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PlayStation Orbis and Next Xbox: Why Used Games Aren't Going Away

PlayStation Orbis and Next Xbox: Why Used Games Aren't Going Away

Tue 10 Apr 2012 2:44pm GMT / 10:44am EDT / 7:44am PDT
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Veteran journalist Chris Morris tackles six reasons why the next-gen systems won't kill used gaming

Sony Computer Entertainment

Sony Computer Entertainment is a Japanese videogame company specialising in a variety of areas in the...

playstation.com

There's a lot of talk making the rounds these days about used games and the next generation.

The popular theory is the next Xbox or PlayStation 4/"Orbis" might altogether block people from playing previously owned games - something that has the core gamer base feeling a bit backstabbed. But the shock of seeing these reports seems to be causing those same people to lose perspective.

Used games are almost certainly not going anywhere with the upcoming generation of consoles. While an evolution is likely, don't let media alarmists convince you that your days of cashing in titles you've lost interest in are over. Here's why:

No one wants to anger the fan base - While things aren't quite as dire as some would have you believe, the glory days of the console industry seem to be coming to an end. While there's room for continued growth among developers and publishers, with a slew of unexplored options, the next generation of consoles is more a service battle than anything else.

There are plenty of other options for gamers to explore these days - and Microsoft and Sony both know it. Given that competition, it's ludicrous to imagine either would risk angering their loyalist customer base to the extent that they would risk losing them.

"Neither wants to open the door for a trouncing like they got from the Wii in the first part of this generation"

Put simply: Gamers see a value in being able to trade in their games and buying used copies for a bit less. Taking that away devalues the console. And whatever advantage there is for the console makers in terms of making third-party publishers happy, it's not worth the risk of losing market share.

After all, while it might be nice to be able to use your Xbox and PlayStation as a movie and television streaming device, there are plenty of other set top boxes that offer that same functionality.

Why alienate GameStop? - GameStop might be an easy punching bag among gamers, but it's one of the most powerful retailers in the industry, regularly grabbing market share away from big box stores like Best Buy and Wal-Mart. While game sales make up the majority of its revenues, it moves a fair number of consoles as well.

1

Last year, GameStop made $2.6 billion selling used games - representing more than 27 percent of its total sales. That's a figure the company is going to guard ferociously. Console sales, meanwhile, made up $1.6 billion in sales, just 16.9 percent of revenue.

GameStop's not dumb enough to threaten not to sell the next generation consoles. That'd be a breach of its fiduciary duties to its shareholders. But the company (and its store employees) certainly has some influence over the buzz surrounding a system. It's simply bad business on Microsoft and Sony's part to cut GameStop off at the knees.

There's still money to be made - In the past two years, game publishers have finally learned how to make used games work to their advantage. EA's "Project $10" showed that by forcing players to pay a small fee to access content on a previously owned game, they could still make money from used game sales. Most publishers quickly followed suit.

So far, that fee has been largely tied to the multiplayer aspects of a game. As the next generation of consoles ties titles to user accounts, players will likely have to pay to unlock the single player portion as well. As with "Project $10," there will be a brief squawk, then an adjustment period (likely among retailers, which will have to adjust pricing on their end), then it will be an accepted part of the video game landscape.

"For all the tempest in a teacup over used games of late, there's a larger truth being overlooked: Natural selection has already put an expiration date on them"

Calling all pirates - Most people who play used games do so as a way to save money on their favorite hobby. Were used games to go away, most would grumble and simply buy new games, but would purchase several less per year. To a smaller subset, though, a ban on used games would be like shining the bat-signal for piracy.

Undoubtedly, the piracy protection systems on the next gen consoles are state of the art, but if that subculture has taught the entertainment industry one thing, it's that it is persistent and capable - and it will quickly find a way around the roadblocks.

Why give Nintendo an advantage? - Have you noticed that all the talk about banning used games has surrounded Sony and Microsoft? Nintendo doesn't seem to worry about them.

While some people seem to have written the Wii U off, there's still a lot of mystery surrounding that system - and if Nintendo has a stellar E3 this year, it could set itself up to once again be king of the gaming hill for another noteworthy run. Gamers might be ignoring the system for now, but Microsoft and Sony certainly aren't. And while both will focus their marketing efforts on each other, neither wants to open the door for a trouncing like they got from the Wii in the first part of this generation.

Let nature take its course - For all the tempest in a teacup over used games of late, there's a larger truth being overlooked: Natural selection has already put an expiration date on them.

Digital distribution isn't mainstream yet, but it's growing fast. And by the end of the upcoming console generation, it's going to be unavoidable. While that's a huge convenience for players, it's a dream come true for publishers, since it will sound a death knell to used games (or, at the very least, damage them enough so they don't substantially impact earnings).

