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Pre-Owned is Back on the Table - But at What Cost?

After Microsoft's dramatic 180, Eurogamer's Wesley Yin-Poole seeks out a variety of opinions on the complex used games issue.

Article by Pete Davison, . Based on an original article by Wesley Yin-Poole, Eurogamer.

Microsoft's stunning 180 on its controversial Xbox One policies has delighted gamers and retailers - but are developers and publishers just as happy?

As part of the sweeping changes to the way Xbox One will work, Microsoft has ditched its in-built system that might have been used by publishers to combat your ability to trade in games.

The decision follows Sony's E3 press conference, which it used to announce that there would be no restrictions on the trading of PlayStation 4 games, and (likely deliberately) provoked a stinging backlash from the gaming community in the direction of Xbox One.

Both Sony and Microsoft are seemingly now in agreement: we should be free do whatever we want with the games we've handed over our hard-earned cash for, as we have done for years.

But bubbling under the surface of the stunned reaction to Microsoft's change of heart is a debate as complex as they come, and it seems there are no easy answers. Do game creators and those who fund them deserve a cut of second-hand sales? When you buy a used game, are developers and publishers damaged? In short, is the second-hand market fair on video game makers?

Microsoft and Sony's next-gen policies have shone a light on the complex second-hand market.

For years now we've heard from publishers that pre-owned is bad for business. According to the established rhetoric, publishers deserve a cut of all sales, including second-hand. That's why EA introduced the now thankfully dead Online Pass.

Online Pass and similar schemes from other publishers, including first party, were an attempt to generate revenue these gargantuan companies felt was rightly theirs. And let's not forget that Microsoft tried - and failed - to introduce a system that would allow publishers to opt-in to second-hand sales. Clearly, senior executives have thought long and hard about how to tackle the second-hand "problem".

Most developers and publishers we spoke to admitted gamers should have the right to trade-in their games, but the general consensus is that they also believe developers deserve to get paid with each game sale.

Before last night's announcement, Battlefield executive producer Patrick Bach, who at DICE is creating Battlefield 4 for next-gen, PC and current-gen consoles, tells Eurogamer he doesn't have a problem with second-hand sales - and even goes as far as saying their critics were "whining" about them. But he outlines a scenario in which used game sales actually cost developers money, which, he says, many gamers are not aware of.

"We're still paying for something that we're not getting paid for, which you could argue is a problem, because we're losing money on second-hand sales. Period."

Battlefield executive producer Patrick Bach
Battlefield 3 was supported by a number of expansion packs post-release.

"The problem is I know too much about games and how they work, especially online games," he says. "If we sell one copy of the game - a worst case scenario! - and that gets resold two million times, and everyone wants a new account in our game, we still have a lot of people working on our back end setting up those accounts and making sure they work.

"There's a lot of work involved. We're still paying for something that we're not getting paid for, which you could argue is a problem, because we're losing money on second-hand sales. Period. There is no gain for us at all from a paying people's salaries perspective, when this happens."

"I was never a fan of used games because of the way the GameStops of the world were basically pirating our first sales."

Oddworld Inhabitants boss Lorne Lanning

Other developers agree with Bach's assertion. Lorne Lanning, the outspoken boss of Oddworld Inhabitants, says Microsoft were "digging their own grave" in their attempt to combat used-game sales, and insists trading games is a "no brainer", but as a game creator he has never approved of the second-hand market.

"I was never a fan of used games because of the way the GameStops of the world were basically pirating our first sales," he tells us. "And that's a fact. They were making their employees sign documents that say, 'you will push a used game if it's on the shelf, and if someone brings up a new game and there's a used one, you're going to push that one.' You sign that to get that job. Great.

"So I've never been a fan of the used game market with an entity that has really no skin in the game for development costs or risks, but is making billions of dollars a year selling those games, and not one of those dollars is coming back to the people who made the games. That is what I've always had a problem with."

Evidence of the true impact of the second-hand market on the industry is hard to come by. Last month Wired reported on a new study citing Japanese video game sales that presented uncertain conclusions.

