Counting Rupees: Feeling used
by Jeff Engel 
{ Oct 7th 2008 at 7:00PM }
Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming:
![image credit: Moe_ [http://flickr.com/photos/moe/2574430333/]](http://www.blogcdn.com/www.joystiq.com/media/2008/10/gamestop.entrance.490w.jpg "image credit: Moe_ [http://flickr.com/photos/moe/2574430333/]")
Bungie audio director Marty O'Donnell recently made some controversial remarks regarding used game sales. To quote, "It seems to me that the folks who create and publish a game shouldn't stop receiving income from further sales." Of course, this seems laughable to all of us who have bought and sold used games for years. It's my property, I can do what I want with it, right? This doesn't have any place in the industry, does it?
Legally, perhaps not. According to the first sale doctrine in copyright law, copyright holders are expected "to obtain all financial benefit for the article or product embodying the intellectual property at the time of the sale, and prohibits placing limitations on purchased items." This basically means that, once you purchase an item, the intellectual property cannot prevent you from doing whatever you want with the item so long as you don't violate copyright (by, say, copying it and then selling it -- otherwise known as pirating).
But, of course, herein lies the problem. A used game sale really is not much better for an intellectual property owner than a pirated game. A used game sold at GameStop provides absolutely no monetary benefit to the game's creators, but a significantly higher profit margin to GameStop than a new game sale. This is, unfortunately, why GameStop employees are always badgering you to trade in your games. Rather than calling up its supplier for more new games from the publisher, GameStop relies on you for its supply. It's a strategy that's been working quite well for the company, to the tune of $1.8 billion in sales in the last quarter. It has to be painful for a publisher and developer to watch a good portion of that money go to used sales instead of more orders to replenish new stock. Doesn't the publisher and developer deserve a piece of that pie?
There's not a lot of precedence for something like this. Certainly, other forms of media don't currently have equivalents. Buying a used book or DVD doesn't send money back to the publisher and creator either. However, the movie rental industry, or at least Blockbuster, does provide royalties to movie studios. This is despite the fact that, by law, Blockbuster does not have to provide any royalties to studios. Instead, Blockbuster has contracted with movie studios to give them extremely cheap movies in exchange for a cut of the rental fees. This is obviously a bit different from selling used games, as the publishers don't provide the inventory (customers do), but something similar could potentially work. For instance, game publishers could give a discount to retailers like GameStop for new games in exchange for some royalties from resold used games. This would increase the margin on new games, which are, of course, necessary to sell (whether through GameStop or elsewhere) in order to create GameStop's preferred wares: used games. While publisher's would love this, it's doubtful this would be an appealing deal for GameStop.
Would something like this be good for the industry, though? Gamers are finicky about this, as they like a good deal, but also like to reward developers (and publishers) for creating something that they like. More money for the developers would also mean more opportunities for these studios to create new games and take more chances. Unfortunately, cheaper games and rewarding developers are basically in direct opposition to each other, since you'll save some money buying used games, but then you won't be rewarding the companies that created them. The problem is that, for the most part, there's no inherent value in buying a new game over the same used game, assuming it's in relatively decent condition. Both of them will provide the exact same experience, as they're both the same data on a disc. So the question becomes, if you're paying for the same experience, shouldn't the company that created that experience be rewarded for each person that they share that experience with? And since GameStop's primary business is to sell used games, shouldn't the content creators that it relies on receive some of the benefit of the secondhand business?
If a system like this were to be implemented, it's quite possible that GameStop would respond by simply raising the prices of used games to cover royalties. Of course, this is already becoming a moot point, since game companies have already figured out a way around retailers and used game sales: user accounts and downloadable games. On the PC, Valve, for instance, requires that its games be tied to a Steam account when installed. While this lets owners play their games on any computer that they can log in to Steam with, reselling the game would be worthless since the CD key has already been registered to another account. Additionally, downloadable games both on consoles and PCs are obviously non-transferable. Sony is already selling full-sized games on PSN, and it's safe to assume that digital distribuition will continue to grow on PlayStation 3 and expand on futute consoles. But just in case it doesn't, Sony did register a handy, little patent that, in a nutshell, prevents games from being played on more than one console. Didn't think that could happen? It already has.
