Posts Tagged‘resale’

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Is The Second Hand Market Really That Detrimental?

I’m not a big user of the second hand market but there have been times when I’ve delved into it in order to get what I want. Usually its when I find out about a particular collector’s edition too late to buy a retail copy and will just wait it out until someone wants to hock their copy on eBay where I’ll snap it up for a song. The last game I did this with was Uncharted 3 (although I failed to mention the saga in the review) and whilst I didn’t get all the collector’s edition downloadable goodies the seller went out of their way to make sure I got a similar amount of value as they did when they purchased it new. I certainly didn’t expect this but it was deeply appreciated all the same.

EB Games Trade In Banner

However his generosity is a symptom of the larger problem at play here. Almost 2 years ago a silent war began between developers (well mostly likely the publishers) and the second hand market where first sale doctrine was being usurped by crippling used games. The first title that I purchased which was affected by this Mass Effect 2 and whilst I have no intention of ever selling that game the fact that it was crippled after initial sale didn’t sit particularly well with me. The trend has been on the increase as of late with many games including some form of one time use DLC in order to make second hand titles less attractive.

It gets even worse when rumours start surfacing that the next generation consoles will start supporting features that cripple second hand games natively removing the requirement from game developers to implement their own system. The justification would probably be something along the lines of “this is what we’ve done for ages on the PC” which is kind of true if you count CD keys but they were usually transferable. There’s also the sticky issue of digital downloads which currently have no method on any platform for enabling resale which is why many publishers are beginning to favour those platforms instead of physical retail releases.

The golden days of unsellable digital titles (and by extension crippled second hand titles) may not be long for this world however as the German consumer protection group VZBV has started legal proceedings against Valve in regards to the Steam platform. This isn’t the first time they’ve gone up against them but recent rulings in the EU have set up some precedents which could lead to digital distribution platforms having to implement some kind of second hand market. Considering Steam has been dealing in digital trade for many years now it’s not like they’re incapable of delivering such functionality, they just simply haven’t had the incentive to do so. Heavy fines from the EU could be the push they need in order to get them moving in the right direction but we’ll have to wait until the court case resolves before we’ll see any real movement on this issue.

I have real trouble seeing how the second hand game market is such a detriment to publishers. Indeed many people use trade-ins in order to fund new game purchases and removing that will put a downward pressure on new sales, to the tune of 10% or so. Now I don’t know how much revenue that publishers are making off those second hand uncrippling schemes but I’m sure a 10% increase is above that, especially if you count the amount of good will generated from not being a dick about the used market. Valve would be heralded as the second coming if they enabled used game trading on Steam, even if they charged a nominal fee to facilitate the transaction.

Really I can’t see any downsides to supporting the second hard market and actively working against it doesn’t do the publishers any favours. I’m not saying they have to go out and actively help facilitate it but they could simply not try to work against it like they’re doing right now. Digital distributors do have to pick up their game in this regard however and I hope it doesn’t come down to strong arming them with the law. Should the EU ruling hold up however that’s could very well be what happens but it would at least be a positive result for us consumers.

Retailers vs Publishers: The Battle For The Second Hand Market.

I’ll admit that I haven’t bought many games used since I’m usually in the store on release day hungering to be one of the first to get my hands on them. Still I realize there’s quite a market for second hand games since not everyone has the disposable income that I do to splurge on the latest and greatest titles. They’re also a significant source of revenue for brick and mortar games retailers as the margins on used titles are significantly higher than their brand new counter-parts and provide an additional sales hook for them to attract customers (I.E. trade-ins for newer games). There are one group of people who aren’t so pleased with the second hand games market however, the publishers.

Second hand titles, whilst generating significant revenue for the retailers, generate almost nothing for the publishers that first distributed the games. The advent of downloadable content mitigated this somewhat as it was usually tied to the console it was downloaded on and not the game itself but it is a pittance compared to what they generate from a new sale. More recently however games publishers have taken a more sinister approach to the second hand market, seeking to make a resold product less attractive than the new unless the consumer ponies up the extra cash to make up the difference.

Sadly this kind of chicanery affected one of my most favorite games, Mass Effect 2. New buyers of the game received a special code that gave them access to the Cerberus Network, a daily news service for the Mass Effect universe plus the gateway to all the DLC available for the game. The code was a one time use deal so anyone buying the game second hand would have to do without or pony up the US$15 for access to it.  Whilst you could argue that you still got the vast majority of the game despite the lack of the additional DLC there was quite a bit of free stuff on there, some of it even on day 1. This meant that anyone buying it without the code was essentially getting an incomplete game, even if it was playable.

Whilst it’s still not the norm to cripple the second hand market like this it is becoming alarmingly common, with several recent titles making used purchases far less desirable through new-only-or-pay-up DLC. It’s still a step ahead of something like Steam which doesn’t allow the sale of second hand titles at all, not even for a trade in on other steam titles. But it’s still a dick move by the publishers who are just trying to squeeze money out of the consumers in any way they can. Realistically though its detrimental to both the publisher and consumer since many trade ins drive new games sales, to the tune of 20%. Cutting that market out completely would harm the new games market significantly, but none of the publishers will admit to that.

It’s also arguably a violation of the First Sale Doctrine although no one has yet tried to test out this particular violation of it in court.

All this does is reduce the perceived value of the product that the publishers are putting forward and will only help to encourage people to seek out alternative methods in lieu of forking out the extra dollars. Whilst I am happy to give up my freedom to sell my games for the convenience that Steam provides (I am a hoarder, though) I know many people who aren’t so willing to make that trade and have avoided purchasing games that remove their right to first sale doctrine. Instead of punishing people for buying second hand they should be encouraging people to buy in early with things like betas and in game items. Of course I find it hard to fault a company that tries to maximize its profits but when it comes at a cost of significant good will I have to wonder if the costs outweigh the potential benefits and the only ones that know the answer to that are the publishers.

And they’re not talking about it, unfortunately.