The choice for console makers (as well as game publishers), therefore, is simple: Fight an ugly PR battle that could anger your customers and retail partners - or wait a few years and let it die a natural death.

22 Comments

Bryce Hunter
Producer

10 2 0.2
Thank you for adding a bit of sanity to this topic! Very refreshing.

Posted:2 years ago

#1

Andrew Clayton
QA Weapons Tester

150 7 0.0
Valid points except for the GameStop one. GameStop has done way too much to anger the industry and consumers. I don't think anyone would be sad to see them go. Seriously, think about it, does anyone really think that consumers are happy to shell out $50 for a game that was released years ago?

If it weren't for the exclusive preorder DLC, I would never buy games from them and neither would my friends. If the industry really wanted to, they could easily shut down GameStop for good. Not one tear would be shed.

Posted:2 years ago

#2
hmm, speaking from a gamer's prospective for once paying $10 to access multi-player features is one thing, though its worth noting from all evidence the majority of users dont actually use those features, I do but I buy games new ever since I ceased to become a student:D, however having to pay the same sum for single player on top of the purchase price is quite another, Gamestop would have to reduce the price it sells each used title at by the same amount, as consumers would not be willing to foot the bill as the whole point of used titles is the lower price point, which would in turn likely lead gamestop to reduce the price it offers those selling their first hand games, which will lead to less used games in circulation as its already questionable to end users that you get much value selling fresh games, and such sellers usually use the money to buy fresh games, so a reduction in the price offered may well reduce the circulation of used titles, so these gamers will be able to afford less titles meaning they'll sell less, should any of this happen Gamestop's profits as well as anyone else involved in the process will see a reduction proportional to the publishers increase in direct profit. Also PC gamers may be tempted into other ways of getting cheap games other than used, who's choice has only increased in number and quality in recent years.

Erm on a side note skip to the end if you just want the cliffnotes version.

Despite many steam titles being sold normally at a higher price point then boxed copies from say Amazon, steam sales can be quite cheap (and so can Impulse ones that are priced to match), with 80-90% off some titles, infact you buy many decent quality games for $10 or less peicemeal, many such sales end up cheaper than most used titles, or at least 33% off during seasonal sales at least bringing them in line if not a reduction over amazon's prices, even for titles like Call of Duty series on average, not forgetting 50% sales which is like buying triple A titles for budget prices, some used gamers tend to like to play more games then they can afford to buy new, raise the price and the number of sales will fall, in addition you may attempt many use gamers into other markets, the rest of used gamers just aren't willing to pay the main retail price for whatever reason so wait for it to get cheaper.

Either way I have to strongly disagree on the brief squark comment, multiplayer aspects were one thing, but targeting single player will basically add the price to the title, given increasing threats to used games from digital distribution, I doubt it will blow over without long-term effect,

Indeed it would be interesting to examine the buying habbits of used game purchaser's who play multiplayer on pc and consols before and since the $10 got added, my personal view is the result if examining console gamers would be they still allocate the same funds as before to game purchases and make up the additional cost buy buying less titles, so in the scheme of things wealth was simply re-distributed to cut publishers into the profit at the expense of the retailers, however in the pc realms, whilst most would probably end up the same as above, a proportion of used gamers may well have decided its cheaper to wait for sales instead, I am biased as since leaving college I purchase most titles through Steam/Impulse Sales or the odd amazon as oppose to Used, as its just plain cheaper, not to mention you dont have to fumble about with grimy discs of suspicious nature or Game guides with peterbing stains you try not to wonder about to much on them, back when I was playing used, more than once I loaded up a game on console, and it failed, leading to a drive straight back to the store where I bought it, console only games would have no choice however, but I suspect it will just be a further re-distribution of wealth, it would not lead to more money in the pot even in the best case scenario for anyone but the publisher and they'll do so at Gamestop and other's expense, and worst case it will reduce the entire used markets who's business will be eagerly lapped up by valve and co.

Put more simply then all the above nothing in this world exists in perfect isolation every action will result in reaction, usually more than one reaction, sparking spiral's of cause and effect that reach far beyond the perceived scope of the matter in hand, this includes profit and price hikes, raising prices here will result in either lower sales or poorer gamers or both, either way money does not teleport in from nowhere, and treating such rises as insignificant or as free money without examining the full ramifications of the action is not wise for any business, nor should such an action be recommended, there has been enough economic problems in recent years caused by such short sighted actions chasing quick profit without examining the long term ramifications, more are not needed.

