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Online Passes: An Explanation & Solution


Let's face it: Online Passes or practically any other scheme publishers come up with to try to curtail the used market are never going to be popular with gamers. No matter how small the incentive is or how miniscule the hassle of attaining it, there are going to be people who insist that any attempt by publishers to reclaim a part of the used market is wrong.

To be honest, a part of me agrees. However another part of me sees exactly what and why publishers are doing what they're doing, and that's the part that I'm going to explore.

The thing a lot of gamers are either ignorant of or choosing to ignore is that the games industry doesn't really have alternate revenue streams the way other entertainment does. I mean, think about it: Any profit the publisher wants to see from a game is entirely dependent on the game selling well. With the high turnover of titles, usually a game has about a two to four week window where the game is going to sell at a large volume, with all but the most insanely popular titles seeing a sharp dropoff in sales afterwards. Beyond that... If the publisher is lucky, the title might see a rerelease as a "Greatest Hits" or equivalent and maybe they might see some sales down the road as a downloadable title from the Playstation Network or Games on Demand. That's it.

Nothing is guaranteed to be there to supplement that game's initial release, and a myriad number of complications can come up to turn the release into a disaster. Releasing the game during the wrong week might see the game competing directly with another, very similar title. Or it might get released during the launch of a huge game and be completely overshadowed or outright ignored. With millions of dollars invested in the development and marketing of a title, it's easy to see why publishers could feel an incredible amount of stress to find another revenue stream any way they can.

Games are things which take years to make and often the fate of a studio, even a well-proven one, rests on just how well the game sells. It's sad to say, but we as gamers often hear about developers closing their doors, sending a group of suddenly-adrift employees looking for new jobs. Every sale counts to many studios, especially when they have to go to their publisher and ask for money to make their next game. When a single title performs far under the expectations for the budget, it's hard to blame the publisher for refusing funding for another title when all they can see is a multimillion dollar hole where their profits from the developer's last title should be.

Is it any wonder that they're looking for some way, any way to help them make an extra buck on the games they're funding? The budget for a triple-A title these days can reach the same sort of cost of movies, and video games are one of the few pieces of entertainment we consume which don't have multiple built-in stages of profitability.

Movies, for example, have many stages. First, the movie gets released on the big screen. Often, a title can earn back the entire budget of filming just through the profits of the theater release. Next, the movie gets released on Blu-Ray and DVD for the home release. If the movie didn't do well in theaters, it's still got a chance to be profitable. A few titles, like The Chronicles of Riddick, did poorly in theaters but still turned a good profit for their home release. Movies then have the licensing fees from being played on TV and streaming services like Netflix to help pad things out.

TV shows are also raking it in from multiple angles. A good TV show not only has the profits from advertisements on the day a new episode airs, but also the licensing fees and/or advertising profits from repeats. If watching a TV show on TV isn't your thing, you can always pick up the episodes from a streaming service, or just buy the year's season on DVD if you want to just watch it all in a marathon.

Books likewise have a few avenues for consumer consumption. You can get the book right when it comes out, if you don't mind shelling out the extra cash for the hardcover edition. Too rich for your blood? You know you can still pick up the paperback or get the title on your Kindle or Ipad for a little less. Reading not your thing? There's always the audiobook edition, most of which are read by professional actors.

We can't forget, of course, that all of the above also have a far longer shelf life in stores than any game. If I'm lucky, I might be able to track down a new copy of a game six months after release if I hunt for it and it was a big title, yet I can walk into a store and find a new copy of a five-year old movie, TV season, or book with considerable ease.

Part of the reason games are so expensive is that the technology required to make them is always changing, and that technology is at the heart of what's required to make the game. The tools developers were using a decade ago are completely different from the tools they use today, unlike an author writing a book or a director filming a TV show or movie. Every developer out there has to either constantly adapt and work on newer engines for their games, or license an engine from someone who is doing that work. Every game a studio develops has to be on the cutting edge, because that's what everyone else is doing.