As co-editors of A Link To The Future, Geoff and Jeff like to discuss, among many other topics, the business aspects of gaming. Game companies often make decisions that on their face appear baffling, or even infuriating, to many gamers. Yet when you think hard about them from the company's perspective, many other decisions are eminently sensible, or at least appeared to be so based on the conditions at the time those choices were made. Our goal with this column is to start a conversation about just those topics. While neither Geoff nor Jeff are employed in the game industry, they do have professional backgrounds that are relevant to the discussion. More to the point, they don't claim to have all the answers -- but this is a conversation worth having. You can reach them at
Legally, perhaps not. According to the first sale doctrine in copyright law, copyright holders are expected "to obtain all financial benefit for the article or product embodying the intellectual property at the time of the sale, and prohibits placing limitations on purchased items." This basically means that, once you purchase an item, the intellectual property cannot prevent you from doing whatever you want with the item so long as you don't violate copyright (by, say, copying it and then selling it -- otherwise known as pirating).
"GameStop relies on you for its supply." |
But, of course, herein lies the problem. A used game sale really is not much better for an intellectual property owner than a pirated game. A used game sold at GameStop provides absolutely no monetary benefit to the game's creators, but a significantly higher profit margin to GameStop than a new game sale. This is, unfortunately, why GameStop employees are always badgering you to trade in your games. Rather than calling up its supplier for more new games from the publisher, GameStop relies on you for its supply. It's a strategy that's been working quite well for the company, to the tune of $1.8 billion in sales in the last quarter. It has to be painful for a publisher and developer to watch a good portion of that money go to used sales instead of more orders to replenish new stock. Doesn't the publisher and developer deserve a piece of that pie?
There's not a lot of precedence for something like this. Certainly, other forms of media don't currently have equivalents. Buying a used book or DVD doesn't send money back to the publisher and creator either. However, the movie rental industry, or at least Blockbuster, does provide royalties to movie studios. This is despite the fact that, by law, Blockbuster does not have to provide any royalties to studios. Instead, Blockbuster has contracted with movie studios to give them extremely cheap movies in exchange for a cut of the rental fees. This is obviously a bit different from selling used games, as the publishers don't provide the inventory (customers do), but something similar could potentially work. For instance, game publishers could give a discount to retailers like GameStop for new games in exchange for some royalties from resold used games. This would increase the margin on new games, which are, of course, necessary to sell (whether through GameStop or elsewhere) in order to create GameStop's preferred wares: used games. While publisher's would love this, it's doubtful this would be an appealing deal for GameStop.
"There's no inherent value in buying a new game over the same used game." |
Would something like this be good for the industry, though? Gamers are finicky about this, as they like a good deal, but also like to reward developers (and publishers) for creating something that they like. More money for the developers would also mean more opportunities for these studios to create new games and take more chances. Unfortunately, cheaper games and rewarding developers are basically in direct opposition to each other, since you'll save some money buying used games, but then you won't be rewarding the companies that created them. The problem is that, for the most part, there's no inherent value in buying a new game over the same used game, assuming it's in relatively decent condition. Both of them will provide the exact same experience, as they're both the same data on a disc. So the question becomes, if you're paying for the same experience, shouldn't the company that created that experience be rewarded for each person that they share that experience with? And since GameStop's primary business is to sell used games, shouldn't the content creators that it relies on receive some of the benefit of the secondhand business?
If a system like this were to be implemented, it's quite possible that GameStop would respond by simply raising the prices of used games to cover royalties. Of course, this is already becoming a moot point, since game companies have already figured out a way around retailers and used game sales: user accounts and downloadable games. On the PC, Valve, for instance, requires that its games be tied to a Steam account when installed. While this lets owners play their games on any computer that they can log in to Steam with, reselling the game would be worthless since the CD key has already been registered to another account. Additionally, downloadable games both on consoles and PCs are obviously non-transferable. Sony is already selling full-sized games on PSN, and it's safe to assume that digital distribuition will continue to grow on PlayStation 3 and expand on futute consoles. But just in case it doesn't, Sony did register a handy, little patent that, in a nutshell, prevents games from being played on more than one console. Didn't think that could happen? It already has.
