Nextbox 1080: The Reckoning

[I Saw Dasein]

I think that article is looking at the issue in the wrong way. If used game sales are abolished, then the value of a new game is actually decreased from the consumer's perspective. This is because consumers value a game that they can resell more than they value a game that they cannot resell. (E.g., I will pay $60 for game X with the expectation that I can resell it for $10, but only $45 for game X if I cannot resell it.) 

 

Since removing the right to resell a game reduces the value of that game, it stands to reason that demand for the game will also be reduced.  If demand for the game is reduced, then (all other things equal) the price of the game will be expected to fall, price being a function of demand. Basically, if publishers reduce the value of video games without reducing the price of video games, consumers will buy fewer video games and spend their money on other products. If publishers wish to get that money (and we can assume they do) they will have a pretty strong incentive to lower prices.

 

I guess I don't see any reason why video game publishers would be immune from the same market forces that push down prices in other markets. If they're going to offer consumers a less valuable product, then they will either have to lower prices or lose sales. 

[Argobot]

Hmm, I see what you're saying, but do a significant number of people buy physical copies of games with the idea to eventually resell that same game? I certainly don't, but my perspective is completed skewed since I haven't bought a physical copy of a game in years.

[I Saw Dasein]

I have definitely purchased a number of games "opening day" knowing that I intended to sell them down the road and recoup some of the price, especially games that I'm not sure I will like. I am generally more willing to spend $60 on a game if I know I can get $25 dollars back in a week. 

[Ucantalas]

I know among my friends and I it is a real consideration when buying games. The chance to get back some money is a powerful force.

[Gormongous]

Since removing the right to resell a game reduces the value of that game, it stands to reason that demand for the game will also be reduced.  If demand for the game is reduced, then (all other things equal) the price of the game will be expected to fall, price being a function of demand. Basically, if publishers reduce the value of video games without reducing the price of video games, consumers will buy fewer video games and spend their money on other products. If publishers wish to get that money (and we can assume they do) they will have a pretty strong incentive to blame piracy, mobile gaming, and whatever else puts the onus back on the consumer.

 

I fixed it for you. This is what's happened in the past whenever anti-consumer practices impact sales.

[I Saw Dasein]

I fixed it for you. This is what's happened in the past whenever anti-consumer practices impact sales.

 

Well, if publishers reduce value without reducing price, then in the short run I'll spend less money on games and more money on other leisure products, and in the long run some other company will come and out-compete them on price (e.g. Steam). So I'm not too bothered either way.

[Frenetic Pony]

I really don't see why they're bothering at all. to be honest.

 

Do you know what Steam did almost single handedly? Destroy the entire retail sales market for PC games. It's basically gone, there's probably 80% of all games going through digital sales now on the PC. I can easily see the same thing happening over the course of a few years with these new consoles. I'm sure there's a vocal minority, which some of you on here will be, that will shout about it until your blue in the face. It hasn't stopped an ever increasing number of PC games to go digital only, nor will it stop the trend in the console space.

 

Though I suppose with this policy in place, jacking up the price of used games and destroying Amazon and Ebay as outlets, it will just cause the same thing to happen all the faster. Say goodbye Gamestop, I used you but I'm not going to miss you.

[Henroid]

The argument that getting rid of used games will be beneficial to publishers and developers works on the assumption that Reaganomics works. There's absolutely no guarantee that the extra revenue won't just line the pockets of executives.

[Frenetic Pony]

The argument that getting rid of used games will be beneficial to publishers and developers works on the assumption that Reaganomics works. There's absolutely no guarantee that the extra revenue won't just line the pockets of executives.

 

Game development cost is too high already, moving to less used games and higher margin digital distribution will certainly line Activision's pockets from Call of Duty sales, but it'll help keep up all those too high end budgets from games that don't sell 10 million copies each time. It's certainly a tradeoff, I'm not going to pretend that I don't buy used games and even pirate a title once in a blue moon (hey, as far as dev's are concerned it's the same thing as a used game). But it's still a tradeoff with benefits for us, the consumer, and not all just going towards the producer.

[JonCole]

I really don't see why they're bothering at all. to be honest.

 

Do you know what Steam did almost single handedly? Destroy the entire retail sales market for PC games. It's basically gone, there's probably 80% of all games going through digital sales now on the PC. I can easily see the same thing happening over the course of a few years with these new consoles. I'm sure there's a vocal minority, which some of you on here will be, that will shout about it until your blue in the face. It hasn't stopped an ever increasing number of PC games to go digital only, nor will it stop the trend in the console space.

