source

56% of American Gamers Don't Buy Games Heather McLellan | 3 Nov 2011 17:50 Filed under: heather mclellan, dlc, market research, newzoo, pre-owned A new market study has indicated that "swapsies" is the most popular game of 2011. Although game-sharing isn't a novel concept in any sense, new research conducted by games market research firm Newzoo has shown that games are now more likely to be shared amongst friends and family than to stay with the original user. Consequently, according to Newzoo's report, more than half of the 82 million gamers in the United States don't actually have to spend money on games. Out of all customers who buy games for PC, Mac or Console, 85% say they regularly purchase pre-owned titles. For a quarter of game-buyers, almost half of their budget goes towards pre-owned titles. In total, the report says, the average American gamer spends 23% of their gaming budget buying pre-owned. The report then expands on the ballooning DLC market, which is expected to become worth $960 million in US sales alone this year. In total, 12% of the money spent on games in the US goes towards DLC, and Newzoo estimates that American and European gamers combined will spend $1.7 billion on DLC in 2011. Taken as a whole, this information reads as a primer on why big publishers have developed such a fondness for DLC and online passes in recent years. AAA titles are expensive and it often makes sense for regular gamers to either wait for a new copy to appear in the pre-owned section or just borrow it from a friend - but doing that cuts out any profit for the developers and publishers, unless they add on DLC or see a major boost in early sequel sales. Though many gamers are irritated by "day-one" DLC and the concept of online passes, it's hard to see how publishers can avoid these methods without seeing a marked decrease in their profits. Source: GameSpot

Yup... that that lost monies /s

It's not next on chopping block - it's on the same boat as used games sales.

If you block used games sales you have succesfully blocked sharing games among friends.

If I'm only going to buy one game this month and my friend/family member is also only going to buy one game this month but we decide to trade games after we've completed them, how does this represent money lost to the publisher?

The maximum number of sales they could get is 2 and they received 2 sales, where is the lost sales?


Why is it "wrong" to do with videogames what has always been done with books? Should the book publishers be able to shut down libraries because they're cutting into their bottom line?

I know many people hate the idea but I believe issueing one online account per copy forcing all the people who buy used to purchase a new code is a good idea. Secondly maybe limit the game to being able to be used on say five different consoles in total, that way legit consumers will not be effected and they can even play the game at a friends house. But they will not be able to sell the game used and they won't be able to share it with many consumers.

Drastic steps need to be taken to curtail used game sales and sharing games as well as piracy. As the industry becomes more and more expensive to make products for the companies can't afford to be taking such large losses. Their is no excuse for a gamer not to buy a legit copy of the games they want, if they have the money for the console and they have money for Live then they can afford to buy around one game a month at least!

As for the DLC info that is interesting. Its really sad because game developers have begun holding content back so when they release the game they already have the first batch or two of DLC ready, which should have been on the initial disk. Look at Gears3 it has the first batch of DLC on the disk itself yet consumers need to pay extra to access it.

I think Nintendo should go with their free DLC model they pruposed at launch of Wii. It may not be as profitable but it should encourage gamers to buy Nintendo software over the competitors. I'm not sure if this will help Nintendo push drastically larger amounts of software but it would be a smart plan to try.

Before cracking down on the problem, you might want to, first, find the problem.

Gaming has been growing and continues to grow, despite the economy tanking. If it's so bad as they say, shouldn't you see the companies folding altogether.

It's like giving a kid a piece of candy. Then the next time he'll ask for 2 pieces because 1 isn't enough. And now he wants 10 pieces.

This sounds like a win-lose (Gamers - Publishers and vice versa) situation. I don't entirely understand the whole concept of online passes, I'm not gonna lie, but pre-owned games do hurt publishers and I can understand why online passes are becoming the norm. There does not seem to be a compromise between the two parties on site. I will say though Batman: Arkham pull the biggest dick move this year, as great as the game is. I know it doesn't have online (?) but why the hell would you limited the SP experience? It's all you got!

The industries growth is small compared to what it could be and should be. In a era where games are getting harder and harder to make and more and more expensive the growth isn't capable of maintaining profitability for many of the less successful games. If your game doesn't sell 700,000+ it doesn't break even if it doesn't sell million plus it isn't that profitable though important to a companies survival because many of the games these publishers release barely break even if they do at all.

Also yah we are seeing companies folding altogether. look at Midway and Acclaim and Majesco/THQ are on the verge of collapse. In fact their are plenty of prominent publishers who are just squeaking by. Even the major publishers are making less on their hugely successful titles resorting to other products which will turn profits to off set these losses.

With the industries growth costs have also grown. In fact costs have grown faster then the industry. Back during the N64 days you could sell like 200,000 copies of a game and not only break even but turn a healthy profit. Two generations later and you need to sell more then triple that many copies to get the same results.

Sharing games and used games weren't a huge problem back then because enough people still bought their games to make a title successful at 200k. But today publishers need to sell way more copies and the consumers simply aren't buying them. There have been several very high quality games which have failed to sell enough copies to break even and that isn't acceptable. If these figures are anywhere close to realistic then some of these less successful games could be saved by the lack of sharing and used sales.

P.S- Those who will use the piracy argument that the consumer wouldn't buy the game anyways and the pirated copy isn't detracting from the profits. Well these consumers are buying used and most often they buy for 10$ off or less if you removed the used sales these consumers wouldn't just stop buying games. They would buy new copies or wait for a slight price cut and buy the new copy. Either way this could potentially double software sales and be the difference between losing money and breaking even!

P.S- GameStop and used game retailers make more money off of used software then new. It is self destructive to keep this practice around and will lead to only more losses. With every title that bombs due to not breaking even you will get one less IP. Many great IP don't break even when they should.

If only businesspeople understood economics...

Okay, first. As in all business of any kind before gaming. Some businesses are going to make some bad decisions or be it bad luck whatsoever and "forced" to close down. Why is gaming an exception? Yeah, sure, a few companies bankrupted due to reasons unknown and we jump in and blame piracy, used games, loaning, etc...

A game does not have to sell 700k to turn a profit if the game is not capable of reach that number. Have you thought maybe they overshoot their development and their game(s) just didn't meat expectation of the gamers.

Why do they have to find something/someone to blame when their business fail? Maybe the failure is in themselves? You know, that's quite high a possiblity.

The mentality that the customers are somehow to blame is really messed up.

Last time I checked games were still selling at a very good rate and trading games isn't something new.

When I was a kid, my friends and I were trading NES games at the time. I never owned the first Final Fantasy but I must have played through the game 4-5 times. Did this hurt Square or the Final Fantasy franchise? Not one bit. When the SNES came along, I bought Final Fantasy II (IV) and every Final Fantasy game ever since. Without game trading I might have missed on the whole franchise.