Braben says used games has "really killed core games"
Single player games in danger, says Braben
The used games market is always a hot topic amongst developers and publishers who don't get a cut of any pre-owned sales. Frontier Development's David Braben argues that the used games business has effectively killed off the single-player focused endeavor, and he believes that not only are used games pushing more games to focus on a multiplayer setting, but he thinks those used games are helping to inflate prices on titles as studios seek ways to recoup lost revenues.
"The real problem when you think about it brutally, if you look at just core gamer games, pre-owned has really killed core games," reflected Braben. "In some cases, it's killed them dead. I know publishers who have stopped games in development because most shops won't reorder stock after initial release, because they rely on the churn from the re-sales."
"It's killing single player games in particular, because they will get pre-owned, and it means your day one sales are it, making them super high risk. I mean, the idea of a game selling out used to be a good thing, but nowadays, those people who buy it on day one may well finish it and return it."
"People will say 'Oh well, I paid all this money and it's mine to do with as I will', but the problem is that's what's keeping the retail price up -- prices would have come down long ago if the industry was getting a share of the resells."
Braben, who has worked on titles like Elite and Kinectimals, is currently facing a crisis on his current title, The Outsider. The game is heavily invested in single player story mechanics, but Braben remains somewhat skeptical of the current development landscape.
"Developers and publishers need that revenue to be able to keep doing high production value games, and so we keep seeing fewer and fewer of them."
If anything, there appear to be signs that some studios are simply, if not begrudgingly, moving to the mobile gaming space, where used-game sales simply do not exist. Braben has acknowledged that his studio is working on new IP specifically for mobile.
"I think the problem was that the market then was very confused, whereas nowadays it's far clearer. Of course, a lot of that is hats off to Apple, but also the principle of the App Store, which is fantastic," he remarked. "And that applies to a lot of platforms -- it applies to Android, and it now applies to Mac OS, and it's been announced for Windows 8 and I think that is a very interesting realignment of the stars."
[via Gamasutra]
People hold on to Albums, books, movies that they love and think special - they do not hold on to every scrap of media they consume. If we make throwaway media, we expect it to be thrown away. Players have no more reason to hold on to a copy of FPS #297 than they do any Michael Bey movie. If the piece says nothing beyond the explosions on screen, why expect love for it? Second hand is a symptom, not a cause.
Just focus on releasing good products and quit blaming 2nd hand market about looses or low sales; most of the companies are using online passes exactly because of that.
Also another suggestion: Lower prices!, Not everyone is willing to pay 70€ for a game.
Consumer spending patterns are changing massively, as are the ways in which you can monetise a product. I think most people are finding it hard to get their heads around it, especially us "old school" developers.
It really is a case of adapt or die at the moment.
Edited 1 times. Last edit by Justin Biddle on 20th March 2012 10:54am
When a retailer controls a major share of the market and stocks new items below the market demand, they force the price to remain high though the retail cycle. A publisher has to set a trade price that will cover the investment at the level of sell in offered by the retailers, or face making a significant loss. As a retailer you can sate consumer demand with the second hand market, which you can feed with returns at a better margin.
If the demand for the product wasn’t there, then there would be no second hand market. It is of course the retailers right to purchase what they want to from the publishers, and to run their business in the best interest of their owners and shareholders, but isn't it clear that retail has affected the shape of the market today and the types of product that are now being made or to Braben’s point, not being made?
As for the initial price, plenty of people can only afford a brand new game by trading in some of their old games - even though they know the retailer is ripping them off. If games were more affordable in the first place, people wouldn't have to do this as much.
So say you have 20 people that bought the game at release, a week later 10 of those people have returned the game for store credt (which I will get to in a minute), then later, 10 more people come in to buy the game and we'd sell them the used copy. So you take a $60 XBox360 game, 20 people buy it, that's $1200. GameStop gets the trade and would generally offer just under half value for the trade in (I think when I worked there a new game trade in would get 25-30 in credit). Then GameStop sells that game for $55. So we sell the 10 used copies and GameStop makes $250 profit. and instead of the publisher getting their rightfully earned returns on investment, they get cheated out of another $700 in sales.
Now back to the store credit. A person brings in a game to trade in, and uses that credit to purchase another new game, from another publisher. So that publisher gets cheated out of $30 because of the store credit used on the purchase. So GameStop makes a $250 profit on a used game and cheats the original publisher out of the new game sales, and it ALSO cheats another publisher out of the $300 in store credit, used to purchase other new games.
The used game market is what effectively killed PC games several years ago. I'd go into a Best Buy and see their massive PS3 and Xbox360 shelves, then see like three panels for PC games. PC games could not be resold due to DRM. Consumers call out publishers for putting DRM on their product, but they don't realize that they're only trying to protect their investment. If you found a mint condition Babe Ruth rookie card and it was something you've always wanted, you wouldn't just set it on a desk for all to see (and potentially steal), you'd put it in a protective case, lock it away in a safe, and protect your investment. Games with DRM are no different, a publisher has a right to protect it's investment. Because if they don't have that protection, and lose sales, how can they take that money and make further investments into new games, new IP's, new anything? shortened retail cycle means shortened life cycle of an entire development studio or publisher. I'm all for survival of the fittest, but when it's caused by borderlined illegal practices such as used game sales, I put my foot down.
