I’ve been revisiting my stance on online passes recently.
I’ve had some interesting conversations with people that I trust and respect on Twitter, and I’ve seen some fair-to-argue reasons why online passes exist. It’s true that publishers are cut out of the used sales loop and would like some of that revenue. There’s genuine concern that publishers may cut back or even fold if extra revenue isn’t somehow culled from consumers, and we see this frequently with DLC. I don’t necessarily agree with these arguments, but I can at least understand where they’re coming from. I’ve reached a point where I accept that, until digital distribution comes into full effect, online passes are here to stay.
This piece, which has NSFW langauge and was publicized by Kotaku today, tries to do the same thing that my Twitter conversations did… but does it in such an offensive, insulting, and immature manner that the message is fatally diluted as a result. It’s a textbook example of how not to argue a point, because anyone who was either neutral or in opposition to the issue at hand stopped reading less than 100 words in:
Fine then. Don’t F___ING BUY IT, you entitled, self-centered pricks. 38 Studios and every other company who implements an online pass don’t have to listen to a f___ing word of your whining.
Tell me why anyone would keep reading after that point, unless they’re already staunch proponents of online passes.
I didn’t, initially. I took to Twitter instead and publicly called Kotaku out for publicizing something so malignant. I understand that it’s a “Speak Up” piece and that a Kotaku staffer didn’t write it… but a Kotaku staffer sure thought it was a good idea to greenlight the piece and share it with its entire readership. More on that in a bit, though.
Mr. “Skeletal-Minion”, the piece’s author, is obviously very passionate about the industry. He doesn’t want leeches– errr, those who buy used games– to have an ill effect on the entertainment that he holds so dear. Indeed, these people who buy used can’t seem to “skip one f___ing value meal to make up the difference between a new and used copy” are seemingly threats.
It’s good to have a message, and to be passionate, but this is not how it’s done the right way. This is voiced as a teenager’s temper tantrum, spewing vile and vitriol at anyone within earshot who doesn’t agree. There’s no message sent here about online passes and whether 38 Studios was in the right or the wrong about moving a quest line to DLC. If there is, it’s upstaged by the delivery method, which bludgeons readers with verbal abuse from stem to stern. Even as a neutral observer, I’d be far less inclined to listen to anything that the writer has to say. Instead, I’d be angry and want to attack the messenger without caring for the message.
Is this what we’re reduced to in order to get our points across? Do I need to start dropping F-bombs and dealing the insults to get people to listen to me? Is the issue really so binary that there’s no room for debate? The decision by Kotaku to publicize such a diatribe is disappointing because it proves that yes might be the answer to these questions and it really should not be. I find it hard to believe that not one other Kotaku commenter didn’t have a less inflammatory argument that could have been showcased. Instead, Mr. “Skeletal-Minion” gets rewarded with a bully pulpit and the bad blood boils between the Used and New factions. Nothing is solved, and nothing even remotely productive emerges as a result.
It’s great that Kotaku is recognizing and publicizing the opinions of its readers with a wider audience. I just hope that, in the future, more care and consideration will go into the selection of these opinions. Passion does not always equate to substance, as this example clearly demonstrates.
Rage was one of the games that impressed me at E3 back in June. It had a Borderlands vibe to it, but substituted more realistic graphics than the cel-shaded approach that Gearbox Software had taken. The game ran at 60 frames per second, even at an early stage, and was fun to play. My interest level shot up for Rage, and it had been on my wishlist with growing excitement.
Unlike the recent Online Pass trend of locking out multiplayer for used consumers and renters, id Software and Bethesda have decided to target solo players instead. Consumers who buy new will get a one-time use code to unlock secret areas via sewer hatches. Players who don’t buy new will not have access to these areas, and it’s possible that this code will not be available via DLC. These sewer hatches are said to be loot caches and are “outside the main path”.
That quote is from id Software’s Tim Willits. Here’s a gem from the same piece:
We’re not detracting from anything. But I know some consumers, when you can’t avoid it, then you get a little touchy subject.
In other words, he knows that this isn’t going to be a popular move with consumers… but he really doesn’t give a damn. The Industry Defense Force is quick to defend Willits here because, after all, people who buy used or rent games instead of buying new aren’t consumers at all. Those people are basically pirates, but without the whole issue of breaking the law.
