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
I was going to post my opinion regarding this subject, but after seeing the reaction generated by a similar previously posted opinion, I feel that it would serve no constructive purpose.
Losing the right to re-sale, doesn't bother me either...I'm still paying less than I was in the 80's...seems like backwards inflation.
If games went liek the cost of everything else, we'd be paying $200 or more for a game, but we don't, so i am very happy with hte way things are now...I get slightly less, but pay less, too.
I guess perspective is everything.
Plus, I don't feel like I am entitled to ANYTHING. Good things cost good money, and I have the patience to save money to get the things I want, os piracy and such just isn't something I do...I don't even use cracks for game I legimately have the right to play...
2. Pre-owned: 23% of console and boxed PC/Mac games budget goes to pre-owned trading
3. DLC: Americans will spend $950 million in 2011 on game and add-on content downloads
1. Is a very understandable figure, that should seriously be telling all these "gaming licensing company's" that the ECONOMY troubles around are having an affect on people. Period. I still cant justify spending 60 dollars on a game, AND WHAT MAKES IT WORSE, is game developers are cutting and edging out some good in-game stuff so they can later SELL it for even more EXTRA profit....
2. They consider trading, in my opinion its another sign that people are not liking these 40-60$ games, added on with 1-4 different 15$ add-on packs...
3. I was one of those people that made a POLL thread on TPU about DLC and the outrageous bullshit it could turn into, and might secretly be turning into @ this very moment. I bet that mw3 design team already has 2 DLC packs in mind (Probably already ready for distribution) for the gamer's that are going to want to keep up with the crowd. Game design is going to be harbored slightly and more extremely because of DLC, it leaves room for greedy predicaments to be planned in very early stages for "extra bank". (Block buster games their and advertisements are already giving clues. Like BF3, they were dying to tell us there was going to be DLC (secretly a way to solidify sales on it.).
I am almost thinking like big man Job's right now when it comes to console design. WHAT SOMEONE NEEDS TO DO, is design and release a console, and GUARANTEE all games will be 39.99$ and NO more. At the same time offering better graphics and performance. Sell @ a regular base point, (maybe even slightly more expensive then 299.99) and maybe there will be more hard-sales on games, and people will appreciate that.
I could imagine Xbox 720 (:laugh:) and PS4 are going to have 69.99-79.99 hard copy games, you never know!!!! Just my 2 cents. After all these companies are seriously slacking in community understanding period/ to them their idea is probably,
"Its only three 20$ bills now, I can not see expense in my eyes!"....Wow, I thought we are having it bad, but 90$ a title! :eek::eek:
Its great you can save but in some places, even in america, times are getting very tuff for some people, EVERYTHING is inflating in price. There is a price tag and liability on everything basically, were any business man can see profit now....
I might ask, were you living on your own back then? I know I can never save up 90$ for games now because of arising quality issue's with those games(ingenuity).
Sometimes, Living expenses overflow people's lives way more often now. A lot of people can probably mustard out 90 bucks(even I), but I can also pick up food for 2 weeks (1 person), and I just cant justify such high prices on video-game entertainment, it will just feed everybody's greed...
The thing that gets me though, is that back then, games were maybe MB is size, scertainly less than 100, but today, with cheaper games, we've gone up to GB's of content, yet it's cheaper.
I know of no other real industry with any real modicum of success that has done that. They are offering 1000's of times more content, for far less!
But if you measure content in hours..well, it's a different story, but again, it's about perspective. And from that perspective, I can understand why the industry as a whole is seeking every avenue possible to make their products of higher value.
And that's what it is, really. Sure, it costs consumers more, but that's what happens when things are valuable...
I have never ever knowingly downloaded any pirated software/songs/videos/movies ever and never will.
A game these days takes what 1 maybe 2 days to complete everything then what buy another game because your bored with the one you just played or wait for the inevitable DLC free or otherwise
I know which game I'd rather play
Like movies, there's hits, and there's bombs. That will never change.
What has changed, is that the way titles were sold in the past led to situations where some titles are worth far more than they originally sold for, and are highly collectable. I can't think of any games in hte last 10 years that has can say the same.
If they cannot increase cost @ the register, they have to increase the unit sales. DLC is another unit of sale. If they can break the used market, they'd potentially have yet another unit of sale...content nonwithstanding.
back in the day when NES games were 50$ a pop very few bought them. Most rented.
So it was "mom can we go to the video store to rent a new game?" rather than "mom can we buy this 50$ game I'll beat in 20 hours?"
So you have to factor in game renting which can now be done by services such as gamefly.com, netflix, and redbox. Which probablly makes up a fat percentage, most likely 40% or more, the rest borrow or buy used.
the inability to resell is inherit in the product when distributed digitally, i'll give you that - but reselling is put on this pedestal when really only gamestop or the equiv make money from it. the end user buying/selling get ripped off every time.
i don't have to go for my serial list every time i install. i keep a backup as i want to have them but steam/origin/d2d keep track of them for me. the former 2 entering them automatically most times. they patch automatically (if i want) easily reinstall from a backup if i don't want to redownload. my only complaint is that they cost the same as a physical retail disc. DD buyers are paying the same for less, because B&M stores and their archaic patrons won't let go of this 50 year old business model.
i do agree that there is the novelty value as i said. some like to have a physical box or CE stuff that came with a game. i do for some games. but those exceptions hardly warrant stores full wall to wall with junk and pre-owned games for a whopping $5 off full retail price.
digital distribution makes sense. it is the natural evolution of the service given the technology available. it makes no sense to hold it back because you're confused about how little you own in the first place. it's a plastic coaster, that's it. your physical disc has no more rights than my digital download. i can replace my download for free, legally, in minutes if something happens. you can't do that with your physical disc.