Not to mention that the profit GameStop and other places make from used games is a little... lopsided, to use a kind word. I'm not going to say that I'm against the used market, because don't get me wrong: I'm not. Yet when GameStop posts sales data where the used market's profit comes very close to beating out the new market, it's easy to understand why publishers accuse GameStop of profit-mongering at the cost of the industry as a whole and why they would develop the Online Pass in the first place.

However, the problem is that publishers are taking an attitude of "Screw GameStop" with the Online Pass mentality, when they should really be working with GameStop on this one. GameStop has no reason to want a war with publishers. They're just a store dealing in games, and having to fight your suppliers isn't any good for either side. The problem is that publishers haven't really given GameStop or other stores any incentive to share the goods of the used market.

Photo by OrangeShooter

The solution is so staggeringly simple that I'm honestly shocked that publishers haven't reached out with this one, but I'll throw it out there anyway: Publishers, you need to talk to GameStop about selling them extra passes in bulk at a discount to put into their used copies of your games. Better yet, work with them and their network technicians so that they can print out a code to give to customers right at the register without having to worry about finding which drawer it's in. Just scan the thing and the code gets printed out on the receipt, no fuss or muss. You might want to put a reasonable delay on the things before GameStop is allowed to hand 'em out, but that one's obvious.

Now, publishers, I know you're raising your arms and blubbering on about how GameStop doesn't deserve any more of your hard-earned cash. I know you think doing this will be cannibalizing the market even further, but allow me to make a two billion, three hundred and ninety four million dollar counterpoint: Doing this means that instead of a used sale maybe translating into a purchase of an Online Pass from you, every used sale from GameStop translates into a bit of extra coin. Every. Single. One. Every time that copy of Battlefield 4 or Dead Space 3 comes in and goes back out, that's a bit of money in your pocket. You're getting a piece of the action for every used sale, just like you want.

This is a deal that benefits everyone. Publishers finally get to have a taste of the sweet, sweet used pie they've been after since day one. GameStop gets to advertise that even used copies of their games come with everything, including the content normally reserved for the people who purchase new copies. Even the people who pick up their games used benefit, since they actually get the content they would have missed out on, normally, and they get it all cheaper than the new copy that they can't justify buying for themselves. Everybody wins.

For better or worse, Online Passes aren't going anywhere. No matter how much we gamers might complain about them. I think at this point we can either roll with it or get out of gaming, because the good ol' days of being free of this sort of hassle disappeared the moment when consoles being online became the standard instead of the exception.

Even though I don't really have a problem with them, I do think Online Passes have a long way to go. Having to type in a 25 character alpha-numeric code on a d-pad kind of sucks, but next generation most consoles will probably have cameras capable of reading a barcode or something to make redeeming goodies like this a little easier on everyone. Also, the sooner publishers look into an authentication process which allows players to get single-player content locked behind a code while offline the better. I mean, yeah, check the code if the console ever does go online with the game, but you don't need to screw the people without internet access.

Initially I was against the concept of the Online Pass. I felt like it was just a cheap way for the developers to make a quick buck at the expense of the used market. Then I had a brainwave and realized that the things also act like DRM, and a pretty benevolent form of it at that. Pirates gonna pirate, of course, but they're not going to be playing any upcoming games online using the company's servers unless they shell out the cash for the privilege.

If you think of the Online Passes as DRM they're about as unobtrusive as entering a CD-Key was for computer games a decade ago, which is pretty reasonable. Compare the Online Pass we console gamers have to some of the stuff the PC crowd has had to put up with, and suddenly it doesn't look quite as evil and draconian. Right now, a lot of the flaming hate for them is simply a PR problem, and one a good marketing crew could have avoided by phrasing it as unobtrusive DRM instead of as a dig at GameStop. That's already out of the bag, but they could probably still do some damage control with that line of thought.

Now if you'll excuse me, I'm off to key in a code so I can play the Catwoman section of Batman: Arkham City.
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About meteorscrapone of us since 11:18 AM on 08.18.2010

My name is meteorscrap.

Occasionally I'll post random thoughts and musings here which are too long, too detailed, or otherwise don't fit in the comments section. Given the length of some of the stuff I've left as a comment, you can well imagine what I consider long.

Do you like words? 'cause I got a lot for you.

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