VP of Epic Games mad about pre-owned game policies

by Ross Miller { Sep 21st 2005 at 2:30PM }

Unreal Tournament 2007 Mark Reins, Vice President of Epic Games (makers of the incredibly addicting Unreal Tournament series), believes that much of the worry over the higher costs of games stem from relations between the developers, retailers, and console makers. Reins does not believe the cost of the games should go up, but ultimately "games need to be the same price as DVDs"

He thinks developers would be more inclined to do that if "[developers] were able to share with [manufacturers] the money they make from rentals and retail, that could help lower the price." On the subject of pre-owned games, Reins is also wishing that outlets such as EBGames and GameStop would share the enormous profits that they make off of secondhand titles and establish an "official refurbished games policy" with some developers.

The latter is a good point – take a game like Metroid Prime 2: Echos, for example. If you walk into GameStop and sell the game to them, you will receive somewhere around $6 or $7. Then they go around and put it on sale for $30. The markup is huge, and it is pure profit for them – so the question begs, should the developers receive some of the revenue, or should retailers start giving us more of our deserved money back when we sell them games? A lot of issues Rein mentions stem from tech support for people who have bought refurbished games, but I am inclined to believe that the game should be supported regardless of the current owner.

[via Evil Avatar]

Reader Comments (Page 1 of 1)

Rumble Bottom @ Dec 18th 2005 10:08PM

Developers do not deserve royalties on second, third, fourth generation owners of a DVD. That's completely absurd. Here's the bottom line - distribute games "on demand." Forget the logistics of shipping, casing, and production. With a growing number of broadband gamers, just offer game downloads with online seriel key authorization. No more piracy, no more driving, no more reselling. There are many benefits to on demand gaming.

JDuB @ Dec 18th 2005 10:08PM

whos willing to wait for a 5GB dowload? Id rather drive the 10 mins to best buy to buy a game.

Tesla @ Dec 18th 2005 10:08PM

I slightly disagree with the games should cost as much as DVDs theory. You get a lot more entertainment out of a game (theoretically) than a movie, so I can understand the higher price. Movies are already overpriced for what you get there but that's another story. Now coming into the next gen of 60 bucks a game is just rediculous. There are few that I think that 60 bucks might actually be justified for (cough...Metal Gear....cough) but I think 30-40 would be the sweet spot for new games (keeping the 15-20 dollar for the hits/best series type stuff). Granted the publishers would strike me down where I stand for even saying so and back it up with the usual BS when in reality they just want to line thier own pockets.....

Now to the topic of preowned...

EB and Gamestop (and the like) are practically committing robbery when it comes to preowned games. Ross hit that topic with some cold hard truth. When they buy for peanuts (and in store credit mind you) and turn around and sell it for 5 bucks less than the current brand new retail price, that's just f'ed up.

It would be great if the publishers (or even someone) would buyback games at even 50 percent of the retail value if it is in good condition with all the included materials. They would make a killing in the amount of media that would flow through there. Too often you have people that sell back entire libraries of games just to put down a small portion of the next console purchase or one or two new games. I've rarely sold back games and with good reason so far.

jimmy @ Dec 18th 2005 10:08PM

Too bad stupid. How about making a game people aren't going to turn aroudn and sell to Gamestop for $5 instead of complaining about losing money when they do.

Why should they get a cut of that money when they did nothing to deserve it, other than making a game that wasn't good enough or long enough to warrant keeping.

With that said, used gamse are rarely worth it, missing booklets, scratched discs you gotta go back and return when they cant load past a certain cinema scene. yuck.

The best is when you get the last copy of a game at gamestop and they take the box of the wall open it and put the disc in that they just took out of a draw and then attempt to charge you $50 for what is essentially and open item. I can't wait for all digital distribution so the stupid stores go out of business.

Larry @ Dec 18th 2005 10:08PM

Don't sell your games to EB. They're a bunch of jerks & they squeeze as much money out of their customers as possible. Here in Canada, most refurbished games sell at EB for 5 bucks less than new. That's a huge rip-off if you ask me. If you want to sell, put them on Craigslist, Ebay, or your local classifieds. That way you get more for them, the person buying pays less, and those jerks at EB get nothing except the insane price you paid for the game in the first place.

