Saturday, November 5th 2011
Games: The Push To Online Distribution And Removal Of Your First Sale Rights
Newzoo, a games industry market research and consulting firm firm has published a report entitled "Newzoo Topic Report DLC, Pre-Owned & Digital Distribution". This explains the ongoing push towards distributing games online, as opposed to physical copies on disc. It explains that there are three basic reasons for this:
1 Free-Riders: Only 44% of US console gamers ever spends money on Console Games
2 Pre-owned: 23% of console and boxed PC/Mac games budget goes to pre-owned trading
3 DLC: Americans will spend $950 million in 2011 on game and add-on content downloads
In their "key facts" summary, Newzoo make the point that the retail channel will not go away, since this is an important outlet. Retail distribution has an important advantage when it comes to eyeballs, plus the box makes for a pleasing, tangible gift. What's nicer to receive: a scrap of paper with an unlock code, or a nicely presented gift box with the same unlock code and perhaps a collectible item? However, the crucial point is that the enclosed disc will disappear as superfast broadband becomes increasingly ubiquitous. For aficionados of tangible representations of their intengible computer games, having the presentation box can make for a satisfying addition to their collection.
In its second reason, the report points out that the games companies see no income or more appropriately, "kickback", from used games being sold legally in high street second hand shops or sold just as legally, directly between private individuals. These companies like online distribution, because it does away with this used market completely.
Of course, this little racket forces gamers to buy "new" games all the time at much higher prices, fattening the companies' bottom lines at the expense of their customers. Nice. This is exactly the kind of silver bullet technical solution that the big music and movie industries are looking for, but thankfully haven't found.
What the report doesn't say, is that this also does away with a purchaser's first-sale rights in the name of attempting to increase profits. The fact is that these companies have no right to a kickback from used sales and this loss of customer freedom and rights is a result of simple money-grubbing greed on their part and possibly a false sense of entitlement. They achieve this restriction through the DRM systems of the various online distribution systems, such as Steam and more recently, Origin, which deliberately disable the transfer of an unwanted game from one subscriber account to another. For a great deal of info regarding used sales and the blinkered approach of the games companies, please see some of the various articles published by Techdirt, by clicking on this search link here. An especially pertinent article from that search is, Video Game Exec Claims Used Games Defraud The Industry. There's also this important article, which explains How The Used Book Market On Amazon Helps The Sale Of New Books. While the story is about books, the principle is equally applicable to computer games.
The full Newzoo report is available free of charge online and is full of stats, figures and brightly coloured pie charts for the reader to chew over.
The report can be downloaded as a pdf here. Note that the file was not downloading very reliably at the time this news article was published. The same content can also be viewed as a web presentation, here. The "key facts" summary is at gamesindustryblog.com and the firm's home page is at www.newzoo.com
1 Free-Riders: Only 44% of US console gamers ever spends money on Console Games
2 Pre-owned: 23% of console and boxed PC/Mac games budget goes to pre-owned trading
3 DLC: Americans will spend $950 million in 2011 on game and add-on content downloads
In its second reason, the report points out that the games companies see no income or more appropriately, "kickback", from used games being sold legally in high street second hand shops or sold just as legally, directly between private individuals. These companies like online distribution, because it does away with this used market completely.
Of course, this little racket forces gamers to buy "new" games all the time at much higher prices, fattening the companies' bottom lines at the expense of their customers. Nice. This is exactly the kind of silver bullet technical solution that the big music and movie industries are looking for, but thankfully haven't found.
What the report doesn't say, is that this also does away with a purchaser's first-sale rights in the name of attempting to increase profits. The fact is that these companies have no right to a kickback from used sales and this loss of customer freedom and rights is a result of simple money-grubbing greed on their part and possibly a false sense of entitlement. They achieve this restriction through the DRM systems of the various online distribution systems, such as Steam and more recently, Origin, which deliberately disable the transfer of an unwanted game from one subscriber account to another. For a great deal of info regarding used sales and the blinkered approach of the games companies, please see some of the various articles published by Techdirt, by clicking on this search link here. An especially pertinent article from that search is, Video Game Exec Claims Used Games Defraud The Industry. There's also this important article, which explains How The Used Book Market On Amazon Helps The Sale Of New Books. While the story is about books, the principle is equally applicable to computer games.