Here’s something for you all to chew on, and I sure as hell hope that I’m not right about this: I believe that this move is the continuation and maturation of an assault on solo players. We’ve already seen the first shot fired by Rockstar Games via L.A. Noire with its varied retailer preorder DLC, which didn’t allow users to purchase the full game at the time of initial sale. This move began the process of eliminating single-player content in exchange for more money than the $60 asking price. Electronic Arts took a different approach to ransoming the overall quality of the single-player experience in The Masters: Tiger Woods PGA Tour Golf 12 by forcing players to make a choice between buying DLC courses for certain events on the PGA Tour schedule or being forced to sit out that week and forfeit the chance to earn any points or money for that week.
Now we have this move by id Software, which may seem like a minor thing to many… but sets the table for more punitive ransomware actions for all but those who buy new. Locking out loot caches is only a start. What will be next? Could publishers lock out replay value by disabling the game after beating it unless you enter a code? Could entire levels be locked away, saved only for those who buy new? How about locking endings if a code is not entered? The Industry Defense Force claims that this isn’t a big deal, but it’s more of a “deal” than it was even a couple of years ago… WHEN IT DIDN’T EVEN EXIST. Now it’s a deal that almost assuredly is going to get bigger as publishers search for more ways to settle the score with GameStop for not getting any kickbacks for used game sales.
That’s the funny thing in this whole mess. The industry either can’t or won’t go after the source of their grievance, so consumers are not only caught in the crossfire… but they’re now the active targets in this War on Used Games. The Industry Defense Force likes to use GameStop as the source of all wrongdoing in the used games market, but they seem to either forget or deny the fact that many other resale destinations exist. When Best Buy opens up their game stores-within-a-store, does anyone think that checks will be cut to game publishers whenever used games are sold? I hope not. Do individual used game sellers on eBay, Craigslist, or auction sites write checks to publishers after a sale? Nope. Does anyone see Amazon making payments to publishers when used game revenue comes in? I didn’t think so. Despite all of this being true, people sure love nailing GameStop to that crucifix of blame. Double standards for the win.
We’ve come to this. The industry apparently has no way of getting its debatable just rewards from the resale of its games, so they’ve decided to punish the consumer instead… and locking multiplayer action was only the start. This is a brand new slippery slope that the industry has begun to descend, and there aren’t the excuses of online maintenance costs to fall back on when you start locking single-player content. It’s now a flat-out “Pay us or screw you” mentality for the industry, and there’s no way that this doesn’t get worse as time goes on. Once you start down that road, there’s no turning back. Just wait until we find out what the Online Pass for Batman: Arkham City— a single-player only game– entails.
I do wonder how long we’ll keep subscribing to the “It’s only…” mentality:
- It’s only multiplayer, so just play by yourself.
- It’s only extra DLC and not part of the main game.
- It’s only loot caches, and doesn’t affect the overall experience.
- It’s only a few challenge maps. Who plays those, anyway?
- It’s only an extra level. You can still beat the game, even if a story element or two is missing.
- It’s only the ending. Who watches those, anyway? That’s what YouTube is for.
- It’s only $20 to renew your license to keep playing for another 6 months. Don’t you care about the industry?
- It’s only $70 for this game. If you account for inflation, you’re getting an awesome deal. I paid $100 for Chrono Trigger.
It’s only entertainment. Maybe there are cheaper alternatives.
First off, a big thank you goes to the staff over at GameCritics for picking up my reaction piece on Ledesma-gate. I see that my viewpoint has incurred about equal amounts of commenters for and against my viewpoint, and I guess that batting .500 isn’t too shabby. I see that at least one commenter works in the industry, and naturally his comments were the most harsh. Being on the opposite side of where he stands, as I am a consumer of his goods, I guess that disagreement is natural. He wants to make money, and I want to be able to afford his goods. We’re both right, and we’re both wrong.