Forrest @ Dec 18th 2005 10:08PM

I don't think he's saying that people that buy used games don't deserve support, exactly. I think he's saying that a lot of the need for support comes from the practices involved in selling used games (invalid serial numbers, etc).

jimmy @ Dec 18th 2005 10:08PM

yea EB are such dishonest scammers. One time I saw a kid ask for a GBA SP. And they guy behind the counter was like "yea, we have a preplayed one right here". And he sold it to the dumb child and the mother before they even realized it was used garbage for slightly less than a new one in the box.

And buying a used GBA is just dumb, its gonna be scratched and damaged no matter what.

They keep trying to force me to buy like used games when I'm in there because its more money for them. You have to specfically request a new game otherwise they try forcing the used crap on you.

I'd say sell you videogames on ebay if you want to sell em. Its more hassle but you're gonna get more money.

Oshi @ Dec 18th 2005 10:08PM

EB Games is such a ripoff. I went to see how much they'd take for a brand new Gamecube, with everything that comes with a retail package... They said they would give me a whopping $20.00. Bastards!

LaughingTarget @ Dec 18th 2005 10:08PM

Sorry, once I buy the game, it is mine, not theirs. Afterwards, I can do with it what I want, include transfer ownership to another individual or entity. Since I am not renting the property from them, they do not have any say what transpires with the physical disk after it leaves the store shelf.

If I chose to trade it in at EBGames for $15 so they can turn around and sell it for $40, that is my right as a consumer. EBGames can set the price at $40 because it is now their property, not the developers, and are entitled to 100% minus taxes of whatever profit they may receive from its sale.

Epic or whoever does not control the physical disk the game comes on. They sold it to the retailer who in turn sold it to me. It is now mine.

Asking retailers to cut the developer in on a part of the used sale is akin to Mitsubishi telling me to give them a piece of the action if I sell my EvoVIII. Sorry, you set your price to make a profit, you don't deserve any more of it after that.

Epic and other game developers lambasting the used market should consider pricing their titles to maximize profit. Price it too low, no profit, price it too high, no one buys it. If they chose to go the registration route like on Windows XP, it would turn-off most consumers and be easily hacked, thus reducing your sales and watching as your games are still sold as used titles. Plus, I'd like to see them create a registry system for the XBox or some other console, good luck.

Glenn @ Dec 18th 2005 10:08PM

At the same time though, EB and the like need the big profit from the used games to offset the tiny profit from the new stuff. For example, a new $50 game normally has between 15-25% profit on it while a system has maybe a 5-10% profit.

jimmy @ Dec 18th 2005 10:08PM

the whole video game market is wildly different than it was in the days of nes and snes. back then used gamse like at funco land was kind of a rarity.

Game generally came out at a price like $50 or $60 somtimes more (Chrono Trigger)and stayed at that price till they eventually faded off the shelves. Now a game comes out at $50 and in several months drops to like $30 or $20.

New games at $60 this generation may be cause for concern, but those prices are still gonna drop.

NewtonHeath @ Dec 18th 2005 10:08PM

Great! EB rants! You know what bugs me? The loser behind the counter of my local EB that grimaces every time I say I dont want to pay the 3 buck "insurance" for if my game gets damaged. I cant believe people pay that nonsense. The 2 people in front of me did last time I was there - I was shocked.

Hate EB Games @ Dec 18th 2005 10:08PM

Why not just change the EULA to exclude the selling of games to corporations like EB Games, Gamestop, etc...?

LaughingTarget @ Dec 18th 2005 10:08PM

13 - It wouldn't survive too long. Would get ruled as illegal by the courts and boom, you got people pissed at your company AND they are still selling your games.

jimmy @ Dec 18th 2005 10:08PM

14, I think it would be legal, but it would prove detrimental to the game makers.

What would be illegal would be the old 80's nintendo strong arm like they tried with toys r us. Saying if the store carried videogame products other than nintendo they would not be supplied with nintendo's goods.

san_ra @ Dec 18th 2005 10:08PM

I try to avoid EB Games as much as possible. Toys R Us surprisingly has a good new selection. But sometimes you have to go there to get something slightly rare, like trying to currently buy Ape Escape 2.

Dmnkly @ Dec 18th 2005 10:08PM

Just to clarify, Glenn, are you talking 15-25% PROFIT, or 15-25% MARKUP. Because there's a massive difference. If the gaming retailers are making 15-25% profit on every game sold, that's absolutely enormous, and I'm clearly in the wrong business.