As co-editors of A Link To The Future, Geoff and Jeff like to discuss, among many other topics, the business aspects of gaming. Game companies often make decisions that on their face appear baffling, or even infuriating, to many gamers. Yet when you think hard about them from the company's perspective, many other decisions are eminently sensible, or at least appeared to be so based on the conditions at the time those choices were made. Our goal with this column is to start a conversation about just those topics. While neither Geoff nor Jeff are employed in the game industry, they do have professional backgrounds that are relevant to the discussion. More to the point, they don't claim to have all the answers -- but this is a conversation worth having. You can reach them at
Reader Comments (Page 1 of 3)
Bones3D @ Oct 7th 2008 7:08PM
Fine then, let the publisher buy the game back from the user after market and let them profit from the resale.
Problem solved.
Knight Marquise @ Oct 7th 2008 7:16PM
Bones,
Exactly. Mr. Odonnell, whom I do appreciate his talent, is simply coming off as a greedy bastard. Could you imagine the OUTCRY if Ford/GM/Chryster decided they needed money from every used car sold and resold? Or how about Weber, were I to decide to sell my grill to someone else? It's BS and a slippery slope, and really...REALLY comes off poorly from a developer whom usually breaks sales records everytime they release a game.
Bones3D @ Oct 7th 2008 7:24PM
Besides, on whose authority does a publisher or manufacturer reserve the right to profit more than once on something they've produced. Does GM profit every time a used car gets sold again outside of a GM owned dealership? Does a book publisher profit every time a used copy of a book gets sold between college students? Do artists get to profit from their work again once they've sold the rights to some other party if the other party turns around and sells the original for 20x what they paid for it?
Our country really needs to get over this foolish sense of entitlement to everything just because others can make something we once owned more profitable than we could. Running to the nearest lawyer over it is both childish and untrustworthy.
Good luck ever getting someone to enter into a contract with you in the future if they know you'll just manipulate the laws to break it.
Ordeith @ Oct 7th 2008 7:41PM
They learn from the government.
If the government can profit from any type of economic activity by taxing it at every stage, why can't the content creators?
Taxed when you make money.
Taxed when you spend money.
Taxed when you pay someone.
Taxed when you get paid.
Taxed when you buy something.
Taxed when you sell something.
Taxed just for owning certain things.
Companies have nothing on the profitability of government.
Mr Khan @ Oct 7th 2008 7:51PM
profitability?
Does our $27,000 PER FAMILY National debt have no bearing on you?
Sheppy (of the Fidlious Clan of Wong) @ Oct 7th 2008 7:53PM
YAY! Reactionary halfwitism is awesome! I love the analogies, guys. I really do. Except you guys forget that your analogies are half-baked.
Does GM stand to profit twice off used cars? Yes, actually. Because more often than not, they are giving you at least a thousand below blue book value of your vehicle. Likewise, they are "trading you up" into another vehicle that they'll make double profit margins next time you trade in your car. So in other words, the car dealership analogy fails.
The book analogy does as well, but for a different reason. Take, as an example, college books since that's the ONLY region where that analogy applies. Used books sales usually work for, at most, a year or two before the teachers upgrade to a new edition of the book. Yearly if the teacher wrote that book. And book buybacks often pay very little. Now, this works well enough in your analogy, but consider this. The college book store doesn't make the used books it's core focus. In fact, they often encourage the new book sales. That's the difference in Gamestop.
Audio CDs? Movies? Well, granted, they can't stop you from selling your copy beyond but music and movies both have ways of profiting long after the initial sales period. Also, movies and music rarely get "clearanced out" unlike games. Not to mention the money those studios make licensing them out to Stars, HBO, TBS, and eventually ABC. Video games, sadly, do not have a similar route aside from Greatest Hits and even then it's a big problem.
