Tuesday, April 17, 2012

The Real Cost Of Bullshit

You may have heard a few weeks ago that both Sony and Microsoft are considering next-gen implementations that would eliminate the existence of used games. For some reason, this has been coined "the nuclear option".

In response to the consumer kerfuffle, THQ's Richard Browne weighed in, and he's all in favor of killing the used game market. Unfortunately, his logic was errant (in the places where he used logic at all).

Let's take a look, and I'm not quoting the entire piece, because it's quite lengthy (hell, even the excerpts are lengthy). Here's the first excerpt:
...if you want to hear about nuclear options, GameStop fired theirs first. A colleague of mine brought to light how bad this has become just the other week. He went into his local GameStop and was point blank REFUSED the option of buying the game he went to get new. After pressuring the sales assistant for a few minutes he finally got his new game - but only after the assistant got his manager's approval to sell it to him. That's the state of retail today, and it's not healthy for the consumer at all.

Yes, it's certainly fair to say that one anecdote from your colleague is representative of the "state of retail" today.

The real cost of used games is the damage that is being wrought on the creativity and variety of games available to the consumer, and it's directly a result of these practices. Developers and publishers alike now spend many hours working on constructs, systems and game design elements to try and eliminate the churn of a game. Whether this be online passes, copious amounts of DLC, or gating mechanisms, one thing is for sure - it doesn't benefit the consumer...But more to the point - do I really want talented studios spending their time designing and implementing this rather than polishing the game?

Wait, what? Because of used games, "talented studios" can't polish their games? Huzzah whah?

Look, I don't disagree that revenue models for companies have changed to focus more on post-purchase opportunities. And I agree that online passes certainly exist because of used games. But I have seen zero evidence that the massive money grab that is DLC is caused by used games, because there isn't any evidence.

This is the beginning of the "bogeyman" section of Browne's screed. The used games market is responsible for every shitty thing gaming companies do. Every single one. Used games cause it all.

Moving on:
The real cost of used games is the death of single player gaming. How do I stop churn? I implement multiplayer and attempt to keep my disc with my consumer playing online against their friends. It works wonderfully for Call of Duty - no doubt it can work wonderfully for me. The problem is, at what cost? Countless millions of dollars would be the answer. Let's take a great example, one of my favorite game series released on this generation - Uncharted. What on Earth was the point of taking the completely single player experience of Uncharted 1 and bolting on an entirely new game to Nathan Drake's second adventure? The multiplayer game (brilliantly executed as one would expect of the Naughty Dog team) had absolutely nothing to do with the single player experience, and from my perspective had absolutely zero interest from me as a consumer, and I'm not alone in that. I hate to think what it cost to make, refine, balance and tune - but I can guarantee it added a whole lot of zeroes to the budget, and made the P&L look a lot more challenging. And it's all aimed at stopping the game churn. Now a lot of people probably derived a lot of enjoyment out of it, and in Uncharted's case it seemed to have no material effect on the quality of the single player experience - but I'd say Uncharted is most certainly the outlier in this because few people have the resources of Sony and Naughty Dog.

This would be what I call "the arms race", and it has nothing to do with used games and everything to do with Call Of Duty and World Of Warcraft. COD and WOW are lifestyle games. If Gamer X has a limited gaming "budget" in terms of time, and he gets immersed in a lifestyle game, he's not going to play much else. Isn't it equally possible that Sony wanted to turn Uncharted into a lifestyle game instead of a simple experience because of the competition, not because of used games? And by the way, it WAS a simple experience: a 10-hour campaign, roughly.

This is a chicken and egg question, really, and while Brown argues that used games caused this, I can argue just as effectively that there are still plenty of successful games with lengthy and satisfying single-player campaigns--what's changed is that certain genres (FPS, in particular) have gutted the length of their single-player campaigns in the last decade. Why? Because they figured out that a rich multiplayer experience creates far more franchise loyalty as gamers play their game every day instead of exhausting a single-player campaign in short order. There's a social aspect to multiplayer gaming that can make a franchise much, more popular.

That has everything to do with the social experience and nothing to do with used games.

Continuing on:
The real cost of used games? Let's take someone like Tim Schafer. Tim works his genius in the video game medium primarily through selling fantastic stories in fantastic worlds, and primarily these experiences are single player games. Tim walks into publisher X and puts his latest, greatest piece of work on the table with a decent mid-range budget. It doesn't stand a chance. What you'll hear in response to that is that publishers are too risk averse. This simply isn't the case; publishers have to deal with P&Ls in reality, and they know the minute that pitch has finished that Tim's game will sell a few hundred thousand copies and then get endlessly churned.

Oh, come on. Tim Schafer is indeed a genius, but his games havne't sold that well, and there's no evidence that it was because of "churn". And in truth, both Psychonauts and Brutal Legend were incredibly creative but very uneven experiences.

As gaming has gotten more popular and become far more mass market, guys like Tim Schafer have been squeezed out. Publishers want big, big hits, not marginal hits. Tim Schafer has delivered a series of fascinating game, but you know what? He's not great with the 15-25 year old demographic. Know what is? Call of Duty.

