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Retail

Retailer plans to share 10% of pre-owned sales with publishers

Retailer plans to share 10% of pre-owned sales with publishers

Tue 24 Apr 2012 7:48am GMT / 3:48am EDT / 12:48am PDT
RetailPublishing

New US site wants to promote "circle of life" in retail environment

New US online retailer EKGaming intends to share 10 per cent of pre-owned games sales with publishers and developers.

The company said it wants to promote a "circle of life" in the retail environment, creating a new revenue stream for publishers and developers, as well as allowing consumers to continue to buy and trade second hand games.

"Publishers are spending record amounts of cash on new game development. This increase in dev costs is steering them in directions that don't necessarily jive with gamers, causing them to take less risks on new and potentially exciting IP's or game mechanics and sticking with tried and true properties that are more of a guarantee," commented CEO Mike Kennedy.

"We want to share our used game revenue with them so they can continue investing in new gaming experiences without worrying about the negative effects used games could be having on their operations."

The retailer also said it intends to "guarantee" better trade-in credit for games compared to the High Street competition - up to 30 per cent - taking advantage of the low overheads of the online marketplace. It currently offers $40 trade-in credit for titles such as Call of Duty: Modern Warfare 3, The Witcher 2 and Assassin's Creed Revelations, and $30 for Kinect Star Wars and Mario Party 9.

25 Comments

Rick Lopez Illustrator, Graphic Designer

1,269 942 0.7
Hmmm... Finally someone steps up and takes an initiative on the issue of used games. Maybe there is hope after all. It will be good for publishers and developers all around. A second hand game thats travelled between multiple owners can probably generate more revenue than a new game. Its a win- win situation for both the retailer and the publisher/developer.

Edited 1 times. Last edit by Rick Lopez on 24th April 2012 4:49pm

Posted:2 years ago

#1

Thomas Dolby Project Manager / Lead Programmer, Ai Solve

340 292 0.9
This is a great step towards brokering a peace on the "war on pre-owned". I hope publishers embrace this and they can come to a satisfying compromise with retail which doesn't hurt the consumer.

Posted:2 years ago

#2

Terence Gage Freelance writer

1,288 120 0.1
I've often wondered why retailers haven't been doing this for some time, because as the onus moves more and more toward online retailers are in a weaker and less influential position. It's a good move by this start-up company to get themselves a bit of publicity and presumably get on good terms with publishers, although I wonder if the publishers are going to getting 10% of the sale price or the profit.

Also:
"potentially exciting IP's"

Got a rogue apostrophe there Matt.

Posted:2 years ago

#3

Mike Kennedy Founder | CEO, GameGavel.com

20 2 0.1
@Terence 10% of the used game selling price or $3-$5 per game. We are also sending prepaid preaddressed return envelopes with all game orders increasing the chance they will be traded back in to EKG.

Posted:2 years ago

#4

Russ Cogman Senior Game Artist, Serious Games International

22 47 2.1
Terrific stuff. A good compromise solution that benefits everybody. A well-travelled second-hand title could end up generating more revenue than a new one over its lifespan. I dearly hope this becomes the accepted model for all used games sellers

Posted:2 years ago

#5

Boris Vigec Technical Art Director, Zootfly

8 4 0.5
Very sad that they pushed it so far. Why should games be any different than other stuff you buy and OWN! It's just publishers wanting to grab more money.

If you sell your Sony TV, does Sony get a share of your sell...this is just greed.

Edited 1 times. Last edit by Boris Vigec on 24th April 2012 5:03pm

Posted:2 years ago

#6

Morville O'Driscoll Blogger & Critic

1,590 1,445 0.9
@ Boris

As pointed out other places, none of us actually own our software. The EULA in almost every title states that it's a license to use the software, not full ownership.

Posted:2 years ago

#7

Brian Smith Artist

196 85 0.4
The publishers need to solve this problem themselves. Can't fault EK for using it as a USP for their start-up to gain ground but it's all wrong. Publishers being paid for items they've already sold goes against a free market IMO.

Posted:2 years ago

#8

Bernard Parker Studying game design, Full Sail University

23 4 0.2
This site will likely become favored amongst game developers.

Posted:2 years ago

#9

Brian Smith Artist

196 85 0.4
@Bernard - But will it be able to compete at a customer level. Devs and Publishers might quite like the idea but it can't work as they've stated. Nobody can tell me they are going to pay more for used software and pay the devs and publishers and still provide competitive prices for re-sell. It doesn't work out.

