Pre-Owned Games A "Critical Situation" For EA

Electronic Arts is continuing to bang the drum over the evils of pre-owned videogame sales, saying the impact of the second-hand market represents a "critical situation" for the company.

In an interview with GamesIndustry, Jens Uwe Intat, EA's general manager for European publishing, said the company is trying to find new ways to discourage pre-owned game sales by engaging consumers beyond the initial purchase of a game. "What we're trying to do is build business models that are more and more online-supported with additional services and additional content that you get online," he said. "So people will see the value in not just getting that physical disc to play at home alone, but actually playing those games online and paying for them."

Intat said the second-hand market that exists for videogames is unique because it doesn't involve a physical product that breaks down over time. "In our understanding of the business model we are actually giving away the rights to play, and if you just pass it on, pass it on, pass it on, that is not comparable to second-hand sales in the normal physical goods area where you have physical wear-out - second-hand cars, second-hand clothes, second-hand books... they're all physically wearing out, so you have an inferior quality product. But digital goods is not actually becoming inferior in quality, so people passing that on is actually very challenging for us," he said.

But while Intat said the burgeoning growth of the second-hand market is a "very critical situation" for EA, he added that the company was trying to address it in a positive way, rather than attempting to punish consumers for buying and selling used titles. "This is such a complex subject, we're not going to be overly confrontational, we're going to solve it with better, more interesting and online offerings going forward," he said, "and that should actually solve the whole current dilemma."

I don't necessarily claim to have a better grasp of the situation than EA, but I maintain (and have for some time) that the pre-owned games market could represent a huge opportunity for videogame publishers willing to embrace the concept. EA may be able to stem the tide by offering greater value for those who choose not to trade in their games, but they could just as easily come across as punitive and money-grubbing, and there's still no guarantee things will change in their favor. Why not try something different?

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As long as I'm not acually pirating the game for profit I'm completely within the boundries of the law. Hell, when I resell it I lose money. It's none of their business what I do with their product once it's in my hands, whether I resell it or use it as toilet paper (that would hurt).

Also, claiming that second hand games are in "inferior product"? Come on, really? A twenty quid product with scratches on the disc, no manual and... nope those are the only disadvantages I can think of. That's opposed to the exact same product for double the price, with a manual. Gee, I wonder which one's the better deal?

I do agree, however, that giving incentive to customers to buy online is a smart idea, if not for the reasons they say; it's the way the market is moving, the sooner companies try to capitalise on this the better.

ok two things ea is a giant corporation that makes the same game each year and so on so forth just hat to get that out of the way every person who reads ea immediately goes f them so ok on to two i buy preowned games mostly because i don't have a job I'm still in school so i don't have steady income and any way to cut costs is used so i only currently buy new games for one reason if i expect them to be good really really good. so unless ea wants to cut costs, about $40 for a new game and i wouldn't buy preowned or if they feel like vastly ramping up quality.

Ya know, games need to stop costing so much so that simply letting someone borrow a game doesn't make the company go out of business.

Intat is wrong in saying that games don't "wear out". The media may not degenerate fast but the graphics and hardware go obsolete. The number of people playing PS1 and N64 games is pretty damn low.

If the video game audience is growing... why worry about the second-hand market? Movie DVDs don't seem to be suffering the same fate. Shouldn't the problems surrounding profits be slowly disappearing?

But hey, if they want to do some "business models" around ensuring people keep their original copy, then more power too them. I hope their solution doesn't encourage more piracy.

I buy pre-owned because I refuse to be ripped of by yet another iteration of a piss poor game that has all the tactics and enjoyment of a game of Hey! Smash My Bollocks Off. Gaming is not a cheap hobby and as much as I can enjoy a decent game very few are what you can call original and worth the money.