It said the removal of a used market might lower profit-per-game for publishers by 10 per cent, but the lack of a used game market might lead to lower new-game prices because consumers would stop factoring in resale value.

We've heard positive noises coming from the major publishers. EA Games Label boss Patrick Söderlund told Eurogamer at E3: "We don't have a problem with second-hand sales as they are today," adding: "We clearly articulated our stance when we abandoned Online Pass."

Alain Corre is boss of Ubisoft in Europe, and one of the publisher's senior executives. His opinion contrasts that of developers who are critical of used-game sales, and tells Eurogamer that the Far Cry and Assassin's Creed maker thinks the second-hand market is good for the industry - despite it potentially costing his company money.

"We like the idea of gamers coming more often to check in at stores and deciding to buy more games. That's important for us. It gives them a reason to come back and give energy to the market."

Ubisoft Europe boss Alain Corre
Ubisoft's Watch Dogs, due out in November 2013.

"We like the idea of the gamers coming more often to check in at stores and deciding to buy more games," he says. "That's important for us. It gives them a reason to come back and gives energy to the market.

"It's also good for the retailers we're partnering with and it's important for the ecosystem of this industry. So, yes, we are pro-second-hand.

"The ecosystem with second-hand gives energy to the retailers and gives gamers reasons to come back and try some new games they wouldn't have bought otherwise. These two reasons are enough to justify the existence of second-hand."

Former Epic Games developer and Gears of War co-creator Cliff "CliffyB" Bleszinski has been vocal in his opposition of second-hand sales of triple-A console games. His point, according to various tweets, is that the continued popularity of used games cannot coexist with the established triple-A model.

"You cannot have game and marketing budgets this high while also having used and rental games existing," he tweeted. "The numbers do NOT work people." Bleszinski suggests that second-hand sales hinder triple-A game development - and it's only going to get worse. There is, of course, a counter-argument to that, which is that triple-A development needs to look at ways to save money rather than constantly increasing budgets, but Bleszinski appears unwilling to consider this possibility, believing that gamers "expect" high-quality, big budget experiences.

Battlefield's Bach believes his hugely popular game series is immune to this, but does see a potential problem for what he describes as mid-tier games, especially those that are single-player only.

"You cannot have game and marketing budgets this high while also having used and rental games existing. The numbers do NOT work people."

Ex-Epic Games designer Cliff Bleszinski

"If you were building a single-player-only game - let's say it takes 10 hours to finish - you're done with it, you sell it, next person plays it, next person, next person, next person," he says. "You only sold one copy. It's like, come on. I made this game! It took a lot of effort and I'm not getting paid for it.

"It's very tricky for the mid-tier games if they're not an online game. And if you're an online game it's the whole back-end issue. Who's paying for the new account? Even though it's not big money, it's still something. It costs something to set up an account and manage that."

The upshot of this, Bach suggests, is a potential reduction in competition, which would be bad for gamers.

"It's hurting the consumer in the end if the developer doesn't get paid," he says. "Then you won't see as many games on the market. There won't be as much competition, which is actually increasing the quality of games.

"We see competition when other games come out, even in other genres, that are upping the game, which keeps us on our toes. In that lies the fact someone is getting paid to do it. Otherwise we will get fewer and fewer game developers. We can see there are a lot of game developers that are suffering from the fact sales are going down and sales of second-hand games are going up, based on the fact people don't have money to buy new games, so they buy used games instead. Then, the mid-tier games will suffer from this."

Last week Nintendo of America boss Reggie Fils-Aime said developers could limit used game sales by simply making their games better, pointing to the relatively low trade-in and resale market for Nintendo products as proof.

"We have been able to step back and say that we are not taking any technological means to impact trade-in and we are confident that if we build great content, then the consumer will not want to trade in our games," Fils-Aime told Polygon.

It's a philosophy echoed by Christofer Sundberg, boss of Swedish developer Avalanche Studios and maker of the Just Cause series and now the open-world Mad Max game for publisher Warner Bros. Avalanche is still seeing high numbers of players for Just Cause 2, which on PC is buoyed by a vibrant modding scene that has resulted in some eye-catching multiplayer shenanigans. Just Cause 2 released three years ago.