Regarding EB pricing on used games, there's nothing evil about their markup. I agree, it sucks. Which is why I never buy or sell used games through them. But there's nothing inherently wrong with overcharging unless it's paired with anti-competitive practices. If you don't like their prices, buy somewhere else. And what's more, no price is too high if people are willing to pay it. If you set up a stand on the corner and sell lemonade for $50 a glass, I suspect you're not going to get very far, but that's entirely your right. But if you can get people to actually buy it... cripes... more power to you.

Brocktoon @ Dec 18th 2005 10:08PM

Uh, I spent several years in retailing and I can tell you this arguement has two flaws:

1) A 70-90% markup is not unrealistic for the handling of dated, distressed, or expiring merchandise. As a matter of fact, You pay these sorts of margins all the time for other stuff, only it's the gamer taking the hit, not the dude in China pumping out salad shooters for Walwort at $.05 each. All retailers have certain categories where they make this kind of Bonanza. Anybody offer you shoe polish or sealant when you bought shoes? They are making more money on that than the pair of shoes!

2) Without the ability to have a high-margin category or add-on sale, most retailers are un-viable in small suburban malls. In the example above, if the shoestore lost the ability to sell laces and polish, they would have to sell either double the shoes, or raise the margin on the shoes to at least make up for the loss in profit, never mind lost sales volume.

So, what would you rather have? EB as it is, with reasonable prices on new games and many locations, subsidised by the braindead who trade in games there, or one EB per town where new games cost maybe $15 more per title, and they are sharing the profits of distressed merchandise with developers?

Easy choice.

Rumble Bottom @ Dec 18th 2005 10:08PM

Bad news is, EB Games and Gamestop are the premier resellers of used games. Sure, you can take a gamble on eBay or other online venues - but if I want a quick fix, then EBGames is the way to go. To their greed, they could push more used inventory if they marked up used games only 10 to 15 percent as opposed to 25 - and the increased volume would yield exponentially higher revenues (but 10% smaller profits). One thing to keep in mind though...investors are more likely to purchase shares from a game seller that grosses more income. Therefore, more stores open and profits increase.

It's not illegal to mark up used games. It's not illegal to sell gasoline at over $3 a gallon, but marking up games and inflating gas prices just pisses people off and implants a mind-set that gasoline and used games are only to be purchased when absolutely necessary.

b @ Dec 18th 2005 10:08PM

I wouldn't mind paying for games what I pay for DVDs, that would be awesome. And yes, it's a rip-off what EB and Gamestop do. I don't care what they do, but if retailers and developers manage some deal to make games cost half of what they cost today, everyone would love to, and certainly the industry would grow much faster.

Glenn @ Dec 18th 2005 10:08PM

I was referring to markup and not profit. 25% markup on a $50 item at a retail location like EB is ceratinly not huge.

LaughingTarget @ Dec 18th 2005 10:08PM

It is illegal. The EULA is only in the game itself and can only be agreed to if the game is actually played. Since retailers do not allow users to return the product if they do not agree with the EULA, adding an unreasonable requirement like that would not hold up in court, or the court system would require the manufacturer to fully reimburse the end-user for all costs of the product, since it was they that pressured retailers into not taking back opened products.

The EULA is little more than a reminder of the basic US copyright laws, and anything further than that requires an agreed, signed copy of the EULA (such as in close BETA tests) prior to purchase. Since the EULA is only read AFTER purchase, anything held within that is not already covered under copyright law (such as transmitting the code without selling the original item along with it) and personal/corporate property rights (anything regarding use of online servers) or other established legal foundation is not going to hold any water.

Contract law requires the following for it to be considered valid:

Intent - the individual must intend to sign the contract. Having it foisted on you in the back of the manual or as a flash on the screen after purchase does not work.

Definiteness - The terms must be made clear enough for the individual to be able to decide to accept or reject the terms. If the terms are indefenite, such as not being able to sell to any corporation at any time, the contract is unenforcable and by defenition can never be breached.

Communication - The contract must be communicated from the offerrer to the offeree to be considered valid. Since, again, the EULA is in the packaging, the offer was not properly communicated prior to purchase and, again, is invalid.