What’s unfortunate in all of this is that Ledesma’s comments have not only damaged relations between the industry and its consumers who read Ledesma’s views… but they’ve also succeeded in widening a rift between the haves and have-nots when it comes to this form of entertainment that we all enjoy. Charges of entitlement are flying back and forth and the argument that video games are a luxury– or even a service– makes what was once touted to be “fun for everyone” into a select group of individuals who are financially fortunate enough to take part.
It’s a disaster waiting to happen.
We all know what the easy solution is: Get members of prominent game publishers and prominent resale retailers together and hammer out some sort of financial agreement. That solution, however, isn’t going to happen as long as you or I are not in charge. Both sides have obligations to their respective investors. If resellers agree, their profits dwindle and shareholders will find another venture that may be more lucrative. As long as the agreement doesn’t occur, the industry will continue to wage this war on resale and there won’t be a winner when it’s all over. In fact, if the industry was actually successful in the removal of resold product and decided not to adjust their pricing scheme, it’s highly likely that the financial state of the console gaming industry would be far worse than it is now.
If recession-like economic conditions continue, which is likely for at least the next couple of years, eliminating cheaper alternatives than new $60 games will erode the consumer base. That’s not a prediction; it’s a fact. We’d be looking at a firm IF/THEN argument; IF you don’t have $60, THEN you won’t be buying these games. Sure, there may be sales now and again, but with several periods each year when there are more than a handful of new releases for each platform, many games are going to be ignored and left on store shelves. This will lead to retailers not being as bullish on console games as a viable revenue stream as the industry will have lost popularity and the depth of its consumer base. That leads to smaller amounts of retailer purchases of games from publishers, which then will lead to more closures and consolidations. Over a decade’s worth of growth will be lost in a short time, and other– cheaper– sources of entertainment will be sought.
Why are used games so bad? It’s not a black and white scenario. Many consumers sell or trade games to be able to afford new releases. I’ll admit that I’ve done it for years. In fact, I sold my entire NES collection and other games back in 1999 to FuncoLand and gained enough store credit to buy $700 worth of new Dreamcast hardware and games. Note the bolded word there: NEW. A fair amount of that $700 went right back to the industry, with FuncoLand receiving a small profit on the sale. They got their profit from me when I willingly traded in my games for less than they were worth. The industry won, the retailer won, and I won. I do the same now. It makes me a second-class citizen in the eyes of the Industry Defense Force, but everyone really does win. It’s the same scenario: I trade in games for less than I paid for them (reseller profit) to afford to buy new ones (publisher / developer profit) that I can enjoy (my own gain). Where’s the loser here? Is it because the publisher doesn’t make any more money from me or the resale retailer if the game finds a new owner? That’s a shame, but the industry is already making money from the reseller to begin with.
And this incessant ranting about GameStop killing the industry? No. GameStop’s #1 revenue driver is sales of new software.
Let me say it again, with emphasis: Gamestop’s #1 revenue driver is sales of new software.
As with any business, there are certainly some GameStop business policies that can be debated. Gutting of new games. Questionable trade-in values. Occasionally over-emphatic employees begging for subscriptions and preorders. GameStop isn’t anywhere near perfect, but they’re also doing business well enough that they’re still here and making money in a time period that’s seen Game Crazy go by the boards and Blockbuster’s Game Rush experiment fail. There are lots of myths out there about how GameStop does business, and a lot of online embellishments of in-store experiences that become gross generalizations. Despite what you may or may not agree with about GameStop’s policies, the company isn’t worse for the industry’s financial well-being than GameFly, Goozex, yard sales, or Goodwill.
How about those who buy used games? People have been doing it for years without having to be harangued or made to feel like a second-class citizen or criminal. It used to be called “getting a good deal”. Now it’s some sort of moral dilemma. Again, there’s no black and white here; if you buy used, you’re a (legal) pirate. It doesn’t matter if you’ve bought once or plenty of times. Think of the developers… think of the publishers. If you want better games, buy the “right way”. You know, outside of this bubble called the internet, consumers honestly don’t care about the developer, the publisher, or even what some no-name blogger has to say. He or she has a budget and sticks by it. If he or she wants a game, that person is oftentimes going to buy cheaper if possible. Impulse shopping has been a revenue driver for video games for a long time; if a game is cheap enough, some people will drop the money on it. It’s not about putting money away each week like Wal-Mart layaway and rejoicing when you finally have been able to stash enough away that you can afford this luxury. Maybe for the hardcore gamer, budgeting and savings are a way of life… but for everyone else, it’s a snap decision: Buy now as cheaply as possible, or table it and see if money becomes available in the future. I see this ALL THE TIME. Sometimes they come back, sometimes they’ll buy it used, and I’ve even seen cases where the consumer has flatly said that games are too expensive and that he’s going to “sell the damned thing.”
