DEBATE: On the Nature of Used Game Fees

Friday, May 31st, 2013

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By


Used Games

Welcome to the second official debate here on oprainfall. While we’ve had articles go out before that have had opinions from multiple sources, our debate articles feature two staff members sitting down to discuss topics of the day.

This will be the first of two debate articles dealing with a couple of issues that came up during the Xbox One reveal on May 21st. The contributors to this debate are Jeff Neuenschwander, co-Editorial Head and author of the Jeff’s Musings opinion series, and Guy Rainey, Assistant Editor and author of the Pretentious Opinionist opinion series.

Three basic rules were agreed upon before debating these topics. First, each contributor will get to make a statement of up to 400 words. Second, after each statement, there will be a cross-examination period where the opposition can ask the contributor up to five questions. Third, and most important, there will be no fighting, name calling, or degrading of any kind towards an opponent, and each contributor will treat the other with respect.

Xbox One Logo

TODAY’S TOPIC: In the weeks leading up to the reveal of the Xbox One, rumors surfaced about how Microsoft would be instituting a fee on used games. While Microsoft has denied that they will charge a fee, details about used games remain unclear. Would you be okay with a game company instituting a fee for used games?

IN FAVOR

JEFF: Over the past couple of years, we’ve seen publishers come up with what I will describe as “creative” ideas in trying to combat losing money in the secondhand market. These have included things like authorization codes and paid disc-locked content. While both have their negatives—especially if the Better Business Bureau finds you’re forcing customers to pay you twice for everything on a new disc—I have no issues with authorization codes.

The main problem with authorization codes is that they are only designed to be used once. After the code is used, you can’t use it again. There is a solution to that: let the second user pay a minimal fee for use of the product. It doesn’t have to be much; just a couple of bucks, maybe five bucks max.

The thing is…the secondhand market exists to let someone buy goods that they couldn’t get when they were new. If there are no new units of the product you’re looking for, you have a right to buy a secondhand unit.

However, I have issue with the selling of secondhand products within weeks or even a couple of months after the release. That timeframe is the most important for the publisher and developer to make their money back. If used products get put back into the market during that stretch, the publisher and developer (no matter how big or small they are) potentially loses money. A small fee is an acceptable way to help them earn some money for their work.

CROSS-EXAMINATION

GUY: Would you have the same problem if a person was selling their DVD, clothing, or, say, a car in the same timeframe? If so, what should be done about it?

JEFF: Perhaps, but it seems sketchy for someone to turn around and sell things like a car, clothes, or a DVD within a couple of weeks or even a month after release in the first place. Somehow, we—game creators and gamers alike—have created this culture where games are disposable after the first playthrough. We suddenly don’t want to own a game after we’ve finished it once, whereas we’d be seen as crazy if we turned around and sold a car after driving it only once.

GUY: Yet, wouldn’t the best solution for gamers and publishers alike be to create content that does not feel disposable? I personally have many games that I love and never want to part with.

JEFF: And so do I. I consider myself a game keeper rather than a game trader. The only time I have ever traded in a game within a week of playing it was with a terrible game called Saint—and for the record, that was when it was nearly four years after the game had come out.

Used Games

And you’re correct, they should strive for content that doesn’t feel disposable. But even if they did, what constitutes disposable, just like beauty, is in the eye of the beholder. No one can definitively say what is quality and what is disposable.

GUY: Online passes usually go for $10 USD. I would expect that publishers would try to get that much from Microsoft’s rumored program. Would you still support the concept?

JEFF: I’m actually not too familiar with online passes. Are they monthly or one-time fees?

GUY: One-time fees. EA introduced and/or popularized the idea with the announcement of Project $10. For sports games, if a game was bought used, a $10 fee would need to be paid to access the online portion of the game.

JEFF: Well, I think I’m actually in agreement with that. However, I feel that a $10 fee is a bit excessive. If you look at the difference between new and used products at places like GameStop, the difference is typically only $5, particularly for newer games.

GUY: Why should people who buy a used copy so close to launch have to pretty much pay full price to play their game? That $5 to $10 savings could be the only way to afford the game.

JEFF: Because developers have bills they have to pay. The opening weeks are the most crucial to getting enough money together to pay for the game. If you don’t get your money back, you end up like 38 Studios (developers of Kingdoms of Amalur: Reckoning): getting your company held up by your loan shark (in this case, the state of Rhode Island).

