Bargains Are for Cheaters

The conversation began here, when THQ’s Cory Ledesma stated that buying used games “cheated” developers. Then it picked up steam when Penny Arcade made a comic about it, as they do. Then it turned into a discussion between PA artist Mike Krahulik and a number of other people.

The thrust of the thing is that when a gamer buys a used game they might save themselves a few bucks, but all of that money will go to GameStop and none of it goes to the developer. You save five, but the developer loses forty-five. (Or however much of the purchase price they normally get from a new copy.) The conversation has taken the shape of a battle between Developers and Gamers. This is a shame, since there are three actors in this equation. I don’t like the idea of painting a Snidely Whiplash mustache on GameStop and declaring them to be our villain, but we should at least list them in our cast of characters.

I think this situation is shaped by three simple facts:

1. Developers and publishers want to earn a living.
2. Gamers, like any consumers, want the most value for their dollar.
3. GameStop has taken advantage of the fact that used games are – in a gameplay sense – indistinguishable from new copies.

Ledesma is talking about a real problem. An unknown (but obviously large) portion of the money being spent on games is ending up in the hands of retailers instead of going to where it can fund more games. But the language he’s used to describe the problem is really unfortunate. I’m not “cheating” a manufacturer when I buy a used television, car, dishwasher, or whatever. People buy and trade used music and movies all the time. (Although those media producers would love to put a stop to it as well.) Bob has purchased something he doesn’t want anymore. I want it. I give him money, he gives me the thing. We’re both better off and neither of us “cheated” the guy who made the thing, because that guy has already been paid.

But videogames are in a uniquely bad position. Like movies and music (and unlike books and cars) a used game is indistinguishable from a new one. (Provided you don’t damage the disc, obviously.) At the same time, videogames are really crazy expensive. I don’t bother with used movies and music because it’s generally not worth the hassle to save 10 percent of the purchase price on a $10 item. But when the item is six times that amount? Yeah. I’ll take whatever savings I can get.

In response to this, publishers have come up with different programs to encourage people to buy new by punishing everyone who pays for games. EA’s project Ten Dollar is a great example. They lock away a portion of the game – characters, weapons, levels, whatever – with online activation so that only the initial buyer gets the thing. Everyone else needs to pay ten bucks. The gamer who buys used is going to have to make two transactions: One to buy the game and another to buy the rest of the game. And everyone has to muck about creating accounts and typing in registration codes and dealing with the added DRM infrastructure that manages all of this. Note the only person who isn’t punished by this system: GameStop. Nice one.

The thing that movies have that games don’t is a graduated pricing system that lets people pay according to how much they care about a given title. If you’re anticipating a film, you can pay top-dollar to see a single showing in the theater. Or you can wait a couple of months, pay a bit less, and see it at the cheap theater. Or you can wait until it comes out on DVD and watch it until you go blind. Or you can wait until the DVD gets marked down. Or you can wait until the movie appears on cable. The less you care, the longer you wait and the less you pay. Games should have been doing this as a matter of standard procedure years ago.

Case in point: Modern Warfare 2 is one of the most popular videogames in history. It sold really well. I’m not really interested in it, though. Not my thing. But if I saw it on the shelf for $10 I might let it fall into my cart just to see what the fuss was about. What the heck, right? It’s ten bucks. But the game is ten months old and is still retailing for five times that. In that same span of time, the movie Avatar went from theater blockbuster to weekend rental. In another year, Avatar might appear somewhere on premium cable for “free” and end up in the DVD bargain bin for $9. And a year from now, new copies of Modern Warfare 2 will still be fifty bucks. I think everyone who thinks MW2 is worth that much has bought it already. But the publishers would rather leave it there than work their way down and go after the secondary markets of lower-interest players. The game will never reach $10. Think about that. Publishers would rather make nothing than let me have it for $10 a few years after release.

And this refusal to lower prices is what is creating this space in which GameStop is able to operate. If games came down in price at a steady pace, it would squeeze the used market instead of gamers. GameStop would need to pay less for used games with the understanding that the new versions will keep getting cheaper. And this would entice a lot of gamers to just hang onto their old games instead of trading them in.

Note the massive success of the casual games market, despite the highly variable quality levels of those sorts of titles. People are willing to take a risk on a $10 or $20 game but get very, very picky with their money when you start asking for $60. I’m not a mathematician, but as far as I can tell, it’s a lot better to sell half a dozen new copies of a game for $20 than to have one $60 copy of the game sit on the shelf forever. I don’t know. Seems that way to me. Maybe I’m using Microsoft calculator wrong?

Gamers who buy used aren’t “cheating” you. They just don’t want to pay that much. There is no reason to not do business with these people once you’ve made your money from the core fans.

Or you can just keep whining for gamers to pay extra in a bad economy when a cheaper alternative is readily available, while at the same time haranguing them with DRM and micro-transactions. I’m sure you can re-shape the long-understood consumer behavior of the average human being if you can just make them feel guilty enough.

Shamus Young is the guy behind Twenty Sided, DM of the Rings, Stolen Pixels, Shamus Plays, and Spoiler Warning. Beat that, fanboy.

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