There seem to be two major demographics being chased right now: bros (Call of Duty, Madden) and hos (the casual gaming market, for which women are a prized, prized demographic). Does that have anything to do with used games? No.

We've almost reached the end of Brown's piece. Hang in there. Next:
The real cost of used games? The variety of games out there is shrinking. Existing franchises that have been successful on a single player formula are being redesigned out of their element to introduce multiplayer features. Resident Evil is now a tactical shooter. Resident. Evil...So we now have a situation where risk is being eliminated from a publisher's purview. You simply cannot afford risk, since the console business has become a complete hit or miss scenario where hits are well rewarded but misses are potentially crippling. Is less choice and less variety of software beneficial to the consumer? Absolutely not.

Yes, the console business HAS become a hit or miss scenario, and used games caused this? No, they didn't--Activision caused it, because Activision became very successful financially as everyone else was floundering, so Activision's model was adopted en masse. Good grief, companies have even specifically cited Activision's success as a reason for the strategic shifts.

He continues:
The real cost of used games has been the destruction of the mid-tier publisher and the elimination of many an independent development studio who in the past conducted work in that space. With next generation budgets leaping yet again only the 'mini-publishers' - such as Epic, Insomniac, Bungie - can possibly survive externally to an actual publisher. Beneficial to the customer? No.

Seriously? They caused this, too, even though there's absolutely zero evidence to support this claim? Christ, did used games kill Kennedy, too?

As he's finishing up, though, he goes for the kill shot:
The rebuttal of course is usually the same. Used games fuel new game sales; this is GameStop's response and some buy into it. Of course, in reality it's pure conjecture without any evidence. If used game trading fueled new game sales then when used game trade-ins became the new standard a few years ago new games sales should have spiked. Of course they didn't; in fact game sales have stayed mostly flat or actually declined. The causation of that is primarily because not only is the GameStop line a complete fallacy, there's actually a worse truth, which is game churning isn't a one-off second hand thing but a multiple of a multiple. New game gets returned for used game which gets returned for used game which gets returned for used game...Give us no used games, give us digital access to software on the day it launches to retail. I don't think we'll see even a minor drop in sales; in fact, I think we'll see it rise. .

Wait, let me get this straight. So he talks about used game sales stimulating new game sales as "pure conjecture", but then everything he says is--wait for it--pure conjecture?

Richard Browne, you made my head hurt.

He made Chris Kohler's head hurt, too, because Kohler put up a terrific rebuttal in a Game|Life post titled Videogames Can’t Afford to Cost This Much. I encourage you to read it in its entirety, because it dissembles Browne from a different angle than I took, and it's incredibly effective (and correct). Here's the closing:
Why do people buy used games? Because they cost less money. Why do people sell their used games? Because they’d rather have money than the game. The number one reason, in that 2008 survey, why gamers traded in games was “The game is not very good.”

Games cost too much: Players don’t feel that it is a good value to pay $60 for a game and then immediately be hit with an additional $10-$20 charge for the rest of the content.

Games cost too much: The popularity of used videogames simply indicates that players are seeking to mitigate those costs from both ends, by buying low-cost used games and/or selling games back for store credit.

Games cost too much: Gamers are dumping more of their money and time into smartphones and tablets, where games cost a dollar or are free and are getting more and more entertaining by the day.

Games cost too much: Gamers are happy to pay $60 and up for the best-in-class experiences like Call of Duty or Skyrim, but they don’t have to pay $60 for B-games anymore. Let alone $90.

Games cost too much, and there are plenty of game publishers that are doing something about it. The ones who aren’t will just keep losing their customers.

To which I would like to add: BOOM. Headshot.

Chris e-mailed me asking about the used book market, where studies exist to support the idea that the sale of used books actually stimulates the sale of new books, and after sending him a link to the most commonly-cited study, I addded this (I'm about to italicize myself--I'm not sure that's wise):
I think the real problems are these:
1. Videogame developers have totally sucked in managing their budgets. Do you notice how not ONE company in this generation has said "We didn't spend wisely." Really? So 90% of these companies are losing money, and no one's been managed poorly? Of course it's everyone else's fault, not theirs.
2. There are only five kinds of games now: Yearly Sports Franchise, Yearly Modern Warfare Honor, Yearly Fantasy game. Christ, I can't even get to five! I'm exaggerating, but when everyone is basically putting out the same game, of course most companies are going to lose money. These games are so similar that they're all cannibalizing each other's sales.
3. It's not just that they want us to pay $60 for new games. It's that it's the same goddamn game every year now. Wait, not it's not--it's a little less game and a little more DLC every year. Seriously, we buy courses for Tiger Woods this year and have to buy the SAME COURSES AGAIN next year? Are you shitting me?

Of course the used game market has exploded. Why wouldn't it? Gaming companies, in many cases, have established an adversarial relationship with their customers. Publishers haven't given customers a good reason to care, so they don't.

I'd love to see what the railroads were saying as other forms of transportation ate into their business and they began losing money. I'm pretty sure the rallying cry was "FIND SOMEONE TO BLAME!"

Chris's response: Put that email up as a post.


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