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TIGA: next gen consoles will "water down" pre-owned, power u

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Digital sales "put more power in the hands of the developer"

Last Thursday, nosy individuals over at NeoGAF unearthed a Sony patent for a technology that slaps a "use permission tag" on game discs, blocking playback if the user's personal details fail to tally with the terms of use for that game. As our chums at CVG note, this could well serve as a basis for an anti-preowned system of some sort, whereby games are locked for the exclusive use of the original buyer.... read more

TIGA: next gen consoles will "water down" pre-owned, power u

Postby CunningSmile » 11 Jan 2013, 14:34

Whilst I agree with his point about lowering price as a result of eliminating the middle man that benefit is completely reduced if MS or Sony are allowed to set prices as they then become not only a replacement middle man but also kill competition that naturally lowers prices by price fixing.

For example, in a world where developers sell to us directly and set their own prices the next CoD would probably sell for £100 a pop (based on the fact we couldn't shop around, had to buy direct from Acti and Kotick would squeeze CoD fans until they squeal) whilst someone like THQ would think "we can't compete with CoD's brand, but we think Metro is a great game so we'll sell it at £20 on the same day as CoD and pick up the scraps" and as a result we all buy Metro, have a great experience and Activision go bankrupt. Happy all round.

In the real world however MS will turn around and set the price they want all online games to be. It's already happened. We all complain about unrealistic prices of Games on Demand and when was the last time you saw a XBLA game that wasn't 1200 or 800 points? MS price fix in order to "create a level playing field" and both the consumer and smaller developers lose out to the big corporations that MS can't afford to piss off by allowing true competition.
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Re: TIGA: next gen consoles will "water down" pre-owned, pow

Postby BaileyBoy » 11 Jan 2013, 15:03

Haven't posted in a while, saw this and thought meh, I have time.

The main problem with a fully digital distribution service on the part of consoles is that at the moment most console gamers primarily buy the big titles physically mostly due to the fact that in Microsoft's case it takes forever to actually put the newer titles on Games on Demand. There is then the issue that when it if finally made available to download, it is released at full price whereas a physical copy will have already had price reductions. While I understand that the shift to digital copies will be more profitable to the companies with the business model they have now there is a likelihood that they will turn people away.

We then have the fall of the gaming specific Brick and Mortars. While we don't always particularly like them, a shift to digital only sales would essentially kill specialist gaming shops like Game, GameStop etc. That's a lot of people that will lose their jobs because EA and ActiBlizzard don't like losing a small amount of money because of the Pre-Owned generation.

And then we have the pre-owned part. The second hand market is a big one that encompasses practically all forms of media. So why is it only gaming (in particular the companies involved) that takes a stand against that. To be honest I can tell you for a fact that the console that allows pre-owned titles will ultimately sell more.

On the bright side this could bring some of my console friends over to PC, might be able to get a good game of Planetside 2 in :)
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Re: TIGA: next gen consoles will "water down" pre-owned, pow

Postby SilentDark » 11 Jan 2013, 15:19

It truly baffles the mind that developers can talk this kind of trash about used games with a straight face, no other industry, film, books, toys, automobile etc. accuses the second hand market of damaging their sales. Video games are the ONLY industry who talks about it. That said their will be no move towards digital only distribution if Microsoft and Sony don't buck up their ideas and sell their products at a reasonable price. Why am I going to pay £45 for a game on PSN or Live if I can pop to Tesco or Asda and pick up the same game for around £30-£35, when the middle man is selling at a lower price point than direct sales then something is very wrong.

Another thing, without the preowned market I wouldn't have been able to buy some of the games I do at the extortionate prices these companies charge. I also wouldn't have been able to pick up some of the early games I miss by not being a day one adopter of games consoles in the first place.

And if these games are not mine to sell, if I do not OWN these games then charging me £45 for a product rental is extortionate.

