Last week I came across a statement made by Lionhead studio developer Mike West in which he told Eurogamer that the biggest threat to the video game industry was not piracy, but used game sales. According to West, “Piracy these days on PC is probably less problematic than second-hand sales on the Xbox.” His statements brought to mind comments made last year by Jerry Holkins of Penny Arcade who argued that those who bought preowned games were not video game consumers at all, adding, “I honestly can’t figure out how buying a used game [is] any better than piracy. From the perspective of the developer, they are almost certainly synonymous.” Since the beginning of 2010, the second hand market has become a hot-button issue, fervently debated among players, developers, and pundits alike.
The debate over the used games market has formed into two distinct camps. On the one hand there is the perspective of developers who see used game sales as significantly cutting into their profits. It makes sense that industry insiders would equate pre-owned sales with piracy since they do not see a cent in either scenario. Rod Cousens, CEO of Codemasters went so far as to call the used market “destructive and…negative to creativity and innovation.” For most studios the sales of the game mark the extent of their profits, and if the sales losses are significant enough, it could mean bankruptcy. Poor sales can also encourage companies to take fewer creative risks, resulting in a greater homogenization of the medium as studios churn out more safe generic titles. As a result, the market will see fewer games like No More Heroes or Psychonauts and more like Halo and Gears of War. At the very extreme the very growth of the medium is put in jeopardy by GameStop and its ilk.
On the other hand are the grim realities of a consumer in an economic downturn. Video games, particularly those to come out for the major consoles, are expensive, and players see the distinct difference in buying a brand new game for $50-$60 and buying a used game for significantly less than that. Money talks just as loudly for consumers as it does producers and in a tough economy low-cost preowned games look like a good bet. As a graduate student/game enthusiast living on a fixed income I feel this weighty issue of whether or not to buy used every time I look to purchase a game. I believe strongly in the power of the medium to achieve the level of a respected art form but I have also need to pay my electric bill, and if I am given the choice of paying $60 for a game brand new or waiting a little bit for it to come out on Amazon or Half.com for $15, the lower price is probably going to ultimately win out.
What has prompted the recent controversy? After all, secondhand markets are natural offshoots of mass culture and a significant factor in cultural media from books and movies to music and comic books. Who doesn’t know of a good place to buy used books, or that great hookup for back issue comic books, or even that local independent game store, where you’re able to find the old hardware and rarer titles? Used video game sales are certainly nothing new. But what is changing is the size of this market, one that has expanded on a national and international scale. GameStop churns in profits to the tune of billions of dollars (according to a recent Gamasutra report, GameStop netted $2.28 billion in revenues during Q1 2011), and nearly half of their profits are from used sales. It is a lucrative business that has started to attract large corporations from Amazon to Walmart to Best Buy looking to grab a piece of that rich pre-owned pie (which just churns up some pretty gross imagery). Even the University-affiliated bookstore near my apartment has started accepting trade-ins for cash on students’ used games. The sheer size of this business and the major players involved has forced the industry to take notice.
Game companies have enacted numerous measures to curb the sale of used games. These tactics have drawn their share of both praise and scorn from players. In 2010, EA initiated the Online Pass. EA games such as Madden NFL 10 now come packaged with a onetime use special code that opens up online play. Players who buy used copies (and thus do not have an available code) have access to online play after they pay a $10 fee. THQ initiated a similar policy, locking players out of online play for Smackdown vs. Raw 2011 without a code. Other companies offer rewards and incentives for players to buy brand new copies. Harmonix used the packaged onetime use number code system to offer players access to free songs for their Rock Band series.
Overall it is a complex issue and both sides have their merits as well as their flaws. As a collector who has to rely on preowned games to supplement his collection, I think it’s unfair to demonize used games outright. Although I feel GameStop has rightfully earned a sizable portion of the scorn directed at it (i.e. mistreatment of their workers, high markup on games, etc., questionable quality of trade-ins, etc.) I feel uneasy lumping small independent game stores with the corporate giants. However, I also feel it is a slippery slope for developers to close off content that is already available on the disc. In any case I feel this isn’t my place to take sides; rather I want to try to stir the pot a little and keep open a lively debate on the topic.
Moreover, with the rapid and dramatic changes occurring in the industry the very used games market which Walmart and the rest are so eager to enter (and developers are so vehemently trying to curtail) may be on a slow boat toward obsolescence. The rise of social and mobile gaming are significant events in the evolution of video games as a medium. Moreover, online based game services such as Xbox Live, PlayStation Network, Steam, and OnLive represent a distinct change in how user acquire and play games. We are rapidly reaching a point where the video game will be a virtual object, one that has no physical form save that as computer code. The industry sees this as good for their interests: they can now maintain stricter control over distribution of their products, eliminating the need to invest millions in manufacturing and distribution costs. Most important for the current debate: there’s no such thing as pre-owned code, forcing the used games market to potentially go the way of the Atari 5200. Heck, even the game console itself as a device may be on the way out as well (the guys at Extra Credits did a really insightful piece on this phenomenon that is worth checking out). Even GameStop is aware of the blowing winds of change and their acquisition of Impulse has them poised to enter the digital distribution business.
This change in the industry has monumental consequences that are even bigger than the possible end of the used games market. It also marks a significant change in what video game ownership means and how much influence producers retain over consumable goods after the point of sale (this is a meaty topic in itself that I hope to explore further in later posts).
So what are we left with? Well the past few rambling paragraphs aside I’d like to hear your thoughts on the issue of used games. This is one of those complicated topics that really doesn’t have an easy answer, and I don’t feel I’m a position to plant a flag and say what everyone should do about used games, but if we can keep an active dialogue I’m sure we’ll all learn something. Thanks again for reading.