Posted:2 years ago

#10
@Boris

No one "pushed" anything. This 10% is a deal being made between EKGaming and publishers. EKGaming is choosing this business model to compete with other front runners such as GameStop. As a consumer, you will still be able to sell your used game. No one is infringing on first sale rights. No one is modifying first sale rights in any way. It's just that now the money that you pay to get a game used and cheap is being split partially with the publisher (how much of that goes to the actual developers that worked on it is another controversy not worth getting into here). This may bother you because you think the suits at the top of used game stores deserve the money more than the suits at the top of publishers; I don't know. But I don't see how this can bother you as a consumer. EKGaming seems to be offering a better deal for consumers than, say, GameStop. And having more places to sell your used games to is a good thing for consumers as competition lowers prices and raises trade in value. It's a win-win-win scenario. But thanks, from the bottom of my heart, for using a TV as an example and not the tiresome car analogy ;).

Posted:2 years ago

#11

Rick Lopez Illustrator, Graphic Designer

1,269 942 0.7
@ Boris

I know your point, if I have a garage sale I guess im entitled to sell my stuff and not give anybody anything, but in this particular case we arent talking about one guy in a garage sale. Retailers like game stop and game are the greedy ones, they are making a business off it. And its draining the developers dry. And its not a question of right or wrong. But would you bite the hand that feeds you? Businesswise, does this make sense?

It benefits the retailer if the game industry was healthy. It means more games in development, more products on store shelves, lower prices on new products for consumers. Businesswise it makes sense to go this route. Sure game stop can even stop selling new merchandise and only sell used. On the long term would this benefit them as a business?

The issue here is greed. And greed is something that hurts someone elsewere every single time. In this case its the retailers hurting the game developers. And sure retailers have every right to sell used games... but as a business... should they?

Eventually developers find other methods to distribute there games and it wont look good for retailers like gamestop. All a developer has to do is pull a huge release like Assasins Creed 3 from a retailers store shelf and that will be millions in losses for the retailer. It like when EA decided to pull Mass effect 3 from GAME store shelves on release. It was massive losses. Soon after other publishers did the same and that resulted in GAME going into administration. these arent facts, but its what im assuming based on the articles here.

Put yourself in the developers position. Sell 100 units of a product and tell me it wont get you mad to see him sell each unit 5 times over and over again. then the retailer doesnt buy as many new copies from you to sell, the retailer keeps making money and you dont. You only made money just of 100 units when the retailer has made 10 times the amount over a product you created.

Posted:2 years ago

#12

Dave Hawes Project Manager coding, Eutechnyx

9 4 0.4
This is a great idea, I wish it had come about earlier, but it really is a better way forward for everyone involved.

Posted:2 years ago

#13

Nicholas Pantazis Senior Editor, VGChartz Ltd

1,020 1,467 1.4
@ Morville Actually Fair Use laws have held up that any time you buy a product with data on it you have full rights to all that data and can do what you want with it. That means everything on a dics you purchase, regardless of where you purchased it, is yours to use, including things like on-disc DLC which you can legally hack to unlock (if you are so inclined and capable).

Edited 1 times. Last edit by Nicholas Pantazis on 24th April 2012 6:49pm

Posted:2 years ago

#14

Andrew Ihegbu Studying Bsc Commercial Music, University of Westminster

463 172 0.4
"Put yourself in the developers position. Sell 100 units of a product and tell me it wont get you mad to see him sell each unit 5 times over and over again. then the retailer doesnt buy as many new copies from you to sell, the retailer keeps making money and you dont. You only made money just of 100 units when the retailer has made 10 times the amount over a product you created."

Firstly, this may not be popular with the Developers on this sight, but I believe those with a honestly good point in a debate (of sorts) should have no problem explaining it to the curious. I apologise to anyone I may offend.

I've always wondered why Devs have been so adamant about this being wrong. It's digital media and the same is true for DVD's and CDs yet only the game industry is getting mad about it. What strikes me as wrong is the profit margin they try to use, but then that's just taking advantage of the fact that games retail at 40 and DVD's retail at 6-12. It's not like Steam and other digital distro isn't making used games look expensive now. (unless you're Activision and are still selling CoD:MW1 and 2 @ 20 (all figures are from Steam) and your last 2 at 40 years after release, in fact on that point I think its companies like these that keep pre-owned alive)

To clarify, at DVD prices, the 3 saved from buying used is significant but not hugely so, most will prefer a shiny new box and spend the extra couple of quid. Whereas gamers, especially the younger ones see a 5 saving of their pocket money in exchange for a couple of scuffs on a case they aren't interested in as just that, a saving of their limited resources. Hell, even that is on the decline thanks to DLC, episodic content and 1-online-account-per-copy locks.

