Xbox One

[DarkeSword]

yeah trying to crush the used games market is kind of a shitty thing to do in a recession

The existence of the used games market is what keeps the prices of new games so high.

When the used games market disappears, you will see retailers and publishers respond by lowering prices, because they have to match what people are willing to pay. Right now they can't match that because used game prices will always be able to undercut new game prices.

Stores like Amazon, Best Buy, Walmart, and Target often offer discounts and deals on new games because, for the most part, their business isn't based on a pre-owned library. Amazon and Best Buy have trade-in programs, sure, but neither of them match the scale of Gamestop's, nor do they base their entire business model on them.

Have you ever seen a specialty store like Gamestop have sales on new games? No, of course not. They don't do it. The only sales they ever have is on their pre-owned library. But when that library disappears, they'll be forced to start offering discounts and pricing competitively, because that's the only way they'll be able to capture consumers.

Look at the PC games market. For all intents and purposes, there is basically no used games market. Digital disto has basically eradicated that. And yet, are games prohibitively expensive? We're all familiar with the deep discounting that Steam does, and other digital retailers often follow suit. Even the new, "unused" PC games are relatively cheap, and it's usually only the multi-platform releases (i.e. the games that Gamestop can influence with publishers over) that are initially expensive.

I realize it's hard to swallow, but the used games market isn't just bad for publishers and developers, it's bad for consumers too. It's only good for retailers; specifically, the one or two retailers that have their massive trade-in programs (like Gamestop).

[Ando]

the used games market isn't just bad for publishers and developers, it's bad for consumers too.

You raise some excellent points here; ideas I'd actually never thought of before.

That being said, though, I feel like the way that Microsoft is going about it is flawed. Obviously it can't yet be said for sure what Microsoft's plan is regarding used games, but if they are indeed prohibiting the ability for me to move my games independently (i.e. selling or giving them directly to people, or even just letting a friend borrow them), then I don't see how that can be good for the consumer. Other forms of media don't have that level of blocking and they seem to be doing fine, price-wise (aren't new albums usually a pretty reasonable $10~15?).

[Doulifée]

The existence of the used games market is what keeps the prices of new games so high.

When the used games market disappears, you will see retailers and publishers respond by lowering prices, because they have to match what people are willing to pay. Right now they can't match that because used game prices will always be able to undercut new game prices.

Stores like Amazon, Best Buy, Walmart, and Target often offer discounts and deals on new games because, for the most part, their business isn't based on a pre-owned library. Amazon and Best Buy have trade-in programs, sure, but neither of them match the scale of Gamestop's, nor do they base their entire business model on them.

Have you ever seen a specialty store like Gamestop have sales on new games? No, of course not. They don't do it. The only sales they ever have is on their pre-owned library. But when that library disappears, they'll be forced to start offering discounts and pricing competitively, because that's the only way they'll be able to capture consumers.

Look at the PC games market. For all intents and purposes, there is basically no used games market. Digital disto has basically eradicated that. And yet, are games prohibitively expensive? We're all familiar with the deep discounting that Steam does, and other digital retailers often follow suit. Even the new, "unused" PC games are relatively cheap, and it's usually only the multi-platform releases (i.e. the games that Gamestop can influence with publishers over) that are initially expensive.

I realize it's hard to swallow, but the used games market isn't just bad for publishers and developers, it's bad for consumers too. It's only good for retailers; specifically, the one or two retailers that have their massive trade-in programs (like Gamestop).

interesting view but that raise another problems.

° On pc we have choice in where we buy stuff (steam, gog, etc) on console not so much it's a monopoly only one store to go.

° The conservation of old game and your ability to replay them as time go. So when microsoft will launch is next-next-gen machine what will happen with all my old collection? if authentication server close?

[Gario]

There's also the issue that for PC games, Darkesword, there is virtually no more physical distribution, so I don't think that it's the lack of used games that drop the prices down, but more that there is virtually no retail expenses that need to be covered (and, in turn, being able to set your own prices to cover only your game and licencing costs).

While I agree that prices will go down a little across the board (a little), I doubt you're going to get anything close to the steam/gog/PC dl'ing prices that you're referencing by merely abolishing the used game market.

