DRM, Online Pass, Project Ten Dollar and the like

[Johnny]

I kinda sympathize with both sides about the "punishing second-hand buyers/offering incentive for new buyers" thing.

If you're not supporting the developer you might as well pirate it and put the saved money towards buying another game new.

Or are we supposed to feel bad about not supporting GameStop as well?

[Thursday Next]

http://www.gamesindustry.biz/articles/2011-08-15-used-game-start-up-offers-publisher-revenue-share

 

Buying Used (from here) > Piracy.

 

If GameStop and others had done this in the first place then we might not have ended up with Online Pass and the like.

[deanb]

Except despite paying publishers a cut, the games will still have the same issues as used sales anywhere else. So what's the point?

 

If it's paying more to buy in the games, and giving away a cut of it's profits to publishers then I don't see it lasting long unless it pushes it's prices up. But then people may as well pick up their used games from GAME/Gamestop, where it's also much more accessible since they can just pop in store and walk out with something instead of posting stuff about all over the place.

[Yantelope]

I kinda sympathize with both sides about the "punishing second-hand buyers/offering incentive for new buyers" thing.

If you're not supporting the developer you might as well pirate it and put the saved money towards buying another game new.

Or are we supposed to feel bad about not supporting GameStop as well?

 

This is a funny thought. It's why the whole "used games are as bad as piracy" is bunk.

[Johnny]

Eh, what?

[Yantelope]

Because basically the game developers are saying that buying a used game from Gamestop makes you as bad as a pirate, something most people would disagree with.

[Johnny]

Game developers are saying that used games sales "hurt" them more than piracy. Which is probably true. I don't think they are in general making a moral judgement against people who buy second-hand in those statements though.

[Yantelope]

...but that's the whole farce. Used game sales don't hurt anyone.

[Faiblesse Des Sens]

Since they are actually a purchased item the argument there is that they're choosing to purchase something where the developer gets no money when they could have had another sale.

[RockyRan]

Since they are actually a purchased item the argument there is that they're choosing to purchase something where the developer gets no money when they could have had another sale.

 

Although it could be easily argued that a developer doesn't inherently deserve any money when their product exchanges hands between two random people for money. To demand that is simply silly (which is what devs are doing as of late).

Edited August 16, 2011 by RockyRan

[Thursday Next]

Except despite paying publishers a cut, the games will still have the same issues as used sales anywhere else. So what's the point?

 

If it's paying more to buy in the games, and giving away a cut of it's profits to publishers then I don't see it lasting long unless it pushes it's prices up. But then people may as well pick up their used games from GAME/Gamestop, where it's also much more accessible since they can just pop in store and walk out with something instead of posting stuff about all over the place.

 

I think you missed my point. From a publisher perspective, this is getting value from used game sales, as such it is better than piracy. Had retailers done this to begin with, then we may not have had the "Project $10" issue in the first place.

 

As it is, perhaps these guys will be able to negotiate for discounted Online Pass codes or something? I don't know. Just saying that this is what publishers had wanted from second hand retailers from the get go.

[Johnny]

...but that's the whole farce. Used game sales don't hurt anyone.

Someone who is apparently willing to spend money on game X is buying it and none of it is going to the developers.

Compared to piracy where someone who may or may not be willing to spend money on game X is getting it for free and the developers get nothing.

 

Mathematically and logically, the former would have a bigger impact.

[deanb]

Except despite paying publishers a cut, the games will still have the same issues as used sales anywhere else. So what's the point?

 

If it's paying more to buy in the games, and giving away a cut of it's profits to publishers then I don't see it lasting long unless it pushes it's prices up. But then people may as well pick up their used games from GAME/Gamestop, where it's also much more accessible since they can just pop in store and walk out with something instead of posting stuff about all over the place.

 

I think you missed my point. From a publisher perspective, this is getting value from used game sales, as such it is better than piracy. Had retailers done this to begin with, then we may not have had the "Project $10" issue in the first place.

 

As it is, perhaps these guys will be able to negotiate for discounted Online Pass codes or something? I don't know. Just saying that this is what publishers had wanted from second hand retailers from the get go.

 

I didn't miss your point, as I've said before I disagree that retailers need to be doing this. I've also made a point before that I strongly doubt that stores doing things like this would change the Project $10/Online Pass/etc that's currently in use. That store is essentially worse from everyone's perspective except the publishers who most likely will still be getting the $10 and the 10% on top.

 

I just don't understand how this is meant to play out.

 

All P$10 does is instantly wipe off a fair amount of value from the product right away. And how would a 10% cut be worked out? How do you get that from people selling on Ebay or similar? If you can talk retailers into giving EA a cut of the profits and people are already used to having to pay for Online Pass n Project $10 stuff then what reason is their for EA to stop running that program? How would it retroactively work with older games?

