Second hand trade hurts developers as much as software piracy...

[Bodhesatva]

Books:

NJ5 said:

Bodhesatva said:

numonex said:

EB Games/Game Stop and many other game stores make most of their profits from their shonky second hand trades.

Game developers and publishers receive no money from the second hand game trade.

Second hand game trades hurts developers as

 much as software piracy. In both cases developers and publishers receive no money from the second hand games sale or downloaded game.

Game stores not only rip off consumers with terrible pricing in their favour, they rip the game industry off as a whole. Renting and lending games to a smaller extent hurt the game developers and publishers. Fewer customers purchase the games by second hand purchase, pirate game, rental or borrowing a game from a friend.

Bear in mind the cost of developing video games these days is sky rocketing, costing as much as $100 million for some game developments.

End of rant/

Okay, let's examine this with a larger lense.

The automobile industry also has a second hand market, and despite several companies having enormous issues recently (GM, Chrysler), no one is blaming the existance of a second hand market. Almost everyone agrees that these companies' problems are caused by their own poor choices and failed business initiatives.

That not good enough for you? Okay, how about the movie industry, which has a vibrant used DVD market? How about books, or music, or jewelry, or guns, or electronics? How about second hand clothes? Used houses? All of these industries have second hand markets, and none of them are crying about it. It's the nature of any industry.

The actual problem is the one you've already highlighted -- game development budgets have "skyrockted, costing as much as $100 million for some game developments."

The problem is, everybody seems to like spending all that money. They want to make big, expensive productions, and now that they've started doing it, they certainly don't want to go backwards. So instead of doing that, they're looking for a scape goat, and they've settled on used games. Despite the fact that it's a market which exists in virtually every other comparable industry, with little or no complaint.

It's like going 200 MPH in your car and then, when your engine rapidly breaks down, you complain that it was built poorly by the designers. In reality, your engine is no different than anyone else's: you're just a fool for driving so fast.

I'm not completely dismissing your point (your point about development costs is valid), but let's look at each of the examples you gave seperately:

Cars/clothes/electronics: they deteriorate with use, much more so than games, which makes new items much more valuable than used ones when compared to games

Books: they also degrade with use more than games, they're much cheaper to make than games (I mean in terms of fixed costs, not the ongoing costs of producing copies)

Music: as with books, recording an album is also much cheaper than making a game, and CDs tend to sell for a long time, which makes them less risky than developing games for music publishers. For the actual artists, they're not the main source of income, concerts are.

DVD: This is the best example you gave, but DVDs are not the main source of profit for movie studios as far as I know, whereas game sales are almost the only source of revenue a game publisher has. Their life would probably be easier if there was something analogous to cinemas for games.

Houses: The fixed costs here are ZERO, a home builder only spends money on materials and labor to build a new home. This is the diammetrical opposite of games, which are expensive to develop and cheap to make a copy of. Bad analogy.

Jewelry: same as houses.

 

This is precisely why I gave so many examples: no two industries are exactly alike. Movies are different than cars which are different from clothes. They're all widely disparate, and yet, despite their differences, every single one of them has a thriving second hand market which exists beside the first hand. What you're essentially arguing here is that video games are special and unique and can't be compared to anything else. Which I'd claim is patently absurd.

To turn your arguments on their face, consider this:

Cars/Clothes/Electronics: Because these deteriorate with use, the price of used products in these segments drop rapidly. Whereas a used video game is often 75%-90% of the original price even 3 months after use, a car is worth 25-33% less the second you drive it off the lot. This makes used cars relatively cheaper (and electronics, and clothes), and thus you're more likely to buy these used. The savings are larger.

DVDs: You are correct that this isn't the only source of revenue for movies. Which only reinforces my point: why were movies able to come up with additional revenue streams, but games haven't done that effectively? It's like saying, "You can't compare the two, it's not fair. Whereas movies have succesfully diversified their revenue streams, game companies haven't been smart enough to do that." That's... precisely my point. A host of bad decisions have led game companies to this place.

Books: Same as Cars/Electronics. Where new books are often 15$, many novels can be found for $1-2 at used bookstores. The savings are enormous, so you could easily argue that Books (And cars and electronics and clothes) have it worse than Games do.

Music: Who's fault is it that games cost so much to make? Again, that was my whole point in the first place. You act like "games are expensive to make" is some absolute, immutable quality of games, when it isn't. Games are not forced to be so expensive to develop. In fact, flash games and browser games are doing amazingly well on the PC: farmville has over 60 million users. It's clearly quite possible to make low cost games that are amazingly popular. So I shed no tears for developers of these mega budget games -- they do not have to spend exorbinantly, they just chose to do so. I have no pity for people who make poor choices and then try to pin the reprecussions of those choices on the consumers (i.e. take away our right to sell products we own).

It would be like a major book publisher going out and getting well known, contemporary artists to illustrate all of their books. This might cost millions of dollars. And then, when they struggled to break even, they blamed the used book market. No one forced them to spend so much money on their books -- it's quite clear that you don't need to spend so much to make a popular novel. It was their choice to spend so much, and now they have to face the consequences.

So what I'm really arguing is that video games don't necessarily have it harder, and don't necessarily have it easier -- they're just slightly different. Again, just as all industries are slightly different from each other, with no two exactly alike. And yet, despite these differences, every other industry I can think of manages a second hand market without complaint. Why can't video games?