"Can we make games that sustain gameplay for a longer period of time so people won't be interested in returning them?"

Avalanche Studios boss Christofer Sundberg
Thousands are still playing open world adventure Just Cause 2 three years after it released.

Sundberg told us developers shouldn't complain about second-hand sales. Instead, they should focus on making games gamers don't want to trade-in.

"I go to the game stores around Stockholm quite often in the area where I live," he says. "I always go through the second-hand boxes trying to find Just Cause 2 and reorganize the shelves a little bit! I very rarely find any copies, which is a good sign. It proves we've done something right and players hold on to those games.

"That's really the challenge for all developers. Can we make games that sustain gameplay for a longer period of time so people won't be interested in returning them?

"If we continue to do story-driven, linear games that end in 10 hours, of course I would return it if I bought the game for $60. If I finish it in two days it will be on the shelf collecting dust, or I can get some money back and buy something new."

Bach says DICE has seen a similar "stickiness" with Battlefield 3, which the developer supported with downloadable content over a year after launch.

“It's up to us to give people a good reason to not trade in,” he says. “Make a better game, that's number one. Two, make sure people have a reason to pay for something else: new content or whatever - something they want to pay for.

“But paying for air, or for a licence that is worth nothing? I don't believe in that. It's up to us as a game developer to give value to the players. And if you have a great game, you won't trade it in, period.

“With Battlefield we're in a good position. We're selling quite a few copies. People seem to be happy and they hold on to their copies. It's a multiplayer game. They play the single-player then jump over to multiplayer, and they keep engaged. We try to engage them. We give them more content.”

"If you have a great game, you won't trade it in, period."

Patrick Bach
EA's Dead Space 3 was mired by micro-transactions.

This sounds like good news for gamers, but Bleszinski has a dim view of the future following Microsoft's policy changes.

"More studios WILL close and you'll see more PC and mobile games," he tweeted.

"I have seen the number of unique gamer tags vs actual sales numbers and it ain't pretty.

"I want developers who worked their asses off to see money on every copy of their game that is sold instead of Gamestop. F*** me, right?

"Brace yourselves. More tacked on multiplayer and DLC are coming. You're also about to see available microtransactions skyrocket. HATS FOR EVERYONE.

"You're going to see digital versions of your favourite games with added 'features' and content to lure you to digital over disc based. 'Do whatever it takes to keep that disc in that tray' is the mantra of developers in a disc-based world."

Time will tell.

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Comments 9

  • Avatar for BDBN #1 BDBN 4 years ago
    Someone else pointed this out somewhere, I forget the actual article, but the reality is that the age of physical media is coming to an end. All content publishers, not just gaming companies, are going to have to figure out how to provide DRM in a way that keeps them in the black and makes their consumers happy (I think these two things go hand in hand).

    Microsoft's initial proposal was by no means an ideal for anyone but them, but it was a start. I would rather have seen them refine their DRM policies over time, like Apple did with iTunes, than capitulate to the fans.

    Personally, I buy the digital version of a game whenever I have the option, but I've never been big on buying used games in the first place, and I accept the downsides and risk that goes with not having a physical copy.
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  • Avatar for pjedavison #2 pjedavison 4 years ago
    @BDBN I'm interested to know opinions on this, because I'm an avid physical collector, particularly of hard-to-find games -- what is it that makes you choose digital over physical? Is it an attempt to rid your life of clutter or is there another reason?

    Personally, I go physical because that way I know I'll be able to revisit these games in future. Sure, I can back up digital games, but that's not especially easy to do on consoles -- and given that some require authentication to start or install, that's not a guarantee they'll work 10 years down the line.
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  • Avatar for Baleoce #3 Baleoce 4 years ago
    I too like the comfort of knowing I'll be able to play them in the future, answerable to nobody. That's why physical DRM scares me off. But likewise I do like the "clutter-free" aspect that digital brings. Considering most physical sales of PC games have DRM that locks you to an account, I tend to buy digital on PC regardless. Although perhaps I could still buy physical for PC, and just "crack" it 10 years down the line. But even then, the common trend seems to be releasing half of hte physical game onto the PC disc itself, and then downloading the other half via a "necessary update". I'd be interested to see someone write an article on the amount of current day physical PC game discs that are playable "out of the box", without updating. I'd venture to guess it's not many.

