My OperaCapps In Hand
Tuesday, November 11, 2008 12:58:43 AM
A post on Kotaku referencing Videogaming247 got me thinking. The post features quotes from Epic's Mike Capps, he talks about both the rental market and the second hand market being a problem for publishers and developers. Essentially his complaint is that the games industry (everything except the retail arm of it anyway) doesn't make any money when games are rented or when they are sold second hand.
This is not a new complaint for the industry and likewise me dismissal of it isn't new either. Perhaps I'm wrong but I can't think of another industry where the original artists (for argument's sake) are paid again on resale. The only thing I can think of that comes close is actors getting paid for repeats of TV programs, and possibly musicians getting royalties for air play. The royalties argument is probably closer to the rental market, however I would point out to Mr Capps that when I worked in a video shop we had to pay anywhere between £60-£100 for our rental films (each copy). We weren't just picking films up on the cheap from Play then renting them out for £3.50 a time. They cost a lot of money, the rentals would eventually pay that (most of the time), but if they didn't, or for extra profit, we would then sell them pre-owned.
The example that is often used as comparison to the 2nd hand games market is that of the second hand car market. My dad, being a northerner, is loathed to pay for a new car. He used to see it as a chumps move as, his words, 'It drops in value as soon as the wheels touch the road'. And he's right, my brother bought himself a 2nd hand Alfa Romeo, he could never afford a brand new one, yet second hand he paid as much as he sold his previous car for (or there abouts) and it's in great condition. However the car industry doesn't get money back when you sell your car, whether you do it through a magazine, a website, privately or through a dealership.
The dealership actually brings me to my next point slightly earlier than I intended, that while games and cars are very different, there are lessons to be learned for publishers. I mentioned before about my dad not being keen on buying new cars, that's increasingly not the case. In recent times car dealerships have begun offering packages and deals with your new car, be that free insurance, a buy back guarantee, free trade-ins, extra features, even tax, petrol and MOT's all being paid for. Buying a new car becomes a much more tempting proposition when you know you're not going to lose as much when you want to replace it, when there's zero risk attached and you know you have a nice new reliable car for the next 2-3 years. In gaming terms, give people a reason to buy new rather than wait a couple of weeks to line someone else's pockets. The recent Burnout game is a good example of this, even the likes of Gears 2 and Fable 2 with their online codes.
Probably the smartest move the car industry has made in the last decade is to buy into, or franchise, the 2nd had dealerships. You can buy a 2nd hand Volvo from a Volvo dealer knowing that it's been checked out by people that specialise in Volvo's, have the parts, and should anything go wrong knowing that you're dealing with Volvo from the off. My first thought with this comparison was Valve and Steam, obviously that doesn't actually deal in 2nd hand games, but it does sell old games with the money going to the devs and publishers.
The better model is to take it more literally, why don't EA buy into Gamestop, Ubisoft into Game? They take a cut of any of their games that get traded in and resold, offering reduced cost on new games for the store (in exchange for favoured shelf space), cheaper resale and better exchange rate to the customer (possibly even more so against other games from the publisher in question)? Basically give the customer a reason to sell your games back to you so you can make a second profit on them. Granted this favours the publishers big enough to invest in game stores, but then that encourages mid level and small publishers to find reasons for customers to buy new. There's always the option of publishers starting their own rental or trade in services on their websites.
To finish off, the quote from Capps that will cause the most fuss on the net
“I’ve talked to some developers who are saying ‘If you want to fight the final boss you go online and pay USD 20, but if you bought the retail version you got it for free’. We don’t make any money when someone rents it, and we don’t make any money when someone buys it used - way more than twice as many people played Gears than bought it.”
This as he suggests it (or repeats the suggestion) is unacceptable. If you pay for a disk you are entitled to everything on it, the publishers have no right to charge a second time for content in such a cock-tease manner. What he's describing is essentially a download model for gaming, which I don't have a problem with (Steam for example), except that the customer has to buy the disk first. If we were talking about a return to the shareware model, where games are sold cheaply, or even free, with a payment having to be made to access the later parts of the game I'd be more forgiving. It still poses issues with the lack of uniformity with the net still, limited speeds and bandwidth caps would hinder a good chunk of users. Eventually you'd get people asking why they couldn't just pay a set price and have the whole thing on the disk and accessible to begin with and then... well then we're back to where we started.
Publishers and developers getting a second payment is an unreasonable expectation, I understand why they want it but it's just never going to happen. They are on the first steps of the right track with DLC, granted not every game is suitable for Burnout style expansions, but then perhaps not every game can be kept off the 2nd hand market. Online components will help with certain areas of the markets, there are people that wont trade in certain games because of the potential use they'll get from it online. Why not create short 4 hour spin offs (a la R&C Quest for Booty) that allow you to swap items and data between the download and retail games. Think about something like Animal Crossing, where by every new Nintendo game you bought gave you new items for your town. And maybe if you're really lucky you'll create the next Little Big Planet and have the consume provide you with the reasons not to sell the game while you fleece them with extortionate costumes?
