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Wired: Study proves, killing used games would do harm to sales (and games are overpriced)
Elikal
Member UncommonPosts: 7,912
"If the marketplace of used videogames were to disappear, game publishers would see their profits decline — unless they massively lowered game prices."
"We find that the optimal price would be on average about 33% lower than the current price level, if the used game market were eliminated,” said Ishihara in an email. “So roughly speaking, in the US, game prices should go down to about $40.”
Source: http://www.wired.com/gamelife/2013/05/nyu-used-games-study
People don't ask questions to get answers - they ask questions to show how smart they are. - Dogbert
Comments
To be honest, it never occurred to me that used game sales were helping new game sales. Even if this weren't the case, it wouldn't matter to me. Attempts to limit or restrict used game sales just rub me the wrong way. Which means I might buy a PS4, but I'm probably never going to buy an XBox One.
I can not remember winning or losing a single debate on the internet.
Barrier to entry is huge. Used games sales allow people to try a franchise at a lower cost and if they like it they can keep up with it. They also allow customers to get some return on their investment.
The problem is many marketing people look at market share. They often think a bigger share of a larger pool is better. That is not always the case.
--John Ruskin
That study predicts that the sales will go down if used games are killed. It doesn't prove anything. To claim it proves something equals to claiming that economists making predictions can't be wrong.
Study is a bit flawed. While I'm against what they are doing for the used games (particular in means of letting friends borrow games) the big problem is dealers like gamestop are raking in a killing, not off the new games but used old ones they are selling and trying to push over the new ones.
The solution needs to find a happy medium where retails and developers can exist together. This means though that in most cases both sides will lose a little off the top (publishers giving retailers more profit from selling the games new, while used game sales wouldn't get the massive killing off used games giving 0 to the publisher). In the end, the game developer SHOULD be getting more money off the games. I don't feel a lower price would really adjust that much for it. Having thea bility to by new games and have them perhaps become cheaper as time goes on would do a lot more in favor of the company given a removal of used games completely from shelves, though i still feel giving developers a cut of the used game profits would work best.
Players ingame could learn this as well. I've always been one who sells things what I think they're worth, and that's usually alot under what the market is. I found out early on, if you sell items very cheap, not only do you make more money over time, you have people come to you with requests. Repeat customers is where the money is truly at. In DAoC I had people all over MIdgard come to my Troll Warrior for Armor. Mainly because they purchased (or someone they know purchased) an item from my house that was probably half of what others were asking for. I had a hard time keeping my house full of armor for customers, and keeping up with the requests, but it was some of the most fun I've ever had in a game.
Look at the PC gaming market. We don't really have used games. I can't go to gamestop and pick up Deus Ex for $15.
But we do have sales!!! Yay steam sales, Deus Ex for $7.99! Bag it!
That's what the console industry will have to learn. I play a lot of games, I might buy between 5-10 new games a year and another 20 or so used/on sale games and also keep a sub/ F2P funds on hand as well.
If publishers think the people who were waiting to pick up a game for $20 are going to go ahead and pay $60 just because an alternative isn't available they are going to be surprised. People will just buy fewer games.
I can right now go to Half-Price Books and purchase used PC games. I used to be able to buy them at GameStop but they decided that selling console games was a whole lot more profitable than selling new or used PC games.
I can buy more PC games at Target than I can at GameStop.
You CAN buy used PC games, but most don't because of things like CD Keys. The greater majority of the time, I won't buy a game new; I'll wait till the price drops to $20 or less. If that means I have to wait a year, so be it, as when games reach that price point I'm generally buying them in bulk and end up backed up on things to play anyway. Console games almost never see these kinds of sales, which is why I instead buy them used. I haven't bought a 'new' console game since Final Fantasy...7.
It might at first seem like that's part of the problem, but it isn't really for the same reason that pirating isn't as much of a problem as the industry likes to claim. If used games went away, it doesn't mean I'd buy new ones; it means I wouldn't buy them at all unless they went on Steam-like sales and dropped to extremely low prices. As this is unlikely, I would be (and will be) ignoring any and all next-gen systems that tax or prohibit used games. Without that, they may only get $300-600 out of me over the lifetime of the console, but multiplied across those who feel as I do, that's a huge chunk of money the developers are missing out on.
But I don't really mind. Sony, Microsoft, please feel free to continue paving the way toward cheap, indie PC gaming. The soil atop your graves will surely serve these golden roads well.
"Forums aren't for intelligent discussion; they're for blow-hards with unwavering opinions."
Somebody, somewhere has better skills as you have, more experience as you have, is smarter than you, has more friends as you do and can stay online longer. Just pray he's not out to get you.
People don't ask questions to get answers - they ask questions to show how smart they are. - Dogbert
Yeah look at the pc market
Our games cost 30% less than they do on consoles.
