Retailers Warn "Project Ten Dollar" Will Hurt Consumers

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Retailers Warn "Project Ten Dollar" Will Hurt Consumers

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Retailers are warning that Electronic Art's new "Project Ten Dollar," designed to help curb the used game market, is more likely to result in angry consumers and ultimately do more harm than good.

You may have noticed how recent EA releases like Mass Effect 2 and Dragon Age: Origins feature launch-day DLC that was comes free with new copies of the game but must be purchased separately by anyone who buys them used. That's Project Ten Dollar in action, an attempt by EA to take back some of the revenues it's losing to the pre-owned market by offering an incentive to buy new - or, depending on your perspective, a punishment for not.

It's obviously a blow aimed directly at retailers who sell used games but according to some of them, it's the customers who will feel the greatest impact. "The person you're pissing off the most is the consumer," Chipsworld Managing Director Don McCabe told GamesIndustry. "This affects [them] directly - they pay the same amount of money and yet the resale value is much reduced. From a retailer's point of view, they'll just readjust [the price] bearing in mind you have to buy the voucher."

An unintended side effect of the program could be a reduction in new game sales, added SwapGame CEO Marc Day, as customers suddenly find it harder to afford their habit. "EA's Project Ten Dollar move is aiming to stifle pre-owned games sales, but what they don't factor in is the damage this could have for them in relation to new sales," Day said. "The majority of customers who trade in for cash or credit do so to acquire new games they could otherwise not afford. Through trading in, we aim to help the customer make gaming more affordable, providing them with a way to buy new games."

This could be especially, and rather ironically, troublesome for a company like EA, which publishes regular iterations of many of its most popular releases, particular in the EA Sports lineup. "They are effectively what I call a franchise software house in that they upgrade their titles, [like] FIFA [and] Madden, all of these are effectively the same title upgraded each year," McCabe said. "And people trade in last year's for this year's. You go anywhere and you'll always find second hand copies of FIFA 07, 08, 09 - it's one of the ones we get the most of."

"People want a system that's as simple as possible - if companies start going down a variety of different routes to block second hand sales, online access - the thing Ubisoft are doing where you have to be online to verify the game - it's just going to turn people off," he continued. "If they try to block pre-owned sales, they will see a reduction in those titles."

It's definitely a risky move for EA and any other publisher that follows in its footsteps. Gamasutra reported last year that GameStop maintained a 48 percent profit margin on the sale of used videogames in its 2008 fiscal year, more than double its margin on new software sales; in other words, even if used retailers are forced to reduce their prices of pre-owned game sales by initiatives like this, it will likely remain lucrative and thus undiminished.

"Will customers simply cough up the full retail price to get the exclusive content and online play on day one, or will they wait to buy it pre-owned at a low enough price, then pay the additional $10 for the same content?" Day asked. "If so the publisher could well shoot themselves in the foot. It is the publisher who is giving the customer the short straw."

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My friend runs a small used games store. This is going to screw him over. There is no margin in new games sale for him as he can't buy in the bulk required to make a profit.

I can see the point of retailers here, it can be annoying.

I however tyhink it might work out, for me anyway, as I dont mint getting new. At least means its quality.

They may need to tweak it slightly however.

thenumberthirteen:
My friend runs a small used games store. This is going to screw him over. There is no margin in new games sale for him as he can't buy in the bulk required to make a profit.

wow that must suck

I can understand developers/publishers wanting some cash. But couldn't they strike a deal with gamestop to give them at least 30% of what they make a used game back to developer/publisher

Stop charging like 60 for brand new games and then. Even around 40 I'd be able to afford to buy most games I want brand new.

devs and publishers must really be wanting money for their games if they want to install this program they should realize that they also get money from Used games sure it maybe a little bit less then the shiny new game sales but it's money nonetheless

"People want a system that's as simple as possible - if companies start going down a variety of different routes to block second hand sales, online access - the thing Ubisoft are doing where you have to be online to verify the game - it's just going to turn people off,"

I wish publishers had this much sense.

Petition against Ubi's DRM here: http://www.petitiononline.com/mod_perl/signed.cgi?ew15dl94

Provide a CD with all the DLC installers burned to it when you trade your game in.

Problem solved.

Ouughh, damn you EA!!! Damn you!

Seriously how low are EA going to go?

Vie:
Provide a CD with all the DLC installers burned to it when you trade your game in.

Problem solved.

I... I honestly can't tell if you're being serious or not.

Ok, I'm not so hot on this either, but I am going to take on the role of Devil's Advocate.

The main counter arguement is that these "Project Ten Dollar" DLC items are not in any way necessary to play either of these great games. The Stone Prisoner is a fun sidequest and Shale is a useful tank, but you can make it through Dragon Age without either. They just add a little to the experience. The same is true of Mass Effect 2. The game can easily be played without any of the Cerberus Network DLCs and it in no way detracts from the game, although Zaeed's loyalty quest does provide a rather enjoyable encounter.