Now, I do agree that game companies shouldn't complain about used game sales but now look at Gamestop for a moment. Are they pushing the new game sales? Nowhere near as much in their brick and mortars as the used game sales. In fact, Gamestop has the practice of dramatically under ordering games thus their usual line of "want it, preorder it." At last count, less than 15% of their business was derived by new game sales. Now consider for a moment you're a game company, and you have an alliance with Gamestop, and you see they are encouraging their userbase to avoid buying the games that make you money. Now do you see the point? Gamestops primary business IS the used games sales. They encourage sales of product which doesn't support the industry and majority of their business plan IS cutting into the video game companies bottom line. Now, given this information, do you really blame the game industry for getting annoyed? After all, apply this same info to Best Buy's business plan and do you believe for a second that movie studios and music studios would put up with that shit? Eventually we may see some companies cutting Gamestop out altogether (AC/DC Rock Band) or switching to digital distribution (Wipeout HD).
x Shadow @ Oct 7th 2008 8:46PM
Mmmm.... its actually 33k per person >.
Evan @ Oct 7th 2008 9:16PM
The ignorance is astonishing. The majority of the cost of a car is the assembly and materials. But with a game, the physical disk and packaging is only worth a buck or two. The other $48 or so that you pay is for a license to run the software.
When Gamestop resells a game, they are not selling a new license. Therefore, Gamestop is charging you $30 for a $1 disk and packaging!
By allowing Gamestop to resell the same license, the cost of the new game to the original buyer has to be increased, because the developer has to collect, up front, the value of all the user licenses that will be lost when Gamestop resells the disk without a license.
Yourself @ Oct 7th 2008 9:35PM
The car, I'm afraid, is a horrendous comparison, for a few reasons.
1.) As was pointed out in the column, a used game is essentially identical to a new game. There's simply no incentive to buy a new game unless you really like shiny packages. This is far from the case with a car, where many people simply do not trust used cars and can afford not to.
2.) It costs way more money to make each individual car than it takes to make each individual game. For a video game developer/publisher, there is one initial investment, and that is the design and programming of the game. From there, it's just printing a bunch of DVDs. The physical medium on which the game is distributed constitutes a negligible percentage of the sale price. Again, not at all the case with cars. While automobile manufacturers do spend a great deal on designing new vehicles, a much more significant portion of what you pay for at the dealer is materials and manual labor.
To put it simply: The amount of money spent by a car manufacturer is directly proportional to the number of cars that they sell. The amount of money spent by a video game publisher is fixed at the development investment, and they are tasked with recouping that expense.
Yourself @ Oct 7th 2008 9:36PM
Alright, while I was typing, Evan figured out a much more succinct way to say the same thing as me. Sorry.
Saria the Cat @ Oct 8th 2008 12:51AM
@Sheppy: "The college book store doesn't make the used books it's core focus. In fact, they often encourage the new book sales."
Not true. My college bookstore, including its privately own competitor across the street, push used books sales like mad and try to get people to sell back their books. This is because they, like Gamestop, stand to make a greater profit from the sale of used books. Other college bookstores function the same way from my experience.
"Are they pushing the new game sales? Nowhere near as much in their brick and mortars as the used game sales."
I would also actually argue that Gamestop pushes new game sales more than college bookstores push new book sales. It touts new games all the time with intense marketing that GAMESTOP pays for, not the developers, as well as pushes preorders for those games, getting people to purchase games as they come out rather than later.
Lastly, You also are forgetting something important. Gamestop plays a very important function in the game industry as a distributor. It brings the developer's games to the consumers. Without Gamestop or other game stores to function as distributors, these developers and publishers must do the distribution themselves. And Gamestop makes gets 10% of the sales of each game sold. They could not stay in business if they did not sell used games.
This isn't an argument FOR Gamestop as the primary distribution method in the game market. I don't like the company, but because I understand how it works, I understand why the company functions the way it does.
Vidikron @ Oct 8th 2008 2:16AM
@Sheppy
"Does GM stand to profit twice off used cars? Yes, actually. Because more often than not, they are giving you at least a thousand below blue book value of your vehicle. Likewise, they are "trading you up" into another vehicle that they'll make double profit margins next time you trade in your car. So in other words, the car dealership analogy fails."