I especially resent companies like EA telling me how damaging my second hand purchases are when their CEO earns more money in a single year than I'm likely to see in my entire life.
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Re: TIGA: next gen consoles will "water down" pre-owned, pow

Postby STE MO » 11 Jan 2013, 15:24

If they go with the digital only route won't they then be a monopoly and have to offer other stores a chance to sell on their platform? That's the way that I'm seeing it at the minute. I really don't think that MP's or the EU would allow a closed shop.
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Re: TIGA: next gen consoles will "water down" pre-owned, pow

Postby CunningSmile » 11 Jan 2013, 15:48

STE MO wrote:If they go with the digital only route won't they then be a monopoly and have to offer other stores a chance to sell on their platform? That's the way that I'm seeing it at the minute. I really don't think that MP's or the EU would allow a closed shop.


In theory you're correct...in practice monopolies are only rarely broken up.

My personal favorite is RBS being told they are too large a bank and need to sell half their branches. They try to sell to Santander (who are almost as big, so I can't see the logic) and after two years of RBS deliberately making the sale fall through it's now been agreed that they can keep their branches otherwise they can't afford to pay the £500m+ fine for rigging the LIBOR rate and driving half the world to bankruptcy.

Meanwhile 1 out of every 9 pound spent in the UK goes to Tesco, there are really only two insurance companies, you have no choice over which water company you use and if you want Broadband you'll almost always need to contact BT for a landline but my local dentist has just been told he can't merge with the dentist down the road to cut costs as it will adversely effect competition so now they'll both go bust.
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Re: TIGA: next gen consoles will "water down" pre-owned, pow

Postby msbhvn » 11 Jan 2013, 16:00

Depressing news, but I'm hoping this kind of DRM is like the horrendous stuff that was touted when they were devising the High Definition disc formats, ie. it's so detrimental to genuine customers that no one wants to be the first to use it and suffer the backlash.

This is an industry that has been censured in the past for cartel behaviour, they can't be trusted to set prices fairly. The issue of second-hand sales is getting really old now, it's perfectly legal and removing the physical product does not remove the customer's right to sell it on, as the EU ruled last year.

Digital distribution done right is convenient and benefits the people who create the content rather than middlemen who suck up the lion's share of the profit for very little effort. Of course, no one has really done it right yet...
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Re: TIGA: next gen consoles will "water down" pre-owned, pow

Postby FishyGinger » 11 Jan 2013, 16:11

msbhvn wrote:
This is an industry that has been censured in the past for cartel behaviour, they can't be trusted to set prices fairly. The issue of second-hand sales is getting really old now, it's perfectly legal and removing the physical product does not remove the customer's right to sell it on, as the EU ruled last year.


True, doesn't mean they have to make it easy to sell games though. Still, I don't think any of this will affect me so can't say I'm overly bothered.
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Re: TIGA: next gen consoles will "water down" pre-owned, pow

Postby Grummy » 11 Jan 2013, 16:45

It truly baffles me the level of ignorance surrounding this subject. Yes, it's not black and white, but there is no doubt that pre-owned market is big business and cuts a significant chunk out of the pocket of the games industry.

I've read one argument above that no other media complains about the 2nd hand market, which may be true, but the revenue streams are very different. In gaming, the industry has one revenue stream in primary sales, and if they plan well a 2nd one in DLC, which, whilst fairly lucrative, not everyone buys into, no small number of people refuse outright to pay the price for CoD map packs, others wait on DLC they want to buy a GotY edition instead, and get all the DLC for cheaper. Primary sales is the real revenue stream for the industry. Other industries have a better revenue stream.

Film for example has movie ticket sales, which usually match the production costs at the very least. After that they have DVD and Blu Ray sales, licencing fees from TV showings. They also have a significant and well publicized revenue stream in additional licencing for toys, games, soundtracks, lunchboxes, posters and, yes video games. Of course, some games have this too, but nowhere near the extent that film does The point is, by the time the 2nd hand market comes into play, a film has gone through a number of revenue streams and made significant money, the 2nd hand market probably does actually take a good chunk of money from them, but it's so far down the line that they don't really notice or account for it.

TV is similar, all its revenue stream is in primary viewings and how the licencing fees for TV works, sales of DVD and Blu Ray are additional revenue streams, which, again, the 2nd hand market will likely impact, but again the bulk of their money comes from initial licencing fees.

