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Retail

GAME's rental plan not "legitimate," says Braben

Wed 14 Jan 2009 3:41pm GMT / 10:41am EST / 7:41am PST
Retail

Frontier Development's founder calls on industry to issue 'rental only' titles "as soon as possible"

Frontier Development's David Braben has cast scepticism upon GAME's upcoming plans to launch a videogames rental service, saying he doubted it was legitimate.

Earlier today, the UK retailer announced plans that would see a subscription-based mail order rental service offered for videogames, akin to that already offered by LoveFilm. Braben told GamesIndustry.biz that the industry would have to act immediately to release rental only copies or face "greatly reduced revenues".

"It's an interesting idea, I'm not sure it's legitimate," he commented. "I think we as an industry should support this kind of thing and we need to, as soon as possible, bring out 'for rental' copies."

"What we could do, much like the DVD industry does, is mark retail copies 'not for rental or resale' and have special 'for rental' copies," he explained.

"What we can do as an industry is make sure those rental copies have access to the sort of thing that is potentially going to be blocked out when the same game disc is reused - by that I mean the ability to do downloads and things like that."

"I think we should be supporting GAME in this and in order to do that we really want to bring in the concept of rental and non-rental copies," Braben added. "If [GAME] plans to do it with normal retail copies then clearly that's a bad thing because that's eating into our sales at already quite a tricky time."

He further commented on claims made by GAME that the rental service would act as a 'try before you buy' option for many consumers.

"Yes, they're trying to sell it to the industry so it doesn't look too much like they're trying to steal our lunch... It reinforces the issues that we've got to allow for. It really means we've got to take action now rather than later."

He continued: "To be honest it requires all of us [in the games industry] to work together in a coherent way... to make a really good service for the user. I'm not out to cause trouble for the consumer but bear in mind this will greatly reduce revenues if we're not careful, and it removes the differentiator between good games and bad games because the problem is none of these sales will be tracked we won't see the figures for the number of rentals."

"I think they're essentially dressing this up as something that is legitimate and backed by the industry, because we don't have rental copies at the moment - to legitimise the existing system, so called 'pre-owned', where there's really very little to distinguish it these days."

"If you go into a shop and take a new game to the counter you'll quite often be presented with an old game, because they don't have stock of the new games, where the price is only a gnat's whisker different."

18 Comments

Chris Hunter-Brown IT / Games specialist, BBFC

52 15 0.3
There are plenty of online services as well. Swapgame & Gamefly (US) to name two examples.

Posted:5 years ago

#1

Tameem Antoniades Creative Director & Co-founder, Ninja Theory Ltd

196 164 0.8
You are correct Andreas, this is a form of Legalised theft.

Posted:5 years ago

#2

Franck Sauer Creative / Tech Art Director, Fresh3d

63 9 0.1
"mark retail copies 'not for rental or resale' "

It's already the case, in continental europe anyway. In belgium, it has been made officially illegal to rent a game since December 1st 08, although it has always been written on the back of the boxes that the games could not be rented or even resold.

People seem not to understand they do not actually own the game they purchase, for that money they just get the right to use it.

Anyway, I do agree we need formal rental versions.

Posted:5 years ago

#3

Stewart Gilray Managing Director, Just Add Water

33 29 0.9
As is the usual companies think they can get away with murder here in the UK, be it DVD rental or resale, or game rental or resale.

A lot of shops have been shut down as they cannot afford to buy for "rental only" copies, however the problem lies in the fact that what we are trying to stop is the wrong people making money from resale/rental.

Is it however legitimate that publishers/developers/movie producers do make extra revenue from resale etc? There appears to be no case in point when it comes to electronic goods, music, cars etc.

So where does the line come?! I clearly admit I cannot just say rental/resale is wrong as it seems wrong that we are effectively saying it is wrong for a customer to be forced into keeping something for life, or bin it.

But as I said I accept it's not right the wrong people DO make money from this.

Digital downloads kill this problem off, so perhaps we grin and bear it for now until we become a 100% digital distribution medium?!

Edited 1 times. Last edit by Stewart Gilray on 14th January 2009 8:27pm

Posted:5 years ago

#4

Mat Bettinson Business Development Manager, Tantalus Media

97 0 0.0
Does anyone really think there's a possibility that the games industry would actually sit down and agree a strategy on producing rental-specific games?

Apart from anything else, Braben does seem to be intimating that the rental copy should be different in some way - which it should be to do it really properly - but that's an additional cost. Alright it can be offset by the additional revenue but let's be realistic, it'll probably introduce a delay in rental copies becoming available... so who wants to be first?

Your rental version is late in the narrow window when your game is being marketed as it's on the shelves at retail. The first guys to do this will almost certainly experience stangely low order quantities from sectors of retail and that's tantamount to commercial suicide.

Ultimately such a move would require an unprecidented level of industry cooperation and might even open the door for unwelcome anti competition investigation.