Used Games

AGAINST

GUY: Used products are a natural product of a capitalist society. Not every person wants or needs the newest thing on the market, and some people who do want the newest thing need extra cash to buy the new products. This means that people who would be satisfied with a used, cheaper product can buy them from people who are ready for something new. In most industries, this is a given. Car dealerships take in used vehicles to give credit towards new vehicle purchases. In the game industry, this is considered a travesty.

In the past generation, publishers have been trying to get some money out of used buyers with online passes. While widespread, I believe that online passes have largely failed to gain money from used buyers, as many games that included it (Dead Space 2 comes to mind) have tacked-on, forgettable multiplayer modes that were easily ignored. Now, a new wrinkle is added: Microsoft may be instituting a fee for used games. Under this system, if a used game is detected on the system, the game will be useless unless an extra fee is paid.

Now, I’m against this for the basic reason that its sole purpose is to take a cut out of the used game market. This system punishes the customer who buys used, forcing them to pay more money than the agreed-upon asking price. This system also gives no incentive for buying new, almost as if it is simply what the consumer is supposed to do and that doing otherwise is a moral failure on the part of the consumer. The system also excludes players who may not have an internet connection, as online activation is mandatory.

CROSS-EXAMINATION

JEFF: Going with your car analogy, I live in a place where most of the dealerships are affiliated with certain car brands, such as Ford, GM, and Toyota. Now, in a similar situation with the current story that Microsoft is going by, they say that they’ll partner up with traditional stores like GameStop to sell used games and trade licenses in return for a cut of the profits. Would this be an okay solution to you as far as used games are concerned?

GUY: This situation only works to the benefit of GameStop. While GameStop is the biggest used game distributor (by benefit of being a nationwide chain), independent game stores and private people using services like Craigslist or Amazon would be left out, giving GameStop a bigger advantage.

JEFF: But that doesn’t seem rather capitalistic. Shouldn’t the smaller game stores as well as the Amazons of the world be able to reap the profits of a used game?

GUY: The difference would be that GameStop would be able to still sell a game by sticker price, but people without this connection would sell with a hidden (or at least not-included) fee. Unless a used game’s price significantly undercut GameStop’s price, why would a consumer choose to buy from someone else? And if the choice was made to significantly undercut GameStop’s price, private people may be able to take the cut, but independent game stores would need to cut the trade-in value of the game, making people more likely to take the game to GameStop. GameStop is nearly a monopoly, and we should be chipping that monopoly away, not adding to it.

JEFF: Would you agree that there is a difference between industries? For example, isn’t there a difference between video games and produce?

GUY: Yes, I would agree.

JEFF: Would you want to buy a used banana?

Used Games

GUY: No, because a “used” banana no longer has any value. In that way, the produce industry and entertainment industries are different: once produce is used, it no longer has value. Entertainment mostly does.

JEFF: So, you seem to agree with me that each industry has different standards and practices. Shouldn’t the developers and publishers be allowed to set their own standards? After all, the secondhand market is a practice of the video game industry.

GUY: Yes, but the practices of the game industry already have some advantages. Expansion packs and downloadable content allow a game to make revenue after an initial release, even on used purchases. DVDs cannot be updated to include extended editions. A car cannot be connected to the Internet for paid updates (at least, not yet). Because games have become so tied to the Internet, new methods of receiving money are available to games that are not available to other industries.


Join us next time, when Jeff and Guy discuss whether Microsoft will stay in the console business if the Xbox One fails.




  • smacd

    I’m personally torn on this topic myself. On one hand, as a free-market capitalist libertarian, I believe in the right of first sale. On the other hand, I’m a software engineer myself and I believe all of the profit for the game should be going to the developers rather than some shady middleman like Gamestop, more because of the way Gamestop does it as a way to undercut the developers while gaining maximum profit for doing practically nothing of value themselves.

    I’ve had no problem with previous methods that they have tried to use to recoup some of the lost money. Its really a tough situation, and there is too much money involved where someone has to lose. Personally, I’d prefer if Gamestop lost, but its not my call. In the end, I’m all for seeing the industry try to create innovative solutions, preferably that do not harm the customers.

    My personal solution is that I ONLY buy used games if the game is no longer available new from most retailers, and only generally directly from the previous owner rather than a middleman (so ebay/craigslist usually). Generally I grab games new, but after the price has dropped to be more in the range I’m willing to pay.

    When it comes down to it, I have no problem with using these fees, even if its full retail price. What I do worry about is the underlying DRM scheme that may make it difficult to obtain games or play games in 10 years on the system. I also worry about the price of these games never going down over time as is currently the norm (outside of Nintendo first party games).

  • -Majin-

    How about a timed lock? After a games has been published for…say a year, the game “unlocks” so that the fee is not needed anymore? This would make it possible for games to be played after the console drops out.

