Kingdoms of Amalur, Used Game Sales

As you may or may not be aware, there was a minor kerfuffle surrounding Kingdoms of Amalur: Reckoning. The gist is that Amalur is an EA-published single-player RPG with an Online Pass that unlocks Day 1 DLC, which is like a triple-word score on the Scrabble board of controversy. The thread on the forums ballooned to 48 pages of indignation, Curt Schilling (CEO and some baseball guy) responded in an eminently reasonable manner, and now the thread is about three times as big.

The irony in all of this is that this particular incident is not that big a deal. However, it touches on so many things that ARE a big deal, that it becomes something that should be a big deal. Specifically, the demonization of used game sales, which has came up before in an unfortunate Penny Arcade post back in August 2010. Later on in the Amalur thread, Curt Schilling laid out the issue:

Herein is the dilema no one wants to talk about right? We CANNOT in ANY WAY cater to people that buy used games exclusively right? We see ZERO revenue. Now as a consumer you may care nothing about that, and that is absolutely your right and we respect that.

However we are a business, we have 400 people, every single one of them is awesome, but I just can’t get them to work for free, so we need to make money to pay them, to make more awesome games.

Now the issue is the straddler, there are people like me, never ever bought a used game in my life, or pirated one, and never will, and people that ONLY buy used because they don’t have the means to buy new or whatever, but they have their reasons, agree with them or not it’s not relevent.

The straddler does both, he buys new and used, he turns in used to buy new, and that new game could be ours right? How do we handle that? How does the industry handle that? Industry? That’s the huge challenge.

I want to talk to the executives out at EA and other game companies for a moment. Are you guys listening? Get ready to write this down:

Fuck you.

A used game sale is a guaranteed new game sale at a lower price point.

Don’t you see? These people are ready and willing to give you money, and YOU ARE NOT LETTING THEM. No one is buying used games because used is better; used games are universally worse, with possibly scratched disks, missing manuals, missing cases, and so on.¹ No one is buying used games to specifically deny money to the developers; otherwise they would simply pirate it. People buy used games because they are otherwise being priced out of the market (which includes people who don’t feel a game is worth full MSRP).

I understand it’s EA or whoever’s right to set their merchandize at whatever price point they like. I have doubts that $59.99 is the precise intersection of Demand and Supply, but whatever. My point here is that used game sales is literal demand that is being filled by other people expressly because you refuse to accept any less than an arbitrary amount. The idea of Online Passes is to get something back from the secondary market, right? Instead of selling $10 Online Passes, how about, I dunno, dropping the price of the game by $10?

Maybe the Online Pass thing makes them more money. If a game is resold ten times, that is potentially $100, right? But if that game was resold for $40 ten times, that means EA could have sold TEN NEW COPIES AT $40. Gamestop could sell used copies at $35, sure, and maybe no game company one wants to get into such a race to the bottom. But at that point, I would hope that EA and friends would get on the right side of incentives instead of the wrong.

Because here’s the thing: this is all about the continual erosion of Consumer Surplus. When you buy a brand new game for $59.99, the ability for you to sell that game to Gamestop for $20 when you are done with it is Consumer Surplus. It is value, whether you explicitly exercise it or not. We can imagine a world where used games somehow don’t exist in any form.² In such a world, you have LOST $20 worth of value and have likely received NOTHING in return – probably LESS than nothing, if the mechanism that prevented used games inconveniences legitimate customers the same way DRM harms actual customers. This is the reason DLC (especially Day 1 DLC) is troubling, the reason Cash Shops are troubling, the reason being forced to go online and register offline, single-player RPGs is troubling: all of these things are signs of Consumer Surplus extraction.

Remember back, say, 20 years ago? When a game company only received greater profit by ensuring they put out quality products? Those days are long gone. It is no longer about generating more sales, but from extracting more dollars from the sales that ARE made. Whoever came up with the phrase “value-added services” is a goddamn Doublespeak genius. Instead of simply getting those extra costume options, we pay for them. Instead of getting free map packs, we pay for them. Instead of being able to earn Sparkleponies and Disco Lions, we pay for them. This incentivizes game designers to have us pay more for less, instead of pay less for more.

The Kingdoms of Amalur controversy is not that big a deal in the scheme of things. Indeed, when you put it in the context of pre-order bonuses and Collector’s Edition items, it’s hard to see 38 Studios “giving away” DLC as particularly nefarious. Lesser evil is still evil though, and I can’t help but wonder whether in a different age those seven quests would have been included in the game, or in a free patch later on. Or as a poster in the Amalur thread said:

Is it just me or does that PR statement just admit that they develope DLC at the same one as the game, or in non moron speak, the game you’re paying 60 bucks for is having parts removed so you could buy then later.

AHow incredibly fucking nice of them to give Us the entire game up front, oh wait, they just admired to holding that back.. What else did they pull out? What other content did they strip from the title to bilk us for later?

Looks like $20-30 GOTY edition it is.why would I pay full price when I can’t trust or believe I’ll actually get the full….Fucking…. Game?