Contractual Capacity - The individual must be of sound mind, body, and of legal age to accept the agreement. Any EULA that requires anything beyond compliance with basic laws cannot be enforced if purchased by a minor since they are not of legal capacity to agree with the contract. This would cut into a major source of income. A minor purchasing a game can void the portions of the EULA that do not conform to copyright law at any time of chosing, also called the Infancy Doctrine

Consideration - This indicates that something of legal value must be given and must be bargained for. Most contracts, such as cell phone contracts, can be bargained over at the point of sale. Since game developers are unable to offer such a bargaining option, there is no legal grounds the contract can be held on.

A requirement to not sell to resellers also are considered contracts in restraint of trade. They are stating you cannot do business with a broad entity and would violate trade practices.

Basically, such a EULA is unenforcable on multiple levels, most blantantly since it is not presented nor agreed to prior to the point of purchase. The only option for developers to stop resellers is to enter into an agreement with each location that would state they will withold selling their used products for a fixed period of time, given that indefenite contracts are not enforable. That, though, would hamper sales as said retailer would retaliate by not selling the product at all.

Overall, Epic can just huff and puff all they want, but it won't do anything to change the fact they can do nothing about their games being re-sold.

nod @ Dec 18th 2005 10:08PM

I agree with Mark Rein 100%, games should be $20. So many of the industry's growing problems would be totally solved by that move alone.

And here's what's going to happen if EB and other retailers won't play ball: publishers will include a 1-time registration code with the game. Boom. No more used games.

Belgand @ Dec 18th 2005 10:08PM

As much as I also dislike the market on used games it has increasingly become the only way to buy titles that are more than a month or two old. The mentality has gotten to be: place a pre-order for a game in advance, play the game intensely for a week or two either beating it or getting bored with it, sell it back to the store for a pittance, the store sells it back to anyone who didn't take part in the first few steps and no new copies are available.

Andrew @ Dec 18th 2005 10:08PM

If you sell any of your games for 7$, you're a sucker.

eBay..people.. eBay!

LMAO this is funny @ Dec 18th 2005 10:08PM

Yeah EB and GameStop are ripoff when comes to pre-owned games. They always try to push sales on it. And plus for older titles say 4 weeks old, they NEVER have more than 2-3 new copies and will suggest you to buy the preowned version for "less". But it's the consumer's fault for re-selling the game to them and buying them. Oh and if you resell it to them, you don't even get money, you get store credit! If you want cash, they give you even less for it.

Pickypants @ Dec 18th 2005 10:08PM

Old crappy games you bought without thinking first are clutter. You know you will never play them, and all they do is take up space. If there is no chance of ever seeing a title on my system again, I will trade that sucker in. I don't care if I only get $.10 a game and if they mark it up to $45, the point is, I dont want it anymore, and someone convenient is willing to pay for it.

Now if you are trading in good games that you enjoyed playing, then you are an idiot.

Brocktoon hit the nail on the head. Would you rather give money to the developers out of your own pockets, or show some restraint when it comes to trading in your software.

tpp @ Dec 18th 2005 10:08PM

Glenn (#10), some industries would consider 15% profit margins pretty big. Your neighborhood gas station, for example, gets single digit or negative profit margins on that precious fuel you pump into your car.

kojo87 @ Dec 18th 2005 10:08PM

i have never sold a used game to any store. mostly because i would rather have the game that i havent played in three months than $4. im all for dropping the price of new games! who isnt?

Brocktoon @ Dec 18th 2005 10:08PM

Here's another kicker: If you think about it, if devlopers are allowed to double or tripple dip on profits on traded in games, it ENCOURAGES shitty games, or creates a positive incentive to create games that have limited replay value.

Who trades in good games?

This whole thing is half-baked!

Michael McGuire @ Dec 18th 2005 10:08PM

For those who talk about "taking a chance with eBay", I would say: phooey. You can be practically GUARANTEED that your game will sell for more on eBay than you would get trade-in credit at EBGames or Gamestop. If I sell or buy used games, I go straight to eBay and skip the middleman. Sure, it's a little less convenient, but I will usually make 100%-300% more on the sale of my games and pay around 50%-75% less on used games.

Rocketboy @ Dec 18th 2005 10:08PM

I usually trade mine into Game Crazy.. I've never liked EB... but this brings up another point.. what's the difference between lost profits due to illegal copies (not black-market) and ones that are due to the purchase of a used game?