And then they get heavily discounted or bundled up with all the add-ons 6 months to a year later.
Somebody, somewhere has better skills as you have, more experience as you have, is smarter than you, has more friends as you do and can stay online longer. Just pray he's not out to get you.
The article is right.
Games has always been overpriced - the prove is in the pudding.
If it wasn't overpriced people those Steam specials and sales would not have been doing so well every time they come up. Steam proves that if the prices was more reasonable (reasonable as in it cost about the price of no more than 2 or 3 eat out lunches) people would not hesitate to purchase a game at all.
People are generally not willing to pay a who half week's worth of food's cost for a game that is okay or don't know whether they are good or not.
I usually buy two of each console system that comes out so that I can play in any of my rooms that I'd like, when I like. It comes from when I shared space with my brother, and we each owned our own systems so we can play at the same time. From that we shared games (or take turns buying / splitting the cost) and as such only owned one of a version. This whole thing about used games has ruined that outlook, and I now probably won't even buy a console. Some very powerful PCs can be made for less than what these consoles are rumored to sale for, and they (the consoles) will still be less powerful as a whole. Not to mention all the great deals I can get on PCs.
Not that I wasn't leaning to skipping this generation anyway, as I've pretty much been exclusive to PC for about 17 years now (about a 90% 10% split on PC and consoles of the time). The fact that new technology will be released in 18 months or whatever that the PC can use is also a plus.
Economics isn't nearly so well understood as you might think. Demand elasticities in particular are mostly a theoretical construct and basically impossible to measure in the real world because there are so many confounding variables. Do I believe that this article has managed to be the first to get a reliable, accurate measurement of demand elasticities in a market as complex as video games? Nope.
"Rather than love, than money, than fame, give me truth."
I did not miss that part. You do not understand that a study does not always result in a proof.
The scientist used real data, and made a model to estimate consumer's behavior when buying games. A bit like weather researchers use real data, and based on it make a model to predict future's weather. Then the researchers used their model to predict what would happen if selling used games was eliminated and published the results, just like weather researchers use their models to make forecasts about future weather.
Their model may work, and they may predict the future game sales, or future weather, correctly. But the game sales, or the weather, may also behave differently from the model. And claiming that their study proved how killing used games would really affect the game market is as ridiculous as claiming that today's feather forecast proved it won't rain next week.
Enjoy your Xbox One Vrika.
I cannot speak for Vrika and his/her love for the new Xbox, but s/he's right in pointing out the loose usage of the word "proves." Anyway, all this talk about sales forecasting but no discussion on first-sale doctrine (US). How does MS hope to stall the secondary video game market if they are still selling physical media with the software on it? I mean, sure, they could make it streamed or cloud-based (thus rendering first-sale limitations to the storage media itself, per my understanding of the current first-sale policies) but as long as they are selling physical media, current first-sale policies seem to work in the favor of the secondary market.
Of course they've tried selling activation codes and the like, but that seems like a weak argument that a video game consumer is merely purchasing a license (they aren't if there is physical media) and doesn't exactly kill the secondary market, as evidenced by its continued coexistence despite those measure from publishers.
Anyhow, while the study is interesting, strong correlative data without a direct and observable causal relationship doesn't equal "proof." It does make for some interesting forecasting and the model may end up being entirely correct. Getting rid of the secondary market seems like a bad idea to me and publishers would be remiss if they did not pay attention to studies like this.
All This Greed in the console wars is only going to do one thing bring back popularity PC gaming .Where Indie developers will get a larger share of the market .For us were get games not control by profits or decisions made not by the CEO but by developers with more freedom to go in the directions they want . Just look at Minecraft a simple looking laughable game which is free to play or a onetime upgrade with 1,000's of Mods and millions of players.
Most of us get go to work and pay our bills and along the way get F up the ass by the American way . But we need a place to work so we take it .we need to buy food and drive cars that need gas and insurance and pay all the taxes for them to be miss spend. We tun to games to relax and get away from life's ass F-ers but know longer the big wigs in gaming wants in on the ass F- ing .
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All of this is because publishers and Microsoft are GREEDY. They want MONEY.
When I buy a game it is mine, it no longer belongs to the publisher. As such, I can do whatever I want with my game.
If I want to play and keep the game until I die or stomp it into the dirt. I can do that because the game is now my property, I own it.
But, heres the sticking point: if I sell it to Gamestop that is a business transaction between me and Gamestop whereby I am selling them my property. What Gamestop does with it after that is up to them because it is now their property. They legally purchased it.
Why arent clothing manufacturers cracking down on Goodwill for selling used clothes? That Polo shirt you bought for $10? Well, now Ralph Lauren wants a piece of that.
Why do video game publishers think they are the only ones that deserve a cut on second hand sales?