Whoa now... how does GM earn twice? Many car dealers have no ties back to the manufacturer for used car sales. I don't know how you came to the conclusion see any of that money. And, yes, many people do trade up, but so do people selling back used games. Many trade them in toward new games. It's the same situation. You're also making some huge assumptions. For example, you're assuming that the person is even selling the car back to a dealership. MANY people sell used cars directly to other individuals. Just browse your local classifies any day of the week.
But, hey, so you don't like the car analogy. Just pick virtually any other non-perishable item in the market. TVs, books, furniture, bikes, toys, etc, etc, etc... anything. Just browse eBay and see if you can find any items being sold used where a vut is going back to the manufacturer.
Vidikron @ Oct 8th 2008 2:46AM
I'd also like to point out that even if there are official dealerships where the manufacturers are getting a cut of used car sales, so what? What's stopping game publishers from doing the same? Basically, Gamestop did the work setting up the used game business and now the dev/pubs are crying because they aren't getting a cut. Well, boo fricking hoo... maybe they should have beat GS to the punch then.
Replica23 @ Oct 8th 2008 6:08AM
"Besides, on whose authority does a publisher or manufacturer reserve the right to profit more than once on something they've produced."
They don't, however what is there to stop a publisher from pursuing digital distribution as their main means of selling a product? It's in full swing with PC gaming and it's starting with consoles too. When that time comes (and it likely will) there will be no room for Gamestop. Honestly, at this point Gamestop really needs to prove they can be beneficial to publishers before those publishers realize they can make a lot more money selling directly to you through PSN/Live. And if you think a company like Activision or Electronic Arts isn't interested in that, then you're dead wrong.
A Pissed-off English Gamer @ Oct 8th 2008 7:43AM
Well, Ordeith, that's stupid; the government kind of need that money. Not least of all for regulaion, which is clearly needed in your economy. Americans can't hide behind a fiscal conservative policy of low regulation anymore, because it's led to the economic situation we're in, and almost every abusive business practice (like this one) isthe result of an industry with loose regulations.
j.howlett @ Oct 8th 2008 9:20AM
we must be on the right track because that was my first thought also bones3d
adamrwlngs @ Oct 7th 2008 7:14PM
"There's no inherent value in buying a new game over the same used game."
I don't agree with that at all. For me I would much rather have a game untouched and be the first to play it. What gets me the most is that gamestop will sell you "new" games that have be opened for display purposes and expect you to pay full price. Last time I checked opened means used.
Tonezilla @ Oct 8th 2008 11:47AM
No.
PLAYED means used...
PREVIOUSLY OWNED means used...
BigD145 @ Oct 7th 2008 8:43PM
These No-CD cracks on my PC don't seem to care if a disc is used or not. All I care about is an intact manual and a disc that won't delaminate in the next 10 years.
bobartig @ Oct 7th 2008 11:33PM
I have no psychological hang up over buying used games. I just don't buy new games used because I would rather support the developer. Otherwise, I'd be a hypocrite. I used to be a game developer, and I still have a lot of contacts in the industry.
madphilb @ Oct 8th 2008 2:21AM
You need to look up the definition of "used" and "new."
"factory sealed" and "new" are not the same thing, new is un-spoiled, un-played, etc... removing the disk from the packaging isn't making it used, putting it into a system and playing it, sliding it across the table, etc.
I find it funny that the same "newness" of a game to cause people to freak at how little it's worth, is the same "newness" that they demand they should pay less for.
Complaining about it here isn't going to get GameStop (or all the other companies who do it) to change. Tell them you would rather have display covers to look at rather than spoiling the factory seal on the games. Or go back to Walmart and try to track down that blue-haired old lady to open the glass case for you so you can look at the game.
kinshadow @ Oct 7th 2008 7:15PM
I hate going into GameStop so much that I pay whatever I have to to go somewhere else. Besides, they charge WAY to much for a used disc (even the ones they cal "new").
No, I don't want to fucking preorder.
Delgado @ Oct 7th 2008 7:39PM
I've plugged it before and I'm going to plug it again - the gaming community needs to be aware of this site!