Cpt Spaulding @ Dec 18th 2005 10:08PM

Lots of long replies ill keep mine simple for the people who buy/sell from places like gamestop:

eBay

Rare Hare @ Dec 18th 2005 10:08PM

i hate selling a game to gamestop for 2 or 3 bucks (STORE CREDIT, mind you!) and then they turn around and put it on the shelf for $20! i try buy NEW from gamestop, but then do my selling on eBay whenever possible.

and i agree that games are way overpriced. there are basically 3 games i really want right now. Legend of Zelda: Twilight Princess, Ninja Gaiden Black, and MGS3: Subsistence.

2 out of those 3 games are essentially the same game that went on sale months ago (which i never got the chance to play) and are just updated with new content. not quite worth 50 bucks, but that's what i'll be paying for them anyway. so that's 150 bucks for a sequel and 2 special edition updates. i'll put the money down, but it will be with gritted teeth and a clinched fist.

*sigh*

Laughing Man @ Dec 18th 2005 10:08PM

I don't understand one simple thing about the games industry.

Why do its consumers put up with so much bullshit?

The retail experience in Gamestop and EB is dreadful. Every time I go into one I feel like if I'm not careful I'm going to get screwed. I think Gamestop and EB purposely push used inventory in order to make the higher markup than they get on new retail inventory. Today I went into a Gamestop within walking distance to pick up all in one fell swoop, Ninja Gaiden Black, Burnout Revenge, We Love Kattamari, and Indigo Prophecy. That's some casssh for a store. They didn't have any of them new, except for a shitty Burnout Revenge with the disc removed. If those stupid goddamn stores can put empty boxes on shelves before the games come out just to fuck with our heads why do they insist on selling what are supposedly display copies that invariably look scratched and abused? The store clerk didn't offer when to come back for more copies. Just stared at me slack jawed. There goes $150. Took my business elsewhere and decided today that I give up on Gamestop. In the past year the only game I've bought there that wasn't a display or reshrink (as I buy and collect and keep well all the games from all systems I buy) was Grand Theft Auto III the day it came out.

The staff at most - I'm generalizing but to be fair - most of these stores are antisocial prigs who believe that all purchases need to be commented upon or act with total snobbish indifference. They're less socially adjusted than comic book store and record store employees, I swear. I have lived in four major cities in the past two years and travel extensively, so I'm not just surveying this from a 50 mile radius. This is pretty much universal. I'll even name some nice guys - the EB in the basement of the mall in downtown Seattle. Those guys are nice and competent and informative without judgmental. Big surprise Bungie went over there at midnight when Halo 2 launched.

Then there's the price of games. Why can Take 2 afford to sell NBA 2k6 for 20? Because honestly the entire industry could. When you enter a Gamestop or EB and see how much shelf space is devoted to used games (ie games that consumers have paid for and are giving up) doesn't it make you wonder if there's a crisis in the industry? The price point on the 2k sports line improved sales if I'm not mistaken, and hasn't buried the company. If all games were priced in the $20 - $30 range more software would sell and this ridiculous after market would be gone.

But that's a much bigger industry issue. Fundamentally, we need to stop eating the shit sandwich that we're given time and again at game stores. I wish to god someone would take a page on how Sony market to hipsters and make some nice game stores staffed by hot chicks with comfortable chairs with unbattered game kiosks selling new shrinkwrapped games with plenty of stock. I am reminded of the comfort of playing PS2 in the basement of the Diesel store in San Francisco..... If only...

Laughing Man @ Dec 18th 2005 10:08PM

By shit sandwich I wish to clarify - if the industry were to raise games to $60 we should all stop buying games for as long as it takes for them to realize what a bullshit shaft that move is. Seriously, the industry would be fine with $20 games. More robust, even.

Glenn @ Dec 18th 2005 10:08PM

"Glenn (#10), some industries would consider 15% profit margins pretty big. Your neighborhood gas station, for example, gets single digit or negative profit margins on that precious fuel you pump into your car."

10% is or more is a nice net profit but, as I clarified later, I was talking about markup and not profit.

