With the economy seemingly in the toilet, budgets may be tighter for families this year going into the holiday season. I think with the downturn in the economy, more gamers may be looking to purchase used games, instead of new games. I've bought used games. I've traded games for store credit, and the games I traded, were then sold as used. Even right now, I'm a member at Goozex.com, where you "trade" used games with other gamers.
Many people have lost their job in the last year, and some are still uncertain if they'll be employed tomorrow, or even next week. The video game industry hasn't been immune to the lay offs, and it's seen increasing numbers this year, of publishers/developers laying staff off, some going bankrupt, and even the doors closing to development studios.
Here are a few links discussing lay offs/studio closures:
Activision Subtracts From 7 Studios, Hits Ex-Scratch Dev With Layoffs
Spore Developer Maxis Lays Off Staff
Raven Software Struck with Mass Layoffs
Majesco closes California development studio, no effect on product lines
This year, seeing lists of studio closures and reports of employees being laid off, a question crossed my mind, "What if gamers didn't purchase used games on current generation consoles, if the games were still being published? Would the development studios still close or the lay offs still be necessary?"
I don't think the answer is a simple, but I believe there's at least one legitimate argument against buying used games that are actually being published:
1) If you buy used games, the developers/publishers don't make money on them.
When I go to a coffee shop, I don't ask if I can buy a "used" bagel or "used" cup of coffee. Why should I do the same with my games? From a developers perspective, I wonder if they think that me buying a used game is like me using the developer for work(sometimes years of work), and not paying them a single dime for any of the work they did. I know I want to be payed for the work I do, so why shouldn't a developer or publisher? If you work for 40 hours in the week, then your boss tells you, "Thanks for the work, but I'm going pay somebody else for the 40 hours of work you already did." That wouldn't make any sense to us.
Isn't that scenario, just like us going to GameStop, only we are the boss(as the consumer) telling the developers, "Thanks for your years of work, but I'm buying it used and paying GameStop for all the labor you did, you won't make a dime."
I think it's an interesting thought, and one that we maybe don't think often about.
The next time you have a used game in your hand, think, "Is it possible that it might be leading to the next layoff or studio closure?"
What do you think about this topic? Do you think the purchase of used games is good or bad for the video game industry? Leave a comment and let me know what you think!
I see what you're saying but I don't necessarily think that developers lose money due to the used games being purchased in the market.
ReplyDeleteIt's like Developer SCE Studios Santa Monica and Publisher Sony Computer Entertainment (SCE) who came together to bring the God of War game. I'm not privy on what kind of deals that developers and publishers make together but I guarantee there are contracts involved, it might go something like this:
Publisher finds a developer. Publisher pays developer 10 million to make a game and the publisher then sells the games to Best Buy, i.e. publisher makes a deal with Best Buy and Best Buy purchases 20 million worth of games for their stores.
The developer receives their money from the publisher covering the cost and overhead to make the game, plus profit. And the publisher receives their money from Best Buy. Therefore the games are already accounted and paid for, so whether or not Billy goes to Game stop and gets a used game, the developer and publisher already received funds for that game. It doesn't matter how many times that used game is cycled back and forth from Billy and Gamestop to Judy to Funco Land.
Another thing to think about is do you think developer/publishers lose money from rentals like Blockbuster, gametap, gamefly, etc?
I agree with the comment, used games are not like used coffee, if anyone plays the game, it is still there, and most of the times (when the owner is done with it) they are not used for ages (creating garbage).
ReplyDeleteInstead you should compare used games with used hammers (or any other thing you can borrow), publishers/developers have increased the budget of games too much, and to protect this DRM is becoming the rule.
There are so many wrong things in this article...
Used games are a product. They usually don't deflate much in value and the core reason for buying it is still in perfect form. It's very similar to buying a used book. Yes, I didn't buy it from the publisher/author, I bought it at a price I was willing to pay in order to get the product.
ReplyDeletePrices for games really should be lower. Too much content is included with the core purchase. I like that with some games and wish I could cut out what I don't care for with others. If I'm never going to play a game online then why pay for that portiton? What about people who will never play games in multiplayer?
DLC is made out to be a bad guy because of abuse. That's ttrue. I wih I could trust the industry to sell me a good core game for $20 or lower then offer me the rest or something I actually want for additional content.
Imagine an fps being broken into a single player release and multiplayer release. As one version starts reaching certain goals further development on additional content starts or becomes available like extrra maps or modes and episodes.
@ Nicodemus at Nite, Dokuro, and Gametaku:
ReplyDeleteThanks for posting your thoughts on this!
@ Nicodemus at Nite: While I don't know how the contracts work with publishers/developers, I do think if a game is being published, and a copy is bought used, not new, then the publisher loses money, more than the developer(which in the long run can affect developers). Stores buy more new copies of games from the publishers, so if used copies are being sold, there's no need for stores to buy more new copies from the developers.
(Read: http://ps3.ign.com/articles/982/982891p1.html on how Factor 5 closed due to it's publisher defaulting on payments)
@ Dokuro: It was funny to me when I saw you point out the coffee example. Let's use your hammer idea. If a new hammer cost $5, and a used hammer cost $4.50, the hammer manufacturer would lose money for every used hammer bought instead of a new hammer.
While I do think the budgets have increased, prices haven't really increased much(if any) from the N64 days, which I find interesting.
"There are so many wrong things in this article..." What else don't you agree with?
@GameTaku:
"Prices for games really should be lower." I certainly agree, especially sports games released every year. The last football game I bought, was ESPN NFL 2K5. It was released at a MSRP of $19.99, which is why I purchased it.
My main issue with DLC, is how games are announced, and BEFORE the game is even released, they've confirmed DLC and I usually think, "The game isn't not out yet, just put it on the disc."
Again, thanks to all three of you for commenting!
@Coffeewithgames:
ReplyDeleteI still disagree that publishers/developers lose money because of used games. The hammer example would be valid if there was only ONE hammer floating around in the world. If someone bought it for $5 then person B buys it for $4.50, then person C buys it for $4.00, and so on.
The publisher/developer have already received funds for the the new games sold. If Best Buy needs more games, they will contact the publisher/developer to purchase more.
Once a publisher/developer sells a game and receives funds for it, they could careless if Bestbuy sells it for more, or that Gamestop has used games.
The only thing that I believe publisher/developers lose money on is from piracy. It's like my friend who has a band, if they sell one CD for $10 and 20 people burn the same copy, they lost the opportunity to make the $200 from the 20 people buying it. Same deal. But once the publisher/developer makes a deal with a store and have been paid. All is well and then time to move on to the next game.
@ Nicodemus at Nite:
ReplyDeleteIf your friend's band, sells one CD for $10, and person A sells his copy to person B for $9.50, and person B sells it to person C for $9.00, the band didn't make anything off the $9.50 or $9.00 transaction, so I would say they lost money on the transaction of the used CD. While saying they "lost" money may not be the right term, they definitely didn't GAIN any money from the used transactions.
Also, publishers/stores have contracts, just like publishers/developers have contracts. Most big box retailers, like Best Buy, Wal-Mart, etc., have contracts with product suppliers(publishers in this case). The supplier gives a certain number of a product(games), to the retail stores, on credit, and allows them 30, 60, or 90 days to sell the product. That's why retail stores don't make 100% of the sale price off games, they usually make between 10-20% off the MSRP, and the other goes back to the publisher.