 

Though I suppose with this policy in place, jacking up the price of used games and destroying Amazon and Ebay as outlets, it will just cause the same thing to happen all the faster. Say goodbye Gamestop, I used you but I'm not going to miss you.

 

I feel like this is a massive exaggeration. Even with digital and the prominence of Steamworks, Steam doesn't mean the end of competitive PC pricing. I'd guess that I've gotten half of my PC games on a combination of Origin, Amazon, Green Man Gaming, GOG, Humble Bundle, or the like. The rise of Steamworks/Steam DRM might have narrowed the field, but there's still plenty of competition and I don't have to bother mucking around with peasants in Gamestop this way.

[Frenetic Pony]

I feel like this is a massive exaggeration. Even with digital and the prominence of Steamworks, Steam doesn't mean the end of competitive PC pricing. I'd guess that I've gotten half of my PC games on a combination of Origin, Amazon, Green Man Gaming, GOG, Humble Bundle, or the like. The rise of Steamworks/Steam DRM might have narrowed the field, but there's still plenty of competition and I don't have to bother mucking around with peasants in Gamestop this way.

 

I didn't say ANYTHING about competitive pricing, I said "the end of boxed retail sales". Huge difference there, you guys are the ones going on and on about competitiveness, which I wrote a fantastic blog about a while ago: http://www.gamasutra.com/blogs/JohnathonSwift/20120417/168732/The_Economics_of_Used_Games.php

 

Tl;Dr used games don't drive down the price of gaming a whole lot. You can see the very effect I've mentioned shown in the PC industry as Steam Sales and Amazon PC Deal of the Day stuff. Without used games threatening to undercut your pricing most every developer on the planet feels free to once in a while drastically slash prices for their older, and even on occasion newer games, knowing that they're the ones that will be guaranteed to benefit either way without those cut price games flooding the used market later.

 

I'm not sure Microsoft, which in this case I will suspect to me Micro$oft, will be very amenable to a huge digital only sale now and again. But Sony seems much more flexible. I can see them setting up annual sales ala steam with huge discounts, or even doing that AND allowing and even encouraging publishers to set their prices to whatever they want whenever they want.

[Zeusthecat]

You know what would be nice? Some actual fucking data that shows what impact (negative or positive) the used game market has on publishers/developers. I've seen arguments in both directions. Some say that used game sales hurt publishers/developers and take money out of their pockets and others say that they actually help because they bring in new customers who might not otherwise buy the game and end up becoming loyal customers.

 

Soooo... is there any actual data? If not then neither point of view has much to stand on.

 

Personally, I am of the belief that used game sales neither hurt nor help publishers and developers because I haven't seen anything convincing enough for either argument. I'm thinking it's a wash.

[JonCole]

I didn't say ANYTHING about competitive pricing, I said "the end of boxed retail sales". Huge difference there, you guys are the ones going on and on about competitiveness, which I wrote a fantastic blog about a while ago: http://www.gamasutra.com/blogs/JohnathonSwift/20120417/168732/The_Economics_of_Used_Games.php

 

Fair enough, I seem to have been belligerently agreeing with you. More or less my point is that retail vs digital is practically meaningless when the evidence is growing more and more unavoidable that game ownership is actually game licensing. Who cares if the license exists physically or digitally unless you really just care so much about the aesthetics of a physical box? I get the argument in books, since the aesthetics of the delivery system are directly tied to the mechanics of reading. In games, it's far more meaningless especially now that publishers are making the boxes with much cheaper plastic and without manuals. 

 

On a side note, I'd hold off on calling your own blogs "fantastic". It may be so, but the tooting of your own horn makes me not want to click the link in a million years even though I know you meant it with no particular arrogance.

[SecretAsianMan]

Fair enough, I seem to have been belligerently agreeing with you. More or less my point is that retail vs digital is practically meaningless when the evidence is growing more and more unavoidable that game ownership is actually game licensing. Who cares if the license exists physically or digitally unless you really just care so much about the aesthetics of a physical box? I get the argument in books, since the aesthetics of the delivery system are directly tied to the mechanics of reading. In games, it's far more meaningless especially now that publishers are making the boxes with much cheaper plastic and without manuals. 

 

There is something to be said for having a setup like Zeus instead of a screenshot of your Steam list or whatever.

