Tagged: Video Game

In an  interview at IGN that’s already raised many hackles and comments, the developer behind The Order: 1886 claims GameStop’s used games business model is hurting developers.

“Weerasuriya’s solution is simple: “I don’t think we should stop used games, but we should do something about getting part of the revenue back from GameStop and places like that. That’s not penalizing consumers; they’ll still get what they want.””

Small problem.

GameStop isn’t just going to “give” money to the companies.  And I’ll go so far as to say that if they’re asked to, they’ll simply go out of business.  If companies try and come up with some method to get said to get said money, Gamestop will not simply settle for less – they’ll raise the prices of their used games, which may well just get people to buy the new ones after all, which gets the developers what they want.

I think it’s safe to say their used games market is more profitable than their new one.  They’ll sell thousands, millions of copies on day of release, but they make a lot more on the used ones they start selling two weeks later. Mainly because they pay outrageously low prices for them  Oh, they might give you twenty or thirty dollars for a hot new game, but that’s credit – look at how much less you get if you ask for cash; more like ten ot fifteen. And that drops fast as time passes, far faster then the price they charge does. They they turn around and sell that copy for five bucks less then a new copy, less another ten percent if you’re a power member.  So the used games make them a lot more money – no surprise they push you to buy the used end when you can.  You save five bucks; they make an extra ten, easy.I’ve heard endless arguments about how developers are getting “shafted” by the used market.  They argue that if everyone “had to” buy a used copy, they companies would do much better, and could even afford to lower their prices.  Save argument – when’s the last time you ever saw a company voluntarily lower their prices cause they were “making enough money”?  The only reason companies lower prices is when they aren’t making enough money.  They lower prices to increase purchases, and “make it up on volume” as the cliche goes.

Books, records, CDs, DVDs, none of these have any limits on what you do with them once you’re done with them.  And any attempt to TRY to do so is met with ridiculous (and justified) pushback. Anyone old enough to remember when DIVX was an actual machine, and not just a codec?  Buyers are already very angry about the DRM, online codes, and all the other things companies added to their products right out of the gate.  The famous users’ agreements you gleefully click all the time basically make you admit that you don’t own the program you just paid for – you bought a license to use the program, technically forever, but still rescindable by the publisher at any time.  Luckily, that agreement is rarely enforced, but there’s nothing stopping them from doing so, save for the potential response of the public.

To a degree, the argument for buying used crosses the argument for pirating – “They’re trying to screw us out of too much money”.  Used gamers just wait for the price to drop, or the used copies to appear, pirates go further and don’t pay at all.  The end result is the same – the developer makes less money.  Prices for new things (electronics, medicines, video games) are more expensive at first because the company is trying to make back the money it spent on its development, off what are called the “first adopters”.  That money needs to be made back quickly, mainly so the company doesn’t go out of business, but more importantly, so they have money to invent the next cool thing.  As the prices go down, the company makes less on each item, but by that time (presumably) it’s pure profit, save for the megligible cost of manufacture.

The rule is simple – when the list price of a new game drops, the company is making money.  With a used copy, Gamestop makes the money.  If you want to make sure the company benefits, buy a new copy on sale – GameStop paid the same amount for the game wholesale, they’re taking a hit on their side to get you in the store.