February 13, 2012

Xbox 720 and PS4: The End of the Used Game Market

The recent dominance of Steam and its competitors in the PC market and digital distribution the question has been asked are these types of services going to come to Consoles and what will it mean to game industry. 

 

The answer is a rather complicated one and also kind of frightening.  There is a silent battle brewing in the gaming industry and it’s not between you and the game developers or at least not directly, it’s a battle that has been growing more and more heated as profits are falling.  A war is being waged between developers and used game vendors such as Gamestop, Vintage Stock and other used game vendors. 

 

Used Game sellers have been the bane of developers for years as every game they sell, unless it is new, does not yield any profits for the developers and developers know that there are hundreds of thousands of people who are more than willing to wait a few months to save $30 dollars on a new title.  Developers would love nothing more than to put them out of business and with the next generation of consoles this is very much a possibility.  Up until recently there wasn’t much they could do about it but with the advent of social and service based gaming it has becoming much easier to restrict content to those who don’t purchase the game.  There are already several titles out that unless you purchase the game new you will not be able to access any of the multi-player content. 

 

Used game sales have always been predominatly and now days exclusively geared toward console gaming.  Used games sales disappeared from the PC market almost entirely during the mid to late nineties with the addition of serial keys and game activations and registrations. 

 

Those of you who watch the market like I do can see the signs that used game sellers are starting to catch wind of this and they are doing their best to brace for the coming storm.  GameStop is a prime example of this with their recent acquisition of PC digital distribution platform “Impluse Games” they are one of the larger platforms next to Steam and it positions them to come out ahead  when, what I consider to be an inevitability, the used game market comes to a screeching halt. 

 

In addition to killing the used game market developers have been looking for ways to deliver their products directly to consumers without actually having to send them any physical product.  Shipping, manufacturing, packaging, etc all cost lots of money and if you can eliminate that and distribute that product of a digital network you cut your costs dramatically and you can cut the middle man, retailer, out of the picture entirely. 

 

All these changes are good in some aspects as it allows the consumer direct access to the product, quick downloads and automatic updates.  Since the costs have been driven down, in a fair market, the costs should come down as well.  You also have the benefit of not ever having to worry about losing a game or having it stolen.

 

There is also a dark side to this change.  With the loss of the middle man, which can dictate their own price, and used game vendors there is little competition to keep prices low.  Even with all their increased profits and lower production costs we aren’t likely to see any drops in game prices and in I would expect to see them stay higher for longer. 

 

There is another nefarious side this battle that very few consider and that is do you really own your games anymore and can you still play them online.  PC gamers have been fighting with Steam for years to have an easy way to play your games offline as not everyone can have a stable internet connection or even one at all.  And let’s not forget that all of our men and women in the armed forces who are deployed abroad do not always have access to internet.  This also brings up the problem of if you say something negative about the company can they can come ban your account and take all the games away that you spent your hard earned money on?  EA and Blizzard both have been known to swing the ban hammer at their users when they speak out against them.  If they completely control their content you are literally at their mercy.  Additionally if you are like me and have over 300 games on your Steam account what happens if you get hacked?  Do you get your games back?  There are a lot of questions that have to be answered before I would be completely sold on this. 

 

I wouldn’t be surprised if the PS4 and the Xbox 720 were completely digital platforms and if not completely I wouldn’t be surprised if the new games didn’t require registration and activation to play both single and multi-player content.

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