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Retail

Current pre-owned model is "destructive," says Cousens

Tue 16 Nov 2010 9:20am GMT / 4:20am EST / 1:20am PST
RetailPublishing

Confrontation between retail and publishers leading to ridiculous business practices

Codemasters

Taken from MobyGames.com:

Codemasters develops and publishes video games for Sony, Nintendo and Microsoft...

codemasters.com

The pre-owned market in its current form is destructive to the games industry and killing attempts to extend the length of a game's shelf life, according to Codemasters CEO Rod Cousens.

Confrontational attitudes between retailers and the publishing community is getting "ridiculous", said Cousens, when both should be working together to benefit from each other's business.

"Pre-owned isn't actually new... the difference was that it wasn't a significant percentage of the market, and it was never promoted as aggressively through the retail community as it is today," he said speaking in the second part of an interview with GamesIndustry.biz.

"You could argue for the retailer in that context, but also what it's done is kill things like subsequent exploitation in platinum and classics... and it expands the potential for piracy by default. They would argue that prices would suggest otherwise - I would say not, because by the time you get down through the food chain, a thing gets more and more ripped off.

"So my view is that it needs to be managed. I don't believe that retail is going to disappear soon - I also believe that 35 per cent of the world market that doesn't have broadband, and its only access it through retail, is still a significant part to any content creator."

Cousens said it's possible with a game like F1 2010 that Codemasters could release a smaller game on disc for retailer partners, and then follow up with downloadable content as the Formula One season unfolds, helping to build a bigger game for those that want it, addressing pre-owned and piracy issues.

"It's not inconceivable to say that we send out a Formula One game that's not complete - maybe it's got six tracks. Then they have to buy their next track, and you follow it around the world. When you turn up in Abu Dhabi you have to pay for the circuit, and whatever the changes are to the cars that are put through. That, I think, would deal with a lot of it, and also address the pre-owned."

But he also warned that retailers need to work with publishers or risk alienating them with aggressive second hand selling, which can only escalate to confrontational situations.

"What we have to figure out is how we're going to work together to make this happen. If retail takes a confrontational point of view and says that if we go online, they won't stock the box - and publishers then say that all they're going to do is put out DLC after launch that retail can't participate in... it's ridiculous.

"Actually, you need them to get to the stage where they stock the box. It's not inconceivable that you're going to ask them to give the box away at some point in time. But then, they participate to an extent in the subsequent DLC exploitation," he offered.

Instead of retail and content creators stubbornly fighting their own corner, they need to work together and find a way in which both can benefit from boxed and digital sales, said Cousens, otherwise creativity and the end product could suffer.

"The way it's structured today is destructive, and it's negative to creativity and innovation. I believe it has to be managed - there's an element of it which is acceptable, and there's an element that isn't.

"If the content creators could participate in the secondary or subsequent exploitation, I think that's fair game. I think equally the retailer then has an argument that he should participate in some of the DLC, which they ordinarily wouldn't. By default, you manage the process.

"What I don't buy off on is that retailers are responding to pre-owned because that's what consumer traffic tells them. If you put the price at zero, you'll get even more traffic, but where does that go?"

The full interview with Rod Cousens, where he also discusses the EGO engine and refining the Q&A process at Codemasters, can be read here.

16 Comments

Andrew Goodchild Studying development, Train2Game

1,254 420 0.3

Posted:3 years ago

#1

Sam Brown Programmer, Cool Games Ltd.

235 164 0.7
It also seems to contradict the comment he made about 35 per cent of the world market not having broadband.

Posted:3 years ago

#2

Andrew Goodchild Studying development, Train2Game

1,254 420 0.3
He does seem to contradict himself a bit, yesterday we were reading him say that publishers shouldn't have written off the formula 1 licence, baring in mind how well it sold, but at the same time saying if anyone else had made the F1 game it wouldn't be as good and wouldn't have sold as well.
I think perhaps he needs to plan what he's going to say in interviews a bit more.

Posted:3 years ago

#3

Chris Hayward

34 0 0.0
Just saw this on Kotaku before here, so i thought i'd copy paste my response from their:

Fantastic idea imo, it allows you to create a dedicated community of supporters for the specific franchise, whilst encouraging new customers to get into it through cheaper pricing strategies. Its basically the same concept for F2p MMO's, albeit in the console Cheap2Play environment instead.

