ghost whistler said:
Vyse86 said:
The reason why online passes exist in the first place is this:
When a publisher releases a game, their profit for each unit sold is about 12$ out of the 60$ the game costs. When you buy the game used however they (and the developers) get 0$ for their efforts. Considering that Gamestop sells new games for nearly as much as as they cost new they make more rofit on each used game they sell than the the people who made that game.
This is where the online pass comes in. Games cost more and more to make and with the used games market taking a ton of money from the developers, the money to make another game/sequel might not be there if the first game doesn't sell really well.
When the publisher sells the game (to the retail chain), the devs get no money.
For there to be used copies, the game has to have sold new.
If i buy an online pass on XBL the publisher doesn't get paid.
The devs have already been paid for their work, regardless how many copies are sold.
Selling on property is entierly legal.
Pissing off customers and shops is not good business sense.
Given the choice peoople will ALWAYS buy new if it's cheap enough. Therefore the issue of lost sales is non existent.
*sigh*
Ok, I was in a hurry this morning, so let me rephrase this a little. The publisher pays the developer no matter what (unless the publisher isn't also the developer, which is rare these days).
How much money does a game really generate per copy:
So let's say you buy a 60$ game made by a small developer and published by EA. The regular edition costs 60$ new. Out of those 60$, 12$ go directly to the retailer for advertising, providing shelf-space etc. (That means if you buy at Gamestop they already get 12$)
So now we have 48$ left.
Out of those, depending on the games success, about 12$ go to the console manufacturers, Sony, Nintendo and MS. (Which is also why PC games are usually around 10$ cheaper).
Now we have 36$ left.
Those go to the Publisher BUT!!! you still have to take the amount of money the game cost to make out of the equation to get the amount the publisher actually earns with each copy sold. Now calculating how much of the 36$ are profit is a bit harder to determine.
A pretty standart amount for an average Console game released for 360 and PS3 is
20.000.000$ (~100 people working on a game for 2 years with an average of 100.000$ per person working on the game per year)
If the game only sells 1.000.000 units, the development costs are 20$ for each unit sold. If they sell 10.000.000 units, it's only 2$ each unit.
Let's say, the average is 10$.
That leaves us at 26$
Then there is marketing (all those trailers, media, etc). Usually the Publishers spend around 15% of what they think they will earn from the title on marketing. In our case that is about 9-10$ per unit.
That leaves us with 16-17$ per unit which is what the industry calls profit.
Now mind you that example was for a game with a fairly moderate success. How many games, especially new IPs out there sell less than 1.000.000 units and actually cause losses? Now, mind you, economists (aka the people financing every none-indie game ever made) also consider the trade-off. That means: If a game barely made any money and they know making a Modern Warfare clone would have earned them a lot more and cost them a lot less to make, what do you think they'll make next? The sequel to the new IP or the Modern Warfare knockoff?
Ok, that was a long long build up, but the point essentially is that especially when it comes to
new unproven IPs that don't have a fanbase yet, it is hard to get any customers at all. Normally some people will risk buying something they don't know yet at full price, but the thing is: With used games they don't have to. So let us assume, that only half the people who would have bought the game new actually buy it new and the other half waits for the slightly cheaper used version. This sort of thing can easily kill new IPs.
Apart from all that:
Gamestop sells used games for nearly as much as the new games, especially in the first few weeks after its launch and they keep A-L-L of what it costs used as profit! They earn several times more than the people who made/published the game and not only that, the people who made the game, earn LESS because of it. Almost every used copy sold is one that could have been sold new. Even if only every second used copy sold used equaled a new purchase the amount of money Gamestop makes with this is still far bigger, than the amount the actual publishers and developers make! And a copy that was traded in once can be traded in several times again, which means gamestop earns money SEVERAL TIMES, while the publisher/developer only got money on the first sale. If they buy a game for 15$ and sell it for 40-45$ THEY MAKE 25-30$. That is more than any Megahit game makes per copy! To put it with words of Moviebob:"Gamedevelopers get screwed! No actually it's worse. Gamedevelopers get fucked! They get fucked in the ass with a radioactive chainsaw! With hepatitis"!I honestly don't get how anyone can be ok with this, even if it is more conveniant.
Seriously: You're fine with this? REALLY?
As for the "regardless of how many units were sold, the devs get the same" argument:
Not quite. Most of the time, the developers get a bonus depending on how many units were sold.
The publishers also get a big say when it comes to the next game the developers produce and its contents. If a new game earns the publisher much, chances are you will see more of it. If not, chances are you will see more of what sold well in the past (aka the more of the same).
I'm also not sure where you got the idea that the money for the online pass dosen't go to the publisher. Actually that's the most likely place it'll go (minus a small percentage taken out by MS)
About pissing off customers:
Have you noticed how most games with an online pass cost 10$ less when you buy them used? If you aren't interesed in the Multiplayer mode:
Congratulations. You just saved 10$. If you are, you lost
5 MINUTES AT MAX to obtain/enter the code (most likely less)! If you are seriously complaining about the 4-5 games each year that even have a pass taking up "too much of your precious time", ... I'm currently trying to find nicer words than "retarded" since surfing around on the escapist, watching Jim's vids and reading/writing replies to my overly long comments is hardly more productive (probably even less) and you're not complaining about the time that takes either, are you?
Yeah, yeah you're doing it out of your own free will. So what? We all keep wasting tons of time with facebook, TV and THE GAMES THEMSELVES! Complaining about the short amount of time the code thing takes with that in mind is just so... I still haven't found a better word >_>
If you feel like you have to get worked up about the publisher's attitude towards the customers, rather look at the PC DRMs where they really assume you are a criminal with DRM that requieres you to be online while you play and that loses all your progress since you last saved when you lose the connection for a few seconds (thanks for that again Ubisoft >_>)
Anyway:
Moviebob (also known as the Game Overthinker) once made a video on the issue.
You can watch it here: http://gameoverthinker.blogspot.com/2010/10/episode-41-revolution.html
he says a lot of the things I said in a much better way and also backs up his arguments better than I do. He and Jim also have these little discussions here on the escapist. I'm looking forward to the next one, since the subject will propably pop up again.
Bottom Line:
You may have noticed that this is a topic near and dear to my heart from the length of this comment. That is because I really believe that this is a very important matter and that it will greatly affect the future of gaming (unless the next console generation will actually be Download only systems but I think we are still 1 generation away from that)
Seriously, face it! Used games may be conveniant for the customers (us), and I can understand where you guys are comming from, but used games really started to hurt the industry ever since they became as big as they are now, and in the long run it's us this will hurt the most.
TL;DR-Version:
(Please at least watch this video if you didn't bother with my post)
http://gameoverthinker.blogspot.com/2010/10/episode-41-revolution.html
