Editorials

Game developers want a cut of the used game pie? I don’t think so

Game developers have been lamenting that the rising cost of game development should be offset by getting compensated from used game sales. Wait, what?

Sean Mesler

With the next generation fast approaching, one of the most prevalent talking points has been used games and the litany of topics that entails. The crux of the argument lies in that developers feel that used game sales, mostly retailers like GameStop, are profiting off of their work by using a standard business practice of buying low and selling high. A common opinion amongst game developers and some gamers is that every used game sold is a lost new game sale and as such, a system needs to be put in place to enable the developers to receive a cut of each used game sale.

In the meantime, publishers have tried to incentivize buying new or prevent trading in by including online passes to prevent used copies from accessing online servers or DLC to extend the value of the game by providing content long after the game’s initial release. While I personally had no real issue with online passes because it only makes sense since online servers need to be maintained and that maintenance cost money and people who never gave the developers money still have access to those servers. Shutting them out behind a one time paywall makes perfect sense to me, however, the fans didn’t like it and EA maintains that they dropped the online pass initiative as a response. The timing of which and the initial Xbox One reveal was unfortunate, if I am giving them the benefit of the doubt, and I will for the purposes of this editorial.

Get real

After Xbox One’s failed attempt to try and stymie used game sales by funneling them through “participating retailers” and thus killing off private sales, loaning and game rentals, developers like former Epic superstar Cliffy B and God of War creator David Jaffe took to Twitter to voice their disdain for used sales and more specifically, GameStop. Again, they were of the opinion that each used sale is money being taken from their pockets and they should get a cut of the used game sales. PS4 developer Ready at Dawn, which has the upcoming The Order: 1866 currently gestating, recently voiced their dissatisfaction with GameStop’s business model of pushing used games over new.

Ready at Dawn’s The Order: 1866 looks intriguing, but will it sell enough and keep players from trading it in?

Now, this might prove controversial, but it’s a stance I firmly believe in so brace yourselves:

Game developers and publishers are not entitled to a single dime after the initial sale. Not one red cent. And the fact that they think they’re entitled to any of it is , quite frankly, ludicrous.

Again, much of the vitriol comes from GameStop’s practices. While I won’t get into the ethics involved with how the stores are run or selling open games as new, I will say that GameStop sells games to employees at a 10% discount which is essentially a little more than tax. The reason for this is because this discount is selling games at cost. What some people don’t know is that retailers, like GameStop, have bought every single copy of the game that they sell in their stores. Selling games to employee’s at a 10% discount is GameStop and other retailers giving up whatever profit they have for that copy of the game. What this means is that the publishers have received payment for their game and at that point it’s up to retailers to recoup that investment any way they can. Sales are offered to make some of that money back in the event that the disc isn’t selling, and to entice consumers into the store to spread those savings to full price items. On extreme cases, the publisher will buy back the unsold copies of a game, but that’s not very common. Retailers are taking a calculated risk on how many copies of a particular game they buy, which is why they push pre-orders. This is to gauge demand for that particular title so they can buy accordingly.

So now that the publisher has received payment for their game how that is divided up between the platform holder, the publisher and the developer usually varies on a contract basis and bares no weight on the fact that GameStop and other retailers make so little on new game sales and nothing from hardware. Of course they are going to do everything they can to boost their revenue, they’re a business. Gamestop provides a service where a service was able be provided – they buy and sell used games. They buy low and sell high and they continue to do this until there is no longer a demand for that used product. This is good business. Period. Full stop.

Like all retailers, the most floorspace is dedicated to what makes the most money. There is a reason why used games are allotted more space than new.

You know you don’t have to sell your games at GameStop, right?

I am well aware that many a gamer and plenty of industry journalist don’t like GameStop and I completely agree that getting very little for your game and watching them turn around and sell it for almost new cost is annoying at least and makes the customer feel ripped-off at best. Fortunately, there are other ways one can sell their games and receive whatever amount they set for their goods. Places like eBay, Craigslist, and Amazon are great avenues to sell your games at a cost the seller dictates. In fact, I’ve used eBay quite a bit in the past year and have afforded myself all kinds of great gaming experiences and without losing more than $20 on my initial purchase. Which is much better than losing $40. For example I purchased Tomb Raider new day one, completed it 3 times and sold it on eBay for $45 including shipping. That means I spent $20 on the game. I took my $40 and bought The Witcher 2 used on eBay for $25. It worked out great for me and I didn’t even have to leave my house to go to the closest GameStop, wait on any lines, or be upsold on anything.