This is not a new complaint for the industry and likewise me dismissal of it isn't new either. Perhaps I'm wrong but I can't think of another industry where the original artists (for argument's sake) are paid again on resale. The only thing I can think of that comes close is actors getting paid for repeats of TV programs, and possibly musicians getting royalties for air play. The royalties argument is probably closer to the rental market, however I would point out to Mr Capps that when I worked in a video shop we had to pay anywhere between £60-£100 for our rental films (each copy). We weren't just picking films up on the cheap from Play then renting them out for £3.50 a time. They cost a lot of money, the rentals would eventually pay that (most of the time), but if they didn't, or for extra profit, we would then sell them pre-owned.
The example that is often used as comparison to the 2nd hand games market is that of the second hand car market. My dad, being a northerner, is loathed to pay for a new car. He used to see it as a chumps move as, his words, 'It drops in value as soon as the wheels touch the road'. And he's right, my brother bought himself a 2nd hand Alfa Romeo, he could never afford a brand new one, yet second hand he paid as much as he sold his previous car for (or there abouts) and it's in great condition. However the car industry doesn't get money back when you sell your car, whether you do it through a magazine, a website, privately or through a dealership.
The dealership actually brings me to my next point slightly earlier than I intended, that while games and cars are very different, there are lessons to be learned for publishers. I mentioned before about my dad not being keen on buying new cars, that's increasingly not the case. In recent times car dealerships have begun offering packages and deals with your new car, be that free insurance, a buy back guarantee, free trade-ins, extra features, even tax, petrol and MOT's all being paid for. Buying a new car becomes a much more tempting proposition when you know you're not going to lose as much when you want to replace it, when there's zero risk attached and you know you have a nice new reliable car for the next 2-3 years. In gaming terms, give people a reason to buy new rather than wait a couple of weeks to line someone else's pockets. The recent Burnout game is a good example of this, even the likes of Gears 2 and Fable 2 with their online codes.
Probably the smartest move the car industry has made in the last decade is to buy into, or franchise, the 2nd had dealerships. You can buy a 2nd hand Volvo from a Volvo dealer knowing that it's been checked out by people that specialise in Volvo's, have the parts, and should anything go wrong knowing that you're dealing with Volvo from the off. My first thought with this comparison was Valve and Steam, obviously that doesn't actually deal in 2nd hand games, but it does sell old games with the money going to the devs and publishers.
The better model is to take it more literally, why don't EA buy into Gamestop, Ubisoft into Game? They take a cut of any of their games that get traded in and resold, offering reduced cost on new games for the store (in exchange for favoured shelf space), cheaper resale and better exchange rate to the customer (possibly even more so against other games from the publisher in question)? Basically give the customer a reason to sell your games back to you so you can make a second profit on them. Granted this favours the publishers big enough to invest in game stores, but then that encourages mid level and small publishers to find reasons for customers to buy new. There's always the option of publishers starting their own rental or trade in services on their websites.
To finish off, the quote from Capps that will cause the most fuss on the net
“I’ve talked to some developers who are saying ‘If you want to fight the final boss you go online and pay USD 20, but if you bought the retail version you got it for free’. We don’t make any money when someone rents it, and we don’t make any money when someone buys it used - way more than twice as many people played Gears than bought it.”
This as he suggests it (or repeats the suggestion) is unacceptable. If you pay for a disk you are entitled to everything on it, the publishers have no right to charge a second time for content in such a cock-tease manner. What he's describing is essentially a download model for gaming, which I don't have a problem with (Steam for example), except that the customer has to buy the disk first. If we were talking about a return to the shareware model, where games are sold cheaply, or even free, with a payment having to be made to access the later parts of the game I'd be more forgiving. It still poses issues with the lack of uniformity with the net still, limited speeds and bandwidth caps would hinder a good chunk of users. Eventually you'd get people asking why they couldn't just pay a set price and have the whole thing on the disk and accessible to begin with and then... well then we're back to where we started.
Publishers and developers getting a second payment is an unreasonable expectation, I understand why they want it but it's just never going to happen. They are on the first steps of the right track with DLC, granted not every game is suitable for Burnout style expansions, but then perhaps not every game can be kept off the 2nd hand market. Online components will help with certain areas of the markets, there are people that wont trade in certain games because of the potential use they'll get from it online. Why not create short 4 hour spin offs (a la R&C Quest for Booty) that allow you to swap items and data between the download and retail games. Think about something like Animal Crossing, where by every new Nintendo game you bought gave you new items for your town. And maybe if you're really lucky you'll create the next Little Big Planet and have the consume provide you with the reasons not to sell the game while you fleece them with extortionate costumes?