 

Yes I understand that Gamestop & Co make significant amount of profit from used sales. But what does EA have to do with any of that? Does EA hire the staff? Rent the stores? Run the websites? EA sold their game to Gamestop for what I assume is at a profitable price. boom your money is made. If you feel you want more then raise your wholesaler price that you sell your games for to Gamestop.

[Thursday Next]

Except despite paying publishers a cut, the games will still have the same issues as used sales anywhere else. So what's the point?

 

If it's paying more to buy in the games, and giving away a cut of it's profits to publishers then I don't see it lasting long unless it pushes it's prices up. But then people may as well pick up their used games from GAME/Gamestop, where it's also much more accessible since they can just pop in store and walk out with something instead of posting stuff about all over the place.

 

I think you missed my point. From a publisher perspective, this is getting value from used game sales, as such it is better than piracy. Had retailers done this to begin with, then we may not have had the "Project $10" issue in the first place.

 

As it is, perhaps these guys will be able to negotiate for discounted Online Pass codes or something? I don't know. Just saying that this is what publishers had wanted from second hand retailers from the get go.

 

I didn't miss your point, as I've said before I disagree that retailers need to be doing this. I've also made a point before that I strongly doubt that stores doing things like this would change the Project $10/Online Pass/etc that's currently in use. That store is essentially worse from everyone's perspective except the publishers who most likely will still be getting the $10 and the 10% on top.

 

I just don't understand how this is meant to play out.

 

All P$10 does is instantly wipe off a fair amount of value from the product right away. And how would a 10% cut be worked out? How do you get that from people selling on Ebay or similar? If you can talk retailers into giving EA a cut of the profits and people are already used to having to pay for Online Pass n Project $10 stuff then what reason is their for EA to stop running that program? How would it retroactively work with older games?

 

Yes I understand that Gamestop & Co make significant amount of profit from used sales. But what does EA have to do with any of that? Does EA hire the staff? Rent the stores? Run the websites? EA sold their game to Gamestop for what I assume is at a profitable price. boom your money is made. If you feel you want more then raise your wholesaler price that you sell your games for to Gamestop.

 

The bit you are missing is the conditional clause: Had retailers done this to begin with publishers may not have gone down the Project $10 route.

 

That said. This could easily work if, in exchange for the 10% revenue that the retailer gives to the publisher, the publisher gives the retailer Project $10 codes at a discount to include with the game. That way purchasers still get the full product at a discount and get to feel warm and fuzzy about supporting developers, the retailer makes a profit, the content creators get paid what they think is their due and people who trade in games get more money. Everybody wins.

 

If publishers raised the wholesale price of games it would just be passed on directly to the consumer. No publisher wants that. They don't want customers to pay more, they just want to see more of the money their customers are paying.

[Yantelope]

@Johnny, Nobody is being harmed by the used game sales though. The only thing that has happened is that technology now allows them to banish or diminish used game sales and they reap greater profits.

 

@TN, It doesn't matter what cut companies like Gamestop give publishers. As long as it's not 100% then publishers and developers will not be happy.

[deanb]

People who trade in games would get less money. I doubt that if the cost of the game includes a cut going to the publishers the used prices would be much cheaper than what GAME/Gamestop would be selling them for given they won't be paying a cut. Unless the game is made by Bioware or DICE there's not much guarantee that the cut would go towards supporting developers since EA have closed or dissolved 5 studios the last 5 years alone. Pandemic was closed a month before their final game was even released. And if the retailer is paying 10% cut towards the publisher on used sales while they will probably still be making a profit that's a hefty overall cut to that.

And if giving a cut would only get a discount on project $10 stuff it just further confirms that EA would have no intention of dropping those schemes even if every retailer was to shift towards 10% cuts.

 

Nobody wins but the publishers bottom line.

[MasterDex]

@Johnny, Nobody is being harmed by the used game sales though. The only thing that has happened is that technology now allows them to banish or diminish used game sales and they reap greater profits.

 

I don't know if you can say nobody is harmed. The used market these days is different to how it was a few years ago. Gamestop undercuts publishers and developers on Day 2. When console games rely so much on front-loaded sales, they're losing profits to Gamestop and when the figures come in, those lost profits could make the difference between a greenlit sequel or an IP locked away in limbo.

[Thursday Next]

Ok, perhaps you didn't read the article.

 

PostalGamer will give trade in sellers 30% more than "The Corner Retail Store". <-- Person trading in wins.

PostalGamer will give 10% of used game sales to publishers. <-- Publisher wins.

I haven't seen a price list yet, but let's say they charge the same as GameStop pre-owned.

