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LONG BLOG

Here we go again on Pre-owned

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So its emerged Sony has filed a patent for a new kind of DRM. The idea of said DRM is to lock physical media games to a single account much like PC gaming presently. Don't you just hate it when a kind of terrible joke comes back to bite you in the rear by ending up potentially true ?

So let's take a look why killing the pre-owned market is cutting off your nose to spite the rest of your face.

Previously rumours of such DRM were around just before the release of the PS3. Sony didn't stop the rumors spreading. The PS3 launch, in console terms, was a disaster considering the console worked. For about a month after people were selling PS3 launch console on Ebay for half the store price. This was just over the rumour of it being included. This time there's actual proof of the concept existing.

People will pirate to spite you, you think I'm joking but, if you don't care for your customers then why should they have some great loyalty to you? Sony if they implement such a DRM system will be dragging any developer who releases on PS4 down with them. This will no doubt put off developers and publishers as not many will want to release on the system where consumers are going out of their way to pirate due to the companies terrible DRM.

It's illegal. That's right since the EU ruled the End User Liscence Agreements held no legal sway for digital content it's really stirred up a real disaster waiting to happen here. The fact Steam is still in court in Germany due to this should have anyone considering placing restrictions upon the user pretty damn worried.

I don't trust you with my games. I'm sorry Sony but I don't. If my entire game collection is bound to my account, what happens if say PSN gets hacked again ? Personally I don't see a company I trust enough to let them be in charge of my gaming collection.

You create a monopoly. Ask most publishers why they sell their games at a certain price. The answer (unless you're Valve) is : Because the other guys do too! This is why the official RRP for games has crept up from £40 to £55. Once one company establishes that the new standard of AAA is worth x amount other companies do the same because they don't want to appear to be offering a lesser product. This rather insane notion of paying premium for premium games is limited to a rather large extent at present by the pre-owned market as if it gets too high less people will buy new unless you get Apple to put their logo on it. The reason game prices have remained constant is due to the stores adjusting prices and accepting a lower cut from sales. Take the cinema example. Cinemas don't make their money from the films, they make maybe £0.01 - £0.05 per ticket. Cinemas make their money from the refreshments which can be sold for up to 400 times their base production cost. Video games stores however can't really make their money up by selling other stuff. Sure accessories etc will sell but not well enough. Due to this increasing squeeze on brick and mortar stores, it led them to push pre-owned more. The publishers own greed has created this situation and it won't be solved by trying to stomp it out. Now before someone points out "But the poor starving developers have to eat." Well yes they do but with publishers turning vast profits or if they fail firing the developers, I'm not going to feel one bit sorry for the fact an executive can't afford a 3rd party yacht for his coca and bunga bunga parties.


"did someone say bunga bunga yacht party ?"


The Market is not yours. Sorry to point this out but it's really not. At present on demand digital downloads are often twice or more expensive than their pre-owned counterparts, once the print run is finished. Now this might be seen as some great valiant effort to defend the publishers but it's really not. The publishers only make money at present from the odd digital sale and from the initial print run of the game, this is often put as the reason for the fairly high initial price dropping down within a month or so. Steam sells games at quite a bit cheaper than new physical copies (In quite a few cases) because it's a digital distribution method and as such the initial print run sales aren't all that will make the games money. With digital distribution it allows the continued sale of the game and a longer term revenue plan to be used. Steam has this nailed down to a fine art and as EA found out to their own cost, customers aren't that loyal if someone else is giving them a better deal hence why Origin now has sales like steam.

Being the odd one out. If Sony does introduce this and only Sony then they might as well file for bankruptcy now. Microsoft has said nothing on the subject of locking games / killing pre-owned sales. Nintendo have actually stated they will never do that (we'll just pretend that little incident when you tried it many years before didn't happen ok). If Sony goes ahead with this then why would people buy the PS4 over another console knowing they'd be at the mercy of publishers and whatever they wanted to charge for games, not what consumers deem acceptable? Steam is a law in itself seemingly where conventions of gaming collapse including this pricing model of all games being priced at the same level. This could be in part due to the indie games on Steam and the system allowing for different pricing. If you implement a "no pre-owned games policy", unless you're willing to price appropriately people will simply not buy it or will pirate it as you're preventing them getting it at a price they feel they want to pay. Why am I willing to pay £5 for an indie game on steam? Because I think it's worth that £5 or the asking price. Why have I never bought an actual game from games on demand? Because at £50 new and often £30 down the line when the pre-owned versions in shops are £5 -£10 why would I pa that?.


Taken today as of writing this article, the physical copy is half the price new of the digital and the pre-owned version is one sixth of the games on demand price

Customers don't like you choosing for them. Part of what will anger many is the idea of the publisher / developer being able to decide what a game is worth. The amount of times this year I've been in, or seen arguments between reviewers and even indie game developers it shows how strong the feeling towards the game is and how often people can be blinded to it. Take the game WET for example, released as a full retail title to a unanimous "Meh it's not great" from most, as a £40 game it was a flop. I bought it for £7 down the line as I felt that's what it was worth to me. The problem is if that publisher is insistent that game is worth £40, by killing pre-owned sales it will always be £40 so people will just pass it over. Now I know what's going to be said "But the publishers get nothing from those sales so why should they care ?" The answer is three letters, DLC. By allowing people to buy pre-owned and having suitable DLC that could interest them you can get people to buy pre-owned and still pay you something. Price the DLC right and make it something people are willing to buy and they will. Why buy a game and have to pay $5 to unlock online when I could buy a different game and spend that $5 on extra content for the game? OK it's more costly to make something rather than put a crappy limiter on like online codes but people are more willing to pay the price if they get something out of it even if it's just some silly re-colour skins or horse armour. The fact game like League of Legends keeps going on micro transactions alone shows DLC can support games, if people feel the DLC stuff is worth the price.