Music? Its the first media to completely adopt the digital sales method which has seriously changed the market in the industries favour. But even so, lets look at the revenue streams for music. Initial revenue is from sales of singles, after that we have album sales, concert tickets, TV time and a huge merchandising structure. Music has always had numerous revenue streams of which sales of songs are only 1 part, which they have then managed to largely shore up thanks to digital sales.

Books, well I'll admit I don't know too much about the revenue model for books. I would assume though that 2nd hand sales have never ever featured as an issue for them. Yes 2nd hand books do massive business, but the difficult nature in finding particular books often means that people will simply search for the cheapest new copies they can find instead. I don't seen the 2nd hand market for books hugely impacting primary book sales. However, we now also have to consider digital sales once again. I don't know too much about the price of ebook and kindle book sales, but no doubt they have made a vastly significant difference in bringing new primary sales.

The point is that every other industry accounts for its sales differently, and have numerous other revenue streams that factor in. The games industry doesn't really. DLC, yes, that is one, but it requires the primary product unlike movies for example where you don't need to see the film in the cinema to then be able to go and buy the blu ray. The games industry lives and dies on its primary sales, and the 2nd hand market tears into that.

In my opinion, the games industry needs to wake up to its pricing. I'm not one of those people who thinks games are too expensive, I was paying £40 for a game 20 years ago (this is another area people need to consider, every other media has increased its prices over the years, except the games industry) and see no problem paying £40 now either, the problem though is that some great games get forgotten because of this price tag. Enslaved for example, a quality game and it didn't do well. Why? Because it was something that people really weren't sure about and it cost £40 to buy. People preferred to spend that money on something they were more comfortable with. Go figure. If the prices were lower than they are now, chances are that more people would have been willing to take a gamble on a great game. Unfortunately, why should bobby Kotick and Activision care whether a game like Enslaved sells well as long as they can continue to make their squillions from CoD?

I've said it before, this industry needs regulations and standards across the board that everyone has to adhere to. Microsoft also needs to wake up a bit too. The steam sales are a fantastic example of the right way of doing digital sales. If the complete AC collection appeared on GoD for £40 next year, I'd be tempted to buy it, and likely so would a lot of people. Similarly, right now you can buy the complete the ME collection new on disc for £40, if that turned up and GoD for £20 next year I'd snap that up in an instant. Great deals are one real way to make extra sales from games in the face of the 2nd hand market. I've owned all the AC games and all the ME games, and yet I'd still be willing to buy them all again in mass collections if the price was good.
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Re: TIGA: next gen consoles will "water down" pre-owned, pow

Postby FishyGinger » 11 Jan 2013, 17:04

Books don't generally cost 40 quid, generally nearer 5-10 for paperbacks. That'd help as they're fairly cheap already. But good post. Pricing is very important.

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Re: TIGA: next gen consoles will "water down" pre-owned, pow

Postby Fumps » 11 Jan 2013, 17:24

Wow

It's pretty obvious that the games industry plan to corner it's user base into using their network & have no interest in the consumer at all. If this comes to being the norm I will be respectfully hanging up my pad. I have followed gaming since the BBC micro & the Atari 2600. The games industry always represented fun & escapism for me but this just looks like old fashioned greed. And I have no interest in spending my money with them.

I always buy my games 2nd hand because I personally feel that games are not worth the large price tag they charge. And if for one second I am expected to believe that the price of games will drop once companies like Microsoft & Sony have the full monopoly which is never going to happen. This is looking like the beginning of a choke hold on the industry & I'm happy to wave goodbye at that point. The games industry always had that little shadow of rebellion to it, a little piece of danger that was always the fun bit, now its the industry that is taking over the product......all i can say is look at what happened to the music industry, people will hopefully vote with their feet & show these bigwig idiots who are the people in power when it comes to gaming.
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Re: TIGA: next gen consoles will "water down" pre-owned, pow

Postby Grummy » 11 Jan 2013, 17:59

Fumps wrote:Wow

It's pretty obvious that the games industry plan to corner it's user base into using their network & have no interest in the consumer at all. If this comes to being the norm I will be respectfully hanging up my pad. I have followed gaming since the BBC micro & the Atari 2600. The games industry always represented fun & escapism for me but this just looks like old fashioned greed. And I have no interest in spending my money with them.

