Download 02_Used_Video_Games_Boynton

1
Matthew Boynton
Instructor Judy Nolen
English 106
10 July 2012
The Controversy Over Used Video Games
The controversy over the sale of used video games rages on, fueled by the profits retailers
gain from them and the sales developers feel they’re losing because of them. Stuck in the middle
are the consumers, merely wanting to get the greatest value for their hard earned dollars and
involuntarily serving as the guinea pigs for attempts from developers to curtail the trade of used
games. In the end, technology will change the way in which video games are bought and sold;
and the concept of used games, as we know them, will become obsolete.
The decline of video games sales in recent years led those employed in the industry to start
searching for reasons as to why this was happening. During the course of their research they
discovered that the largest video game retailer in the country, Gamestop, was earning substantial
profits from the sales of used games, to the tune of $1.2 billon in the past fiscal year (Kucher,
The Penny Arcarde). As this information spread throughout the industry, some developers
latched onto it and began blaming the sale of used games for the decline in sales of new games.
Unfortunately for Gamestop, their position as the leader in the sales of used games made them
the whipping boy for publishers and developers over the sale of used video games. Some
developers feel that every used game sold was taking money out of their pockets (Oxford), so
much so that some raised the novel concept of developers getting royalties from the sale of their
2
used games. For reference, I’ve worked in the video game industry for fourteen years, so I’m
intimately familiar with the time and effort it takes to create a video game. It’s truly a labor of
love, and most developers are in it for more than just a paycheck. While I can understand why
some developers feel the need to affix blame with GameStop, in my opinion that reaction is
purely an emotional one. In my opinion it is illogical to blame GameStop for the decline in the
sale of new video games because, as is the case with any business, Gamestop exists to generate
profits that will allow it to expand its operations and pay dividends to its shareholders. To that
end, it only makes sense that they would want to sell products that give the best return on their
investment, such as used games, so we should not be surprised when their sales force pushes that
product, which is what does happen. For example, if a customer is ready to purchase a new
version of a game they have in stock used, the sales clerk is trained to always ask if the customer
would like the used copy instead. After all, the sale of a used game is a win for the retailer and
consumer, with greater profit for the former and dollars saved for the latter. Does this sales tactic
result in lost revenue for developers? While some would argue it does, I would argue it does not
because when the customer is faced with the choice between two, for all intents and purposes,
identical products, why would they not choose the less expensive option? We should also
consider that when customers do trade in their games, they are doing so to offset the cost of the
new games they are purchasing, so the trade of used games actually does benefit developers.
GameStop also does a brisk business in the game consoles themselves, which is the foundation
for everything the developers do. The fact is the trade of all types of used goods has been a
mainstay of commerce since prehistoric times and other industries have managed to survive, if
not thrive, because of it, so it’s very unlikely that the high consumer demand for used games will
ever change.
3
However, one thing that has changed is the average budget required to produce a game
which, over the past two decades, has increased to tens of millions of dollars (Crossley). On top
of that, the marketing campaigns for today’s want-to-be-blockbuster games can easily match or
exceed their production budgets (Ben). Surprisingly though, the retail price of video games has
not kept pace with inflation. For example, in 1992 the average retail price for video games was
$49.95 which equates, in 2012 dollars, to $81.12 (Parish). Unfortunately, the retail price
consumers are willing to pay for a new game seems to have peaked at the current price of $60,
except in rare cases for things like special collector’s editions. While developers do their utmost
to put as much value into their products as possible, not all games are created equal in terms of
their content or quality. Yet, any game that is initially released at a price below the industry
standard, which just happens to be the maximum consumers will pay, is automatically perceived
to be of lesser quality just because of the lower price. While we can safely assume that
consumers want every game they’re buying to be worth the price they’re paying, perhaps their
desire for all titles to be triple-A quality explains their perception that all games should have
uniform pricing, at least when they’re initially released. Whatever their reasoning, it is critical
that we consider the psychology of the consumer so that however the industry deals with this
issue, they do so in a manner that does not damage their relationship with them.
So, if we agree that the retailers who deal in used games are not the source of the
controversy, nor are their customers, does that mean that the woes of developers are selfinduced? For the most part, the answer to that question is no, but their efforts to affect the sales
of used games can sometimes make their situation worse, at least temporarily. For example, in
June 2010, EA Sports began requiring customers to enter a pass code (Kucher, EA Sports),
included with every new game, in order to access its online features. If the customer purchases
4
the game new, he simply enters the code and play as normal but, if he purchases the game used,
gaining access to the online features of the game may not be as simple. If the previous owner
used his code, which was likely because the online features of EA Sports games are an important
part of the experience, the purchaser of the used game would need to spend an additional $10 to
gain access to the game’s online features. When asked why this program was put in place,
Andrew Wilson, Senior Vice President of World Wide Development at EA Sports, stated
“…we’ve made a significant investment to offer the most immersive online experience available.
