How Can Publishers Defeat the Used Game Monster?

As you likely already know, Microsoft unveiled the Xbox One this week (in a fashion that almost everyone, including us, hated).  One of the major ongoing stories is Microsoft’s peculiar approach to DRM for disc-based titles.  There have been confusing and contradictory statements about how Xbox One discs will function when they’re not at their home console, and whether or not it will be possible for users to loan games to friends without them having to pay a fee for the privilege. 

Today, Joystiq reported that Microsoft has a system in place that will allow themselves and publishers to obtain money from stores that sell used games, such as GameStop, with a cloud-based system that, “wipes the license use from the previous owner’s account so that the installed game on their Xbox One can no longer be accessed”.  It’s an interesting idea, and if the report proves true, then the system could potentially enable players to loan games and play them on other systems while being unable to access the installed version of their game. 

(Of course, if this is true, it also makes you wonder why in the hell Microsoft didn’t just go ahead and state this in the first place.)

In the meantime, while we wait for E3 to see how Microsoft attempts to clean up the mess they made for themselves, it may be time to take a look and see how we arrived in this place to begin with.  Publishers have long held contempt for the used games market.  It’s an easy way for players, no longer interested in the game they bought (probably at full price) to attempt to recoup some of the money spent and use it on other things.  This enables a more cost-conscious consumer to pick up a game they’ve been wanting at a reduced price.  Of course, the game is typically only $5-10 cheaper than buying the game brand new.  To combat this, many of these publishers started implementing an “online pass” feature, so that if you wanted to access the online features of a game, you’d either have to purchase the game new, or purchase an online pass from the publisher, which incidentally costs about $5-10.  With EA abandoning the online pass for its future games, it would seem that the idea was unsuccessful in significantly changing the numbers in the publisher’s favor.  Then, if pre-owned sales continue to remain strong despite having to pay the difference in cost between a new and used game for multiplayer features, what’s really the impetus for someone to buy a used game in the first place?

Well, certainly saving money has something to do with it.  GameStop’s used game prices are pretty consistent, and sites like Amazon can allow a consumer to buy a game at an even lower price if they find an aggressive seller.  It’s also important to consider GameStop’s return policy: one of the advantages of buying a game used, rather than new, is that buyers have a certain number of days they can try the game and return it with receipt in hand, no questions asked.  GameStop does this because it’s an effective way of driving used sales while keeping their profit margins on used games high, simply by encouraging players to try a game and see if it’s right for them.  Considering how few games see a demo before release, this is a big deal.  No one likes to pay $60 on a game they hate, only to have to sell the game back at a $25 loss.  Publishers have been cited as fearing that releasing a demo will cut into the sales of its games, but by doing so, they’ve effectively created their own worst enemy. 

At Sony’s PlayStation 4 reveal, they mentioned an initiative that would allow players to “try before you buy”.  Time will tell if this is simply an instance of telling customers what they want to hear, or if Sony will have a system in place that will actually allow players to try every digital release that comes down the pike, but it would certainly mark a step in the right direction, giving players one less reason to purchase games used.  However, there’s two other ways of giving consumers incentive to buy new and not sell their games back into the used market.  The first, of course, is digital sales.  More and more games, especially AAA titles, are being released as day-and-date digital titles, and it’s likely to be the industry standard for all games released on next-generation consoles.  However, at present, most digital versions of games are priced on consoles for the same amount as their physical counterparts, which doesn’t do much to drive sales.  Being significantly cheaper than disc based games, in conjunction with the ability to try before purchasing, would strengthen the sales of digital copies of games, and keep physical discs from going back to the GameStops and Amazons of the world.

The other thing game companies can do to keep players playing their games is something that publishers will meet with far more resistance: Getting rid of iterative physical releases, particularly for multiplayer-focused games.  Listen, EA, there’s a better-than-average chance that, the day after the Super Bowl, that copy of Madden your customer bought at launch is going straight back to GameStop, and some crafty consumer who was interested in purchasing your game, but not $60 worth of interested, is going to swoop in and buy it used, try it for a few days, and either keep it or return it in a week.

 

Do you know why this happens? Because everyone knows you’re making a new one.  If I can say, with certainty, that a new Madden or Call of Duty is going to come out at roughly the same time every year, I can also say with certainty when I can buy the game in that sweet spot of cheaper-but-still-new-enough.  Also, it’s not as if EA and Activision are setting the world on fire with innovative new features with each installment.  Typically, it’s a couple of minor tweaks, a new feature or two, and new rosters, maps, et cetera.  Right now, these companies are trying to have the best of both worlds by releasing a new title every year and supporting it with additional DLC.  But in addition to being very unfriendly to consumers, it also feeds the pre-owned monster they’re so eager to either get a cut of or otherwise diminish.  By releasing a new title only when it’s impractical to release updates as paid DLC, it keeps games on the shelf and money rolling in every year. 

As simple of an idea as it sounds, however, don’t hold your breath.  EA, Activision, and other like-minded publishers aren’t just in the business to make a profit, they’re in it to make as large of a profit as possible, and even if a change in business model might be better for them in the long term, history says that these companies will be reluctant to turn down the dollar in front of them for future gains. 

Besides, it’s not like a publisher has ever run one of their key franchises into the ground, right?