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Pre-owned market is "defrauding the industry"

By Oliver Welsh

Thu 30 Oct 2008 3:16pm GMT / 11:16am EDT / 8:16am PDT

Frontier boss David Braben shocked by retailers increased focus on second-hand sales

Frontier founder and creator of Elite, David Braben, has said that he thinks HMV's move into selling pre-owned games is "shocking", and that the increasing emphasis on the pre-owned market is a serious threat to the games industry.

Speaking to our sister site at the GameCity festival in Nottingham, Braben said: "The shops are not giving us a way of distinguishing between pre-owned and new. So the shops are essentially defrauding the industry."

Braben, in Nottingham to talk about the making of Frontier's WiiWare hit Lost Winds, acknowledges that the prevalence of pre-owned games is one factor pushing his company towards digital distribution.

"We've got a lot of retailers eating our lunch and refusing to sell full-priced games. I've been in a shop where I've tried to buy a copy of a relatively recent game, and I've taken an empty box off the shelf and they've given me a pre-owned copy. That, I think, is disgraceful," he said. "Not holding stock of new games, substituting them with pre-owned games at the same or much the same price... That is really destroying the shelf-life of our games."

On HMV's move into selling pre-owned titles - the first non-specialist retailer to do so - Braben said: "That is shocking, and I think the games industry has to do something about it soon."

"There are a lot of studies that suggest it's anywhere between 8 and 12 or 15 times a pre-owned game goes round. If you think that the industry's getting a tiny percentage of those 12 or 15 sales - typically from the sale of a GBP 40 game, the industry only gets GBP 20 anyway, in round figures. That is lost to the system," he said.

He's not a proponent of DRM - "personally, I detest DRM," he said - but understands that publishers are being forced into a corner. "Look at EA. They have been crucified for the admittedly draconian DRM on Spore, but they're in a very difficult position. They need to do something."

Instead, he argues that the games industry should move to a similar model to that used by the film industry for DVD and video sales. "They brought out rental copies, and copies not for resale or rental. That distinction is really important in the video market, and all of the chains honour it because they know it's more than their life's worth not to," he said.

"My argument is that for every game there are two versions. One is personal, not for resale and it's made abundantly clear you can't sell it. And it's made available for something like GBP 25. And a resale and rental copy, which in film is actually about GBP 80."

"The key thing is to find a way where actually we give the benefit to people who have original copies," he argued. "It's a very small step to make games distinguishable - it can be done with serial numbers. I'm not talking DRM or anything draconian, but we can give stuff to the person who has a new game, and we can start tipping the balance."

Braben also thinks that the pre-owned market, along with piracy, is pushing developers and publishers towards exclusively online gaming strategies.

"This isn't really special pleading, it's a practical point of view, because otherwise the industry will be forced to go 100 per cent online, and I also find that a shame," Braben said. "I love single-player games. Getting a beautifully crafted single player experience is something that's going to be killed if we're not careful, because the online validation of online games means that they tend to get pre-owned a lot less."

GameCity runs today, tomorrow and Saturday in venues across the centre of Nottingham.

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Franck Sauer Creative / Tech Art Director, Fresh3d

65 10 0.2
I'm puzzled. Isn't it stated in the license agreement of the software that it should be not for resale? Didn't check, but if it's the case are not these retailers in illegality?
Anyway I agree it should follow the DVD model.

Posted:7 years ago


David Chang EVP, Marketing and Business Development, OnNet USA

2 0 0.0
I find the recent interviews on GamesIndustry regarding second hand sales really miss the point. Consumers run the show, and I think they will overwhelmingly reject any attempt to curtail second-hand sales. I think a lot of people in the game industry just don't want to admit that fact.

Another point I think is errant here is that online = no single player. Online distribution does not, in it of itself, mean the elimination of a single player experience - it is just a distribution mechanism . . .

Posted:7 years ago


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

196 164 0.8
In the movie space, the movie comes out in cinemas, then for sale, then for rental, then on TV. If they didn't, their revenue streams would be destroyed, just like is happening with games and the second hand market.

You could certainly download massive 20gb-40gb games online but will people who have access to high-speed broadband will be prepared to do so? Even if it is in chunks?

It would help if there were good stats out there on downloads to prove out the business model. For example, how well did Warhawk online do Vs retail copy? Or Half life steam vs Half life retail? A good first step would be to blow the doors open on these kinds of stats.

Posted:7 years ago


Peter Law Freelance Game Designer and Unity Developer, Enigma 23

44 3 0.1
Being able to trade in old games help consumers afford new games on release day at full price.

Everything is sold second hand now, Amazon and Play do "shops" that let people sell dvds/ books/ etc and are offered along side new products.

I personally prefer having things digitally now, it's easier and just better, don't have to keep swapping CD's in my PC to swap between games.

Pre-owned isn't going to go away, consumers need a good reason to buy new over pre-owned. Why spend 45 on a new game when they can get a second hand copy, a lot of the time in near mint condition, for 10 less?

Frank Sauer:
I worked for GAME for ~7 years and was always told it says something along those lines for PC Games, which is why GAME don't do second hand PC games. As far as I'm aware there's no such license agreement for consoles games?

I've certainly never agreed to anything when I've popped a game into a console and started it up.

Posted:7 years ago


Franck Sauer Creative / Tech Art Director, Fresh3d

65 10 0.2
Well, I just checked on the back of a copy of UT3 for playstation3 for instance. It clearly states you cannot resell or rent without express agreement from SCEE. (translated from my french language copy anyway).

Posted:7 years ago


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