Posted:2 years ago

#3

Daniel Hughes
Studying PhD Literary Modernism

436 496 1.1
I can see the next Sony/Microsoft consoles locking out used games and forcing you to purchase an online pass to unlock the game, therefore ensuring publishers get a slice of the pie. Banning second-hand out right would be absurd.

Posted:2 years ago

#4

Ian Brown
IT Developer / IT Infrastructure

107 26 0.2
If they want digital to be then mainstream then they must reduce the prices accordingly or offer sales/discounts that are worth the effort. On Xbox live i can buy Crysis 2 direct to my console for £19.99 with no manual/box or anything to say I paid for it. Or i could go on to the internet and get a new boxed copy for half the price and wait a day but get a box, disc & manual. till they offer more for the consumer it's not going to take off like they think. If they sell a boxed copy with all the trimmings for £39.99 and sell the digital version for £29.99 (seeing as its only a file and nothing is manufactured and there is no staff to pay) then I'll seriously give it a thought. Out of all of the games I have on my steam account not one was paid for at full price. Every single one of them was on sale with some at around 50% or less.

Posted:2 years ago

#5

Al Rhodes
Web producer/designer

21 7 0.3
People buy used games simply because they cannot afford the ridiculous prices charged when new games launch. No other form of entertainment costs as much as gaming except possibly Premiership football, music festivals or opera.

It is either buy a used game or wait a month or two until the price of unsold new games drops to an affordable price. That is your choice if you object to video game piracy as I do.

If console manufacturers or games publishers want us to buy new games, stop ripping us off. As the games industry grows ever bigger, eclipsing even the movie industry, prices should drop, not increase. Just as dvds, blu rays and hd tvs have dropped in price. And although many us have grown up with gaming and stayed as gamers, a large proportion of the gaming audience are still kids. There is something immoral about trying to squeeze extra revenue out of a game that someone has already purchased.

You now don't even get the full game half the time. You now only get a basic version of the game with premium 'add ons' (for which read the full game) for a cost. This is something that Nintendo don't seem to do at least.

You wonder why the games industry is always reportedly going through a tough time? Try putting your customers first, many of whom have grown up and spent more than half their lives playing video games.

Many gamers have shown Nintendo, Sony or Microsoft a loyalty for so many years... an adoration almost... that many other worldwide brands could only dream of. Yet as always there is forever talk of 'how can we squeeze more money out of our customers?'

Well the answer is simple, we don't have an endless supply of money. If any manufacturer produces a console that does not play old games, let alone used games. I for one will not be buying it. I couldn't afford to buy any games for it!

Posted:2 years ago

#6

John Byrd
Principal

10 17 1.7
It's funny how people talk about how absurd getting rid of the secondary market for console games is. But they accept that there is no secondary market for games for PCs and smartphones with no question whatsoever.

Can you not imagine, as exists with iOS and Android, a cheap, easy-to-access market of consoles that play thousands or tens of thousands of games?

What people are really saying in this thread is "I want to own the next-gen consoles but I am accustomed to buying discounted games at Gamestop." That's exactly the problem that digital distribution is intended to solve. An efficient market where game prices fluctuate quickly with demand and supply, and you can play what you want with little or no wait.

Console manufacturers are not competing against one another. They are competing against the App Store. That's where the future of the game marketplace lies.

Posted:2 years ago

#7

Graham Bromley
Lead Level Designer

9 2 0.2
"Last year, GameStop made $2.6 billion selling used games - representing more than 27 percent of its total sales"

And how much of that made its way back to the Developers and Publishers who are investing the millions required to make these games in the 1st place?

Some might even go as far as to say that the sale of a pre-owned game prevents the sale of a new game; which would have seen some money go back to the developer, thus costing the developers and publishers money.

Hence EA's "Project $10"

And even then I've witnessed sales staff in Game, actively discouraging customers from buying new stock, even when the combined price of 2nd hand game, and activation code exceeds the price of the new game.

So I can see why Sony and Microsoft might not be keen on 2nd hand games.

In response to Al :-
£40 for Skyrim, which gave more than 200 hours gameplay was an absolute bargain.
£40 for Mass Effect 2, which I logged more than 40 hours on, also good.
same for FIFA and Battlefield, both of which I've logged hundreds of hours on.

£7 for Thor DVD - running time 2 hours.

No other entertainment industry gives better per minute value for money than games.
Even when you compare full price games to cut price film.

Edited 1 times. Last edit by Graham Bromley on 10th April 2012 8:03pm

Posted:2 years ago

#8

Craig Bamford
Writer/Consultant

40 54 1.4
And how much of that made its way back to the Developers and Publishers who are investing the millions required to make these games in the 1st place?
Every dime spent by someone who would not have bought the game were resale not a possibility, of course.

