Future of Gaming: You Are Cheating the System!!!

Hey everyone, this is the last issue of the term before going onto exams, or, if you are on co-op right now like I am, it is getting into the final month of the term, and you better start thinking about that work report. For this issue, I’m going to be discussing a topic that has come up many times in the media and a couple of times in this column over the years – video game rentals and used games.
I’m sure all self-proclaimed gamers, and many who say they just play games casually and therefore aren’t “gamers,” have rented a few games. I definitely won’t deny that game rentals are a great way to try out a game and see if all the hype is really justified, or for the speed freaks out there, it can be a way to actually complete an entire game.
As for used games, who doesn’t want to save some money and pick up a game after someone else has finished playing it? For many games, there really isn’t much replay value to draw you into keeping the game and starting the adventure again, and so the games just end up sitting on a shelf collecting dust, but if a store would actually pay you good money (that is questionable at some spots), then why not?
For both rentals and used games, the biggest issue is the impact on the developer through the lack of sales. For rentals, it is obvious that the company renting out the game is making all the money, while the developer only gets income from the actual number of copies purchased by renters. The rental place is able to “sell” the game over and over again without ever needing to purchase new products, and at the end of the process, the game will probably go into the used game bin. Of course, there are other retailers, like EB Games/Microplay, that skip the rental phase and just buy the games directly from gamers to resell. For used games, people will readily pay 90% of the retail price for a new game when it goes on the shelf; the problem here is that the publisher and developer sees absolutely no profit from that sale. While a new sale will normally yield some profits for the developer, the process of reselling the same game allows the retailer to keep all of the profits for themselves.
There are tons of games on the market that deserve higher praise and the chance for a sequel, but if the developer doesn’t see enough of a profit on the original, there is little chance that decision makers of the company will give the green light to a new adventure. So the bottom line is basically, if you want to support the industry and you want a sequel for that game you just bought, buy new, especially if the game has only recently come out. Do you really care about saving $10 enough that you are willing to give EB Games $40 and the developer $0?
Now I’m not going to say that buying used games is entirely evil, but I think there is a time window in which it should be avoided. Multiple game developers have shown that they make most of the profit on a game in the first few months of sales; beyond that point, it really isn’t noticeable. So don’t worry about buying NHL 2011 used when NHL 2012 is coming out in a month – by that time, the developer really doesn’t care.
It seems some publishers aren’t willing to accept the losses incurred by rentals and used games and are taking steps to prevent the practice. EA is now introducing a “PlayPass” which uses an individual code to authenticate a game for online play. This idea is currently being used by other publishers and is the norm in PC gaming, but its effects have yet to be seen in the console gaming crowd. In a new copy of the game, purchasers will receive a code in addition to the traditional manual; register the code with your Xbox Live tag or PlayStation Network profile and you are good to go. The interesting part comes when you want buy a used copy of the game – How do you get around the missing playpass? Here is where the publishers are able to actually profit from the reselling of their games by offering the playpass as a separate purchase from their online store.
I see a couple of benefits for the industry – if you are in favour of developers not going bankrupt, that is. The biggest benefit, of course, is the fact that the publisher and developer actually make a profit on the resale of the game, at least in an indirect way. Instead of the retailer pocketing all the money, the developer is able to charge each user for the use of their product. The other benefit is in the data the continued sales provide. What I said earlier about the publishers making most of their money from a game in the first few months was an actual statement from a publisher, but how do they really know? The publisher has no way of knowing what sales they would have had if they weren’t actually profiting from the resale, but now there is a way to track those resales, as everyone who wants the full experience will need to purchase a playpass from the online store. Publishers would be able to track sales of a game over its entire life span, releasing downloadable content and continuing to operate servers long after they would have normally shut them down, purely because they know that people are still buying the game and they are still getting income from it.
Now for the downside, which is basically the eradication of the entire rental and used game market. Let’s say a game retails for $60, including a playpass, and a store wants to sell the game used, knowing that you will have to purchase a playpass. If the playpass costs $30, the retailer can only charge $20 for the brand new game if they want to entice you to choose a used copy over a new one. That’s a far cry from the traditional $50 price tag. Also, that means the store can only offer the original owner about $10 for their copy, which will definitely cut down on the supply of used copies.
The consequences will be even worse for rental stores, as they will basically be forced to shut down their gaming sections. Renting a game will be impossible once people realize that the $6 rental fee doesn’t include the $30 playpass (again, just an estimate). With video game rentals a dead market, there goes another source of used games.
As you can see, there are dire consequences for the rental and used game markets, and the promise of lost profits for publishers. Who should win? Let’s reword that statement a bit… Who should win: The people who create and produce the game or the companies that resell the product without contributing to the industry? Hmm, seems like an obvious choice to me.
So that’s it for this article and for this term. Good luck on exams and work term report writing, and be sure to set aside some time for some gaming.