Thursday, August 26, 2010

The Most Dangerous Game

I saw this  earlier in the week
Smackdown vs. Raw 2011's one-time code for online play might upset pre-owned buyers - but THQ 'doesn't care'.

That's according to the publisher's creative director for wrestling games Cory Ledesma, who told CVG that "loyal fans" who are interested in buying the game first-hand are more important:

"I don't think we really care whether used game buyers are upset because new game buyers get everything. So if used game buyers are upset they don't get the online feature set I don't really have much sympathy for them."

"That's a little blunt but we hope it doesn't disappoint people. We hope people understand that when the game's bought used we get cheated," he continued.


People who don't buy a game new aren't loyal? Strong words.

I mentioned this before, but I think it bears repeating: this is dynamite the game industry is fooling with.

Before we have this discussion, let me make clear that I am not talking about indie developers. There is no real used game market for their product, because almost all of it is distributed digitally. They have a huge problem with piracy, but piracy is theft, not a legitimate resale transaction.

Am I sympathetic to the notion that gaming companies are getting the short end of the stick when the product is resold and they're not getting a piece of the action? Yes. Is it just that simple? No.

First off, there's basically a used market for everything.There always has been. It's even in law, commonly referred to as the Right Of First Sale doctrine (please note: it has not yet been established whether this legally applies to goods sold digitally, although Verner vs. Autodesk (2008) strong implies that digital goods are no different).

The sale of used games is not in shaky legal status. It's not sketchy.

When, exactly, has a used product market destroyed the associated new product market? I don't know of any examples.

Fundamentally, this is what we're dealing with. Game companies are claiming that the used game market is entirely parasitic. Gamestop and other merchants of used games are claiming that the relationship is symbiotic, not parasitic.

If there is a logical argument for the position that the relationship is entirely parasitic, I certainly can't think of one. It is far more likely that the relationship is symbiotic, and that the argument revolves around the degree of symbiosis.

Here's where we hit a wall. Anyone who claims to have an accurate analysis of how the used game market affects the size of the new game market is being disingenuous. Even if the size of the new and used game markets could be established with a remarkable degree of precision, the only way to reach an ending point is to factor in a magic number that is the percentage of used game sales that cannibalize new game sales.

Why do I call it a magic number? Because it cannot be established. We just don't know.

That's why it's so dangerous for companies to be attempting to cripple the used game market with the use of one-time online passes, etc. There's no way for them to even estimate the effect this will have on their sales. They're flying blind.

So what do we know? Well, we know that in a world where used game sales weren't permitted, that the overall size of the gaming market would decrease. There's no disputing that.

We also know that there would be fewer people around to buy DLC, because fewer people would be playing each game. Again, though, precisely tying "fewer" to a percentage is impossible.

Again, maybe that's a small number, but my point is that the gaming companies themselves don't know.

We also know that the robustness of the used game market has, to some degree, been created by the gaming companies themselves. If someone buys a $60 game and finishes the single player campaign in 10 hours or less--one or two days, in other words-- they're somehow doing something wrong if they sell the game back to Gamestop for $25 or $30?

You've got to be kidding me.

That's why this issue is so difficult to discuss with any clarity of mind. Sure, if you want to, you can call the guy who only buys used games a parasite, but what about the guy who sold his copy to get money to buy another new game? What do you call him?

You're stopping that guy, too.

Like I said, a dangerous game.

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