Get FULL value for your used games at Goozex, stop feeding Gamestop.
http://www.goozex.com/trading/asp/referral.asp?idr=562948189861
kevinski @ Oct 8th 2008 8:36AM
I just hate going there, requesting a new copy of a game, then seeing that total son-of-a-bitch behind the counter just take a game out of a sleeve, put it into a case and go toward the back room to shrinkwrap it. Ass, I said NEW.
t3kni9e @ Oct 7th 2008 7:19PM
I hate gamestop and truthfully I wish developers did get a cut from used game sales. But like you said, the law technically allows you to sell it which is a very important law because I wouldn't want someone stopping me from selling my games.
But like it was said, Gamestop relies on the consumers for their supply. I personally hardly ever trade in games unless I absolutely know I will never play a game again or I hate it and only if I can get a decent amount of money for it. But aside from me their are millions who do not know about how gamestop is actually ripping you off and is willing to sell their games for even a little bit of money and with the economy the way it is, people are more willing to do it now more than ever.
As for the used games, I only buy them with my edge card to get money off and if it's a game that's sold for $55 used and $60 new, then I only buy it with a 20% off used game so that with my edge card it's 30% off. I do this because I am not a person who can afford to buy all the games new.
I just hate how they give you $20-25 for a new game that has just been released, then sell it for $55 which is only $5 off the new price, also they do not sell a game cheaper if it's in bad condition. All games no matter how good of a condition or how bad are sold at the same price, with or without box art, manual, etc.
The only way for a money grubbing store like Gamestop to fall is for another retail store to combat them, but not only combat them, but actually be competitive. Circuit City sells some used games, but guess what? They sell at the same exact price as Gamestop and as far as my own personal knowledge is concerned, they do not buy games from you, but if they did, the chances are they would give you the same amount of money seeing as Gamestop is able to do so.
The one thing that Circuit City does do right, alone with some other stores like Best Buy, Target, Toys R US, etc. Is the fact that they offer $10 gift cards with new purchases for popular/hyped games. In the end Circuit City still makes it's money back because the gift card has to be used at Circuit City, but atleast next time you go in to purchase a game, you get $10 off.
But in the end Used games are by far one of the most "Lets rip them off" business in gaming unless someone can get really competitive, which no one seems to do... Which leaves Gamestop as the unchallenged monopoly.
wiredknight @ Oct 7th 2008 7:27PM
...copyright holders are expected "to obtain all financial benefit for the article or product embodying the intellectual property at the time of the sale...
Normally, I would completely agree with something like this. But in this case, GameStop does see a ridiculously disproportionate amount of profit from used games compared to how much developers make from new game sales.
It wouldn't be so bad if GameStop's markup wasn't so unfair. I used to like the idea of selling used games there, until I'd only get $8 for a title I paid $50 for a month ago, then see it up for sale at $30.
Now I do it all on Amazon, and the experience has been so much more pleasant and financially efficient.
Half the time I can get a new copy of a game cheaper than a used one at GameStop. Including shipping.
That and nearly all GameStop employees are total tools.
KingHippp0 @ Oct 7th 2008 7:28PM
Interesting, I wonder what Marty's take on Libraries are.
Screw all those people reading books. Freeloaders!
onetrueping @ Oct 8th 2008 6:32AM
Mm, might want to rethink that comment. Libraries are more likely to stock up on "reference" books, which few people are going to buy, than in pulp books, which are quite popular. In fact, a library can be easily considered a "trial basis" system, since it has a finite amount of books, and they have to be returned. Indeed, it is more akin to movie rental places, than a place like GameStop.
The reference books that libraries pick up tend to be quite expensive for that reason, in fact: being a niche market, the books are less likely to sell in large numbers than your best selling paperback. The high prices also mean that more people are likely to go to a library, unless they intend to use the book more than once... because library reference sections, being valuable, are frequently for in-building use only.
On top of that, most libraries are run exclusively from donations, used book sales, and a small portion of tax dollars (usually barely enough to keep the system running), and they have no profit margin to speak of. Librarians are poorly paid, which is just a greater testament to their dedication to their chosen careers.
Next time you choose an analogy like that, please think more carefully.
KingHippp0 @ Oct 8th 2008 10:38AM
My local Library in Portland, OR gives me access to all sorts of media. In the past week I've checked out Season 1 of Lost, the new Neal Stephenson book, and a couple graphic novels by Warren Ellis (Planetary) and Neil Gaiman (Sandman). My brother even brought home a copy of Age of Empires III one day, just to show me that our library has that available.