That's what it comes down to, Graham. The only reason why PC digital distribution can get away with a lack of resale is because Steam buyers—Steam being synonymous with the platform these days—has those huge, public, and impressive sales. If you want to kill resale, you're going to need to realize that the price of games will be inexorably pushed downward.

It ain't gonna be a free lunch.

Edit: Oh, and let's not mix things up here. There are other media that provide far more time-per-dollar than major-release games do. The price of a new AAA game can buy you a boxed set of a television series, a series' worth of graphic novels, a whole lot of mass paperback books, or something like sixty to seventy songs on iTunes. It could also buy months of access to a service like Netflix or Rhapsody, where the amount of available content isn't even comparable.

But, more importantly, that same AAA price would buy a ton of indie bundles, enough cash shop stuff to make even the most money-grubbing F2P MMOs a comfortable affair, or a simply ridiculous number of iOS Apps.

Heck, thanks to the shrinking length of your typical AAA game, a few trips to the cinema might well be cheaper if you go to a matinee and hold the popcorn.

This isn't 2002. The entertainment options of consumers have completely changed. The same-old same-old case for console games just doesn't apply anymore. Locking out resale won't fix that. A clear eye just might.

Edited 1 times. Last edit by Craig Bamford on 10th April 2012 10:25pm

Posted:2 years ago

#9

Preet D Bass
student

92 13 0.1
This is beginning of the end of Sony & MS reign.

Posted:2 years ago

#10

Peter Stirling
Software Engineer

25 7 0.3
So another article that misses the point completly. They're slowly edging toward reason. But it is still based on the faulty premise that price of new games will remain the same with copy protection and that there is some significant saving for people buying used games for the current generation.

The main difference between the proposed system and the current one is very small. When you go to the counter and buy a game, you are buying one single copy for yourself. There is no hidden resale value factored into the cost because it has no resale value. It stands to reason that it would be cheaper to buy new games and most people would be unaffected.

Secondly there is an assumption that used games are more accessible to poorer gamers, I must say some kind of citation it needed for that point. From my experience used games are only marginally cheaper. The price 'a few years later' and the price of a used copy of a recent release are hugely different. This assumption is patently false.

Edited 2 times. Last edit by Peter Stirling on 11th April 2012 12:07am

Posted:2 years ago

#11

Alex Bunch
Proof Reader

91 102 1.1
They could never sell a code for single player on pre-owned copies. How many PS3's and 360's are not connected to the internet? I bet it's a fair whack. Do they really want to cut out that section of the market?

Posted:2 years ago

#12

James Podesta
Lead Programmer

16 1 0.1
I would expect ps3 and x360 to go the way of Steam and the App Store, which means second hand sales becomes a non-issue. This is indeed natural selection, and it gives Sony and Microsoft a lot of power (as it did with Apple) in that they control the marketing on the Store. Consumers on those platforms have shown they are willing to accept a world without resale. Developers like it as it reduces a lot of barriers to publication. And generally prices can be lower and fluctuate with sales, so consumers like it also.

On the other hand....

It would be interesting to know the WIFI connectivity stats of the consoles though. Consoles do have the one difference that they don't need to be connected to the internet or a computer. iOS, at the very least, must be connected to a computer that is connected to the internet, while purchasing an app, but its not practicable to be dragging a console to/from the computer. My house is wifi'd so I'm good, but there must be a large percentage of houses still that don't have wifi so there is no internet near the television where the console sits?

Edited 1 times. Last edit by James Podesta on 11th April 2012 12:54am

Posted:2 years ago

#13

Tony Johns

520 12 0.0
Sanity and calmness in journalism is refreshing.

It is nice to read an article that takes things into perspective.

I for one would feel that if Microsoft and Sony go down the percived route to stop used games sales, they would only be shooting themselves in the foot and Nintendo would only come out as a huge winner.

I hope for the sakes of MS and SONY that they would think twice if these rumours were ever true that they were thinking of going down that dangerous path.

Posted:2 years ago

#14

Craig Page
Programmer

382 218 0.6
I don't trust Sony or Microsoft to do the right thing if used games were to disappear. Just look at their DLC and arcade titles, the prices NEVER go down except during sales a few times a year.

I got Mass Effect 2 for $19.99 (new), but to play all of the DLC would cost an extra $20-$30 (for a few hours of gameplay and some avatar items).

