Pre-owned cannibalizes industry, says Silicon Knights' Dyack...

[Uli]

"There's not going to be an industry," warns Silicon Knights head

Used games are a constant irritant for many in this industry - they're at best tolerated and at worst despised with a passion. Frontier Development's David Braben recently lashed out against the used games business, saying that it's effectively killed off single-player titles, and now Silicon Knights boss Denis Dyack has weighed in with his thoughts as well.

Speaking to GamesIndustry International, Dyack remarked, "From a consumer side, [in the last few years] we started seeing used games really come into fruition, and I believe that has caused quite a problem. I would argue that used games actually increase the cost of games."

The biggest problem is that used games have essentially cut off the revenue tail for most titles, Dyack explained.

"If used games continue the way that they are, it's going to cannibalize, there's not going to be an industry"

Denis Dyack

"There used to be something in games for 20 years called a tail, where say you have a game called Warcraft that would sell for 10 years. Because there are no used games, you could actually sell a game for a long time, and get recurring revenue for quite a while. Recurring revenue is very key," he said.

"Now there is no tail. Literally, you will get most of your sales within three months of launch, which has created this really unhealthy extreme where you have to sell it really fast and then you have to do anything else to get money," he continued, alluding to steps developers take like including multiplayer or launching DLC.

Dyack warned that if the pre-owned market continues unchecked it could threaten the industry as we know it.

"I would argue, and I've said this before, that used games are cannibalizing the industry. If developers and publishers don't see revenue from that, it's not a matter of hey 'we're trying to increase the price of games to consumers, and we want more,' we're just trying to survive as an industry. If used games continue the way that they are, it's going to cannibalize, there's not going to be an industry," he said. "People won't make those kinds of games. So I think that's inflated the price of games, and I think that prices would have come down if there was a longer tail, but there isn't."

source: http://www.gamesindustry.biz/article...try-says-dyack

i'm getting tired of so called industry insiders stating completely one-sided, totally profit-only concerned theories about the second hand gaming market. like i said in the PS4 thread, devs and publishers should start thinking about the reasons gamers sell or trade in their games. if they would start making better games, means games with great single player value and worth playing through more than once, then lots of gamers would stick with them.

[MartyG]

Entitlement.

Not gamer exclusive.

[EvilBoris]

i'm getting tired of so called industry insiders stating completely one-sided, totally profit-only concerned theories about the second hand gaming market.

Try telling that to the countless studios that have closed down in the last 5 years, because they aren't making enough money to stay open.
Also, Last time I checked Denis Dyack was more of an industry insider than you!

[eastyy]

think dlc is the way forward but it has to be done right ..none of this day one or already on the disc "dlc" think for me borderlands got that just right based on players feedback released over a steady period that kept me playing for ages

Thing is though if they do find a way to kill off the second hand market would that kill off the games shops ? and if it did wouldnt that cause problems for actually selling systems i reckon there will come a point where gameshops will do a deal and give a cut of profits

Agree with the thing about value though i got streetfighter x tekken and selling it ....cos i know with the 12 characters already on disc and probably more coming later i will buy the enevitable better version

[EvilBoris]

Thing is though if they do find a way to kill off the second hand market would that kill off the games shops ? and if it did wouldnt that cause problems for actually selling systems i reckon there will come a point where gameshops will do a deal and give a cut of profits

Selling mostly second hand games hasn't done GAME any favours. The whole industry is screwed , the developers aren't making enough money and the shops aren't making enough money.

[eastyy]

i would happily pay a bit more for a game if its a game i would really like (such as borderlands or skyrim) and the money going to the developers (hence why i am a big fan of kickstarter) digital downloads are fine with me to

Just this gen there has been a lot of things that annoyed me things already on disc

Recently i bought ultimate marvel vs capcom 3 on the vita and i was really really annoyed that i STILL had to pay extra for the two DLC characters even though they have been since the original mvc3 ...its just things like that which really bug me

[jim g]

If the film industry can survive, so can gamers. Difference is maybe, just maybe the games business finance model is broken?

