Send News. Want a reply? Read this. More in the FAQ.   News Forum - All Forums - Mobile - PDA - RSS Headlines  RSS Headlines   Twitter  Twitter
Customize
User Settings
Styles:
LAN Parties
Upcoming one-time events:

Regularly scheduled events

Quote of the Day

"Piracy these days on PC is probably less problematic than second-hand sales on the Xbox," says lead Fable III combat designer Mike West. "I've been working on PC games for many years and piracy is always a problem. There are a lot of honest people out there as well, and if they like your game they'll buy it." Thanks joao.

View
26. Re: Quote of the  Day May 18, 2011, 15:25 jfernald
 
As far back as I can remember there have always been "Used Game Sales" and "Video Game Rentals". During the hayday of the NES mom and pop shops were buying and reselling games, even PC titles at the time were on shelves available for re-resale.

The difference between then and now is both scale and the evolution of the buisness. Mom and pop shops in the 80's and 90's didn't offer their used games on compuserve and ship the products across state lines. I would be suprised if all the mom and pop used game stores + game rental services accounted for even 1% of the industry's game sales in those days.

Today we have Gamestop, a company who has built their buisness model around used game sales. They make so much profit doing this that they can now afford not to stock their shelves with "New Games" and instead request customers pre-order if they want the game on release day. If not give it 36 hours (the average length of a modern game) and you can buy it newly "used". And if it's not available at your local store you can be darn sure you'll be able to buy it online through gamestop and have it shipped across state lines to your door or the closest gamstop store.

And lets be frank it's the newly "used" game sales that are stabbing at the heart of the games industry. Companies like microsoft, sony and others spend millions of dollars marketing their product, buying air time on television, and getting the word out that "This games out, it's awsome and you really want to buy it". And for it to be available "used" just a few days after it's release hurts the developers.

Developers don't make any profits on "used game sales", and gamestop spends very little advertising their used game titles, a few store banners for trade in incentives but other than that the the buying and reselling of used games is pure profit with little risk. The margins on used game trade-ins is also larger than on new titles. Gamestop typically buys the product for around ~$10 to ~$15 less than the MSRP, and if you take a look at the price scheme they have for buying back newly released titles you'll notice that their profit margin is nearly double that (They buy new titles back at $35 and resell for $55.99).

Now this is to some extent the Game Industrys fault. The average game length is ~35 hours due to content size, and development costs associated with a title (100-200 people average on a project). If a modern game lasted as long as some of the older titles, or if they had nearly as much replayability as older titles then it would take weeks before that game ended up on Gamestops shelves rather than days. But no, the industry has by and large resorted to linear gameplay to allow for "story telling" and decided that ~35 hrs is enough.

They focus on "Piracy" as being the reason their game sales are slumping and consistantly add copyright protection schemes to their products which cause legitimate consumers no end of grief.

They never really take into account that the consumers over the years have become more refined in their tastes, or that their product does not offer enough value to the consumer for them to purchase it new or not pirate it to begin with.

The industry really needs to take a step back, and look at what the hell is going on rather than simply looking at their shrinking profit margins and reacting on impluse.

Institute customer loyalty programs, where each new title that ships comes with a prepaid envelope to return old games made by that publisher for "Points" which can be spent for both games and content or "fan gear" or even special pre-order bonus's for the next title.

EA's project $5.00 was a decent approach to making a few bucks off of even the used game sales. Give people a code that they use first time through and if they buy a game used well they'll have to pony up another $5.00 for what you got for "Free" new (profit margins on new game sales are aproximately $5-$10 depending on the media format, and the target device.)

For years the RIAA has added an added tariff to blank casette and CD sales to make up for "Piracy" perhaps the industry should look into options on how to do something similar for games. (I'm not a huge fan of the RIAA but a tariff on CD sales is a lot less obtrusive than hauling your ass to court and asking you to pay $20k for the $5.00 worth of songs that got pirated)

In short figure out how to give a new product "Added Value" so that it looks less attractive to buy used or to pirate without screwing consumers over in the process.

Most companies think going "Digital" is going to increase their revenue streams so they don't want to take the above aproaches, but they are still ham strung by the fact that they can't offer added value via digital content because they have to price match their retail outlets (Why would I buy this for $59.99 in walmart when I can get it on steam right now for $35.99?). Let me tell you walmart wouldn't be very happy about that.

So the industry can complain all it wants about used game sales or priacy. The problem is that the Industry, Retail Outlets, Buisness Models and Consumers have all changed and the old way of doing things simply doesn't work anymore. Right now the industry is holding onto an old broken buisness model as tightly as the RIAA was when Napster was at it's prime.