If I couldn't borrow from the library I might purchase these items. Therefore, I'm "taking money out of the publisher's pocket" according to some. I've never used the library for research, only for entertainment. I also volunteer at my library, because it provides so much for me and my community. Check out the catalog at http://www.multcolib.org , search for any popular movie or television show, comic book or novel and you'll be able to find it.
Do you still think this is a poor analogy?
Farseer (GDI) @ Oct 8th 2008 10:39AM
Dude, I'm with you. I can't believe all those overpaid library CEOs and fatcat librarians make so much money off of the hard work of others. Seriously, the book publishers and authors don't see a dime of the pile 'o cash that libraries rake in.
onetrueping @ Oct 8th 2008 9:56PM
Yes it is a poor analogy, for the simple fact that libraries ARE NOT MAKING PILES OF MONEY. So, if you read my comment again, you will notice that that was my main point.
The secondary point is that libraries ARE NOT SELLING THEIR MEDIA. They have a finite amount of resources, which must be returned to the library after a set amount of time, or you will in fact pay for a new copy of the media. For those people who are going to the library for entertainment, they have to rely on what is in the library at that particular moment. Sure, it's a lot of books, but it's not the same selection every day. While one person reads Miscellaneous Bodice-Ripper Romance, nobody else can... so if they want to read that book at any time, they have to go buy that book.
Again, libraries are a try-before-you-buy format: you get to preview the media, and decide for yourself whether that media is worth keeping a copy around.
So, to recap. Comparing a company that actively encourages people to buy overpriced used copies of media from them while offering maybe a tenth of that value for the media in the first place and in place of original sales, resulting in a huge profit margin, to a state- and donation-supported not-for-profit organization which provides research materials and entertainment on an extremely limited basis for little to no profit at all is a VERY poor analogy.
Dirty @ Oct 7th 2008 7:32PM
Death to Gamestop!!!
Titanium_Orchid @ Oct 7th 2008 8:24PM
still makes me chuckle
Saria the Cat @ Oct 8th 2008 12:56AM
STOP GAMESTOP!
please @ Oct 7th 2008 7:38PM
What if a gas station was selling gas for over 100% markup? Everyone would whine about price gouging. The gamestop does it and it is business as usual.
KingHippp0 @ Oct 7th 2008 7:40PM
I wouldn't buy gas there! I don't shop at gamestop either.
There ARE alternatives, it's not a monopoly.
midwat @ Oct 7th 2008 7:57PM
This is an incredibly flawed analogy. Basically, as bad as it could be while still involving a retail transaction.
A better analogy would be if your neighborhood gas station was selling used gas (which, for some reason, can still fuel your car) at slightly less than the price of new gas.
Question is: should the Saudis still get a cut?
BigD145 @ Oct 7th 2008 8:46PM
The gas will still be taxed and the Bush's are still alive, so the answer is yes. The Saudi's would get a cut, one way or another.
SKI @ Oct 8th 2008 9:48AM
Did you know the markup at Gamestop or Walmart or anywhere for new games is less than one dollar? They NEED the used sales to stay afloat. Selling only new games is an impossible thing to make money at. Sure it seems like they won't give you much for your used game but what can they do? There is no guarantee that that used game will sell (that's why direct-sales will net you more money) and a lot of games won't be sold for years and then it will be at $5. If you want more money, find someone to buy your game directly.
knighty (GT: ZeraKnight) @ Oct 7th 2008 7:46PM
Hmmmmm.
I'm gonna dodge this one, though the article is basically exactly what I was saying last week or whenever the Bungie one was posted.
knighty (GT: ZeraKnight) @ Oct 7th 2008 7:56PM
Just to clarify,
"But, of course, herein lies the problem. A used game sale really is not much better for an intellectual property owner than a pirated game. "
That's the bit of the article I agree with, before we end up with a cavalcade of comments again.
Meta @ Oct 7th 2008 8:19PM
Which basically means that a pirated game is the same as a used game sale to the publisher.