And yes, you're correct about the publisher getting the price for the order, but what about restock orders?
Personally I've never traded in a single game I've ever purchased, even bad ones, for several reasons. I love having the box. I have a bookcase as tall as me and wide as my arm that I've got slammed full of every game I've ever purchased (going all the way back to the original NES). It's kind of my personal shrine to gaming I guess. The other reason, is I know one day when I have the time, I'm going to want to play some of those games again. But I digress.
Games are priced at not just a level that people are willing to pay for them, but also a level at which a publisher is willing to sell them. Supply and Demand isn't a one sided deal where the consumer turns their nose up at any price they don't like until they're satisfied. A publisher that prices a new release at the price they choose (generally $60 across three main platforms i.e. PS3, 360, PC) Because they also have to cover revenue lost to used game sales. I remember back when PC games and new console games were 50 bucks brand new. Before used game sales got more mainstream and places like GAME and GameStop had a built up back inventory of used games.
I could guarantee you if publishers were to get even a fraction of the revenue from used game sales, that would subsidize their overall revenue enough to allow a reduction in new release price points.
Also, I would not conflate selling a used copy of a game and cheating the publisher out of profit, especially if selling older games is how the player gets money for new games.
The idea that Actiblizzard had, and that Ubisoft has followed, that all of their major IPs have to have at least one new installment every year has killed core games. The fact that consumers still buy the new CoD game or Assassin's Creed game every year has killed core games. The fact that publishers don't seem to want good games, but mediocre ones has killed core games. Used sales has done very little to effect what big publishers want to do.
Blaming the consumer is about the worst thing that you could do. It makes consumers feel like crap, but not in the way that will make them change their ways. More in the way that they'll remember that the industry, rather than doubling down and making better games, or finding creative ways to solve the used games 'problem,'(like the cerberus network on ME2), they decided to whine and complain about how the consumer doesn't love them. Students who see publishers blaming their customers for their problems are less likely to seek jobs with said publishers and core development companies, and will instead pursue independent studios that are seeking to change and adapt to the times.
The fact that yearly updates of the same product essentially turned games into a commododity, with very little incentive to keep the old one.
@Andreas - Like has already been said, retailers buy a small initial batch of stock, then never restock because they're quite content to recycle the same used copies over and over once the initial allocation has been sold. So publishers have to keep their prices high to make as much revenue of the initial surge of sales as they possibly can, because they'll make almost nothing once that's died down, even though people may still be buying the game.
It was a lot of the same stuff, oh but wait! there's a tower defense minigame... blah.
I do agree that a lot of publishers are really dredging the bottom of the barrel sometimes for content. But in today's economy, working on new IP cost a great deal more money to develop than iterations on top of previous IPs. There are several things a publisher needs to consider in this regard. Can they afford the cost of developing a new IP, while being able to fill the paychecks of existing development teams, existing publishing company staff, cover overhead (rent, lights, interwebz, etc), and still come out with a product that will make enough money for them to not only get a return on their investment, but also make a profit.
One of the first things to go out the door during a recession is the purchase of entertainment products. The gaming industry is bigger than the movie industry, and they don't have all those pesky actors and billionaire celebrities that get on tv for acting like sluts and white trash. But back to my original topic. Recession always brings about less game sales because people have less money to spend. So it would be logical to assume that your average every day video game consumer, is going to be less likely to risk their monthly allowance (maybe it's only enough for a single game!), on a new IP that they aren't sure about. Instead they are more likely to get the next iteration of an IP they've already come to know and love. Thus, you have the cause of the stagnation in development of new IP's over the past several years.
Over the past several years, there have really been very few new IP's that have done as well as iterations of existing IPs. Bcause people are staying in their comfort zone rather than purchase something from a new IP.That being said we've also seen the degradation of existing IPs due to exhausting possible content ideas. But that is generally a case of the publishers wanting new iterations produced with a little money as possible. Limiting producting resources limits creativity. Of course, giving developers to come out with a new iteration every year has also had a LOT to do with degradation over the past few years.
Not only this, but the fact that customers will get more money for their trade in the earlier they bring it back, the more it encourages people to rush through the game as quickly as they can rather than taking their time and enjoying it more. The sooner they trade it in, the sooner they stop talking about the game to their friends, it fades away quicker. The whole thing just erodes the effective lifetime of a game.
Personally, I've never traded a game in at a retailer, and I've never bought a pre-owned game. Even games that turned out to be stinkers, because I just disagree with the whole concept.
At the end of the day, if a game flops, someone like me or you finds their job in danger. If they made a terrible game, I guess no one can argue, but I hate seeing average, but not brilliant, games get poor sales, and the developer closed down as a result. There's not much room for a game to sell slowly but steadily any more, it seems like you have to be a sure fire hit or a complete failure, so no wonder publishers only take safe bets now. If there were middle ground, say, a risky new IP that turned out only "ok" and got "ok" sales, rather than a complete disaster, publishers wouldn't be so terrified of trying.