Collin Campbell recently wrote an editorial on used games. He makes the argument that used games sales at stores like GameSpot hurt the game industry as a whole because publishers (and by extension developers) don’t receive a dime of used game sales. I think he makes a poor argument, though.
He neatly dodges the question of why the used market doesn’t seem to be the ruin of other industries, such as books, movies or music, or as one commenter suggested, cars. He says this about these other products:
Unlike books and other media, games have a short life in the hands of consumers. Books, DVDs and CDs are keep-ables, sometimes for years. Games, once they’re played out, are often not.
Here he actually reveals the problem, and it’s not with the used game market. The problem is that “games have a short life.” Which is horribly ironic considering how games compare as a medium to books, music or movies. Games are interactive and dynamic, the others are passive and static. Games are generative, the others are fixed. To “complete” a game ranges from 8 to 10 hours (for “short” games) to 30, 40, or more (for “long” games). Compare that to 1 hour for a CD, 2 hours for a movie, or 6 to 8 hours for a book.
The use game market is so strong because games are so expensive. I’ve got a large collection of DVDs, three or four hundred last time I counted. I could easily have twice that if I actually had a decent place to stick all of them. I’ve got a similar collection of CDs. I can look at these large collections and calculate how much money I’ve dumped into them: $6,000 on DVDs, $5,000 on CDs, roughly speaking. Considering I’ve been collecting them over the last decade, and many of them have been gifts, that all seems pretty reasonable (relatively speaking).
Now, what if I had 200 PS2 games that I had bought new? $10,000. And that’s assuming a $49.95 price point. And how many of them would I want to pop in and play today? I’ll let you guess… and then compare that number to how many of my movies I’d want to pop in and play today, let alone next year or 10 years from now.
I can only justify spending $60 on a console game because I know I can trade it in and recoup half that. I didn’t do that for a long time: I only bought new and I kept all the games I bought. At one point I realized that I simply didn’t care to play 90% of those games ever again. I traded them all in to a Gamespot and I’m sitting on nearly $400 in credit… credit that I’ll most likely spend on new games, though honestly I’ll spend it on a used copy if its available.
Because of the way our industry creates games we create the “problem” that Collin is arguing. We create sequels, we create derivatives in a genre, we create clones. I’m actually all for that: games are tricky design problems, and they’re software to boot, so all of this copying and cloning and making of sequels is simply evolution at work. Call of Duty 4 is a spectacular FPS, why would I go back to Call of Duty 3 (except for the WWII themes)? SimCity 4 is a near-perfect rendition of SimCity in my opinion, why would I want to play SimCity 3000 or SimCity 2000? The opposite is most often true in movies: “the only sequel that doesn’t make money is the last one,” therefore would can conclude that movies “devolve” with successive generations (of the same movie, not the medium as a whole).
All that’s too say is Collin’s comparison to other used markets is false, or at least using the comparison to bolster his argument fails. All it does it point the finger right back at the publishers. As one of the comments points out, the used game market forces publishers to create the best “first run” title, i.e. titles that demand to be purchased the day of release. Or, titles that demand to be kept long enough to dry up the used games market.
That’s the real problem. Publishers think that “units sold” should equate to the number of people who play/own their product. That’s why they hated rentals. It’s exactly how the “business” software industry likes to think, and it’s exactly what every DRM solutions attempts to enforce (including digital distribution). But this market perspective is only true for “consumables,” i.e. products whose purchase leads immediately (or nearly so) to their consumption, and thus removal from the market. Examples would be food, gas, printer ink, paper, or more abstractly (contractually) movie tickets, rent, utility bills.
Publishers want their market to be one of consumables. But it’s not. It’s a product-oriented market, like toys or cars or houses. Ownership is invested into something tangible and (relatively) permanent. Ownership only ever changes hands, even if it’s to toss the product into the trash. It’s property.
Basically, you can’t have your cake and eat it, too. If you want your product to be “property” then you can basically charge a very high cost beyond manufacturing, basically whatever the market will bare, but your market size is based upon how many people at any point in time want to own your product. So for example, if 500 people want to own your product today and a year from now 500 people want to own your product but it’s a different 500 people, your market size is still 500 people, and in an idealized market economy you may end up with only 500 total sales, even though 1000 people at one time or another “owned” or “used” your product.
Now, if you want your product to be a “consumable” it basically, or inevitably, becomes a commodity, i.e. it’s cost is driven by incredibly slim margins on the manufacturing cost, not the research and development cost. In the case of video games, a “consumable” cost would be very close to what CDs, DVDs and books cost, roughly $15 to $20. Instead, publishers try to factor all costs into the product cost, including research, development, marketing, manufacturing and distribution. It’s simply a luxury that the market will no longer tolerate.
Publishers will argue that there’s no way they could develop games if their retail price was $15 or $20. And they’d be right, if they continued to do business as usual. But as we should all realize — and if the web hasn’t taught you this I don’t know what will — the only constant is change, and if a business doesn’t change when its market changes it will become irrelevant (see music industry). The industry must change. Either the budgets have to be smaller or the market has to be larger. Pointing the finger at used games is no different than the music industry pointing the finger at a housewife sharing music on a P2P network (other than the strict legality of the respective practices): something is wrong with either the business model or the product if the market doesn’t desire one enough to put up with the other.