The thing that strikes me as a better point is that when games move to digital only, or do what they do to eliminate pre-owned, will that bring release prices down to 20, because if we stop looking at all the small indies and companies with terrible games, I don't really see any Devs on the verge of administration. Aside from Team Bondi, who allegedly were involved in the slave trade.

Edited 1 times. Last edit by Andrew Ihegbu on 24th April 2012 7:20pm

Posted:2 years ago

#15

Morville O'Driscoll Blogger & Critic

1,590 1,445 0.9
@ Nicholas

Oh, that's hilarious. Some of the DLC on-disc is shockingly badly encrypted (apparently, anyways) - XML files that can be re-written or some nonsense.

Posted:2 years ago

#16
well the main problem with the no other industry argument is mainly because digital products like games, movies ect. have the same content that they did when they were new (why the online pass system is inplemented into most games these days) A used car or any physical product will not be the same as buying it new. Assuming that a game's disc is in good condition of course.

That's why hollywood kicked up way back when and that's why the games industry is kicking up the same fuss. Hollywood is kind of stuck in the mud with the second hand dvd thing but the games industry can do online passes and stuff like that, so perhaps if more retailers decided to come to an aggreement like this that affects the customer in no way then it'll be happier days for every party involved (retailers, customers, publishers and developers)

The problem is mainly with the lack of incentive to buy new amoung customers because theres no difference between new and used to many customers so why spend extra?

I'd say this is quite positive for everyone. Now if gamestop can come to a similar aggreement (even a tiny fraction could keep publishers happy) we might see growth in the AAA games industry

Posted:2 years ago

#17

Preet Basson Studying Mathematics with Statistics, University of Portsmouth

92 13 0.1
This whole used game thing is stupid & immature, If publishers want to cut the middle man. Why dont they open their own retail unit, Its not like they dont have the funding, instead of bitching about how they not making money when they clearly are. Oops let Pandora out the box.

Posted:2 years ago

#18

Curt Sampson Sofware Developer

596 360 0.6
Nicholas, you write, "...Fair Use laws have held up that any time you buy a product with data on it you have full rights to all that data and can do what you want with it."

This is simply entirely wrong.

Fair use in copyright certainly doesn't say that, and that's never been the case. These days doing something like decrypting DLC without the permission of the publisher is illegal under the DMCA in the United States and similar laws in most other (first-world) nations.

Now, I don't particularly like the current copyright climate, but when I see complaints about not being able to use content you didn't pay for, I'm tempted to put that down to the greed of consumers.

Posted:2 years ago

#19

Fyzard Brown Sales Associate, VideoGameAdvantage

39 6 0.2
@ Nicholas
Only problem is that you aren't buying the item. It is a lifetime lease, on which you agree to the terms and conditions of or return the product to the place of the sale of such lease.

Edited 1 times. Last edit by Fyzard Brown on 25th April 2012 2:22am

Posted:2 years ago

#20

Benjamin Seeberger Writer/Translator

28 18 0.6
With the world of patches and undeveloped yet released games, this move makes perfect sense.

The question is, what incentive do players have to pay the full price of the game when they can just pay the used price and still feel like they are supporting the developers?

This move, if adopted by other companies, will sadly drive the price of used games up, and possibly (once an interchange of money is handled) create regulations that require all sales of any games to go to publishers and developers or face legal action.

Although I do like the idea of used game sales benefiting the developers. I just wish there were another way.

Posted:2 years ago

#21

Boris Vigec Technical Art Director, Zootfly

8 4 0.5
Did anyone ever think about the consumer? The games today are way overpriced. They should think about lowering the prices to solve their problems. If the games were cheaper I wouldn't buy them used.

Posted:2 years ago

#22

Craig Page Programmer

384 220 0.6
Lots of good ideas by this retailer, but why pay people $40 for a used game? Instead why don't you sell it for $10 less than you normally would, so sell it for $45 instead of $55, and pay just $30 for the customer's used game.

That way the gamer who trades everything in won't notice any difference. But the gamers who choose to pay $60 for the new copy versus $55 for the used, would be much more likely to get the used game for just $45.

Posted:2 years ago

#23

Mike Kennedy Founder | CEO, GameGavel.com

20 2 0.1
We see it as continuing to promote a free market for "physical" games. A market that will cease to exist sooner than later unless retail changes to accomodate the creators of these games at some level.

Posted:2 years ago

#24

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