Secondhand games annoy publishers
During an otherwise excellent and optimistic talk at the Develop
conference in Brighton yesterday, industry stalwart David Braben
embarked on a brief but heated tangent from his speech topic to attack
videogames retailers - specifically, those videogames retailers who
engage in the second-hand goods market.
This is, of course, a bone of long-standing contention between
retailers and the rest of the industry. Braben added fuel to the fire
by presenting photographs of retailers whose shop windows, he pointed
out, consisted entirely of second-hand goods ("the only new thing is
the A4 piece of paper advertising Wii Fit") and making the anecdotal
claim that some games pass through the used re-sale process ten times
or more.
I can't dispute the scale of the second-hand (or even tenth-hand)
market since, like Braben, I don't actually have any figures on the
size or prevalence of this market. One area where I agree with him is
that more research into the scale of the market (and, crucially, into
the price points at which it operates) would be extremely helpful.
So for now, let's accept his assertion that second-hand sales
represent a large enough percentage of overall sales to seriously sting
the industry. That's probably true, although for a proper business case
to be made, real figures are needed.
The industry is, of course, within its rights if it wants to weigh
down more heavily on the retailers who engage in this trade. Many of
them are retailers with whom the industry does business - supplying new
hardware and software, paying for point-of-sale promotions, and so on.
That puts the industry in a position of some power, assuming, of
course, that it's willing to risk cutting off its own nose to spite its
face by further reducing the appeal of new software at these outlets.
Where the industry's rights - and more importantly, the sanity of its
actions - come into question is in some of Braben's more outlandish
proposals to tackle what he emotively, incorrectly and utterly
unhelpfully described as retail "piracy". (He did, in fairness,
subsequently soften his tone and start describing it as "rental", which
is equally inaccurate but not quite so deliberately emotive.)
He talked in terms of unique codes which could be printed on discs to
activate them, or even taking the step of making a DRM-protected
download into the primary product, with the disc full of game data
being an "optional" add-on for those who don't wish to download a DVD
or Blu-Ray sized chunk of data. Essentially, Braben wants to find a way
to strip consumers of their rights over the game they buy. He wants a
way to ensure that you can't sell it, can't lend it, can't pass it on.
And let's be clear here - there was a lot of nodding in the
industry-heavy audience as he laid out this draconian stuff. He's
hardly a lone, Quixotian figure bashing away at windmills in the dusk.
The rights which Braben wants to take away from his customers are
called, in the United States, Right of First Sale. In Europe, it's
called Exhaustion of Rights. Both describe a similar thing - the fact
that once you sell a piece of media to a consumer, you automatically
give up certain rights in the process. You stop being able to enforce a
trademark action against the consumer for selling your product, for
instance; in essence, you drop all rights which could otherwise prevent
the consumer from re-selling the item they've bought. It is this right
which allows the existence of second-hand book stores, second-hand
record stores, and so on.
What Braben and others in the industry want to do is to usurp this
right, not through legal means but through technical restrictions.
There's something very questionable about the basic morality of using
technical instruments unthought-of when such laws came into force to
circumvent the law and rob consumers of basic rights. Exhaustion of
Rights and Right of First Sale aren't some grubby legal loophole that
consumers are using to rob hard-working developers of their money -
they're a fundamental part of the covenant between nation and creator
which gives us the copyright laws and allows creators to make money in
the first place.
More important than the moral and legal arguments, however, are the
practical ones. On a simple level, boiled and reduced, measures like
these don't just rob consumers of their rights - they also treat paying
customers like criminals. This is one of the most simple and potent
arguments against DRM and the majority of "anti-piracy" measures - what
they come down to is placing restrictions on legitimate customers which
pirates will not face.
Legitimate customers potentially wouldn't be able to lend games to
friends, bring them to someone else's house and play on their console,
or perhaps even pass them on to a younger sibling or cousin when
they're done. Pirates, of course, would continue to be able to do
anything they bloody well liked. On the scale of business own-goals,
vastly increasing the appeal of piracy to your consumers has to rate
pretty highly. Just ask the music business, assuming you can get an
answer in between the spluttering and wheezing as they recover from the
ferocious beating they've taken in recent years due to policies such as
this.
In Braben's defence, however - and I should reiterate that the vast
bulk of his talk was enlightening, entertaining and wonderfully
optimistic - he did also make some really positive suggestions about
how the second-hand market could actually be leveraged as a force for
good within the industry.
He talked about optional downloadable content, player subscriptions
and in-game advertising as ways to extract revenue even from copies of
games which don't return any initial revenue to your company. This is,
quite obviously, the approach the industry needs to take. If a copy of
a game passes through the re-sale process ten times, don't treat that
as ten instances of lost revenue - treat it as ten chances to sell DLC
to a consumer, or ten more sets of eyeballs looking at in-game ads.
Look at the positives of second-hand gaming, rather than grousing over
retail "piracy" or other such nonsense. By providing a market-generated
lower price point, it's giving more and more people access to games.
Quite simply, it's a total fallacy to think that the 35 to 40 pound
price point is the standard for games; if you want to know what
consumers are actually paying, try adding the second-hand and
discounted prices, and even the revenue returned to them for trading in
old games, and then reaching an average figure.
Chances are most games are being sold for well under 15 pounds, or
even under 10 pounds - around the cost of a DVD. Kick the stool out
from under the retail mechanisms that provide those price points, and
you'll lose thousands - possibly millions - of consumers, and risk
alienating an entire generation of teenagers from the industry. Find a
way to capitalise on all those extra eyeballs and players instead.
The second hand market isn't a problem for your business unless your
thinking is inflexible, traditional and rapidly becoming outdated. For
those with fresh ideas and the will to implement them, the second-hand
market is great news - and frankly, the day is coming when we'll say
the same thing about piracy and file-sharing. In the not too distant
future, businesses will wake up to the idea that if a million people
are downloading your game over BitTorrent, it should be the best thing
that's ever happened to your company, not the worst. My fear, however,
is that we're going to have to do the same agonising birthing process
that the music industry just went through before this kind of thinking
starts really making itself known.
(Gamesindustry.biz)
Mstation Games Review
Mon, 01 Sep 2008