[DarkeSword]

There's also the issue that for PC games, Darkesword, there is virtually no more physical distribution, so I don't think that it's the lack of used games that drop the prices down, but more that there is virtually no retail expenses that need to be covered (and, in turn, being able to set your own prices to cover only your game and licencing costs).

While I agree that prices will go down a little across the board (a little), I doubt you're going to get anything close to the steam/gog/PC dl'ing prices that you're referencing by merely abolishing the used game market.

I'm not saying they will. All I'm saying is that the market will respond to what people are willing to pay.

[Brandon Strader]

I hope it responds. x_x

I tell you, prices of everything gaming-related is too darn high these days.

[The Coop]

I personally don't think the prices for games will drop at all. Remember when game companies justified the cost of $60 games over $50 ones back when the 360 and PS3 were new, by saying how much longer the development cycles were, and how much more they had to put out to make them? Now, part of that $60 cost is blamed on making up lost money from the used game market, part of it on piracy, and so forth. Digital distribution was pimped by them as being so much faster and cheaper, but the digital games still cost the same as the retail ones, don't they? And once again, it's to make up lost revenue from the used games/piracy/whatever. It's all about scapegoats, and not stating the real reason; that they want to charge that much, and people keep willingly forking out the cash for those big (supposedly) AAA titles at launch. Until that changes, and people say "fuck this" and stop buying games at those $60+ launch prices, the costs for the players won't go down at all.

Of course, knowing the bigger game companies today, they'd just blame those low sales figures on piracy and used games, and then jack the price up another $10. And frankly, if the perfect DRM was invented that stopped piracy, and the used game market vanished, the game makers would come up with another reason to explain their $60 games.[/cynical]

Edited May 31, 2013 by The Coop

[KyleJCrb]

I'm with The Coop: I don't trust that Microsoft or Sony will drop the residual value or packaging costs from the price of their games whatsoever. It's possible with PC games because there are various online retailers vying for our dollar, but when each console is practically a monopoly unto itself with only one publisher providing the content and reaping the benefits, there will be no reason for them to drop prices and have huge sales like Steam, Amazon, or GOG. Console consumers have been conditioned long enough to accept that a new game always costs $50-$60, and there is no way any system manufacturer is going to be willing to give up that revenue stream as long as people will cough up the cash.

[Thin Crust]

Do you think it would make a difference if digital downloaded games were priced at $55?

[Brandon Strader]

Do you think it would make a difference if digital downloaded games were priced at $55?

Green Man Gaming knows how to do et. Letting you pre-order brand new, high-profile games for anywhere from $35 to $45

It works, it sure does.

[Sixto]

i never agree with pig. ever.

ever.

except right now. gmg es bueno. that's where i get all my preorders for cheap

[Brandon Strader]

I don't know how accurate this is, but it's scary as hell.

I have my webcam aimed at the wall most of the time.

This does not seem like something a reasonable person would bring into their home.

[DarkeSword]

That bit about restricting access to paying viewers only is complete and utter bullshit.

[Toadofsky]

That bit about restricting access to paying viewers only is complete and utter bullshit.

I think it was reported they filed a patent for it, it's incredibly stupid and sadistic no matter if it's real or not.

Anybody who thinks game prices will be lower when they cripple those "mean ol used game stores" is delusional. When they've been nickel and dime-ing gamers for anything they can pull, it's hard to believe that companies who squeeze every ounce of profit and work they can get off of developers will somehow give back to gamers out of the goodness of their cold steely hearts.

companies need to reassess how they make games and how to do it without spending good awful amounts of money. they put themselves into this position. They had every chance to go after used game sales in the past and they choose to do nothing. That incompetence is their fault, and the consumer shouldn't have to be punished for their failures.

[Garrett Williamson]

I don't know how accurate this is, but it's scary as hell.

I have my webcam aimed at the wall most of the time.

This does not seem like something a reasonable person would bring into their home.

I don't even know why I'm still on this forum. And I created it.

I'd love to see this plan backfire so the company totally gets hacked. I don't know how that would happen, but it'd be funny.

[Brandon Strader]

I'd love to see this plan backfire so the company totally gets hacked. I don't know how that would happen, but it'd be funny.

I don't think that'd be cool because it's the customers who would be the victims of a hacking... personal information and credit card numbers all over the place...