    • GKS

      The problem here is the internet. Even as a frequent user of the net, I
      also see the CONS of always being connected and your life always
      being on record. This idea of password access or even time locks require some sort of connection that people must be plugged into. Should we need to be always plugged-in and registered into a network to enjoy a game and should a person who lacks the access to a network be denied the enjoyment of a physical product they’ve purchased? This idea of needing to be always connected is an indirect furtherance of this growing over-dependence.

    • -Majin-

      This is what i fear the most. Unless they patch the system in the end, one day the console and it’s games will not work anymore. And this is painful with games that game out in the end of the console’s life span. This move is so short sighted.

  • Skotter

    Many people would disagree, as they should (as everyone has their own opinions), but I definitely think the defense of Used game fees did a great job. I shared my sentiments with it in the past, but have come to change it over time.
    I think publishers and developers definitely should reap the rewards over a game sale, but I wonder how ill this would affect Used game sales altogether.

    Used games have their own market.
    Sure, they sit in line with New games, but the money goes to different pockets – and hence, they’re treated differently from one another in strategy and perception.
    When you consider that they have their own market, one that’s been settled and made comfy in itself, and that a drain is now being made on the side of it in order to benefit the New games market… then you’re discouraging the whole market – for the sellers and the buyers, whether it’s charging extra towards the buyers who can barely find reason to purchase the game at its cheapest price, or it’s cutting away profits from the ones selling the game.
    Mind you, I don’t mind this too much, as I’m all for getting profits towards the original makers, or at least the ones who pay the developers. This would be because we often buy new AAA/1st Party titles, and used cult/3rd Party hits. The AAA/1st Party titles didn’t need the extra boost in sales, the cult/3rd Party hit did – yet we don’t seem to treat it as such.
    However, I don’t think it’s right on *how* we’re gearing our sales and market practice towards it *now*.

    In my eyes, they should have dipped into the Used game market sooner. Create connections and deals that allowed a small percentage to go towards them – or to create official refurbished products that guarantee a higher quality and safe quantity (possibly a locked number in reserved stock) for customers who wish to buy from the developers/publishers even after years have passed and most retail profits no longer go towards them.

    But doing it now? In the way they’re doing it?
    The Used market, in both buyers and sellers, could feel threatened. Which can also affect the New games market.
    People may be discouraged from buying new games in fear of making a bad purchase that they can’t resell at a decent price (due to the stores refusing to pay extra in order to sell cheap in order to encourage Used games buyers to purchase their games and take the extra fee blow).
    At the same time, Used game buyers will second-guess their Used purchases due to that extra fee, and may be discouraged from buying any, and just go for the New game price, which can guarantee quality.
    Which, in turn, may discourage Used game sellers to restock many of their items.
    Which can also affect online stores/auction houses.
    The entire system can be turned upside down from a domino effect.

    This problem, would be a problem for me.
    This would mean Used games would less likely be put up to market.
    And without the main developers and publishers agreeing to continue sales and stock of many of their games: This means hidden gems will become even more hidden and inaccessible for buyers like me.
    I’m often trying to find amazing games that never got proper marketing or simply were harshly reviewed or ignored or just never heard of. Yet I’m still a fan of new games and love to support my favorite developers. AND I’m a fan of almost every game genre. This means it’s physically and financially impossible for me to purchase every game out there that I’m looking forward to playing.
    Which means many games will pass me by without my knowing.
    How many hidden gems were in the SNES? PS1? Sega Saturn? Dreamcast? Let alone PC.
    There’s still hidden gems to be found in even the 360 and PS3 and Wii. And I’m sure there will be so much more in the future.

    If the Used game market begins to falter from these fees, it’s going to be harder and harder for me to find and purchase these unknown classics that I physically could not notice before.

    It’d be lovely if they just put all these games up for digital purchase – but even digital games get removed from purchase over time due to license expiration…
    And then it becomes even harder the less systems become backwards compatible – while at the same increasing in its authentication procedures… [which, in the worse case scenario: could prevent the upcoming consoles and their games from being playable once the next iteration comes out — and with servers no longer searching for authenticity of games, and games preventing themselves from working if they’re authenticated, many games could be rendered unplayable unless they’re put up for digital in the next console iteration] If any of that’s true then it’s all a nightmare in the works towards Used games, really.

    So, overall, I can’t support Used game fees. Not like this. Not now. Not when the market’s already been made, settled down, and feels intruded upon – that the threat might discourage the entire system.
    Because if I did support this, I would have no reason to complain when the hidden classics are gone forever.