I would think that, rather than locking features, cutting content for future DLC, and basically trying to nickel and dime what’s left of its consumer base, the console gaming industry would instead think about how to not get back to gaining more consumers… but also try to use incentives instead of what’s viewed as punitive actions to maintain the consumers that it’s been trying to build for years.
We’ve all said things this week that probably should have been held in check. What we need to do now is find real solutions and enact them before it’s too late.
I’ve been reading some comments to some articles relating to Cory Ledesma‘s verbal slap at used game buyers and about Sony’s decision to at least consider using some sort of Online Pass system for their games, and I’m disappointed in what I’ve seen. It’s one thing for industry workers to be so defensive or to say some pretty dumb things, as they believe that used games affect their bottom lines. It’s another for gamers to point fingers at others and basically tell them that they don’t belong to the Gamers’ Club.
Let’s take a look at some examples:
1. “If you can’t afford a $60 game, you shouldn’t be playing video games.”
I love this argument, which generally comes from a group of commenters that I like to call the Industry Defense Force. It’s similar to the “You’re not a real gamer if…” argument in that there are apparently rules to becoming a video game consumer which aren’t clearly stated when you buy a game. It’s bunk, of course. The console gaming industry went through its strongest period of growth by expanding its potential user base. During the previous two console generations (PS2/Xbox/GC and PSX/N64/DC), console hardware and software prices were generally under control and it was all about selling the best value. Yes, the Nintendo 64 did have higher software prices for a time, thanks to Hiroshi Yamauchi’s decision to stick with cartridge-based media, but these prices eventually fell into line with its competition. Now, publishers have happily tacked on a $10 “HD tax” to games for the Xbox 360 and PlayStation 3, citing higher development costs… and, unsurprisingly, software sales have trended down thanks to a recessed economy and games that feel incomplete or rushed.
Please note the term recessed economy. The Federal Government may claim that the Great Recession is over, but look around you and you’ll see a different story. Foreclosures are still happening. Layoffs are still occurring and new job creation is occurring at the speed of molasses. Unemployment has gotten so bad that the rate is inaccurate because some people have been out of work for so long that their benefits have ended. Credit is tighter. Taxes are going up to try and help states that are on the verge of going into receivership. Despite all of these things, the console gaming industry and the Industry Defense Force both insist that $60 is not that much money. The Industry Defense Force will cite pointless inflation comparisons and mention that we’ve been “due” for a price hike. Really? Now? Despite economic reality? The same economic reality that’s sent the industry into its first bonafide downturn in over a decade?
2. “It’s only a $5 difference. Don’t be cheap.”
No… not really. Depending on the retailer, that difference can be $10 or more if certain conditions are fulfilled. That’s enough for a quick lunch, a bit of gas for your vehicle, or extra cash in your pocket that can be spent elsewhere. In tough economic times, it’s not the amount of the savings that is important– it’s the fact that you’re saving any money at all that’s the key. Sometimes you have to wonder how many of these commenters have actual bills or financial obligations, because the value of money seems to escape them. Try this math: Even if you do only save $5 for each game and buy one per month for a full year, you save enough to buy an extra game each year… or two if you partake in discount programs from GameStop or Play ‘n Trade. It adds up, and the bottom line is what matters the most to consumers in times like these. Consumers will continue to be cheap, and they frankly don’t care if the Industry Defense Force calls them out for being that way.
3. “Better for the developers to get money when you buy new than for GameStop to get all of your money.”