I also have to kind of question the long term retail strategy here. This act of biting the hand that feeds them might result in short term revenue but it seems obvious that it's also making a more rapid shift to digital distribution look more attractive by the minute as Stewart says.

Posted:5 years ago

#5

Alexander Cederholm Editor-in-Chief, GAMEcore.se

42 0 0.0
Renting games are as good as dead in Sweden. I actually have been trying to work on a article for quite some time that will touch this subject. When of the factors are piracy though. Many people rent and copy the freaking games. And then we have the other way around when people rather download games then rent them.

No video/Movie outlet in Sweden of greater size rent out games anymore. it's quite sad.

Posted:5 years ago

#6
Surely, in the larger scheme of things the core fundamentals are to

1/ Produce core games that retain the fundamentals of gameplay and entertainment to generate a successful product, and thus produce profit as a byproduct
2/ To adapt with the times
3/ Navigate through 2009 into 2010 with the least amount of collateral damage

I highly doubt the games industry as a whole would adopt a specific game for private purchase vs game for rental only advocacy

Posted:5 years ago

#7

robert troughton UK General Manager, Epic Games

222 96 0.4
I believe that the retailers will be shooting themselves in the foot if they continue with this sort of practice...

When the next-gen of consoles launch, I fully expect most games will be available as digital downloads. "Cloud Gaming", if you will, where data is loaded off the internet and stored temporarily on a user's harddrive.

There will probably still be disc versions of games as well... but hopefully these will be "activated" over the internet in some way... making it so that either rentals "just don't work" or so that a decent proportion of the rental revenue goes to the publisher/developer... make facilities such as Lovefilm redundant by requiring that the player pays 2.50 as soon as the disc is put in the machine.

Actually... how about this: discs are purchased at a small price of, say, 2.50 ... when the disc is inserted into the machine, they get to play a demo of the game, eg. the first level... if they want to continue, they either need to buy the game or to pay for the next level ... eg. you could charge 2.50 per level but stop charging once 25 has been paid... a model like this could actually increase revenues for everyone involved... except the retailers, of course.

Posted:5 years ago

#8

Fran Mulhern , Recruit3D

863 707 0.8
Rob Troughton has the right idea. And if retailers don't go for something like that, then give the disks away for free with Games magazines (the mags can contribute to the cost as it'll drive their sales), or make the first levels available for free via download. The disk has the first level, or maybe 2, and after that each level is downloaded (with a system that enables play on only one machine) on a "pay per level" basis, perhaps with a discount if you buy the whole lot in one go. Then, if you trade the disk or give it away, the publisher/developer will continue to get royalties from any further use of it by someone else.

One other effect though - games that are, well, crap, would end up making even bigger losses, as people will only buy a level or two, then move on. But that's no bad thing.

Posted:5 years ago

#9

Fran Mulhern , Recruit3D

863 707 0.8
Andreas, just because it's legal doesn't make it fair:)

You're right though - retail will do what it chooses, and the industry will respond to it as it chooses, too. Fair doesn't - and probably shouldn't, since it's so hard to define - come into it. The problem right now is that the industry ISN'T responding to it in a way that safeguards its own interests. You guys have OFP2 coming out soon. Presumably, you've spent a fair bit of money on it - and you need to recoup that before you can even start looking to pay bonuses etc, or make a profit. Within a month of its release, that game will be on the pre-owned shelf at HMV or Game, with the retailer making just as much of a profit on each resale (presumably, otherwise they wouldn't be pushing pre-owned as much) - but with you guys seeing none of it. Just because it already happens with books and music doesn't make it right - and even if it IS right for those sectors, that doesn't make it right for games.

And why is it you don't get HMV selling secondhand music, or Waterstones selling secondhand books? That's a genuine, non-rhetorical, question. I guess if it was smaller indie outlets doing secondhand games, nobody would mind as much - given their market share, their capacity for damage to the industry isn't as great and so the problem wouldn't be as pressing. But it's not. It's two of the main outlets for the industry here. Maybe one solution is for retail to agree to pay a certain royalty rate on each secondhand copy sold - whether they would or not, I don't know, but it's either do nothing, agree a compromise, or speed up attempts to move away from traditional retail.

Posted:5 years ago

#10

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.

2,284 2,493 1.1
One of the reasons those other industries don't mind second hand sales is because first hand sales last much longer. Those kinds of retailers have much larger store footprints and their shelf space is much larger than the average GAME or GameStop.

If new releases could stay on the new release wall at GAME or GameStop for more than a week or two before being replaced by the next game (and subsequently forcing consumers to purchase a used copy) this would not be much of an issue because titles would have longer sales periods for publishers to enjoy.

It is my opinion that these retailers have intentionally designed their store footprint to fit this business model. It forces consumers to purchase second hand if they don't buy a new copy within a given launch period for most titles.

Thankfully some big box retailers are gaining market share in the video game industry where games tend to have much more shelf space. The games section of the average Best Buy, for instance, is usually larger than an entire GameStop (and none of their clerks try to force the used copy on you either).