The entry cost of a game on release is circa ?40, way higher than any other medium. Consequence, we sell our used games on eBay etc to minimise the cost of buying the next game, thus almost (maybe) proving the cost of the new game is so high we subvent it through the sale of used games. Conclusion, maybe, new games cost too much....?

[Guts]

Try telling that to the countless studios that have closed down in the last 5 years, because they aren't making enough money to stay open.

Isn't that sort of what free market capitalism is all about? Some make lot of money, others go out of business.

Also, if I'm not completely wrong, the video game industry is still growing and making more money than ever before, and someone's getting that money, so the whole industry can't be "screwed".

[Fader209]

Selling mostly second hand games hasn't done GAME any favours. The whole industry is screwed , the developers aren't making enough money and the shops aren't making enough money.

No, having multiple stores in one city didn't do Game any favours. Having two stores is alright....five though?
Like Uli says, if they make better and more worthwhile games then people are more likely to keep them.

[Daragon]

Either reduce the RRP for new games or release premium quality DLC at no additional cost in order to increase longevity. What is a gamer going to do with a single player only game that takes 10 hours or less to beat? Not buy it? You want to do away with the preowned market without scaring away customers, then that's the compromise to make. Failing that, with all this extra money you'd be making just make your damn products better so that they warrant your obscene price tags! And I'm talking AAA standard titles, none of this shovelware bollocks.

Put up or hush the **** up.

[davek22]

Well I bought kid Icarus from hmv last Friday for ?35. With that I got a free ?10 hmv gift card with my O2 app. I was looking at hmv trade in prices today and noticed I can get ?30 exchange for it. That's a crazy trade price thats hard to refuse at the moment.

[Robster]

Second hand sales have been around for years so why is it now becoming a hot topic - because we are in a global recession publishers/dev's are trying to re-coup every penny they can.

Personally I dont agree with this, its the tip of the ice berg. For example if I buy a blu ray I can no longer sell it on, same for books et al.

Whats next outlawing the second hand car market....

The principle is the same and it stinks imo.

I pay money for a game, I rinse it and sell it/trade to recoup my money back. Im perfectly entitled to do that and until they make it illegal - which call my cynical they are trying to do on the back on sopa etc - I will continue to do so.

[Uli]

Try telling that to the countless studios that have closed down in the last 5 years, because they aren't making enough money to stay open.
Also, Last time I checked Denis Dyack was more of an industry insider than you!

i don't get your point Boris.

Whats next outlawing the second hand car market....

exactly my thoughts too. and what about other media which also have both physical and digital distribution, like books, movies etc.? are we going to lose ownership here too in due time?

[sj33]

I had this conversation with someone else last night.

I don't think people buying used games is the problem by itself - after all, people have been buying and trading goods for thousands of years. People like to discuss the concept of 'licences' (whereby you are actually buying a 'licence' rather than a product), but this flies in the face of reality and real life perceptions of a purchase. It's not realistic to outlaw the concept of people trading goods that they have purchased (and I would be scared of the long-term effect if this ever occurred - where do you draw the line?).

The problem lies in the fact at the mainstream dedicated retailers actively build their business model around used games at the expense of new games, and by implication promote used games over new games. The problem lies in the retailing culture, rather than the consumers. Entire businesses, the likes of Game and Gamestop, structure their business around the promotion of preowned titles over new games. There is quite a difference between a person buying a game on ebay, and someone walking into a Game store where the store clerk tries their hardest to encourage you to buy their preowned games over their new ones (especially during the launch period where most of the sales lie). We have a retailing culture that is set up to downplay new games in favour of the added profit that used games offer for the retailers. Used games are treated as the core part of their business, rather than a complementary part of their business. This kind of cannibalistic, short-sighted retailing is the problem.

It is wrong to blame consumers for feeling entitled to trade what they have purchased, and it is wrong to critisise consumers for being enticed by lower prices (especially in an economic system that encourages this). We shouldn't be trying to criminalise the personal trade of goods. Instead, the retailers need to examine where they lie in the broader retail market and ensure their relevance, rather than pushing publishers towards digital sales. This is a problem in the retailing culture, and it might see the end of that particular section of the industry.

[Uli]

Jake,
that's a very good and comprehensive reflection on the topic!

maybe you should volunteer for an article