Ah, the new version of The Crusades. Let’s forget the fact that the developers got their money for games sold already. Let’s also forget that GameStop isn’t the only source for used games around. Do developers get any money when you trade used games on Goozex? Nope. How about eBay? Nope. What if you see a game at a yard sale or flea market? Negative. Developers and publishers stopped getting their money’s worth of a rented title after a few rentals at GameFly or Blockbuster. Besides, why should gaming consumers care about the industry and how much money it makes when the industry has made it abundantly clear that it doesn’t care about consumers? As for the GameStop stigma, it’s downright laughable how commenters hang onto silly memes and attack a retail chain based on hearsay and the “cool to hate” factor. GameStop, like any other retail chain, has its share of problems and business policies that make consumers cringe… but it’s still a video game store, and there just aren’t very many of them left. The used games problem seems to have GameStop at its core, but there are many other retailers who deal with pre-owned games, both in online and brick-and-mortar spaces.
4. “Servers cost money to maintain. They aren’t free, you know.”
Oh, I know they’re not free. The problem is that the same number of people who own the game have the ability to play it online. In order for a game to be pre-owned, somebody had to buy it first before selling it or trading it in. The seller no longer plays the game online; the new owner does. There’s no additional stress on the server. With the Online Pass program, the $10 is basically free money for the publisher, and it’s not at all guaranteed to go towards server maintenance or upgrades. It’s like a gas tax in some states; ideally, this money should be going to road repair, but it usually goes into a different government fund. This is a shallow and impossible-to-defend argument.
5. “People who buy used games deserve to get a lesser experience.”
Since when? Consumers have been buying pre-owned games for decades, but only now do we vilify them? I don’t think so. Contrary to prior belief or notion, buying used games isn’t a crime, it isn’t a new fad, and it should not be a punitive situation. I’ll agree that, if you buy used, you should expect certain possibilities… like missing instruction manuals, cracked or missing cases, and possible physical damage to the media… but the games are still expected to work like they should. This business of locking content away as a deterrent from buying used in order to generate “a lesser experience” is a cash grab from publishers who decided that used games are the reason for the current business downturn.
Having said all of this, I’m going to step away from the matter once again as I’m trying not get back to writing basics rather than continuing to harp on the same topics. I will say that this issue isn’t going away and is going to likely worsen in the coming months. What will be interesting to see if how consumers respond and whether there will be any pushback– or if they’re just resigned to their fate of having to pay more to play what they want. In the meantime, I’ll be back to writing impressions and reviews soon.
Some things are better left unsaid.
For example, most gaming consumers know that the industry doesn’t care about them. The disconnect between the industry and the consumer has never been more evident than it’s been during this console generation, as I’ve mentioned more than a few times before. We’ve known that the industry treats used game purchasers as second-class citizens– or worse– and this well-publicized “war on used games” has devolved into taking basic gameplay modes away from those looking to not pay $60 apiece for games that may or may not be worth their asking prices.
Cory Ledesma, who has been working on THQ‘s WWE games for years now, finally took the gloves off and said what has assuredly been on the minds of many publishers and developers since this war on used games really began in earnest– he doesn’t care about used game purchasers.
I don’t think we really care whether used game buyers are upset because new game buyers get everything. So if used game buyers are upset they don’t get the online feature set I don’t really have much sympathy for them. That’s a little blunt but we hope it doesn’t disappoint people. We hope people understand that when the game’s bought used we get cheated. I don’t think anyone wants that so in order for us to make strong, high-quality WWE games we need loyal fans that are interested in purchasing the game. We want to award those fans with additional content.
Let’s break down this piece of honesty– and attempted backtracking– from Mr. Ledesma here.
Ledesma has chosen to, with this quote, be the mouthpiece of THQ– if not the industry– and say “they” don’t care about used game buyers. We know that; in fact, they don’t care about consumers, period. It’s business. The “don’t care” part has been magnified during this console generation because, for the first time in many years, the industry is not thriving and a scapegoat has to be sought. It’s easy to pinpoint used games as a problem, considering that publishers and developers don’t make ANY MORE money from sales of their games. Note the capitalized words here: ANY MORE. The fact is that the publisher and developer already made their money from the game when it was bought by the retailer that originally sold the game as new. Want to cite online server fees? Those were factored into the original sale; there aren’t any extra people playing the game online… just different people.