I always buy my games 2nd hand because I personally feel that games are not worth the large price tag they charge. And if for one second I am expected to believe that the price of games will drop once companies like Microsoft & Sony have the full monopoly which is never going to happen. This is looking like the beginning of a choke hold on the industry & I'm happy to wave goodbye at that point. The games industry always had that little shadow of rebellion to it, a little piece of danger that was always the fun bit, now its the industry that is taking over the product......all i can say is look at what happened to the music industry, people will hopefully vote with their feet & show these bigwig idiots who are the people in power when it comes to gaming.


You always buy your games 2nd hand? Then your hanging up your pad means nothing, frankly, you'll make things a tiny bit better. Seriously, You only buy 2nd hand and have the gall to comment on this subject at all. People like you are part of the problem.
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Re: TIGA: next gen consoles will "water down" pre-owned, pow

Postby comabob » 11 Jan 2013, 18:44

Thats a bit harsh grumster -

Im the way of thinking - pay what you feel is an appropriate price.

EG - if HItman aint worth 40quid - shop around, wait for prices to drop or get it pre=owned. Thats what i call personal preference and the freedom of choice.

Saying someone is part of the problem cos they only buy second hand games is like saying YOU are part of the problem Grumster as you rent some games you play. The publisher/developer didnt get anything for your rental! Why not ban renting of games as well?

Cois that would be the next step for publishers.
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Re: TIGA: next gen consoles will "water down" pre-owned, pow

Postby Clanger67 » 11 Jan 2013, 18:45

Agree with Grummy that the games industry need to wake up on their pricing,or the way they get revenue,like being able to get a share of the pre owned market.Also comparing it to any other media is a bit hard given how long the film,music and especially books have been about compared to the still relatively young games industry.Also agree that you could still easily blow £40 on a game twenty years ago.
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Re: TIGA: next gen consoles will "water down" pre-owned, pow

Postby Windowlicker79 » 11 Jan 2013, 19:22

I always thought this was a pretty rubbish thing for console game developers to do, but then you have to think of the fact that its been working with the PC games market for years with no complaints. Why? Because PC games are far more affordable.
For example on Amazon Assassins Creed 3 for Xbox 360 and PS3 is £39.99, for PC its only £24.99. PC games have always been considerably cheaper than console games with no real explanation as to why this is. I think this is simply because PC owners buy near enough all of their games new (due to security keys preventing pre-owned sales). This means the price of the game isn't inflated to offset the losses from the pre-owned market. If console games in the future are going to be locked to one system then they need to drastically reduce the RRP. I'd happily buy all my games new if the the standard price for a new release was £24.99-£29.99 and older games were £10-£20. What do you think the chances of this happening are though? :|
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Re: TIGA: next gen consoles will "water down" pre-owned, pow

Postby Clanger67 » 11 Jan 2013, 19:42

Windowlicker79 wrote:I always thought this was a pretty rubbish thing for console game developers to do, but then you have to think of the fact that its been working with the PC games market for years with no complaints. Why? Because PC games are far more affordable.
For example on Amazon Assassins Creed 3 for Xbox 360 and PS3 is £39.99, for PC its only £24.99. PC games have always been considerably cheaper than console games with no real explanation as to why this is. I think this is simply because PC owners buy near enough all of their games new (due to security keys preventing pre-owned sales). This means the price of the game isn't inflated to offset the losses from the pre-owned market. If console games in the future are going to be locked to one system then they need to drastically reduce the RRP. I'd happily buy all my games new if the the standard price for a new release was £24.99-£29.99 and older games were £10-£20. What do you think the chances of this happening are though? :|



Yeah but then take into account a pc is about two grand for initial outlay for high spec., which if you are lucky will last a few years but then you may have to spend a few hundred on new graphics,memory etc.With a console you pay the initial outlay of two three hundred quid and nothing on it again,unless you get another HD etc.That's all the way through its life until the next gen. comes out.

Plus as i understand it with something like the Ps3 they are notoriously tricky to programme for.
Last edited by Clanger67 on 11 Jan 2013, 19:56, edited 1 time in total.
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