because not only is the GameStop line a complete fallacy, there's actually a worse truth, which is game churning isn't a one-off second hand thing but a multiple of a multiple. New game gets returned for used game which gets returned for used game which gets returned for used game. It's not like GameStop is pushing new game sales when I bring the first game back. They push enough pre-orders of new software to satisfy their churn on used.

XXSP: Or maybe the new games that were returned were utter shite? *shrugs shoulders*. Pre-sales are a big part of Gamestop's revenue, but brick and mortar stores, and sites like Amazon do about the same. But I'm sure you're just standing in front of Gamestop at this point yelling "ALL OF MY HATE!!" and shaking your fist in protest because it's the one that gets the most notice in gaming media.
I was a student once, albeit briefly - I was certainly a kid once - and when I bought a game the value of it to me was far more than the disposable entertainment construct that surrounds games today. I played those games to death. Because the second rebuttal is that without trade-ins people can't afford games. But you know what? I've grown up, and so has a large part of our user base. We don't necessarily sell to "kids" anymore. We sell a lot of product to adults with decent disposable income - people who will find a way to buy Skyrim, Saints Row : The Third, Assassin's Creed, Battlefield 3, Batman and Call of Duty in November. Look at the numbers, they did. As for the kids, well, those over 17 will find a way too.
 XXSP: I was a student and a kid once, as well, and I had people to teach me how to properly perceive things. Notice I said properly perceive, and not to just see something i dislike and completely fashion an argument from thin air and my anal cavity.  I'm an adult, and I have bills, and responsibilities now. Gaming for me has gone from first to somewhere between third and forth in my list of obligations, and that's coming from someone who writes about games. I don't normally have the time to rush out and purchase every new game that comes out, lest I give up my apartment and life to rig a generator to a cardboard box in order to play whenever i want. I have a disposable income, but it's not going to be stuck on playing 60 dollar games with DLC costs of anywhere between 5 to 15 to 20 dollars. I might be lowly consumer, but I am definitely not a walking wallet, nor do i have an arboretum filled with money bearing trees out back.

But of course to you, this is only people who need to grow up and shell out money for every game they want. Four games come out that you want at 60 dollars a pop, and you just go right to the retailer and buy them at full price, with no regrets. If you can do that, than more power to you. I was taught to be financially responsible and to shop around to find the best price for my dollar. So comparing us both, I feel like I'm the one coming out on top for saving money and getting what I want.
So personally I hope and would actively encourage Microsoft and Sony to embrace the "Nuclear Option" and put an end to this. Give us no used games, give us digital access to software on the day it launches to retail. I don't think we'll see even a minor drop in sales; in fact, I think we'll see it rise. Oh and don't worry either of you, I'll buy my Durango or Orbis from, or if I have to.


The strange thing about this debate, is that first, and foremost you have to understand that used game sales have been around for years. From the recycled games and music kiosks at the mall in the 80's to EB, and Funcoland in the 90s. Even thrift stores have their own stores that sell used movies and games. So in some strange attempt to want to cripple Gamestop you'd be hurting the smaller stores that make a living on used games, and for what?  So you can get your digital landscape future where you're forced to purchase and repurchase the same games every console cycle because a company will stop doing backwards compatibility?

 Sony is already getting rich off of selling their PS1 and 2 library to people who can't play the physical copies on the current hardware. That's not right, but they're going to do whatever it takes to recoup their losses from their past failures, and if that means forcing you to buy games you already own then so be it. Microsoft will do the same as well. Imagine a future where the Richard Brownes of the world have their way and you can't get used games anymore. Then think about the games you missed out and how once those physical copy games go out of print there's little to no way for you to get a chance to even hunt for these games of generations past (Well they could sell them digitally, but that's clearly based on popularity i'm sure). Would the answer then be that we just go the opposite direction and just aim for full scale piracy? If that's how the future is going to be, then the gaming industry as we know it is incredibly screwed.

Game on.

1 comment:

  1. Another point is that their use of Call of Duty as a game that uses multiplayer as a way to extend game play is negated by the facts that: CoD's single player is notoriously short and horrible; as CoD releases a new game EVERY year, why would they want you to play Black Ops again when they have Modern Warfare 3 to whore out to you?