[SecretAsianMan]

So Polygon is reporting the XBone won't require a fee for used games and that regular games will require periodic authentication checks.  The game discs will contain some encryption code that will authorize the machine it's installed on to play it.  If you give a buddy your disc, then when he installs it on his system your system will be deauthenticated and he'll now own it.  There also won't be a fee for activating used games.  Here's Larry Hyrb's official statement:

 

The ability to trade in and resell games is important to gamers and to Xbox. Xbox One is designed to support the trade in and resale of games. Reports about our policies for trade in and resale are inaccurate and incomplete. We will disclose more information in the near future.

[Gormongous]

The lack of message control is appalling. Weren't they forewarned by the half-dozen kerfuffles in the months leading up to their announcement to have a strong, explicit position on always-on functionality and used game sales? We now have at least three different versions of how the new Xbox will work, all supposedly from the mouths of Microsoft execs.

[Zeusthecat]

There is something to be said for having a setup like Zeus instead of a screenshot of your Steam list or whatever.

 

I am admittedly a little bit biased about DRM and the shift away from physical content. I even recently bought Dishonored for PC at the store because I prefer a physical copy that I can add to my collection. There is just something about physically owning all of that stuff that gives it a sense of permanence and visibility in my life. Not saying that's the way it should be but sometimes I sit there looking at my collection with a great sense of satisfaction at all of the cool shit I've accumulated over the years.

 

Not sure where I'm going with this but man, fucking video games.

[Ucantalas]

Not sure where I'm going with this but man, fucking video games.

Please don't, it's bad for the cartridges.

[Zeusthecat]

Please don't, it's bad for the cartridges.

My deep dark secret revealed, damn.

[Henroid]

So Polygon is reporting the XBone won't require a fee for used games and that regular games will require periodic authentication checks.  The game discs will contain some encryption code that will authorize the machine it's installed on to play it.  If you give a buddy your disc, then when he installs it on his system your system will be deauthenticated and he'll now own it.  There also won't be a fee for activating used games.  Here's Larry Hyrb's official statement:

Gameinformer is a little specific about the sources of the same news.

 

Indirect unofficial Microsoft sources

Which means this needs a massive grain of salt.

[Frenetic Pony]

Fair enough, I seem to have been belligerently agreeing with you. More or less my point is that retail vs digital is practically meaningless when the evidence is growing more and more unavoidable that game ownership is actually game licensing. Who cares if the license exists physically or digitally unless you really just care so much about the aesthetics of a physical box? I get the argument in books, since the aesthetics of the delivery system are directly tied to the mechanics of reading. In games, it's far more meaningless especially now that publishers are making the boxes with much cheaper plastic and without manuals. 

 

On a side note, I'd hold off on calling your own blogs "fantastic". It may be so, but the tooting of your own horn makes me not want to click the link in a million years even though I know you meant it with no particular arrogance.

 

Hey, I was the first person on earth (so far as I can tell) that's ever suggested that used games could create an artificial price floor. As someone that really enjoys economics I was proud of that, so there

 

In other Microsoft News, on rep claims this next generation of consoles could add up to a billion console sales total: http://www.gamesindustry.biz/articles/2013-05-25-microsoft-next-gen-could-hit-1-billion-consoles-sold

 

I assume he said that while smoking crack and then at the end went

 

[tegan]

I used to be pretty big on the idea of having physical cartridges of everything, but I've really come around on digital games lately. I really like the idea of having an always-available digital library and never having to worry about losing cartridges, and the "but digital games won't last forever like cartridges" idea seems silly to me now. Everything ends eventually. Even CDs and cartridges have a limited shelf life. But I feel like those licenses are probably going to be renewed so frequently that it's hard to care about how they'll eventually go away.

[Twig]

You don't have to worry about losing cartridges, but when it's Nintendo and your entire system gets stolen, you do have to worry about losing literally all of your games at once!

 

Fortunately, everyone else is much less stupid about handling digital goods accounts.

[JonCole]

Thank goodness the rumor mill is still cranking post-reveal:

 

The Xbox One can talk to you, will feature remote play

 

Polygon is reporting that the One will have a feature where a friend can connect to your game remotely via Skype and "help one another get through sections of the game when they're stuck". If that's true, it seems kind of like nothing we've ever seen before. Sure, we've all couch co-op-ed a single player game before, but in this scenario you could both be playing separate instances of the same single-player game across the country from one another and help each other in a "oh man, I remember how to do that part" way. Kinda neat, if true.

[Merus]

I bought Bioshock Infinite via retail so I'm not entirely sure the retail market for PC games is 'destroyed'. It was never particularly healthy to begin with, and plenty of people would prefer not to tie up their internet for a day downloading a new release.