I hate to quote Steve Jobbs but it's time for the industry to "Think Different" otherwise they will soon be spending all their time searching under rocks for all the penny's they discarded over the years.
 
Previous Post Next Post Reply Quote Edit Delete Report
 
    Date Subject Author
  1. May 18, 10:33 Re: Quote of the  Day nin
  2. May 18, 10:38 Re: Quote of the  Day DrEvil
  3. May 18, 11:08  Re: Quote of the  Day eRe4s3r
  5. May 18, 11:19   Re: Quote of the  Day DrEvil
  37. May 18, 20:16    Re: Quote of the  Day eRe4s3r
  38. May 18, 21:14     Re: Quote of the  Day PHJF
  39. May 18, 21:21      Re: Quote of the  Day Prez
  40. May 18, 21:22       Re: Quote of the  Day eRe4s3r
  4. May 18, 11:10 Re: Quote of the  Day Atomic
  7. May 18, 11:47  Re: Quote of the  Day Beamer
  11. May 18, 12:10   Re: Quote of the  Day DrEvil
  43. May 18, 22:06    Re: Quote of the  Day Beamer
  44. May 18, 22:10     Re: Quote of the  Day Beamer
  6. May 18, 11:26 Re: Quote of the  Day Verno
  8. May 18, 11:49  Re: Quote of the  Day Creston
  9. May 18, 12:02  Re: Quote of the  Day StingingVelvet
  12. May 18, 12:14   Re: Quote of the  Day Verno
  13. May 18, 12:32    Re: Quote of the  Day Jerykk
  14. May 18, 12:47     Re: Quote of the  Day killer_roach
  45. May 18, 22:23     Re: Quote of the  Day DukeFNukem
  46. May 18, 23:23      Re: Quote of the  Day PHJF
  48. May 19, 00:13      Re: Quote of the  Day Jerykk
  49. May 19, 03:07       Re: Quote of the  Day DukeFNukem
  51. May 19, 05:44        Re: Quote of the  Day Bhruic
  52. May 19, 06:05         Re: Quote of the  Day DukeFNukem
  53. May 19, 07:42          Re: Quote of the  Day Bhruic
  54. May 19, 08:12           Re: Quote of the  Day DukeFNukem
  58. May 19, 10:07            Re: Quote of the  Day Bhruic
  60. May 19, 12:34        Re: Quote of the  Day Jerykk
  61. May 19, 12:47         Re: Quote of the  Day Beamer
  34. May 18, 19:23    Re: Quote of the  Day Prez
  35. May 18, 19:31     Re: Quote of the  Day PHJF
  36. May 18, 20:09      Re: Quote of the  Day Prez
  42. May 18, 22:04      Re: Quote of the  Day Beamer
  10. May 18, 12:05 Re: Quote of the  Day Verno
  16. May 18, 13:15  Re: Quote of the  Day Creston
  18. May 18, 13:59   Re: Quote of the  Day Burrito of Peace
  22. May 18, 14:42   Re: Quote of the  Day kanniballl
  24. May 18, 15:12    Re: Quote of the  Day Tom
  25. May 18, 15:19     Re: Quote of the  Day nin
  30. May 18, 16:29    Re: Quote of the  Day Creston
  31. May 18, 17:44     Re: Quote of the  Day jfernald
  15. May 18, 13:02 Re: Quote of the  Day Verno
  23. May 18, 15:07  Re: Quote of the  Day killer_roach
  17. May 18, 13:28 Re: Quote of the  Day Verno
  19. May 18, 14:15  Re: Quote of the  Day Creston
  20. May 18, 14:21 Re: Quote of the  Day Verno
  29. May 18, 16:26  Re: Quote of the  Day Creston
  21. May 18, 14:38 Re: Quote of the  Day kanniballl
>> 26. May 18, 15:25 Re: Quote of the  Day jfernald
  27. May 18, 15:34 Re: Quote of the  Day Verno
  33. May 18, 19:16  Re: Quote of the  Day DarkCntry
  28. May 18, 16:25 Re: Quote of the  Day kanniballl
  32. May 18, 17:55 Re: Quote of the  Day Verno
  50. May 19, 05:29  Re: Quote of the  Day Bhruic
  41. May 18, 21:57 Re: Quote of the  Day Dades
  47. May 18, 23:29 Re: Quote of the  Day Dades
  55. May 19, 08:48 Re: Quote of the  Day Verno
  56. May 19, 09:43  Re: Quote of the  Day Beamer
  57. May 19, 09:46   Re: Quote of the  Day Beamer
  59. May 19, 10:56    Re: Quote of the  Day DukeFNukem


footer

Blue's News logo