When these are viewed in the same way as post launch DLC, they are not really all that daunting for Used Retailers. While it does give an incentive to buy new, there is no requirement for the buyer of the used title to invest in it. The game is just as good either way.

Angry? I love this free DLC.

Am I missing something here? I'm not sure I've read everything correctly. Is EA now charging $10 to activate the games prior to any form of play, or, are they charging $10 for the DLC content? If it's the former, I can see why this is an issue, and it's appalling. If it's the latter, well, here you go, here's a tissue; why is DLC necessary to play a game?

I really don't think this will work too well. I work at a store that sells used games. I was curious about the cost for some new titles that came out. The cost for my company to buy a new or used version of, let's say Mass Effect 2 or Dante's Inferno:
New: $50.82
Used: $10.29
And we usually sell a used copy for about $50. So, there's about $40 dollars of profit per used game. We could drop it by $30 dollars and still make a profit.

What they don't seem to understand is that the price reduction of buying it pre owned is probably more than the value of the dlc anyway. Kinda defeats the point really.

Actually, this will make my want to buy the game new even more. I DISPISE used games, and the upscale pawnbrokers that sell them. Oh sure, if I want a classic cartridge or something it will more than likely be used, and I have no problem with that; it's just places like Gamestop(and since they've about run everyone out of business, they are the ones I will be picking on) that annoy the fuck out of me by charging what, $4-5 under the new price? Ooooh, such savings! And NONE of that money goes to the publisher and developers. Not to mention the quality. Many used games come without the original cover and/or manual, and of course will be scratched to high hell, because Gamestop doesn't check nor do they have a disc cleaner on the premises and they rely upon the customer to check their games for them.

I dislike EA, mainly because they forced the delay of ToR, but I side with them on the early DLC plan.

Am I the only broke college student who will never trade in a game? Aside from that, I'm down for whatever keeps Bioware making games, and I always buy new assuming the game's still being made so this doesn't bother me at all.

I haven't bought any games pre-owned in years. I dislike how little used games go toward in credit or cash. (Especially considering how high many used games sell for.)

I have a question though, does Ea or any developer make any money from used game selling/trading? I can't imagine why they would. And if they don't make money, why should they care if the used game customers who aren't lining their pockets with gold are not playing their games? (Obviously if the used game market makes them a significant profit I can understand, otherwise...)

thenumberthirteen:
My friend runs a small used games store. This is going to screw him over. There is no margin in new games sale for him as he can't buy in the bulk required to make a profit.

Well, so what?

What makes him more important than the developers of games who deserve to earn a profit for their work?

I don't really see the problem here. It's not like the game becomes unplayable without the DLC they are giving away for free. Blaming EA as money grubbing is also a falacious argument, because they still are still losing money hand over fist in the current market.

if i find a new game is too expensive i generally wait for the the price to go down. i mean, used games aren't that much cheaper here in the UK. generally you can get a new game cheaper online than the store bought used game price anyway.

i got DA Origins Collector's Edition for 19.99 and Mass Effect 2 for 29.99, both brand new

I'm cheering for EA on this. They have the right idea.

Used game resale is practically piracy.

Onyx Oblivion:

thenumberthirteen:
My friend runs a small used games store. This is going to screw him over. There is no margin in new games sale for him as he can't buy in the bulk required to make a profit.

Well, so what?

What makes him more important than the developers of games who deserve to earn a profit for their work?

Well it means he could go out of business if such schemes catch on.

I think that videogame companies are taking the wrong route in addressing used video game sales. Instead of trying to abolish them they could just compete with the retailers:

Publishers could start trade-in and resale programs to costumers. Print out and assemble a mailing slip, put your used game in the mail, receive publisher credit and/or money(paypal, cheque, etc). Not sure how much the mailing would cost the company, but it must be doable if others liek Netflix can do it. This would basically cut out the middle man, taking those hefty re-sale profits away from the gaming stores without significantly affecting the customer.

This article makes no sence, it seems like the retailers who sell used games (btw Gamestop hurts small game retailers more then all the publishers in the world combined, multiplied by 10 and then raised by itself.) bitching that this may cause some people to buy new rather then used. How this will make people stop buying new games I dont see the article really avoids it only saying that it will make the Retailer pay less for used games. So the reason this will hurt is because Gamestop will use it as an excuse to pay you even less for the used game they are going to jack the price up on.

So its bad for gamers because Gamestop will use it as an excuse to screw them over more, so we should be angry at EA... because Gamestop says so.

The people who give a pittance for used games are worried about the consumer? pull the other one it plays jingle bells.

I almost always buy new, after being burnt on used a number of times in the past, discs scratched and basically unplayable, the price difference of $5-$10 is not worth it and I tell the people who annoy the hell out of me at the stores wanting me to trade in where to stick it.