Maybe if so man new games didn't cost $50 bucks or so, more people would buy them new. Maybe the game publishers need to think of ways lower development costs. They could certainly save money if they advertized less. Do you have any idea what a full color ad in a magazine costs? A few years ago, I was helping my mom start her own business. She tried to get an ad in a magazine. A full page ad was $1000 for one issue. That was if she didn't want it in color too. It was something like $1500 or something for color. That was in a regionally published magazine too, not one of these mags that has world-wide coverage. I bet TV commercials, sponsoring sports games etc are not cheap either.

i'd just have to say if EA put more effort into making great games all the time instead of tossing [insert colourful euphemism here] at the wall and going with what sticks they'd have less an issue with used games "costing" them money

i will say they are getting better at releasing good games but they've had a ton of crap game

The second hand gaming market is exactly like any other second hand market, and it's protected under IP law in the USA. At least now we KNOW without a shadow of a doubt that the limited activations on their DRM isn't to deter piracy. It's to deter used game sales. I'm beginning to rethink my decision to bye Spore next month, EA really is an evil empire.

I think what they mean is taking a cut from retailers seeing as they get nothing after the first sale.

Retailers like GAME here in the UK are already selling pre-owned titles for just £5 less than RRP, when they used to be 3 times that. They're squeezing every penny out of the scheme, and whilst they're still a fraction cheaper than new games £40 for something someone has had their grubby little mitts on is far too much IMO.

I reckon they'll try to make it so on eBay you can't sell game that are less than 12 months old or something. As much as I love pre-owned games (in fact it's all I ever buy, I rarely pre-order games now) it's a situation that has to change because the market is so strong and cuts out the very people making the game. For some retailers to be charging nearly the RRP and not having to pass on the same cash as when selling a new game just isn't good.

It's no wonder studios are going out of business, to be fair.

EA's seemingly proactive approach is something to carefully applaud. Other companies seem to have this idea that "if we could charge consumers full price for every purchase, we'd get more money". In actual fact the amount of disposable income that consumers have is fixed by external factors, so finding a way to interest consumers in buying something new for cheap rather than something old for cheap is probably a good idea - if you're a game company.

I find it fascinating that the high prices of games have essentially spurred the growth of so-called "casual gaming" where you can get 80% of your gaming kicks for free. Perhaps EA sees that this is foreshadowing the end of the current business model and is looking for something that will avoid the dead-end ahead.

Whether they can adapt themselves remains to be seen.

ElArabDeMagnifico:
Ya know, games need to stop costing so much so that simply letting someone borrow a game doesn't make the company go out of business.

Thanks, though I assume you don't have as much of a problem as I do (except your Norwegian, in which case you get to bitch all you like).

As for EA, they need to understand that unless they want to kill the brick-and-motar store completely, they'd best leave the pre-owned industry alone. Of course, if they want to kill those stores, I'd gladly help.

Hey I know another "critical situation".. What about EA's shitty quality on pc games? Game crashes, bugs that aren't fixed a year after release and more come to mind.

Maybe EA should start looking at their games from a consumer's point of view, instead of just seeing game industry as another cash flow that needs to be optimized. I think it's kinda obvious that EA is just in this for the money, and that they don't give a crap about us players.

Clearly people arn't enjoying the game, or have gotten bored of it. Thats why they're giving these games up for preowned. The fact that they're bored or arn't enjoying it is the issue that EA need to address

I usually buy pre-owned games when I'm not too certain that I'll enjoy the game. For example, I recently bought Okami for the Wii at full price because I was confident that I would like it, however I bought Resident Evil: Umbrella Chronicles pre-owned because I wasn't sure if the game was worth buying and I didn't want to spend full price to find out.

I think that's a big problem with buying games. Why pay more for a game you might like? Established franchises will sell a lot of new games (Zelda, GTA, FF etc.) but smaller, or new IPs get overlooked.

TheBadass:
A twenty quid product with scratches on the disc, no manual and... nope those are the only disadvantages I can think of. That's opposed to the exact same product for double the price, with a manual. Gee, I wonder which one's the better deal?

Actually, for some people this is an issue. A few months ago I saw a copy of Condemned for the PC, preowned at EB, for five bucks. Five bucks! But the box was destroyed, looked like somebody's dog had spent a fun afternoon with it, and the manual wasn't any better. The best I can say about it is that it probably ran without any trouble. So I didn't buy it; I expect a certain level of overall quality in my games, in the physical contents as well as in the game itself, and I'd rather pay 20 or 30 bucks for a good, complete copy than five bucks for one that looks like a chew toy.