    • Well done. Very reasonable and rational argument as well as being respectful.

  • I’m totally against this. This type of system is unbelievable. I love Guy’s car example. What about used clothes? I mean it goes on and on. The video game industry will be the only one that has this double way of getting money out of you. This will kill small game stores and hurt rental sales. So what about netflix, redbox, gamefly? So now I pay 5 dollars to rent a game and then have to pay another 10 just to play it? I don’t think so. Plus my best friend and I buy games and share games with each other. Now I have to pay to play my friend’s game? Its unfair and its greedy. The only way I would be on board with this is if they lowered the cost of the game, but no they won’t. Look at all these digtal release pricing on consoles. You don’t get a copy of the game and the publisher doesn’t have a shipping cost overhead and they still charge you 59.99 for a brand new game. Maybe 54.99 if you are lucky. None of this is good for us and only helps greedy game companies like EA. Wii U isn’t doing this and so far PS4 isn’t doing this. I say peolpe should vote with thier wallet and do not support this!

    • Jeff Neuenschwander

      Well, in my defense, both Guy and I agreed that there should be a way to share or rent games without having to pay either a used game fee or the full price of the game. The only part we differed on was whether it should be “per use” (like with the Nintendo demos) or “timed”.

  • Shulknameholderthing

    Used game fees are stupid. End of.
    There you go, in ten words or less.

  • Bec66

    That was very good, you both made a mature and smart argument that left a lot to think about. However it got me thinking, Why don’t game companies have it set already that they get some profit back from the purchase of used games?

  • multibottler0cket

    The thing is, they say there’s a fee per account. I grew up in a family with multiple gamers, and knowing how much Microsoft imposes their whole account thing, you’re probably going to have to pay a fee per user, unless I’m understanding the system wrong.

    Moreover, in say, ten years, the only way to get games will be used, and who’s to say there will still be servers active to keep the account information, accept payment, etc. It’s not future proof. Companies, and divisons of companies, are not immortal. That’s another thing to consider.

    On top of all that, the selling of games shortly after purchasing is something that I have never done, but a lot of people evidently do. Games are expensive, and I guess some people are more willing to try a game if they know they can sell it if they don’t really enjoy it. If there’s a fee, they’ll have to further lower the used price, making it less profitable for gamer and retailer, and it makes it more of a problem for gamers who buy/receive used games. A child for instance may have a hard time paying an online fee. I’m sure there will be redeemable cards or something at the store, but it still weakens the appeal significantly.

    • multibottler0cket

      I forgot to mention that used games are sometimes missing a manual or case, and if it’s a console game, there could be scratches, so the lower price is really the main thing you’re looking for in a used game.

  • Jack Banks

    I Think that the more options that you give gamers, the better off you are. Why not have GameStop to give the developers a “cut” fee from every used game sold. That fee could be five or ten dollars, etc.. Also why not have a system where Gamestop cannot put games up as used until a certain amount of time has passed, meaning they could not buy used games until a certain time. As far as gamers having to pay a fee to play used games, if GameStop gave the developers a cut fee from every used game sold then there should be no need for gamers to have to pay a fee to play used games. In this way you could play the games offline without ever having to connect to the internet. (Depending on the game.)

  • James Best

    I can see both sides of the issue, but I’m a little worried about the implications used game fees carry with them. We already live in a world where consoles are becoming more and more user unfriendly. Do we really need a device in place that limits our access to games? We already have region-locking for that kind of nonsense! And what happens if you don’t buy a game at release and you can’t find a new copy of it no matter how hard you look when you do decide to buy it? Apparently, there needs to be some kind of compromise. Maybe game devs can still get a portion of the money earned by a used game sale?

  • Tom Greene

    Epic fail X bone…lol

  • RagunaXL

    Guy wins my vote in the final answer to Jeff questions. I make sure to always buy new or ‘buy retail’ when it comes to current-gen games. As a Nintendo gamer I feel that any used game sales could cripple them. If they don’t get there cut they might not be able to continue producing and developing games before long.
    I am a game collector though. when I buy used games I buy old games for older systems NES, Genesis, Intellivision etc. What nobody has addressed yet is the collectability of a system that adds these online USED activation fees. Will I beable to purchase a game from a thrift store or garage sale and somehow play it on (PS4,Xbox ONE) three console cycles from now?

  • Rick Xeros

    The used banana was the dumbest leading question I’ve ever read, no offense Jeff, but that question kind of angered me and made what seemed like a reasonable debate suddenly lose quality 🙁