You kill part of the consoles legacy. Not everyone buys a console right out of its gate, many people now hang back and wait a while before buying it. When people do buy it there will be games previously released back in the early days of the system that they might wish to check out. Games like say Dead Rising or Metal Gear Solid 4. Now if you can only buy these new it either means once the print run is over that game will pretty much be gone. Or if it's on games on demand it will mean bigger hard drives are required more. This then brings up another problem. What if the publisher goes under? No really Midway went under and all their games vanished from XBLA, now imagine if this wasn't some ports of old games lost but say Halo 3, or Uncharted. With Pre-owned at least that part of the console's legacy will still exist and people will still be able to acquire and play those games. Now with Sony's love of proprietary hardware as can be seen with the PSP and PSVita memory card issues people will be pretty annoyed to be downloading all their games and then due to Sony putting a small hard drive in the PS4. People having to pay yet more money simply to be able to play and own some of the classic of the system from before they purchased said system will be more than a little annoyed that on top of still paying the high release style prices they also have to further spend on more storage. Customers aren't stupid and at about 50GB per Blue Ray disk if the game download is uncompressed it's a lot of storage space there.

You actually will kill your own sales. No really doing this plainly stupid thing will harm you. I'm mostly a person who does go to brick and mortar stores even to buy steam cash to buy games off steam. Pre-owned sales are what are keeping brick and mortar shops afloat. I previously pointed out the cinema example to show how publishers are pushing for larger cuts from stores, who are having to lose out as they know customers are less willing to accept higher prices. Brick and Mortar stores are needed as they sell the hardware for the consoles, they often supply alternative ways to get digital currency for those less willing to have their card details stores (as I'm sure the PSN hack put plenty of people off). Brick and Mortar stores generate sales from people who can't or won't put cards on their console, the fact a kid can go into Game here in the UK and buy £10 of steam cash proves how this can drive sales. Parents too are often more comfortable buying from stores than having someone use their card to buy games. Without the physical retail outlets you can't so easily have games being presents, what you think even at my age there's not some kind of enjoyment in unwrapping a present ? An enjoyment you don't get so much from simply looking at a screen to already see what you've been given right away. Game here in the UK almost went under this year, the fact we lost Gamestation to save Game shows how unstable the market is especially in physical retail, if you kill pre-owned sales then like if you prevented cinemas from selling food you'd be cutting off their main income source. If publishers aren't willing to stop taking larger cuts from stores and as such provide an alternative revenue source they can use then pre-owned sales are a problem of the publishers own creation. Game here in the UK used to be fully able to run and stay open on new sales. Until about 4-5 years ago they didn't really have a pre-owned section at all, so it shows how required pre-owned sales now are to make up the revenue gap that maybe half of the average Game store is now pre-owned games.



Look to say a pre-owned sale is a sale lost is wrong, pre-owned sales are a potential future sale. People are less willing in these economic times to pay full price on a new franchise game, however if the person enjoys the game they will be more receptive to paying full price for the next game in the franchise as they know the quality will be there. This was a very nice little play used by Valve with The Orange box allowing them to box Portal, a relative unknown and high risk thing, with known quality games and then be able to follow up with Portal 2 as its own retail release. With the rise of DLC a pre-owned sale doesn't need to be lost revenues as games can continue to generate revenue via DLC for long after launch. Finally you need those physical stores to keep going to sell your future titles.

So Sony and Crytek I know you're pushing this very strongly too. Stop demonising those who buy pre-owned, there's plenty of reasons to and unless you want to keep those games in print constantly or want to budge a bit on pricing for them on demand, killing pre-owned sales dead will harm you and the consumer in the end.

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About Dwavenhobbleone of us since 8:33 AM on 06.19.2012

A qualified Environmental Chemist who happens to live in a fairly dense city with no real environment or chemistry industry.

I review indie games on another blog and you'll see them pop up here if I think the review is a good or interesting one (along with a shameless bit of self promotion)

I also operate another blog reviewing films and I mean t pick that back up when I can.

I've been gaming since the SNES days. I've been in the pro scene before for tribes 2 but hate the present pro scenes and have no interest in going back into it.

I tend to get into quite a few Betas and love ones without NDA as it means I can write about them. I have even beta tested an xbox 360 game in my time (and no not a normal public Beta one )

In gaming I'm normally the guy looking at the shelf below the AAA titles first to see if there are any great hidden gems.

My gaming drug of choice: Timesplitters in any flavour (Why won't you make Timesplitters 4 Crytek, why ????? I need my fix of insanity )
Xbox LIVE:hobblejp
Steam ID:dwavenhobble


 

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