Posted:5 years ago

#11
Jimmy: Nintendo. It's already happening. Kawashima? Wii Fit? Mario Kart? Wii Play? All comparatively 'ancient' when looked at in the context of the rest of the chart. If they can do it, why can't everyone else? Change the marketing models - and I'm amazed that more people haven't already - and good things happen. Change the quality and focus of titles - and I'm amazed that more people haven't already - and good things happen. Nintendo have proved that to be the case.

We have a leader in the field, in far more ways than one - why aren't more companies paying attention?

I absolutely agree that retailers in the sector aren't doing all they should (or even half of it), but the point has now been proved: We are no longer the short term hit-driven business we once were. At least, we don't have to be, or try to be that anymore. This is Good.

Broader changes are surely at this point inevitable. And if not, why not?

Posted:5 years ago

#12

Fran Mulhern , Recruit3D

863 707 0.8
Andreas:

"I just find it odd that Developers and Publishers try to maximise profit every way they can, but when a retailer does the same (and at the same time gives the consumer more and better choices) everyone on the developing/publishing side is up in arms"

Nobody has anything against retailers maximising their profit - the question is whether they do so at the expense of the games industry. At the end of the day though, it'll boil down to a battle of wills - can the industry get its collective head together long enough to face down retailers on this, or not?

One other thing. This is a genuine question, but what about the idea that not EVERY game can be brilliant? Look at how big our industry is now, and how many studios there are worldwide producing games. Surely the idea of everyone producing unbelievably great games (although personally I think the GOW franchise is vastly overrated, but that's just me) is a pipedream? I'm jyst throwing this out there - I'm genuinely interested in what you (or anyone else, for that matter) thinks of this notion? I mean, you can't have a market full of superstars, without any middling or (even) poor titles?

Posted:5 years ago

#13

Fran Mulhern , Recruit3D

863 707 0.8
I think we'll have to disagree, Andreas:)

Agreed on the bit about a low budget game can be brilliant - just look at Enigmo on the Iphone, if you've tried it. Awesome little game, yet simply as hell. but yeah, the same principle applies to console titles: just because it's more complicated to produce doesn't automatically mean it'll be awesome.

And check this one out:

[link url=http://nanowar.free.fr/
]http://nanowar.free.fr/
[/link]

Enjoy!


Posted:5 years ago

#14

robert troughton UK General Manager, Epic Games

222 96 0.4
"games that are, well, crap, would end up making even bigger losses, as people will only buy a level or two, then move on. But that's no bad thing."

I'm not so sure about this ... I think the games that could lose out would be things like movie licences, when the games are crap ... crap games that are crap and don't even have Hulk to help sell them would never sell either way so would have nothing to lose - actually, they might still pick up a few sales of people buying the first level or two...?

Think of "The Sims". They've released something like nine hundred expansion packs for that, selling at 10-15 each ... they're CONSTANTLY at the top of the charts ... if EA thought any more people might be interested in the game, they could just give it for free and make money off expansions ... (the fact is, though, they don't need to - people will gladly pay 30 for the game AND pay through the nose for Ikea furniture...)

The games that would benefit most would be the 70-80% games, I reckon ... at the moment, if they release in a week where there are a couple of 90% games released (Call of Duty, Halo, Gears of War, etc) then their sales are instantly killed... consumers can only buy so many 30+ games each month..!

I think giving the first levels of a game away completely for free might be a mistake, though - you'd probably get some gamers who would spend most of their time just playing every game out there and never buying anything... so it's probably best to put a 5-10 nominal price on each game.

Posted:5 years ago

#15

Fran Mulhern , Recruit3D

863 707 0.8
Robert, I disagree with your last bit. If you think about it, a lot of demos, freely available, are essentially the first level of a game anyway - and I don't think many people just download and play demos all the time.

I've never understood what was so good about the Gears of War franchise. Maybe it's just me, but I really didn't think it was that revolutionary, or that good...

Posted:5 years ago

#16

robert troughton UK General Manager, Epic Games

222 96 0.4
I've never played GoW... I never really have time to play games lately... the 2 kids take up most of my spare time and my wife hates them (games, that is, not the kids)... so, when I do play, I tend to play the games that don't take up much time... Geometry Wars, Worms, etc... I liked Halo for a while - but now my son just runs rings round me on it...

You're right re: demos. I guess the "limiters" to stop people just grabbing everything are download time, price of magazines (and that magazines will need to pick and choose demos, they can't have them all) and so on... if the shops were just handing out free discs, people would just grab everything - but that's never gonna happen :-)

Posted:5 years ago

#17

Fran Mulhern , Recruit3D

863 707 0.8
Quite. To be honest, I think if retail is happy to **** the industry over like this, then the industry should simply press ahead with alternative distribution methods - you guys (I'm not going to say "we" because, let's be honest, I'm a recruiter and neither make nor publish games:)) owe retail **** all:)

Posted:5 years ago

#18

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