[DarkeSword]

I think it was reported they filed a patent for it, it's incredibly stupid and sadistic no matter if it's real or not.

Anybody who thinks game prices will be lower when they cripple those "mean ol used game stores" is delusional. When they've been nickel and dime-ing gamers for anything they can pull, it's hard to believe that companies who squeeze every ounce of profit and work they can get off of developers will somehow give back to gamers out of the goodness of their cold steely hearts.

companies need to reassess how they make games and how to do it without spending good awful amounts of money. they put themselves into this position. They had every chance to go after used game sales in the past and they choose to do nothing. That incompetence is their fault, and the consumer shouldn't have to be punished for their failures.

It's not delusional. It's economics. And it's not about companies "giving back" or having anything to do with feelings.

When a product is expensive and there's no option to buy a cheaper, used copy, that product will not sell as much. Less people will buy, because they are not willing to pay the higher price. They will wait for a discount or price drop. That means publishers and retailers will be making less money than they used to.

Publishers will respond to this by adjusting the MSRP of the product, and retailers will respond by having sales. When you can't sell a product because it's too expensive, you lower the price. That's one of the most basic rules of economics.

Also I'm not sure what you mean by "they had every chance to go after used game sales in the past and choose [sic] to do nothing." What could they have done in the past to address used games that they aren't trying to do now? How would you, as a publisher, monetize second-hand sales of your products?

[Native Jovian]

When a product is expensive and there's no option to buy a cheaper, used copy, that product will not sell as much. Less people will buy, because they are not willing to pay the higher price. They will wait for a discount or price drop. That means publishers and retailers will be making less money than they used to.

That's one interpretation; the other is that used games provided price competition for new games, so publishers and retailers had to keep their prices somewhat reasonable, or very few people would buy new games, since they'd all be waiting for used ones to hit the market. If that's the case, then eliminating used games will cause the price of new games to rise, since there's still the demand for games but the downward pressure on prices exerted by the used game market is gone.

Which scenario is true depends on how much demand there is for games. If there's no way to get cheap, used games, will people stop buying them, or will they just buy all their games at new-game prices? Obviously the answer is "some of both", but which one is the dominant shift in the market will determine whether new games become more or less expensive.

Or just if the Xbox One suffers in comparison to the Wii U and PS4, assuming they don't pull similar used game shenanigans.

[lazygecko]

Used games for consoles are part of a larger ecosystem. All the average, console-focused game consumers I'm familiar with largely finance their buying habits by re-selling their old games. I'd bet that without a second hand market, overall game sales would decrease significantly. Game prices going down thanks to no reselling seems like an overly optimistic outlook. I don't think publishers nor retailers would start thinking about that before some serious damage is done to them.

[Gario]

When a product is expensive and there's no option to buy a cheaper, used copy, that product will not sell as much. Less people will buy, because they are not willing to pay the higher price. They will wait for a discount or price drop. That means publishers and retailers will be making less money than they used to.

Um, actually because of the fact that used games don't go into the developer's pockets at all, merely shutting down the operation would lead to a significant increase of profits due to the monopolization of the market, even if they kept their prices the same. At worst, they'd be breaking even (I'd be banking on the first option, though), but there would be absolutely no loss, as you're implying.

I understand why they might (might) lower prices (if that brought in a larger profit than normal - which it might not, if the prices don't recoup production costs with the increased sales), but to assume less people would buy a new game because the used game market went under doesn't make too much logical sense.

[Crowbar Man]

I severely doubt that prices will drop just because publishers have more control over the used market and/or destroy it. They will just keep inhaling the new-found profits and never look back. Expecting them to do anything consumer friendly at this point is pretty unrealistic. Unless the market completely buckles, prices will stay where they are.

Green Man Gaming knows how to do et. Letting you pre-order brand new, high-profile games for anywhere from $35 to $45

It works, it sure does.

GMG is on the PC where there is lots of competition to keep prices low / reasonable. WIth XBLA / PSN there is no competition. There isn't any reason to lower the price. I wouldn't expect crazy Steam-like sales

Edited May 31, 2013 by Crowbar Man

[Melbu Frahma]

I'm with The Coop: I don't trust that Microsoft or Sony will drop the residual value or packaging costs from the price of their games whatsoever. It's possible with PC games because there are various online retailers vying for our dollar, but when each console is practically a monopoly unto itself with only one publisher providing the content and reaping the benefits, there will be no reason for them to drop prices and have huge sales like Steam, Amazon, or GOG. Console consumers have been conditioned long enough to accept that a new game always costs $50-$60, and there is no way any system manufacturer is going to be willing to give up that revenue stream as long as people will cough up the cash.

