Used Vs New

The Mass Effect Day 1 DLC debate got me thinking about some of the issues in the games industry.  Are customers being exploited?  Are customers losing out while stuck in the middle of the publishers’ fight against used games?  My thoughts on DLC can be found here.

I can see why publishers and developers might not like used games.

New games go into the shops, with the retailer paying a fee for the product and then selling it on, making the initial outlay back plus profits.  That in itself, is fair.  However, when it comes to used games, the retailer pays the customer a small trade in fee and then re-sells the game, keeping all the income from that sale to themselves.  Although multiple customers will buy the game, often exchanging the same copy, the developer only receives payment on the first sale.

Publishers/developers get nothing from a used game sale.. all the profit on used sales goes straight to the retailer.  Repeat this a few times per new copy sold, and the retailer is making a fortune from somebody else’s hard work.

What’s more, the retailer sticks the used game on the shelf next to the new copies.. then pushes the used copy when somebody comes to buy the game.  Kotaku’s article about EB Games/GameStop includes mention of instructions to employees to deliberately position used copies in front of new copies.  When the used game sometimes has no indication of its used state other than a slightly reduced price, it’d be easy for customers to not even notice, and perhaps even think they are buying a new copy.

The publisher or developer takes all the risk in making and then marketing the game, while the retailer is only involved in the last part: the selling.  If they work with a publisher on a sale or return policy: they can throw a non-selling game back at the publisher and get a refund.. so they don’t even take any risk there either.

If I was watching somebody else make money from my work, and I could do something about it.. I damned well would!

Inevitably, the publishers wanted to do something about it, and they came up with Project $10, the online pass, the battle code, the variously locked content.  New games come with a code, while those buying a used copy need to buy one to access certain features.  As customers, we call it locked content; publishers call it a “reward” for those buying new.  It’s still content that should come with the game in most people’s eyes, though, and perhaps that’s why customers dislike it so much.

More recently, Kingdoms of Amalur: Reckoning was sold with a locked out a section of single-player content.  This met with backlash.. people don’t like the idea of single-player content being affected, but it only works the same way as locked multiplayer.  If you buy the game new, you get all the features of the game; if you buy a used game, you have to buy a pass.

I suspect the annoyance with Amalur was because the border between online pass and Day 1 DLC is starting to get blurred.. and the idea has been suggested that eventually we’ll see schemes where you barely get anything for your initial purchase, but have to unlock the rest of the game in pieces, with a fee for each one.

Clearly, customers are worried about being exploited by the online pass system.. but there’s more.  A look around at the comments on almost any article where an online pass is mentioned shows that people are still confused.  They see the “online pass required for multiplayer” and think it means they have to pay an additional fee, even when they have bought new.

On the price front, the online pass isn’t a huge deal.  If you buy new, you get everything you would have got before: it doesn’t affect you.  If you’re buying used, then you just take the cost of buying a pass into consideration when you buy a used game.. and don’t go buying used games that are only £2 cheaper than a new copy.

I will agree that entering the code is hassle, and sure, sometimes the code doesn’t work for whatever reason – but it takes a minute to type the code in, and whenever you buy anything, you run the risk of something not quite working.  That’s why we have customer services.

What I don’t like is that activation codes make it harder to share games between friends.  Like with rentals, you can get a free short-term pass to access the content.  However, this rules out swapping games back and forth between friends as short-term passes are a one shot deal.  If you’re going to buy the online pass for a game to share it.. you might as well just wait and grab a new copy in a sale!

Worryingly, it also looks like things are heading in the direction that we won’t even be able to share with members of the same household.  EA’s Battlefield 3 comes to mind here because according to their own FAQ on the website, it unlocks to ONE gamertag on a console, rather than just tying to one account and being available to all other accounts on that console.

Using Battlefield 3 as an example again.. it is no wonder customers are confused.  I really had to search for the details for this, and while the “Online Passes can only be used for one user profile” is expected on PC, I wasn’t sure it also applied to the Xbox 360 until I searched the FAQ as an Xbox 360 user.

If I purchase a game for the console, I expect both myself and my boyfriend to be able to use it.  I don’t expect us to have to buy a copy each, as we do for PC games.. but once a precedent has been set and a company is seen to be able to make a bit more money that way, others will follow like sharks scenting blood.

In response to the success of online passes (EA reported $10-15 million last year), some UK retailers came forward saying they would share part of the sale from used games, if publishers were to give them something else in return (via MCV).  Smaller retailers may well be saying that they are willing to share, but well, have they volunteered to give any of that extra profit back so far?

If the retailer dropped the price of used games, so that (price of used game) + (price of new online code) = (just under full price for new game), then the publisher would get their share from the online code, and the retailer would be taking a reduced amount of profit from the used sale.  Effectively, they would be sharing the used sales.

That isn’t enough for some, though.  Volition’s Jameson Durall complained about making no money from used sales.. but also claiming that customers are at fault, and went on to say that he hoped the new Xbox would indeed refuse to play used games, as had been rumoured.

Durall’s blog post also tried to dismiss the cost of games.. saying they were “only $60” (£40).  That actually irritated me a great deal, as it was such an ignorant comment!  That’s a lot of money to some people.  Even for those who earn decent wages.. paying £40 for every game that interests you is just not feasible.. especially when a load come out close together.

Stamping out the used market is a bad idea.  Some believe that trading drives the sales of new games, sequels and DLC.  Some people consider the resale value of their games when buying, and if you prevent them trading their games in, then they will buy fewer games.

Some only buy new games because they know can trade them in when they’ve finished, and use that money to go towards the next game.  Others buy used because they can’t afford to buy new.. though presumably they aren’t buying the latest title at £2 off, a day after launch.  While some pubs/devs might not care about those who can’t afford to buy new, the fact that they are there, buying used games, enables retailers to in turn take games from people in the first group, who trade their games to be able to afford the next new game.

I buy mainly new games, though with heavy use of the Steam sales.  Although we do buy used, this is never around launch.. the used games we pick up are several months old at least.

But what are the alternatives?  Digital retailer Green Man Gaming allows customers to trade games in for credit which can then be used for new purchases.. so there is no way that this is technically beyond the likes of Steam or Origin.

Publishers could make more use of digital distribution to cut out the middle man.. though some should certainly look at their pricing structure.  EA and THQ in particular tend to price games high and then fail to lower them as time passes; even during their sales, with up to 50% off, the price is still higher than the non-sale price elsewhere.

Whether we like them or not.. whether they are eroding our rights as customers or not.. online passes are probably here to stay.

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