After backtracking a bit by claiming that he doesn’t want to disappoint people, Ledesma really lets the cat out of the bag and uses the “C” word: Cheated.
When the game’s bought used, we get cheated, he says. Oh… so he doesn’t care about used game buyers, except when they buy the game used. Then he– and the industry– gets cheated. If you don’t care about used game buyers, then why should they care about you when they’re trying to buy a game as cheaply as possible? Sure, it’s all about the bottom line for the industry, but the consumer’s bottom line doesn’t count for anything? Since when? Consumers have other fiscal responsibilities than gaming… that includes people who work within the industry, too. Especially when it comes to Q4 and new games swell into retailers like a software tsunami, paying $60 for each game means that you are forced to limit what you can buy. I have a sinking suspicion that not too many consumers have $200 per month to drop on new releases. Then you’re either forced to play pick-and-choose or to try and buy the game you want as cheaply as possible. If cheap means that retailers are putting certain games on sale, great… but with the profit margin on new games being so thin for retailers, that rarely happens. The other options are either renting– which THQ’s Online Pass program doesn’t account for– or buying used, which can be significantly cheaper than $60 in certain instances.
The last part of Ledesma’s quote is priceless, because he equates the Online Pass with being an “award” for “loyal fans”. Not really. Considering that the online component of a game used to be an expectation and not a right– as it has apparently become– this isn’t an “award” or an incentive for new purchasers. It’s legalized extortion. Holding online play for ransom, especially when Xbox 360 users are already paying a fee for the ability to play online, is another stop along the industry’s slippery slope of descent. Incentives are adding things to the game… like extra levels, extra characters or weapons, and other things designed to make the game more enjoyable. Locking features is punitive.
The industry has lost sight of one major part of the used game formula. There are many consumers that trade their games in towards new games, and this happens a lot. That $60 price tag is a little more attractive if you trade games in for store credit towards new games, or if you sell games to friends or online for cash. For all of the outcry against GameStop, trading sites like Goozex and auction sites like eBay are just as involved in this issue that the Online Pass program is trying to put down. The industry, quite frankly, refuses to admit that games cost too much to sell in large and consistent quantities given the current economic climate. By holding online play for ransom, publishers are forcing trade-in and resale values down and this is counter-productive to game trades or resales in the first place: Game consumers need that buffer to be able to keep up with the latest games.
I’ve said this time and time again, and yet nobody listens. This is why software sales have been consistently off on a year-on-year comparison. This is why publishers are struggling to find answers and are quick to blame used games. The industry demands that consumers to foot a constantly increasing bill for entertainment and consumers have been indirectly telling the industry that they no longer have the money, by way of decreasing revenues. Rather than accept any kind of responsibility or acknowledge that there’s a problem, Cory Ledesma has taken the gloves off and spoken his mind.
In response, I will assume the role of the consumer base. Here’s our response to Mr. Ledesma and the rest of the industry:
I don’t think that we, as gaming consumers, really care whether the industry is upset because we’re just trying to afford to buy games without having to take out a second mortgage on our homes or work a third job. So if the industry is upset that they’re not getting any more money from us, then we really don’t have much sympathy for them. That’s a little blunt, but we hope that it doesn’t disappoint anyone in the industry. We hope the industry understands that game prices need to come down and that we need better incentives in order for us to continue spending our money on a consistent basis on your products. We want to reward companies that recognize and acknowledge the issue of high prices with our loyalty.
I think that’s about right.
It’s almost as if someone noteworthy in the console gaming industry has been reading my blogs about this War on Used Games and decided to try and get some analysts out there to try and prive prove that, in fact, used games are gradually killing this once invulnerable activity. An article on Gamasutra talks about a study performed by Cowen Group that basically blames GameStop and the “dramatic” growth of used games for the industry’s woes. In the article, Cowen analyst Doug Creutz not only understands the recent popularity of Online Pass-like DLC in games currently, but actually thinks that more– and more aggressive– restrictions can be placed on software to dissuade consumers from buying used and “recapture value” from the used game market.
This is going to get ugly.
Publishers and developers can cry all they want about how expensive that game development is, and how used games take food off of somebody’s table, but they are far from innocent when it comes to this division in economics. The industry has decided what is best for its consumer base, which then is valiantly used as a reason why video games are $60 apiece.