    Bottom line, if there's no physical DRM, I'll buy physical, because I don't trust any digital service to keep its word. Steam gets around this by providing more bang for your buck than its console digital counterparts. Also the fact I can buy steam keys from many different websites, so they tend to compete on the same platform, meaning a deal is always there to be found.

    Obviously I trust GOG.com. No DRM whatsoever, so I have no quarrels in purchasing from them.
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  • Avatar for Suzusiiro #4 Suzusiiro 4 years ago
    Gamestop's practice of pushing used games over new is like piracy- it's bad, but most methods of shutting it down directly cause unnecessary harm to consumers, so the correct answer is to catch flies with honey by incentivizing consumer behavior that gives you more money rather than punishing/blocking behavior that gives you less money. Steam, iTunes, and video streaming services have done more to combat piracy in their respective markets than any DRM.
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  • Avatar for BDBN #5 BDBN 4 years ago
    @pjedavison Oh, I used to be an avid collector of games. From the SNES through the PS2 era, I had a sizable collection of carts and discs that would make any GameStop clerk's jaw drop (Earthbound, check. Suikoden II, check. Every NES, SNES and PS1 Castlevania title, check.). I went to great lengths to get the non-Greatest Hits pressing and keep everything in pristine condition, too. Eventually, I came to the reality that I'll play most of these games once, move on, and let the cart or disc sit on my shelf for years. It felt like I was owning games for the sake of owning them, which just seemed silly to me. I eventually sold or gave away my collection, and now my gaming shelf has three titles on it: Chrono Trigger, Castlevania: Symphony of the Night, and Katamari Damacy (my three all-time favorites).

    Which brings us to digital distribution... It comes down to convenience for me. It's easier to choose something at PSN, let it download while I make dinner, and then play it right away. This is the height of laziness, but it's really nice to never have to change discs, either (the same way owning an iPod seemed frivolous at first, but after a week, you could never go back to a Discman). Once I'm done with a game, I can move onto the next, and the only clutter I need to worry about is on my PS3 hard drive. If I see a game that looks like something I'd want to have a permanent copy of, I'll buy the disc and give it a go. I thought Ni No Kuni was going to be a keeper, but I ended up quitting about 25 hours in and gave the disc to a friend. In a way, not-being a collector has been liberating. Case in point, last year, I wanted to play the Mega Man Legends series for the first time. Before, I'd scour eBay for days to find pristine, like-new copies that would have cost me an arm and a leg. Instead, I found an auction for two scratched, disc-only copies for twenty bucks apiece, played through and enjoyed them both, then re-sold the discs for $10.00 when I was done.

    There are a lot of disadvantages to digital-only that concern me. As long as I have the disc and a working PS1 or 2, I can play Symphony of the Night. There is nothing stopping Sony from removing SotN from PSN and deleting every sold copy off everyone's PS3 with the next software update, and writing code that will make your PS3 spit out the physical copy. It would have to be some extreme bad luck, but in theory, I could lose my digital collection due to a bad hard drive. I traded the guarantee permanent access for the convenience of easy access. It's the risk I choose to take, and I'm fine with it. I completely understand the collector/archivist mentality, it's just not for me anymore.

    That aside, I own around 1500 CDs and still buy all of my music on disc. Old habits die hard.