We want to reserve EA SPORTS online services for people who pay EA to access them."
(Kuchera, EA Sports). Gamers were quick to dissect Mr. Wilson’s logic and found it lacking
because, when a game is purchased new, EA Sports is getting their fee for supporting their online
services. When the original owner sells his game, he can no longer play the game, but EA Sports
still has a spot reserved for whoever owns that game. That being the case, does it matter if
someone besides the original owner plays the game online? Apparently, to EA Sports, it does. In
contrast, other developers have taken a less punitive approach by rewarding consumers who
purchase their games new with extra content to but so far, these methods have proven to be less
successful because of the content itself not having adequate value, in the consumer’s eyes, to
offset the difference in price from a used version of the game. It’s possible this method could
work if the consumer perceives the value of the extra content to be great enough to offset the
difference in price between a new and used version of the game. Subsequent owners of the game
would be given the opportunity to purchase the extra content, but that could generate the same ill
will as EA Sports’ method.
Ultimately, the resolution of this controversy will come in the form of digital distribution,
which is currently being used for smaller, independently developed games and DLC
5
(downloadable content) for full-sized games. Consumers are already acclimated to on-demand
services for other forms of entertainment (e.g. music, movies, television shows, etc.) so it seems
logical, if not predestined, that video game developers, publishers, and consumers will embrace
this commerce model. Besides the convenience of nearly instant home delivery of the latest
titles, consumers will likely benefit from lower prices due to reduced production and distribution
costs. Even on a large scale, the packaging, duplication, and shipping costs associated with retail
distribution of a commercial video game add appreciably to the final retail price of the product,
not to mention the costs retailers add to the bottom line to pay for internal distribution, stock
clerks, and sales clerks. Publishers and retailers also have to work out arrangements for
allocating floor space and shelf space for their products which takes time and, in the business
world, time is money. Since the focus of this essay is on the sale of used games, the question that
comes to mind about digital distribution is this. Can a video game that exists in a purely digital
format be resold or traded in? Technically, it could be argued that a product that exists in only a
digital form cannot be considered used because, for all intents and purposes, it cannot be
damaged or degrade in the same way that a hard copy can. Beyond that, consumers do not
currently have a way to resell or trade games or add-ons they purchase in digital form, but that
may change soon, due to a recent European court ruling which established that “it is indeed
permissible to resell software licenses even if the digital good has been downloaded directly
from the Internet” (Dorvak). This ruling will most certainly have a ripple effect in the United
States, so those responsible for creating and managing digital distribution should pay heed and
prepare their systems to accommodate the inevitable need to buy and sell “used” digital-only
video games.
In conclusion, it would be difficult to dispute that the manner in which video games are
6
bought and sold must change or it is likely some publishers and developers will cease to exist.
The technology already exists to implement digital-only distribution, so all that remains is for the
publishers and developers to find the will to do it, and the sooner they do, the sooner the
controversy over used video games will be resolved.
7
Works Cited
Ben, Fritz. "Video Game Borrows Page from Hollywood Playbook." Los Angeles Times. Los
Angeles Times, 18 Nov. 2009. Web. 08 July 2012.
<http://articles.latimes.com/2009/nov/18/business/fi-ct-duty18>.
Crossley, Rob. "News." Study: Average Dev Costs as High as $28m. Develop, 11 Jan. 2010.
Web. 06 July 2012. <http://www.develop-online.net/news/33625/Study-Average-devcost-as-high-as-28m>
Kuchera, Ben. "EA Sports to Charge $10 to Play Used Games Online." Ars Technica. Condé
Nast, 11 May 2010. Web. 10 July 2012. <http://arstechnica.com/gaming/2010/05/easports-to-charge-10-to-play-used-games-online/>.
Kuchera, Ben. "The Penny Arcade Report." The PA Report. Penny Arcade, 29 Mar. 2012. Web.
06 July 2012. <http://www.penny-arcade.com/report/editorial-article/a-war-on-usedgames-is-a-war-on-gamestop-here-comes-the-science>.
Parish, Jeremy. "The '90s Game Price Comparison Charticle." 1Up.com. IGN Entertainment
Games, 30 Mar. 2012. Web. 06 July 2012. <http://www.1up.com/news/90s-game-pricecomparison-charticle>.
Oxford, Nadia. "Used Games: Good or Bad for Gaming?" Used Video Games: Good or Bad for
the Gaming Industry? 2010 TechSavvy Global, LLC, 07 Dec. 2011. Web. 06 July 2012.
<http://gametheoryonline.com/2011/12/07/used-games-video-gaming-gamestop/>.