 

If you trade in for example CoD W@W at Gamestop for $10. They sell it pre-owned for $24.99. That's a $14.99 (150%) profit, without all the overheads and stuff.

 

If you trade in the same game at PG they give you $13. PG sell it for $24.99 and kick $2.50 up to the publisher. That's still a $9.50 (or 73%) profit again, before overheads and such. Hell, they could undercut GameStop and sell at $21.99, give $2.20 to the publisher and still get over 50% profit.

 

EDIT: http://www.postalgamer.com/password for source on the 30% to trade ins.

Edited August 16, 2011 by Thursday Next

[deanb]

Yeah I read the article. I was talking more about Gamestop. Who wouldn't be increasing their trade in prices while also having to give a cut to publishers.

 

As for that other company, what happens when the company collapses? As you've said your profit calculations are without any of the overheads. One of which will be the free posting on both trading in and delivering games. That isn't going to be cheap. Their maths puts the 10% at "$3-5" which means games retailing for $30-$50. Their calculation also puts it at $500million towards publishers within 4-5years. That means an overall revenue of $5billion. Which is pretty damn high for a start-up. And given their mission statement suggest wanting to stop the publishers abolishment of used sales I don't think a small discount on P$10 codes is really what they're after. I'm failing to see how postalgamer could form a "mutually beneficial relationship" with companies when several of them are actively trying to destroying their business model of selling used games. I have a feeling the mutually beneficial relationship with EA will go as far as EA happily accepting the 10% cuts and sales metrics and stop there.

 

Every part of their business model just seems to revolve around making less money than everyone else selling used games. And as publishers go further and further to clamp down on used sales it'll just become more and more unprofitable to run.

[Thursday Next]

I don't disagree for one second that PG are going to be less profitable than GameStop. I will say that PG most likely will have much lower overheads than GS due to a lack of brick and mortar stores. I still think that PG will be profitable though.

 

The biggest hurdle is, as has been pointed out elsewhere, publishers being seen as firing a shot across the bows of one of their major retailers.

 

As has been pointed out earlier in this thread, the cost to EA of an Online Pass is questionable at best, so for a 10% kickback there is no reason for EA not to hand out Online Passes to PG, if only to encourage more people to traffic used games through PG and increase EA's used game revenue.

 

EDIT: Too much "they" not enough proper noun.

Edited August 16, 2011 by Thursday Next

[Yantelope]

@Johnny, Nobody is being harmed by the used game sales though. The only thing that has happened is that technology now allows them to banish or diminish used game sales and they reap greater profits.

 

I don't know if you can say nobody is harmed. The used market these days is different to how it was a few years ago. Gamestop undercuts publishers and developers on Day 2. When console games rely so much on front-loaded sales, they're losing profits to Gamestop and when the figures come in, those lost profits could make the difference between a greenlit sequel or an IP locked away in limbo.

 

How do Gamestop's practices differ now from those a few years ago?

[Johnny]

@Johnny, Nobody is being harmed by the used game sales though. The only thing that has happened is that technology now allows them to banish or diminish used game sales and they reap greater profits.

 

Every dollar that goes into used games sales are dollars that could have gone to game developers and publishers.

 

Do note that I'm not agreeing with online pass, project ten dollar or anything like that though. I think it affects devs and publishers negatively, but it's not like I think the devs/publishers should have a right to a part of the cash every time their product changes hands.

I think Valve/Steam has the right idea about what to do about customers willing to buy the game but not at full price... =)

[Yantelope]

I think steam is a great example of how digital distribution has clearly cut costs and eliminated the second hand market. The fact that publishers will sell their games at the sub $10 level or offer their entire catalogs for $60-100 is a bit insane. If publishers came out and said "we're locking you out from ever selling the game again but we're cutting the price by $20" I think everyone would be just fine by that. That's essentially what they've done on steam except with more steep discounts.

[deanb]

Just to take the heat off Thursday a bit:

 

http://forums.eidosgames.com/showthread.php?t=119397

 

What the fuck do they think this is? A console?

[Yantelope]

So... I bought my copy from GMG already. I'm going to be a bit on the upset side if it wont work.

 

From the GMG Staff: "We have assurences from the publisher that all keys bought will not in fact be region locked in this specific instance. My colleague Rob will post a more in depth response as soon as we can

 

We're rather busy in the GMG office this morning!

 

Games Com!

 

"

 

"They(keys) still work everywhere.

 

They will continue to work everywhere, and we have 100% confirmation from the publisher from this.

 

There was a while yesterday when we were told there would be lots of different versions but the publisher emailed us last night to confirm this would not be the case! "

Edited August 16, 2011 by Yantelope