In a recession.
Haven’t we gone over this before? Haven’t we talked about how an extra $10 per game means fewer games purchased per year? Need I mention that the economic climate is starkly different now than it was three years ago? If you want more people to buy more games, then you have to make them affordable. You know… drop prices. High-definition televisions and Blu-ray players are finding their way into more households because the technology and the media have both come down in price. The only entertainment expenses that have increased are movie tickets, including 3D and IMAX events. Everything else is coming down but console games, and nobody in the industry cares to mention that.
Doesn’t anyone remember when console gaming really picked up steam during the 1990s? Sony burst onto the scene with an affordable new platform with reasonably-priced games and a mentality to get everyone involved, including core gamers from the Nintendo and SEGA stables and new consumers who might not have been into gaming before. Video games started to become more inclusive, and aside from Nintendo’s misstep on media for the Nintendo 64 ($70 per game? No.), we saw the popularity of video games begin to skyrocket. Nobody wanted to price anybody out of the market; despite new technology, we saw platform prices hovering at $300 or less. The consoles that broke this rule– 3DO, CD-i, Neo Geo, Saturn– all sold minor amounts and faded into obscurity. Even into the early 2000s, prices remained the same for both hardware and software despite technological advances and rising development costs.
Let’s also not forget that used games existed during the same period.
Now, let’s review what this generation has brought us:
- Two of the three gaming platforms in this generation launched for over $300, with software prices at $60 for the first time in over a decade.
- Features and functionality that previously had been included with a software purchase have been eliminated or held back for later distribution as downloadable content, mostly of the paid variety.
- Some games require a constant internet connection to work, despite being paid for… so if your internet service goes down, some games don’t work at all.
Higher prices. Less functionality. Fewer features. And somehow the consumer is to blame when they decide that $60 is too much?
Creutz and other analysts like him who share this punitive vision are in for some surprises. Creutz may believe that consumers will conform:
We believe that consumers are likely to grudgingly accept a revised and evolving pricing strategy that reflects the value they receive outside of and in addition to the traditional single-player offline experience.
Note his verbiage here. See the word grudgingly? That means that consumers aren’t going to like it. There’s only so far that you can push a consumer base before people realize that the console gaming industry has completely lost touch with reality and that it’s just an expensive fad that’s managed to outlast most. Perhaps they’ll move on to free online gaming. Maybe they’ll go back to older games. Maybe they’ll just leave video gaming behind and find less expensive hobbies.
I know that I move closer and closer to going full-on retrogaming with every story like this that I read and comment on. Playing games like Final Fantasy IV Advance or Virtua Tennis on my Game Boy Micro remind me of a time when the industry that I love wasn’t out to drain me of every penny I make in order to enjoy myself and stay current. Playing games like Tony Hawk’s Pro Skater or Castlevania: Symphony of the Night on my PlayStation reminds me of simpler times, too. Maybe I’m just getting older or more cynical, but there’s a part of me that genuinely believes that these recent events and the widening divide between the console gaming industry and its consumer base is going to lead to irreparable damage.
No continues, my friends.
The list of publishers looking to punish the based of used game consumers is growing seemingly by the day. Electronic Arts started it with their Online Pass. UbiSoft then mentioned that it was going to start implementing something similar in the near future. Next, THQ dropped a bombshell and made online play a DLC feature for UFC Undisputed 2010. Now, SEGA is apparently interested in some variation of EA’s Online Pass idea.
The Bandwagon of Greed is indeed filling up, and I certainly don’t expect the trend to slow down anytime soon.
Working in gaming retail is an eye-opening experience when it comes to seeing how people who are not always online posting comments or on message boards actually shop. The high cost of software is taking a toll. More than a few customers have mentioned that Red Dead Redemption is their one game for the summer. Many traded in games to bring the cost down. Others gradually paid down the cost of the game in advance so as not to have to deal with the impact of dropping $60 plus the local 8.8% sales tax on in one day. Despite the decent amount of games due this summer, there’s almost no interest. Titles like Tiger Woods PGA Tour 11 and Rock Band: Green Day are seeing a lukewarm reception pre-launch. May was too full; Red Dead Redemption and Super Mario Galaxy 2 were pretty much all people could afford while Blur, Split/Second, Lost Planet 2, ModNation Racers, and other games just sit. Even UFC Undisputed 2010 is feared to be selling below expectations.