I'm also an advocate of varying pricing strategies for game components, I play FPS' for the story and very very rarely the multiplayer so if companies were able to sell off differing components of the game at a suitable price point then you can colour me happy.

The inevitable problem with this lies in the "present complex", games are very popular gifts (especially for young children who are unaware of the true cost of things) and if someone buys them a game as a gift, only to be told 3 hours in that they need to buy more, I doubt mum and dad will be pleased at giving over their card details to companies, especially as their is still (an unfounded) fear in online transactions with many of my parents' friends/relatives.

Its the next logical step forward for the industry to diversify and reach more consumers beyond the "casual revolution"

Posted:3 years ago

#4

Andrew Bryant Content Manager

5 0 0.0
It's a poor business model if they're intending to release licensed games on a yearly schedule, as people are definitely not going to be happy with vendor lock-in for iterative releases.

More often than not, I suspect next years version will be funded by last years boxed product.

Posted:3 years ago

#5

Christopher McCraken CEO/Production Director, Double Cluepon Software

111 257 2.3
When it comes to pre-owned (exploitative business model), retail (incomplete, buggy games, DLC, DRM, etc) and publishers (lock-in, idiotic pricing)...I have a hard time feeling any sympathy for any of the parties involved here. The sad fact is, consumers have to hold their nose when dealing with any of these entities.

Steam was a step in the right direction. But even they lack certain consumer enabling features, like the ability to give your games to others. In the end, nobody talks about how to please the customer...the conversation always focuses on math, numbers....which on some levels causes sane people to exclude thinking outside the box. If these people want to make money, realize that you need to stop trying to annoy the customers you want to serve. Even Gabe Newell noted that dropping the price of Portal brought on more sales...and that you can make just as much money by spreading out sales.

Until Publishers, Developers, Retail and Pre-Owned operators start actually giving some value to the customer, and stop treating the customers like cattle not much is going to change.

Posted:3 years ago

#6

Tommy Taylor Graphic Designer/youth worker

1 0 0.0
This is disgusting! @ 1st i loved the idea of dlc before i found out alot of publishers have the content preloaded on the disk and just need unlocking which is almost as bad as buying a 1/3 of a game only to have to buy more to get the full experience.

I mean if you buy a table and no longer want it would ikea think of a way to stop you selling it? Or sell you a table with 2 legs and sell you the rest later?

Also as pound shops have proven and as Christopher McCraken stated, you can make more money selling things cheaper in more volume over time.

Posted:3 years ago

#7

San Shepherd Co-Founder, Escapist Games Ltd

1 0 0.0
This is all part of the transition to a future model that is in the process of being defined. Publishers and Retailers are squabbling about an outdated business model. Boxed products are competing with digital download products on different platforms and consumers are aware they're getting ripped off - even at pre-owned prices.

Retail need to work with publishers or even directly with developers to market digital download products and get a cut of sales. This is the future. Lets get there already.

Currently, few companies is thinking of a win - win scenario for all involved. Something where retail, publishers, developers and consumers get a fair deal. Retail and Publishers bashing it isn't going to do anything for either developers or consumers.

Apple and Google have got this partly right so far - Retail and Publishing need to merge. The only problem with Apple is the monopoly they have on which titles are rewarded with approval and marketing exposure. And Google are still thinking like small time middlemen taking tiny cuts on massive transactions, rather than understanding that they need to develop relationships with the game (and app) developers as well as hardware manufacturers.

We're all bored of Retail and Publishers fighting it out for their respective (ridiculously large) cuts of the game industry's multi-billion dollar pie. As a consumer I want my money to go to the developer, and as a developer I'd rather sell my product for less and have a direct relationship with my consumers.

Come on guys - it's obvious.

Posted:3 years ago

#8

Arman Borghem Studying Juristprogrammet, Stockholm University

5 0 0.0
You could probably release two editions of the game, one with an "all-pass" code which would give access to all the DLC content which will be released in the coming year (and charge full price for it from the start).

Kind of like how Telltale did with the Strong Bad episodic games (and other franchises too, I assume).

Edited 3 times. Last edit by Arman Borghem on 16th November 2010 4:57pm

Posted:3 years ago

#9

Greg Wilcox Creator, Destroy All Fanboys!