For people who are more straight-up game players, it's probably a different issue, particularly if the intent is to buy it, play it and then trade it in again. And that's probably the majority, so your point is certainly valid - just not quite universal.

I love buying pre-owned games, as you may have guessed, not just because they're cheap but because it's often the only way to get something I may have missed out on earlier. Psychonauts is my favourite example, but there have been several others, many of which have in fact led to revenues going to the original developers and publishers: A pre-owned Divine Divinity, for example, led to the purchase of a new Beyond Divinity and serious interest in Ego Draconis, while a pre-owned X2: The Threat resulted in a new copy of X3: Reunion, and ongoing interest in that franchise as well. (In fact, the used market, albeit not via EB or other mainstream retailers, is the only way I'll ever get a copy of the original X: Beyond the Frontier.)

I very rarely buy games full price, I'm making an exception for Fallout 3 as I really really want it, however I only ever buy stuff in good condition and I hunt out special editions. If new games were the same price as pre-owned then I would buy new everytime.

You know what would be a good deterrent from second-hand gaming sales? Some god damned games with depth and quality that you want to hold on to. If it's another shitty FPS with 10 hours of gameplay and no replay value, yeah of course it's going to be resold.

I've got some PC games from before some of the people here have been born. I'm not going to re-sell them. You know why? They are quality titles with depth and replayability. They have mod communities and post-release support. I want these games because I want to keep playing them.

Chasing the console gamer cash cow has its downsides. The games are short and vapid and people buy and sell them as needed to get the game experience. The customers also have short attention spans that continuously leap to whatever is newest and shiniest (fault: your marketing and design). You can't reap the console market for its major bucks and complain about the built-in downsides. That's asinine.

Hmm, maybe that's why they use ridiculous DRM - You can't buy second hand or let a friend borrow it if the game self-destructs after 3 uses!

If they make us buy their games online, I would go mental, because a lot gaming companies don't let Iceland buy online.
EA has lost all my my respect for them. Which wasn't much to begin with.
Also, my spore has one install left.

I'm pretty unimpressed with EA at the moment,
for the record I like to buy games online, its how i bought Portal and Phsyconaughts and incidentally the full version of the Spore creature creator (which i had to buy from New Zealand, because neither the American or Australian store would sell it to me, and i'm in Australia).
However in order to buy games online regularly data allowances are going to have to change in Australia. A topic to which i have devoted a thread here: http://www.escapistmagazine.com/forums/read/9.70510?page=1
I think EA need to worry less about people passing on games they have legitimately bought and more about selling their customers a product that they the customer will then own until such time as they see fit to dispose of their own will. It's for this reason that i have not yet bought Spore even tho it is amoungst my most anticipated games in years.

dukethepcdr:
Maybe if so man new games didn't cost $50 bucks or so, more people would buy them new. Maybe the game publishers need to think of ways lower development costs. They could certainly save money if they advertized less. Do you have any idea what a full color ad in a magazine costs?

sure, they could cut their advertising budget, and save a lot of money. of course the downside is, no-one will buy the game because no-one will have heard of it. also. $50 bucks? get over it. Down-under, recent PRE-OWNED games, often cost upwards of $80.

IMO, EA can get over it too, what they sell is a product, like a DVD or clothing or a car. not 'the rights to play a game' I think this mistake is one of the biggest flaws of their business model. If i buy a dvd, and get bored of it, or decide I don't like it, I'll sell it second hand. pop it on eBay or something. that is NO different to a game. neither is second hand clothing as one of the examples used in the article. although games as a product don't decay as such, they do become outdated. They go out of fashion like clothes.

what EA should be (and seems to be thinking of) doing is developing games with lots of re-play value, not just in terms of future on-line updates. even single player games.
If i go down to EB and see a whole load of a certain game on the pre-owned shelves that says to me that this game doesnt have a whole lot of longevity, so I'll be damned if i pay full price for it if i want to try it out. wheras games that do have depth, re-playability, or even just good gameplay that makes you want to play it through multiple times. are usually a rarely seen on the pre-owned shelves, so there is little alternative to buying these games new. (apart from piracy, but I prefer to reward Good games with my money).