Edited 1 times. Last edit by Craig Page on 11th April 2012 1:31pm

Posted:2 years ago

#15

Curt Sampson
Sofware Developer

582 329 0.6
It's not true that the prices never go down. I've been noticing deals on PSN "full game" titles (i.e., ones that originally came out on--and are still available on--disc) get slowly better over the last year. Just Cause 2 recently dropped from US$25, which was already not unreasonable to $20. And I recently picked up Bioshock 2 for $15.

That said, I still frequently see the disc versions (new, not used) of full game titles selling for less, and these prices may be affected by the fact that there is competition from the disc titles. I certainly would not take as a given titles where used sales are not a possibility will come down in price, because we simply don't see it happening now for digital-only games.

Edited 1 times. Last edit by Curt Sampson on 11th April 2012 3:56pm

Posted:2 years ago

#16

Graham Bromley
Lead Level Designer

9 2 0.2
"or something like sixty to seventy songs on iTunes."

Even epics that last over 10 minutes, and assuming the full 70 tunes, this is only 700 minutes, just under 12 Hours.
An average song lasts around 3 1/2 minutes. A fraction over 4 hours, for the 70.

"The price of a new AAA game can buy you a boxed set of a television series"
Indead, season 1 Homeland is now reduced to just £28, for 12 hours viewing.
3.88p per minute

None of these are matching Skyrims 0.0033p per minute
(Calculated using the full retail price, not the £25 that I, and many other customers managed to buy brand new for)

Posted:2 years ago

#17

Jim Webb
Executive Editor/Community Director

2,232 2,161 1.0
I agree that per price, videos games are the economic king. However, music does tend to get more than 1 listen whereas games don't often get more than just the 1 play through.

Even factoring that in, you still get far more for your money/time with a video game.

Posted:2 years ago

#18

Kevin Patterson
musician

181 94 0.5
With games being $59.99 for a new title, I find it difficult to buy all the games I would love to play. Instead, I buy the titles that i Must have which aren't really that many, and rent the others through gamefly or locally. Sometimes those rentals become purchases, or inspired me to buy the developer's next game as I enjoyed the rental so much. If they tried killing the rental and used market on the new consoles, I would probably go back to PC gaming mostly.
I find it difficult to believe this rumor, as the article suggests, this would be an insane step for Sony and MS to try.

Posted:2 years ago

#19

Josh Meier

40 15 0.4
Most games I buy are for my PC or PS Vita, one of which doesn't do used games all that well and the other is so new that finding used games for it that I would want is difficult.

I personally like the convenience of having a digital copy on the system instead of having to haul around physical games for my mobile gaming. At least Sony had the sense to discount PS Vita games when you buy them from the PSN instead of getting a physical copy, even if it's only by $5.

I wish some of the PSP games that have been on there for a while would be discounted a little more though. Some of them are still up there for $20-$30 even though they've been around for a few years. I would have considered buying Final Fantasy Duodecim if I could have gotten it at under $20, but it's not worth $30 to me, especially as a digital copy.

For my PC I like to have physical copies of a game if possible, but since Steam puts so many good games on sale it's cheaper and more convenient to just buy it from there. In some cases a service like Steam is the only way to get that game.

Posted:2 years ago

#20

Greg Wilcox
Creator, Destroy All Fanboys!

2,122 1,033 0.5
Heh. I find it hilarious that that "PS4" in the mock up looks almost exactly like the Sanyo TRY-1 3DO Multiplayer released in Japan. Anyway, as someone who owns about 2000 games (many used) and goes back to them multiple times (A good game is like a good book, I say), I'm not giving up on my collection any time soon. That and as the only one here who seems to live in an area with shitty online service, a digital only console interests me not at all.

Sure, I can take my Vita or 3DS to a Starbucks or other Wi-Fi spot and get content, but I'm not sure they'd appreciate me dragging my PC in to do some gaming. And nope, I don't have (nor can I afford) a laptop. Yeah, I'm that broke and us porr chumps are the ones being shit on by all the folks who keep forgetting that we also buy games (new as well as used) when we can afford them.

Posted:2 years ago

#21

James Butterworth
IT Hardware & Software

24 1 0.0
This whole thing stinks of Apple's "In App purchase" where you often have to buy a game, and then get charged to unlock content. Are games devs trying to follow suit? Buy a digital game and then have to pay once again (or several times depending on the features) to play it? Apple's In App system has massive flaws where users have had to restore their device and they've not been able to actually restore these features, but had to pay again!

If you have to replace your console's HDD for example, and the above situation happens, I'd hate to see the outcry, especially if it worked on a NO REFUNDS policy like Apple. Why does everyone have to copy the deluded company that is Apple and its fanbois?

Posted:2 years ago

#22

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