    (Edited to correct spelling and grammar mistakes from writing this on my iPhone. Damn you, autocorrect.)Edited June 2013 by BDBN
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  • Avatar for Ahlkaiser #6 Ahlkaiser 4 years ago
    There are legitimate issues with how Gamestop and similar stores do business so why doesn't the game industry focus on those that make it a business of reselling instead of the massive amount of bad PR that comes with punishing the end consumer?
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  • Avatar for SargeSmash #7 SargeSmash 4 years ago
    I'm sorry, but if the industry thinks that killing used games is going to bail them out, they're sorely mistaken. They're going to slit their own throats out of pure greed.
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  • Avatar for benjaminlu86 #8 benjaminlu86 4 years ago
    To respond to Mr. Bleszinski, when the bottom drops out of AAA (and it will), that's when publishers will stop being irresponsible with their dev and marketing dollars. While playing this low-level numbers game, publishers have created a graphical arms race which puts players' expectations way out of whack for what's necessary or sufficient to make a good game. Players expect 10 bazillion polytoads and gigafloppies because of lack of expectation management in the AAA space. When the bottom drops out and the budgets stop balancing themselves, we'll see better managed "AA" titles which look good and play better. Graphics have never been a substitute for gameplay.Edited June 2013 by benjaminlu86
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  • Avatar for SavageEvil #9 SavageEvil 4 years ago
    Going all digital is the future not something I really welcome since it means that we will lose something. No matter what we think we will lose something. Convenience is nice but there is no security in it, in fact if anyone noticed how the Movie industry handles digital versions of their movies. You are given a license for a certain time even if you have the physical copy the digital version has an expiration date. It's all about control and industries are more than welcome to remove that from consumers hands. MS policy was very heavyhanded and ugly, only apologists could see any benefit of anything MS was attempting to pass off as a gesture of goodwill.
    How Gamestop does business is the exact same as any other giant corporation. If a new game comes out there shouldn't be a used copy of the game that soon if there is then obviously something is wrong, the game either was too easy or it wasn't entertaining. Damaging the gaming market is pure crap spewed from publishers mouths. To accomplish that there would have to be more used copies circulating that new copies...how would that be possible if used games somehow outsold new version of the same game? What kind of magical vacuum are publishers expecting us to believe that their games sell in? Good games will sell regardless, why are game publishers attempting to somehow create this fallacy that their product is more valuable than every other product on the market that has to abide by the very same laws of sale?

    Not sure why MS doesn't just do what Sony did with PS3, one system can support one main account and 5 sub accounts and they all can use the main accounts games, also PSN digital purchases used to be allowed to share but thye had to curb that a bit so developers would get more sales as people took it beyond too far. PSN allows you to go to someone else's system and login with your details and get your digital games and your physical games' achievements so you could theoretically just pop in the game and play and continue from where you left off on your system. Only thing MS has is allowing you access to your entire library that is on your console, best thing they had going for them despite the problems that many gamers would face with bandwidth limits. All the other stuff Sony was already doing, so how on earth MS comes out of the gate touting revolutionary when only one thing was beneficial and everything else has been done before and without such stringent and anti consumer sentiment attached to it. Try again MS.

    Again the gaming publishers need us and not the other way around. Just because technology is going a certain direction doesn't mean we have no say in how it evolves in our hobby. There is no need to just sit back and take it just because they decided it was in our "best" interests.

    Digital games are easily looked at by gamers as non shareable and we don't think to share them simply because of it not being physically possible which is why we don't think about at all. Physical game oh of course, if a friend comes by and he wants to borrow a game I lend it to him no problem a digital game, he'll have to buy it himself because I wouldn't attempt to figure out lending it since it was never an actual thought in my head. This is the sort of thinking that these guys are banking on, if it's digital you'll not even worry about not being able to share it since we don't automatically equate sharing of digital media in the same sense as physical. If MS had come out with an all digital system sans the BluRay people would have swallowed their pill much easier, but they had discs and then talked about digital and restrictions and people got confused and then upset. Selling me a license for $60 then telling me that you will allow me to give it away but not lend it...yea not many people are going to take that lying down. I am still in awe at the gumption MS had coming after their reveal. These old suits are definitely ballsy, they should have stuck to their guns though and figured out how to make things more attractive but 180 turn with them snatching things away like the sour kid who takes his ball away when he doesn't like being wrong makes these guys look terrible and in a scramble to save face since it only seems to be reaction to Sony's media victory and pre sale victory. Good luck but I don't trust these guys any more, in fact I am more wary of them now more than ever.
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