Mr ESC,Lives Again. @ Oct 7th 2008 9:08PM
To be honest I disagree:
Yes they don't get profit from the sale of a used game but is better than having your game pirated since piracy leads to poor sales.
A used game goes from hand to hand while a pirated game can be distributed to large groups of people preventing further sales.
I know there are some good people that will get it legal but you are talking about a few people that will do that for good will but you can’t depend on it.
Evan @ Oct 7th 2008 9:38PM
Used games are probably WORST than piracy. With piracy, many people would not have paid money for the game, the publishers are not losing sales to those people. But with used games, people paid money for the used game, and would have paid that money to the publisher if it was not available for used.
Morisato @ Oct 7th 2008 9:39PM
Hmmm... soo... is Marty implying that if you are considering getting one of his games and have no intention of purchasing a new copy, he is allowing you to pirate it since it means just the same to him? If so, sign me up! I'll take that as permission to pirate games when I absolutely refuse to purchase brand new.
Morisato @ Oct 7th 2008 9:41PM
Of course, there are some games I have to have on day 1, but most games I can wait until someone sells a copy to GameStop.
Mr ESC,Lives Again. @ Oct 7th 2008 9:57PM
Evan I think you are confused.
You think that the people who get it pirate didn’t have any interest in the game to start with and the people who bought it used had.
The people who bought it used would rather get it pirate since they don’t even have to pay anything for it and it also prevents further sales from people who wanted a new copy.
In the case of a used copy at least companies get profit from the initial bought also that the effects of used games aren’t noticeable until the second or third month not to mention that videogames follow a trend. The sales of the first month will be strong but as new stuff is released people soon forgets about your product meaning that you’ll get weaker sales as time passes on.
If they are really affected by this why not resort to Digital distribution, not only they’ll get a better profit (and with luck maybe leave Gamestop ahole in ruin).
Mike @ Oct 8th 2008 12:44AM
Knighty, did you write this article? I don't know if you saw my last reply to that discussion we had on the Bungie story. This part of this story pretty much sums up my last comment.
"Of course, this is already becoming a moot point, since game companies have already figured out a way around retailers and used game sales: user accounts and downloadable games."
If devs want to get around it they need to support the game with DLC or some form of fair DRM. I don't pirate, so I don't care about the DRM as long as it doesn't act like a virus.
I still don't agree that piracy and used games are the same. A used game is one lost sale. Piracy leads to thousands of lost sales. Sex and masturbation aren't the same just because you ejaculate.
knighty (GT: ZeraKnight) @ Oct 8th 2008 3:28AM
I'm referring to the choice made by a single person whether to pirate or buy used. One of the reasons it makes no difference is because the number of people who aren't prepared to buy knew is always going to be higher than the supply of used games. Once the used games have run out, these people still aren't going to want to pay full price for it, so will just pirate, or possibly wait it out. I still don't get why people are saying used games have made money in the first place...so what? By selling them on they aren't providing any MORE money to the publishers, this is the point. If I was to trade in a game right now, and someone bought it, would it make any more money for the dev? What if I didn't trade it in? What if I traded it in and it didn't sell? There's no difference whatsoever as far as money goes.
The only logical argument for used games being better is that they pump more money into the industry by letting people buy more new games with the money they get from trade ins, but it's pretty negligible, and it's still an overall net loss for the industry unless you magically get all your money back from the trade in.
emagius @ Oct 8th 2008 10:03AM
That's an absurd comment.
When you buy a new copy of Madden 09 at Best Buy, your money goes to Best Buy. It does not go to the developers of the game. Best Buy does buy games from EA, but every copy of Madden 09 is purchased by Best Buy *before* it is purchased by you.
When you buy a used copy of Madden 09 at GameStop, your money goes to GameStop. It does not go to the developers of the game. GameStop buys the game from a customer who bought the game from GameStop/BestBuy who bought the game from EA.
All that's different is that there's another layer of buying and selling in between. Beyond that, the assumption that "used = evil" (or "piracy = evil") advocates make is that everyone who buys/sells a used game (or pirates a game) would have paid full price for it had the used game market (or BitTorrent) been unavailable.