Kristopher Kirk @ Dec 18th 2005 10:08PM

I totally disagree with the views here about companies like EB GAMES AND GAMESTOP sharing profits from selling pre owned games. IF you look at the grand scale of the amount of CASH and CREDIT they give for taking peoples JUNK, Scratched, NEW, GOOD, and Really crappy games. Yes games like metroid prime 2 and other AAA titles they do pay a anmount to the customer that usually gets doubbled when it comes to its USED resale price. But Companies like game stop and EB are like any other USED, JUNK, Antique dealer.(yes NES and Genesis and even PS1 i consider antique)They are paying for something that the developer already got his kickback for. WHEN THAT GAME WAS SOLD AS NEW everyone got paid. The Store that sold it, The vendors, The developer and all other other people that get a cut of that $49.99. When a CONSUMER decides to trade in to sell his/her game weither it is a private individual or a company like EB, that game was already PAID OUT. SO the used title that is sold for almost double the price that the company paid for it is FREE CAPITALISM. Remember the USeless crap that is sitting on those store shelves that will never sell.. thats why popular titles are only worth 6-$15 bucks on a trade in and sell USED for $29.99 - 44.99. This is how they make up losses on crappy titles that never sell but they still buy from a consumer. If developers feel they ARE ENTITLED TO PROFITS that companies make on USED titles then Capitialism is dead to these people and they should support a SOCIALIST POLITAL PARTY and perhaps move to CUBA. THIS IS THE USA this isnt a socialistic - communistic Society and Economy. Next you'll be telling me when i try to EBAY HALO 3 or Unreal torn 2008 Im gonna have to pay a EBAY FEE that goes back to the developers. IF that happens we might as well boycot video game makers.

I hate to rant but this is BU|| $h1T Viewpoint from developers. Greedy bastards. DO your jobs people. Make your games and sell them. You only deserve a profit ONCE.

Chris K @ Dec 18th 2005 10:08PM

Funny, I just sold my old Pontiac, and GM didn't ask me for any money. The government did, of course...

Put the crack pipe down, Reins. If you want continuing revenue, sell a game "service" like Sony or Blizzard, or like Valve is dying to.

If you're all fed up with EB, don't sell games to them. Simple as that. I've been in the store, and I've seen TONS of used games. SOMEONE is selling games to them.

Personally I keep all my old games. I'll probably sell them at a garage sale in a few years for $5 apiece. But then again, I might keep them forever. I still have my NES games, and I've played a few recently. Ditto for some old PC games like System Shock 2 and Baldur's Gate. Games don't get less fun as the discs get older.

And as for "scratch insurance", just pirate the game if your copy gets damaged. You bought the game, you have a right to play the game. If companies charged a reasonable fee for replacement media like they used to (ie: send $5 and disk 1), that would be acceptable, but since you can't do that, just go to isohunt, grab the ISO, mod your XBox, and play.

Kyle @ Dec 18th 2005 10:08PM

For those who think that anyone can require that games not be resold, or demand a cut of it, do some reading on the First-sale doctrine (http://en.wikipedia.org/wiki/First-sale_doctrine). IIRC Garth Brooks made a big stink about this ten years ago, and that went about as far as this will. You make your money from the first sale, and if someone wants to resell after that, it's legal.

Now there is an exception for computer software (as opposed to, say, music), but both the statute and case law are contradictory on this, so it's a little murky. A reasonable person could conclude that that this is likely to be straightened out in the next few years, though the law is not always a reasonable person and I am not a lawyer.

Vinnie @ Dec 18th 2005 10:08PM

How come no-one has mentioned the "5 dollar pre-order" scam that EB and Gamestop force upon us?

I went to EB on Monday to see if they had Socom III yet and they said "not until Wednesday, unless you pre-order--you can get it Tuesday" I didn't want to "pre-order" it so I went back on Wed. and they tried to tell me they're sold-out unless you pre-ordered it.

I honestly think this is a CROCK. I can almost gaurantee that they had plenty of copies of Socom but did not sell me a copy so in the future I will do there pre-order BS. They have been doing this for years and we fall for it. I'm guilty of doing this in the past because I'm hungry for a game on it's release date. But I'll never do it again because I realize it's a scam. They have a lot of nerve let me tell ya, like they don't already make enough money. They have to go and rip-off KIDS who are 90% (guessing) of the consumers.

Is it just me? Too much of a consiracy theory? What do you guys think?