High prices, a glut of software releases, and now a trend towards significant loss in the value of purchased games spells what could be the beginning of a major backfire for the industry. Publishers (and their short-sighted internet volunteer defense force) may not like the used game market, but the fact is that a fair amount of trades go towards buying new games within their launch windows. If trade-in values continue to decline– or if trades drop off significantly– new game sales will start to decline for many games not titled Halo, Call of Duty, or Grand Theft Auto. The disposable income just isn’t there. Trades and second-hand sales are what’s kept many facets of the industry alive through the brunt of the Great Recession. This gives consumers the opportunity to afford games that money isn’t otherwise available for.
The thing that gets me about this topic is the number of people who are apparently wealthy enough to tell people to “get a job” and buy new. Almost every website that allows comments and has a news story on this topic has a member of the Industry Defense Force to tell the rest of us that we need to get better jobs, save our money, or to just stop being pirates and buy new. It’s not just NeoGAF, which I usually relay as an example in entries like these. It’s Kotaku, Destructoid, Joystiq, and others. It’s amazing that these ignorant people fail to keep in mind that the national unemployment rate is still hovering near 10% with layoffs still sporadically occurring. They seem to forget that the average gaming consumer has grown up and now has bills to pay, including rent or mortgages, car payments, credit cards, medical insurance payments, rising food costs, fluctuating energy costs, and other life occurrences that take priority over buying a $60 video game. Credit is tighter than ever now, which curbs impulse purchases.
The bottom line is that the industry never adjusted to the consumer when the Great Recession began taking its toll and instead focused solely on its own bottom line and ways to inflate revenues.
When console gaming really took off in popularity during the late 1990s through about 2005 or so, it was all about trying to draw more consumers in. Even with the upgrade in technology from the 32/64-bit generation to the 128-bit era with the Dreamcast, PlayStation 2, Xbox, and Gamecube… game prices stayed relatively stationary (or even declined). Prices probably could have risen during the last console generation because the economy was fairly strong then, but the focus was on getting more people into games. It was an extension of Sony’s philosophy during the PlayStation era; nobody cared if you were new to gaming or had been playing for decades. The industry seemed to understand that more revenue naturally existed when the consumer base was large and varied.
Now, it’s solely about how much money that the industry can squeeze from consumers. They assume that nobody can live without games; they think that society is hooked and is willing to pay whatever is asked. At times, consumers have fallen into line. We’ve seen sets of plastic instruments sell despite a triple-digit price tag. We’ve seen map packs for Modern Warfare 2 sell like hotcakes for $15 each transaction, despite grumblings. We’ve seen some adaptation to the HD tax and its associated higher price points. All the while, it’s not just been cash and credit transactions that have fueled these sales; games and consoles have been traded in for store credit at various retailers and that credit has been used to buy both second-hand and new games, consoles, and accessories. This factor is generally overlooked, but it’s significant.
If publishers and developers continue to wage this war on used games and game rentals, there’s going to be irreparable damage. I can sit here and tell you that I’m close to the last straw and ready to just sell off my current-generation games and hardware in order to go all retro, but that’s minimal compared to what will happen. The reality is that the industry will see just how little money that consumers have to spend. Perhaps one out of every 10-15 games released in a month will sell with reasonable success while the other sit and wait for their inevitable markdown and subsequent financial loss– if they even sell at all. Lower sales will lead to smaller video game sections within stores, and retail chains will be less apt to buy substantial quantities of new games from IPs that don’t have proven sales track records. This will lead to further reductions in revenues for publishers and developers, leading to contractions, layoffs, and closures. The strongest will survive, of course, but many other companies will fold.
Of course, nobody sees this. Scenarios like mine are overreactions or extreme circumstances in the eyes of many.
Continue to jump on this bandwagon as it careens down this slippery slope. There’s apparently plenty of room. Just remember that there’s no turning back.