2,193 1,170 0.5
^ Excellent comment.

However, as a gamer for 38 years and counting, I see this complete demonizing of the used market by some company heads and analysts as more than a bit silly (er, not YOUR comment, Chris). Sure the market for pre-owned has grown by leaps and bounds and yes, major retail outlets that trade in pre-owned product stiff the consumer big time. However, there have ALWAYS been used games. It's just the business model hasn't been beneficial to the consumer for about 15 years (20 if you only traded and bought games at Funco).

The main difference is we've gone from trading/reselling with friends and classmates in the 70's to the beginnings of used retail with FuncoLand and other reselling outlets (retail and mail order) in the late 80's and early 90's to the Gamstop/EB games current model of trade in, get screwed, get a subscription to Game Informer pushed at you so we can make a bit more money before you leave disgusted. From what I can recall, prices were a LOT more fair back in the mid-late 90's (for certain releases at least).

One very small reason I can think of for the truly crappy trade in rates these days is too many copies being printed of "big" titles that fail to do more than big box-office numbers for the first week or three and drop off dramatically as users who aren't into online play return games that only pack in about 6-8 hours of single player action and have little replay value other than higher difficulty levels.

I saw this with Halo 2 when the GameStop near me had close to 100 returns the first week or so from users who didn't yet have Xbox Live (and couldn't get it/didn't want it at that time). They got caught up in the hype of pre-ordering and standing outside in the rain for that midnight launch not realizing they'd have to pay MORE money for the "privilege" of getting shot in the head online repeatedly by 12-year old jerks with a mean streak.

Additionally, this "golden" age of rushed product on console and PC requiring patches (sometimes to run or even install properly) is the absolute WORST for users who haven't the ability to download fixes, period. The fact that many popular releases also end up as MUCH cheaper "Game of the Year" or Greatest Hits releases WITH the proper patches is both a good thing for those who wait but a bad thing for those who run out on day one and have to deal with crap that should have been fixed in QA. Couple this with the stupidity of the industry treating game launches like summer blockbusters instead of allowing sales to gain momentum over time and we're in for more of this dreck while new forms of digital downloads are pushed as if they're 100% flawless.

There are a bunch of game trading websites and social gatherings these days that work perfectly for users tired of the current system. Also, most independent game stores make much of their money on used games as well as accessories. Having worked in indie game retail some years back, I can safely say that hell, sometimes the ONLY way to make ends meet when there's a slow release week is through sales of pre-owned titles. The current digital model ignores pre-owning altogether and is USELESS for those gamers who can't afford or get broadband or just want physical copies of games but don't have money to shell out for new versions.

Steam is indeed handy-dandy and I'm a Valve supporter... to a point. However, since retail copies of games on the service CAN'T be resold (as anyone who bought a used disc version of Killing Floor from a retail outlet or auction site found out), you're stuck with games you might not like or even if you liked them and played them to death, you can't do a damn thing with it once you want to move on.

I've gotten tired of holding my nose, so I avoid major retail altogether when I need to sell or trade off games I no longer want to play. Then again, I only have about 2000 or so here, so maybe I'm a bit crazier than most (or just a bit of a historian, ha ha)...

Edited 1 times. Last edit by Greg Wilcox on 16th November 2010 5:45pm

Posted:3 years ago

#10

Haven Tso Web-based Game Reviewer

255 8 0.0
Well maker better games and sell them at reasonable price points. If you are trying to sell mediorcre "cash-in" titles from franchises of course people will not fall for them again and again. The music genre and the Wii shovelware are very good examples. If it is a great game, it has higher chance of selling well and less chance of people sending them back to the second hand market. It is the developer's / publisher's duty to make games more replayable and enter the market at a reasonable price points but not their right to tap in to cash in on junks that they made but people don't want to keep

Posted:3 years ago

#11

David Rider Publisher, Hustler UK

83 0 0.0
I'm sorry, but the industry needs to get over this one and come up with a new way to monetize IPs. Does Ford demand a cut of every one of its cars sold by a private individual? Will Apple send the collectors round if I sell my laptop on eBay? Okay, so they probably would, but you get the idea. Penguin books doesn't tell me I can't dump their stuff at Cancer Research or a second hand bookshop... Why on Earth should a game be any different? Justify it all you want, but it's purely sour grapes because someone else is earning money and you're not.