¹ Remember when games came with cloth maps and game posters? I still have the two game posters that came packaged in the FF6 box. Those sure as hell didn’t show up with your used game copy.

² Just look at Steam: no used game sales. Of course, you should also look at Steam because they are on the right side of consumer incentives. In return for DRM and no resale of games, we get hassle-free DRM, truly ludicrous sales (consumer surplus!), automatic game updates, amazingly fast downloads, integrated community, and the ability to manage a library of titles without worrying about CDs or CD keys. Compare that to the typical ham-fisted Ubisoft or EA implementation of DRM.

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Posted on February 1, 2012, in Philosophy and tagged , , , , . Bookmark the permalink. 10 Comments.

  1. Next up:

    Steering wheels as “value-added surplus” equipment. You are only allowed to sell your car without this optional equipment. Customers that buy used cars will have to buy their own steering wheel at the original car producer. How else could they feed all of their thousands of hard-working employees?

    Oh.

  2. Reblogged this on York g33k and commented:
    Some valid points made here. The consumer potentially loses if he buys a game and can’t sell it when he is done, but the publisher gets none of the used game resell money (from someone who might have bought it new if there wasn’t a used one available). Gamestop is the middleman, collecting on the profit from a broken business model.

  3. You missed the fact that if the consumer goes to someplace like gamestop to sell thier game they are exposed to the games they don’t have. It’s an opportunity for the marketing department to sell to that gamer and to make them aware of a game they may not have heard of.

    The game companies are a victim of thier own success. WOW and XBOX started driving subcription models. Subscription models benefit the company that convinces the player to pay the sub and everyone else loses.

    Subs are great from a control perspective but bad from a quantitative perspective. Even if they have more money to spend, someone spending a monthly sub, feels obligated to get thier money’s worth. Thus they don’t buy more games.

    They are making the same mistake the comic book industry did. Lock things down make them higher budget and more expensive and the core players will pay for awhile, but then they’ll gradually over time just quit games all together because the cost benefit ratio will get too bad. my sad prediction is they’ll keep ratcheting up prices and squeezing more and more money out of fewer and fewer people. All the while screaming about how Piracy is killing them. But it won’t be piracy or used game sales that kill them, it’ll be thier overpriced games and thier refusal to give the customer quality products at a reasonable price.

    • Yep. I have a huge issue with people claiming a person isn’t a fan if they bought used, or otherwise gave the company $0. As the F2P model demonstrates handily, every player generates value even if they don’t pay – the community is stronger, word of mouth reaches farther, and the sequel is more likely successful the more people play the game.

  4. Flosch’s example highlights the whole problem: Software doesn’t decay in the way that the real world decays, software is entropy free. There are no stains on the carpet, no instruments not working, no oil to be changed – the software is as perfect second hand as it was the day it left the showroom.

    The answer might be to introduce artificial entropy into software.

    • …why? For what possible good? So these companies might gain a few more dollars from the secondary market? In exchange for baking poison pills in every legitimate person’s copy?

      Simply put: fuck that.

      It figures that the moment we solve the problem of scarcity in one tiny portion of the human experience, we must go out of our way to destroy it.

      And by the way, how is it that game companies are impacted in secondary sales harder than the movie industry? I bet you that the average movie costs more to produce than the average game, and movies are actually more disposable in terms of “using up” their value.

  5. No, quite the opposite, to prevent the original authors from feeling that they have to keep making money every time the software is sold.

    My theory is that since software doesn’t change, whether second hand or not, the only way to devalue it such that the original authors don’t care is to build in the entropy it doesn’t have naturally.

    Flosch highlighted the point with his/her example that it doesn’t apply to the car industry. Original equipment manufacturers don’t care that cars are being sold second hand because the parts market still exists and second hand cars require parts because of entropy.

  6. Actually, I’m wrong. Why should we have to introduce artificial entropy when it isn’t required merely to stop people from being greedy ? Point taken.

  7. Except that software does decay.

    It no longer runs with new operating systems, or drivers, or was programmed in such a way that it breaks / bugs out on modern machines.

    Or the what was cutting edge graphics a decade ago are horrible and blocky today. Or the audio is in mono and sounds tinny.

    Or a hundred other things. Moore’s Law sees systems double in speed every 18 months or so – a title that is 3 years old is a long way behind the curve. It has decayed.

    Regarding secondhand, a lot of people underestimate GameStop’s market power. They sell a lot of secondhand titles and every secondhand sale is mostly profit, so even if every new game was $5 (which has other impacts) they could still make money on selling it for $3.

  8. “Now the issue is the straddler, there are people like me, never ever bought a used game in my life, or pirated one, and never will, and people that ONLY buy used because they don’t have the means to buy new or whatever, but they have their reasons, agree with them or not it’s not relevent.”

    Just cause i’m not as well off as you are doesn’t mean you can hold yourself up above me.

    Hey, everyone! Curt Schilling discriminates against the poor!