I gotta agree with Kyle for the most part here. I think the companies will keep trying to justify the $60 price tag to consumers, no matter whether there's used games or not. At most, I think we could expect to see them drop the price tag $5 and make a huge PR deal out of it, a la "You scratched our back, and good things happened, see? Keep buying games from us please!" and then slowly sneak it back up to $60 due to some other "issue" they discover.

The game companies kind of created the used market as it exists today through their own greed, anyway. I've been told by several people who work at Gamestop that the sale of a $60 game usually nets them as a company, at most, $2-3 a pop, and it's been that way for years. That's outrageous, and forces them to find a new revenue stream... such as, I don't know, used games.

[The Legendary Zoltan]

I'm still only on like post 182 or something, so I'm not ready to make a real post about what I think about everything yet. I just wanted to say (in case it hasn't been said yet), it's called the Xbone.

[The Derrit]

The game companies kind of created the used market as it exists today through their own greed, anyway. I've been told by several people who work at Gamestop that the sale of a $60 game usually nets them as a company, at most, $2-3 a pop, and it's been that way for years. That's outrageous, and forces them to find a new revenue stream... such as, I don't know, used games.

it's not as outrageous as it sounds, really at all. 2 dollars for a 60 dollar product seems crazy but %revenue of most (quality) retail products is very low.

clearly it's not killing anyone as just about any store involved in selling *things* sells videogames

[Toadofsky]

It's not delusional. It's economics. And it's not about companies "giving back" or having anything to do with feelings.

So by reducing what choices a consumer this will make things better? LOL.

When a product is expensive and there's no option to buy a cheaper, used copy, that product will not sell as much. Less people will buy, because they are not willing to pay the higher price. They will wait for a discount or price drop. That means publishers and retailers will be making less money than they used to.

Can't really argue that, but it's funny that they'll be willing to lose more on revenue by capping retail chains in the knee that they rely on.

Publishers will respond to this by adjusting the MSRP of the product, and retailers will respond by having sales. When you can't sell a product because it's too expensive, you lower the price. That's one of the most basic rules of economics.

There is no possible way that they'll do this, companies spend upwards of 100 million to make just one game, and that doesn't count the ad campaigns for them. The way games are developed has become grossly inefficient. If they were to actual reduce prices, they'll still more than likely incur a loss.

When there's a 1,000+ people developing the next Assassin's Creed, you think that the quality is going to be any higher than the previous title? It may end up worse.

So if they cripple the used market more to force people to buy NEW, why on Earth would they reduce the price point of their games?

Also I'm not sure what you mean by "they had every chance to go after used game sales in the past and choose [sic] to do nothing." What could they have done in the past to address used games that they aren't trying to do now?

Before the market crash, new game sales were doing just fine, most companies made peace with used game sales. Companies WATCHED IT GROW for decades. Here's just one quote from the CEO of Take Two, probably from 2005.

“We would prefer that retailers only sold new games,” he said, “but we’ve learned to make peace with it.”

It wasn't until the near economic collapse that the game companies decided used games were very bad and people's mentality on spending shifted. But I stand by the assertion that when the used game market was growing, they could have pulled support from GameStop before the company blew up to a behemoth they couldn't stop or cower before, they knew places like FuncoLand EB Games, and Babbages was selling used copies of their games, they did nothing about it, they are just as much to blame.

How would you, as a publisher, monetize second-hand sales of your products?

I probably wouldn't, to be totally honest. If the game is good enough, people will buy it new. Take Nintendo for example, they saw the upcoming problems and they headed them aggressively. price points that it could maintain throughout the lifetime of the software without having to slash the price later. It attempted to develop games that would be sticky over long periods of time, so that users wouldn’t want to sell them.

That's the model I would follow, and it's a strategy companies here should follow.

If you want a decent crash course read on the used game market, read this...

Used Video Games: The New Software Piracy

Edited June 1, 2013 by Toadofsky