Yea EA is bending us over, so what? Gaming companies have been doing it forever, I remember buying new games back in the 80s with code wheels.

Gaming stores are just as bad though.

Onyx Oblivion:

thenumberthirteen:
My friend runs a small used games store. This is going to screw him over. There is no margin in new games sale for him as he can't buy in the bulk required to make a profit.

Well, so what?

What make him more important than the developers of games who deserve to earn a profit for their work?

They already made a profit from their work during the intial sale. Now they want profit from someone else's work (i.e. the used game store). The publisher isn't investing any money buying back games that are no longer wanted. Yet they still want a cut from those sales. If publishers want to profit from used games sales, let them create their own trade-in programs.

I've always thought that EA was really sensitive to stopping trade-ins because most of their big sport franchises depend on the same people buying them year after year. People will be less likely to purchase the next installment of a sports franchise if they can't get rid of the previous version.

thenumberthirteen:

Onyx Oblivion:

thenumberthirteen:
My friend runs a small used games store. This is going to screw him over. There is no margin in new games sale for him as he can't buy in the bulk required to make a profit.

Well, so what?

What makes him more important than the developers of games who deserve to earn a profit for their work?

Well it means he could go out of business if such schemes catch on.

Well, not every business can survive. That's life. You win some, you lose some.

mogamer:

Onyx Oblivion:

thenumberthirteen:
My friend runs a small used games store. This is going to screw him over. There is no margin in new games sale for him as he can't buy in the bulk required to make a profit.

Well, so what?

What make him more important than the developers of games who deserve to earn a profit for their work?

They already made a profit from their work during the intial sale. Now they want profit from someone else's work (i.e. the used game store). The publisher isn't investing any money buying back games that are no longer wanted. Yet they still want a cut from those sales. If publishers want to profit from used games sales, let them create their own trade-in programs.

They don't just make games in one batch to go for one run of profit. Each game has a development cost to cover, and some games get VERY limited runs, meaning that every game not bought new cuts into profit, or even prevents them from making profit in the first place. That's how game companies die. Games cost a lot to make these days. Why do you think this "indie game" craze has caught on with the advent of digital distribution?

I don't hate this. I think it's a good idea and it's acceptable.

Maybe I'm missing something, but how will this affect consumers negatively? A new game comes with bonus DLC, but a used game is still a full game. That feels like a positive affect to me, but I suppose it depends how you look at it. Some people might feel entitled to it, like they're paying for an incomplete game, but that seems selfish to me; You paid less for a used copy, and you expect the same bonuses earned as someone who pays full price for a new copy? That sounds the same as complaining about collector's editions having more bonuses than a regular copy.

I like this bonus DLC plan, and hope they continue with it.

I have to say I like EA's thought on this they are not stopping the customer from being able to buy or sell their used games they are just giving incentive to buy the game new.
The gamers can still buy and sell used games they just may miss out on a small piece of the game unless they want to pay the 10 dollars to download the content that would have been free if they bought it new. Which as long as it is not a game changing piece of the story or gameplay then I am all for it. It is also giving the developers a way to possibly make some cash off of the games that are sold used.

The Thief:
That sounds the same as complaining about collector's editions having more bonuses than a regular copy.

You forgot the part where the normal copy has already been used...
The used video game market HAS to be available(not allowing resale of a game is the same as not allowing the resale of a painting or a book). That's why publishers are really being critiqued.

thenumberthirteen:

Onyx Oblivion:

thenumberthirteen:
My friend runs a small used games store. This is going to screw him over. There is no margin in new games sale for him as he can't buy in the bulk required to make a profit.

Well, so what?

What makes him more important than the developers of games who deserve to earn a profit for their work?

Well it means he could go out of business if such schemes catch on.

Then I guess he will have to do the same thing EA is doing. Find some way to increase his profits.

I see this as a brilliant idea, on EA's behalf as it helps both the consumer and EA (+Developers) if bought first hand. But I have one minor quarrell with it, and you'll probably laugh me away saying some people can't be pleased, but I really just don't understand DLC, on the Xbox, fair enough as Microsoft force you to pay to have it on their, but on PC being a PC gamer I just don't see the need to pay for it, I bought a game assuming it was the full thing only to find I have half of it? Personally, I don't like that, I avoid games with DLC, or buy a GOTY/special edition which comes with the DLC.

I love Project : Ten Dollar (or five pounds as I'm sure it's not called over here :p). It's nothing but a small perk to people who buy the game new, in a way that doesn't make it unplayable if you get it second hand. I think the consumer is the last person that should be bitching.

I'm not surprised retailers are bitching about this, I'm fairly certain their profit margins are higher on used games. I do wish they wouldn't dress it up like they're thinking of the consumer, though.

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