Now, imagine if the customer paid $60 for a retail game thus paying the publisher their money, and then when I went to sell it on eBay I had to give them more money from my sale? Sounds absurd, right? Do you think that you will still get the measly amount you already get from retailers? GameStop would absolutely offset the money they have to share by taking it from the cost they buy the used game for. In everyone’s rush to say the developer deserves money for the used game sale, the customer is the one who is getting even more taken advantage of.

Make no mistake, if developers worked out a way to get a cut of used game sales, private sales would be effectively dead. No longer would we have control over how we sell our games, to whom we sell our games and for how much we sell our games for.

On any film/TV/commercial set, the crew that helped make the film get paid for their work and move on to the next project. They don’t collect a dime from used DVD sales, streaming or TV broadcasts.

The woes of gaffers and grips

I’ve seen the analogy of the film industry having other revenue streams such as DVD, streaming, TV rights, box office, and so on to make up for used sales. As someone who has worked and still occasionally works in the film industry I can tell you in no uncertain terms, the people who help make a movie don’t see one dime after production wraps. For those that don’t know there are two groups of people in a film production. Those that are “above the line” and those “below the line.” “Above the line” refers to the creative department of production. The director, the screenwriter, the producer and the actors, generally. “Below the line” is everyone else. The grips, the gaffers, wardrobe, the Director of Photography, etc. I make this distinction because once principal photography (the actual film shoot) is done, everyone below the line has collected their pay and move on to their next project. They don’t see a dime from DVD sales, streaming, TV rights, box office, and so on. And in most cases, neither do most any one above the line unless it’s Stephen Spielberg or Robert Downey Jr. and they’ve made a deal to share in profits. The only people that see the money from all of those extra revenue streams are the producers and the movie studio.

Why did I digress for a brief lesson on how film making works? Because unlike film developers generally do get a cut or every new sale and merchandising if they licensed properly provided they weren’t contracted for their work on a particular game. They also collect from DLC, and the like so if they want more money, then they need to create more lucrative revenue streams, but they certainly aren’t entitled to any money once that game is sold into the hands of a consumer in a physical medium anyway.

Find a better way but leave me out of it

I am well aware that this may put me on the side of being “against the developers” but I can assure you that I’m not. I think the creators of games deserve every bit of money they earn for their hard work. That doesn’t not mean, however, that they should keep making money from every sold copy of a game once that copy is sold and quite frankly, I think it’s absurd to think so. I am not going to pretend I have a solution because I don’t and it’s not my job to. I will, however, speak as a consumer and clearly state that what I’ve bought is mine to sell, break, burn, loan, trader or use as a coaster and there is nothing anyone other than me can or should say about it.

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  • Vicious1

    Nicely said and a very well written article. It’s true that Gamestop
    doesn’t give reasonable prices when it comes to trade-ins, but hey it’s a
    business and it comes with the territory. Like they say “sharks are
    born swimming” and that’s grim reality that we live in and whether you
    like it or not you will have to deal with it. Period.

    Do not get me wrong I believe that a Game Developer should get paid for
    all their hard work, but that doesn’t mean that they should get rewarded
    for a used game sale was made and plus since Gamestop already buys the
    copies that they want to sell and have already compensated the developer
    for it then why should they ask for more. If a developer wants to get
    paid more money then they need to make more blockbuster games.

    I think that’s where the problem lies too, I think that many developers
    don’t really take the time to think about the games that they are
    making. I didn’t say all developers, I said many developers because
    there are some really good games out there like “The Last of Us” or
    indies games like “FEZ and Limbo” then there are those that I am like
    “WTF” For instance, “fast and furious showdown” was an abysmal mistake
    of game or even worse “Ride to Hell: Retribution” was unbelievably
    embarrassing and I wonder why in the hell did they even attempt to make
    it.

    Instead of making shit games like that they should have taken a
    different approach with the money they received or at least make the
    game somewhat good if not better. I am not bashing developers for their
    hard work because it is a lot of work, my point is if game developers
    want more money make better games and then you will not have to worry
    about used game sales and penny pinching.