Posted:3 years ago

#12

Aleksi Ranta Product Manager - Hardware

275 127 0.5
Consumers seem only willing to pay less and less for their games (an assumption why there is a healthy preowned market), while the industry makes games that are more and more expensive (to produce). This is why speculation and talk about preowned games will continue for the forseeable future.

Posted:3 years ago

#13

Tony Johns

520 12 0.0
Mmmm

Publishers making incomplete games that are primarily used for download content to get the full game experience...

Compared to Retailers heavily marketing their pre-owned games where they get more of a proffit and consumers get games for a cheaper price and attracts new gamers or even younger gamers who don't have the money to get a full priced game....

I would rather publishers adjust to consumer needs and understand that the pre-owned market is there to attract newer gamers or younger gamers while the more older gamers who do have more money to spend will always have the money to buy the latest games at full price.

Because unless if there is a way for publishers to still get money from pre-owned games (which is perhaps why publishers are arguing) I don't think this issue is helping the industry at all...

Perhaps they are afraid of the 4th Videogame Market Crash (1st was too many PONG clones, 2nd was the crash caused by too many consoles and poor quality Atari 2600 games, 3rd was the too many CD add-ons and early CD consoles that cost allot of money in the early 90's that almost could have caused another big disaster if too many went down that expencive road)

I think if there was to be a market crash soon, it would be because of too many pre-owned games being on shelves and the industry being too reliant on retailing which is why publishers are also looking down DLC, download stores and other ways of keeping their side of the market healthy.

Posted:3 years ago

#14

Erin H Content Manager

5 0 0.0
It's understandable that the publishers would be concerned about the issue of pre-owned games sales especially in light of the rising costs of producing games. I do however, think sometimes that they take this view a little too far and the view of pre-owned games equalling 'lost revenue' (which they no doubt see it as) is slightly misguided in my view. Sure ok in basic terms they don't get money for the game - and retailers have certainly been pushing them much more aggresively the last few years (better margins for them I guess). However notions of digital only distribution are unrealistic at this point in time for full disc based games - I own a large collection of games and I'm pretty sure not all of them would fit on my 120Gb HD for my 360, especially when coupled with XBLA games and DLC. I don't mind digital distribution and DLC but I value physical copies of games as I can take there wherever I want and play them on anyone's console or just sell or give them away as I please. I think the pubishers trying to control that is a little misguided and will only alienate the consumer.



I think a second hand market for anything is important for the consumer and where matters of choice are concerned - especially as some retailers tend to not stock many older games which can be hard to find outside of a secondhand seller. The notion of selling incomplete games seems quite stupid to me - I simply would not buy a game if I had to waste time purchasing more content online (especially if it meant I had to mess around with the 360's stupid ms points system) and then downloading what may be large files merely for the priviledge of playing the game in it's complete state. The notion seems overly controlling and out of touch.



Also at this point in time it's inevitable that there would be more consumers leaning towards pre-owned, we are still in a recession after all and games are a (sometimes) expensive luxury some people may not be able to afford otherwise. Some publishers also complain about rentals of games don't they? Yet me renting a game is what got me to actually purchase it and the subsequent sequel.

Also is it just me or does his comment about preowned games expanding 'the potential for piracy by default' not make any sense? How does me buying Rainbow Six Vegas for a fiver make piracy more of danger?! Sometimes it's hard to tell if all this is just histrionic handwringing.

Posted:3 years ago

#15

Greg Wilcox Creator, Destroy All Fanboys!

2,193 1,170 0.5
^ of course, I brought up the console storage space issue before (a HUGE problem, as NO game system has a large enough drive for games, movies and other crap forced into each new update) and even this whole "cloud" storage solution and the upcoming streaming media services are in no way the best solution for paranoid types like myself.

What happens when that cloud server goes down, gets hacked or hit by some other electronic/human error annoyance that shuts folks off from their content? I'd say collectors such as myself, Erin and a few thousand other die-hards from the Digital Press forums will be sitting at home during the great game riots actually playing our retail versions on whatever works while Rome burns...

Posted:3 years ago

#16

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