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OPINION: The end of pre-owned would be a disaster for games

Ben Parfitt
OPINION: The end of pre-owned would be a disaster for games

Reports this morning – which it must be said remain totally unsubstantiated – claim that the Next Xbox could incorporate a new technology that blocks the use of pre-owned games on the console.

The gravity of this news, if true, would have industry-wide ramifications. The fallout for retail would be obvious, cutting off a major revenue stream.

But aside from my obvious retail-leaning tendencies, I for one believe that such a development would have disastrous consequences for the games market. Or at least for the Next Xbox.

We all know the arguments against pre-owned. The sale of a pre-owned game sees all profit land with the retailer, cutting publishers and developers out of the loop. For the content creators it is unfair, it is argued. And of course that point has credence.

But what I sometimes struggle to understand is how content makers remain blind to the effect that an end to pre-owned would have on their business.

Let’s look at 2011. Starting with the release of Deus Ex: Human Revolution on August 26th, a run of successive triple-A releases ran all the way through to November 18th. It went something like this:

Deus Ex: Human Revolution, Driver: San Francisco, Dead Island, Gears Of War 3, F1 2011, FIFA 12, Batman: Arkham City, Need for Speed: The Run, Battlefield 3, Uncharted 3: Drake’s Deception, Modern Warfare 3, The Elder Scrolls V: Skyrim, Assassin’s Creed: Revelations and Saints Row 3.

For a punter paying an average of £40 per title that represents an outlay of £560 over the course of a little under three months. That’s £187 per pay cheque. And that’s omitting a shed load of other releases that hit in the period.

Now, when mine and Mrs Ben’s wages are combined we represent something like the UK national average earning family. And I can tell you that there’s absolutely no way I could afford that outlay on games were I not able to offset the cost against trading-in my older titles. No way.

So I’m faced with the very real possibility that I could be priced out of my main habit and interest in the next generation.

So what can platform holders do to offset what I would see as the inevitable collapse of the software market whilst still maintaining a freeze on pre-owned? Well, lower game prices would seem the only option. That string of releases would be far more affordable at £25. Or even £30. But the chances of that happening? Zero.

And what of retail, which is struggling to survive in this current pre-owned rich environment? Lower public outlay can only ever mean one thing – higher prices to try and preserve margins. It becomes a self-perpetuating cycle that spells very bad news for the industry.

Of course, it could mean even worse news for Microsoft. Should Sony decide to not follow suit with anti pre-owned tech then that affords PS4 one hell of a USP over its rival. Although it would be one shared by Wii U, of course (we can safely say that Nintendo would not have the foresight to include such tech in its machine).

As I sit here I’m simply hoping that the reports aren’t true. I was interested to hear Microsoft’s response, which although “not commenting on rumour and speculation” was anything but a simply “we don’t comment on rumour and speculation”.

"As an innovator we're always thinking about what is next and how we can push the boundaries of technology like we did with Kinect,” a spokesperson told Kotaku.

“We believe the key to extending the lifespan of a console is not just about the console hardware, but about the games and entertainment experiences being delivered to consumers. Beyond that we don't comment on rumours or speculation."

These are dangerous times. The games industry is approaching a new generation of machines and the decision made by platform holders now will dictate how the sector fares in today’s connected, smartphone obsessed and cloud-hungry society. I just hope those decisions prove to be the right ones.

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Tags: Opinion , pre-owned , video games , trade-in , second hand , danger , Xbox , next

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2 comments

An interesting illustration Ben, but I suspect the developers and publishers are standing there with their hands over their ears singing tunelessly, "La di dah di di dah dah."

Sometimes I want to shout at these people, "Go ahead and change to a digital model, as you seem to think it will be the utopia you dream of".

It is a fact that there is not enough margin in boxed new games for the bricks and mortar boys to be viable and it is only the pre-owned trade that is keeping them in business. And I agree with the anti retail voices who proclaim ad nauseam that the retailers should not have any special rights or considerations, but that works both ways, the developers do not have any rights for a share of retailers profits from used games.

If they and platform holders want to sabotage the people who sell their games, then that is up to them, but in the meantime stop whingeing. At the end of the day, with digital, it is going to end up with very expensive corporate produced games competing with increasingly sophisticated and engaging £1.49 apps.

Chris Ratcliff

Chris Ratcliff INDUSTRY
Jan 26th 2012 at 2:57PM

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Publishers will only work with retail for as long as they have to. We're seeing EA step up its digital offering to consumer and I wouldn't be surprised if other publishers step up their digital offering. It will all soon be the publishers selling to consumer directly via their own download services or via PSN or Live. With the high level of competition, margins will still be squeezed whatever the trade price so bringing prices down doesn't solve much by itself. It doesn't really help the consumer either as if you can wait 2-3 weeks you can usually get a new release for 25 on a promo (or even at launch from a supermarket). If you want to be an early adopter and jump into every new game as soon as its released then it's going to cost you basically. As for the new Xbox blocking preowned that isn't going to happen. I'd prefer to see games sold as campaigns much cheaper and then if the customer wants to play the online multiplayer they can buy it from the PSN or Live store (or on a scratch card from a brick n mortar). This lowers the price of games, maintains a kind of lock/restriction on the online "ever lasting" part of a game with every consumer knowing they are only buying the campaign preowned - rather than now when consumers dont know which games they buy preowned and dont get access to online without buying something extra.

Darren Bennett

Darren Bennett INDUSTRY
Jan 26th 2012 at 10:37PM

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