  • Jeffrey Alexander

    The argument against Gamestop is more to do with the fact that they sell games that are recently released for very little price difference and sometimes even force customers to buy used and thus take away from the developers (it’s happened to me on multiple occasions, I pick up a new copy and all of a sudden am paying less because the clerk figures I want to save $5 and by used…which I don’t).
    There should be a limitation on when a used copy can be sold IMO. Say, 60 days after release. Think of it like a movie in the theatre; there’s a reason we track opening weekend, opening week and then continual weeks…after the initial release they revenues tend to work their way down. There’s always something newer, there’s a cut going away to piracy, there are less screens showing it etc. The game industry deserves a few unhindered weeks to actually make their profit.
    Used games, 15-20 years ago, was a great way to get a game I had missed out on, back when a simple re-print wasn’t an option. I challenge anyone to recount a story of seeing 4 new and 10 used copies of Donkey Kong Country on the shelves at the same time. It didn’t happen. Because a “missed experience” is a thing of the past, I understand why retailers want to make money off of anything, but why do we sit back and watch Gamestop revenue climb (which it has, year over year) while studios are getting shuttered because of a flop (and by “flop” I mean things like God’s Hand/Okami and Playstation All-Stars…hardly crappy games).
    Should devs get cash from a used sale? Not necessarily, but they should be afforded the opportunity to make money from all of the early adopters that want their game, from those who line up outside for a midnight release, to those who show up the following weekend and see 12 copies used and ready to line Gamestop’s pockets.

  • http://www.gamerhorizon.com/ Ted Polak

    Nintendo said on this topic, “Developers should make games that people want to play instead of trade in.” Sums it up well.

  • http://www.gamerhorizon.com/ Ted Polak

    Shoutout to PlayStation All Stars.

  • http://virtualgamemuseum.webs.com/ Mr.Louis

    Nice article, I agree.

  • http://virtualgamemuseum.webs.com/ Mr.Louis

    Real shame, I enjoy the game more than Brawl ,lol… I think the problem was lack of market and at the same time, didn’t really have many content to justify a $60 price tag, granted that it’s also cross-buy. The game had potentials, Superbot even showed some canceled DLC like Dart from LoD and a stage that mix Journey and Gravity Rush.

  • Sean Mesler

    Thanks! I really appreciate that!

    I think game developers think about the game they are making, but they need to just accept that sometime people want to move on to something else and for a lot of us, $60 a pop is a bit much. I sell my games to offset the cost of my next purchase. I rarely keep games. I have exactly 3 games in my “collection.” Left 4 Dead 2 (and that’s because my GF likes it – I would have sold it ages ago. In fact, I did, and my GF complained so I got it again), Black Ops 2, and The Last of Us.

  • Sean Mesler

    Thanks for reading and commenting!

    A missed experience isn’t really a thing of the past because I feel that way all the time. Not just because I review games, but I like being part of the zeitgeist and the conversations about games. That being said, if a game I was marginally interested in had a 60 day window before I could trade it in, I would wait the 60 days either to buy it new or used because I wouldn’t play ball. I’m not going to sit on $40 for 60 days, you know what I mean?

  • Sean Mesler

    Thanks Mr.Louis!

  • Jeffrey Alexander

    We agree to disagree I guess, lol.

    My issue is that we reward the wrong people. If there is a game I want to play, I’ll pay for it. The less I want to experience it, the longer I’m willing to wait to pick it up. For instance, Naughty Dog games are day one (when I had money anyway…) but something like WWE ’12 can wait for a lower price. I still feel like THQ (at the time) deserved my money, not Gamestop.

    Indie games have it on lock, and nobody seems to bring them into the mix. When scaled I would argue that they deal with similar ‘break even’ yet they never have to deal with used sales. Braid still most likely sells units, sometimes at the original price, but even when it’s heavily discounted money still goes to Jonathan Blow. And that game wasn’t long. I beat it in a few hours. Didn’t complain, didn’t feel cheated that I couldn’t trade it in for my next XBLA purchase.

    I’m just super pro-developer I guess. I stopped liking used games when Micro Play went under (yeah, I’m old and Canadian). Across the board I will go digital this generation.

    Great article though, well articulated.