The full Newzoo report is available free of charge online and is full of stats, figures and brightly coloured pie charts for the reader to chew over.
The report can be downloaded as a pdf here. Note that the file was not downloading very reliably at the time this news article was published. The same content can also be viewed as a web presentation, here. The "key facts" summary is at gamesindustryblog.com and the firm's home page is at www.newzoo.com
54 Comments on Games: The Push To Online Distribution And Removal Of Your First Sale Rights
Gaming companies however do not sell the kind of products Microsoft does and do not have a residual support income.
However this is a spin article.
notice that the first two statistics are percentages nad hte third is a monetary value?
that instead should be a percentage value of total game sales (new retail not free/2nd hand) and would most likely come in far less than either the freeloaders or 2nd hand percentages.
So the move to DLC based, does not create a large income.
(that is the gist of the article right? DLC being the future?)
Games are SUCH a rip off anymore. I purchase two or three games a year, but always make sure to try out the "full game demos" you can find on line first ;) Good ones get money, bad ones get trashed.
Oh and welcome to TPU. :cool: I see that you've been a member for a while, but have chosen to make your first post against one of my news articles. Thankyou very much! :toast:
also I may have read too much into the story, but noticed that qubit has also posted other articles and polls and stuff about DLC before, and assumed it was supposed to be obvious he was doing so.
As no steam game has any resell value games are only worth 1/2 price when new.So what do the rest do ?. So the rest buy consoles just to watch netflix ?.
I can use myself as an example, I wasn't interested enough to pick up a copy of Uncharted 3 on release and em currently waiting for it to go dirt cheap before I consider touching the game. If it doesn't reduce in price then it is something that I can see myself passing on and saving the money for the games I am actually interested in.
Before that, EB games before Gamestop bought them up, had some of the best used PC game deals.
Only rare events bring me to pay full price. Last one was BF3, next one is TOR. But thats maybe a once a year, if even that, event.
Also there is 9% that crack their console and download the games illegally (the 9% is not based on anything, just a random #)
Its not my fault theres piracy, and my privacy and convenience and choice should not have to suffer as a result.latest c.o.d is 100$ in aus, way too much money too.
And of course the most outrageous thing is that there's no proof at all that this damned "piracy" :rolleyes: is hurting content producers of any kind. Big Content just relies on false figures and their political influence to screw people over. :shadedshu
Just check out article Piracy problems? US copyright industries show terrific health by Ars Technica. This industry is totally outperforming many others in a recession and yet they want to pass ever more draconian laws to curb "piracy". Asshats. :nutkick:
dont forget people who buy PS3 for media use, or get given as a gift they never use.
To top it all off, we are providing them with there means to an income, they should be bending over backwards to please us, not treat us as criminals, huge sham i feel.:toast:
Take bf 3, how many copies sold since released,3 million? more? times what?=60$-80$ average per person?=x$$$$.$$$$$$ millions.?
I suppose you can go in circles though, its either buy it and shut up and play, or vote with the feet, and miss out.its a hard one!!
I'm interested in BF3, but I'm in no hurry to get it, because I'm not too sure what I think of Origin. I have to look into it properly, before I make a decision. Besides, waiting is easy for me, as I have several triple A games I bought ages ago and still haven't played. :laugh:
#2: Not I, last time I did that was over 10 years ago.
#3: I've only bought one DLC, ever, and don't intend to buy another.
Two things:
1) If they move to an online-only model, how many sales are going to lose due to lack of access and/or choice?
2) People need to wise up and not buy DLC. It's only encouraging them to put a noose on consumer choice.
I do buy DLC despite it going against the grain, but only if it's very cheap, which usually means on a Steam special offer.
often wait a couple month then price is slashed in half on sites like play.com
really dislike digital copys of games as my internet is only 2mb and when i want to play a game i dont like having to wait a entire day to download it for the next
maybe these gamedevs should stop putting out shady console ports and games that actually work on day 1, i would not mind having to wait abit longer for a game what works
along with all this drm stuff what gets cracked often way before the game is released why do they bother with it anymore i cant think of a game what has not been cracked
all they are seeing is how to make more money from the user
these people are just getting greedy i dont think they can stop the selling of pre owned games places like game and gamestation stores on the histreet usualy 3/4 of there shop is pre own games for console
if anything they would have better luck putting a tax on pre own games