Okay, here’s the excerpt that I said I would post today. It’s the first part of the article, which focuses on the industry point of view.
Since EA games released their Online Pass for their sports games, they have expanded it to include popular series such as Medal of Honor, Dead Space 2, and Battlefield 3. Other companies such as THQ, Warner Bros. Interactive Entertainment, Ubisoft, and Sony Computer Entertainment have since included their own 10 dollar online pass in their games. Even though EA’s website states that the Online Pass is “in order to continue to enhance the online experiences that are attracting nearly five million connected game sessions a day”, Dr. Michael Capps, the president of Epic Games said “our primary retailer makes the majority of its money off the secondary sales, and so you’re starting to see games taking proactive steps toward that by… if you buy the retail version you get the unlock code.”
According to a report by market analysis firm NewZoo, 23 percent of video games sales in the United States are those of used games. This in an industry that was down six percent in 2010, and was recently down six percent September of 2011, compared to the same month last year. When talking about the PS3 game Heavy Rain, Guillaume de Fondaumiere, co-founder of Quantic Dream stated “my calculation is, as Quantic Dream, I lost between €5 and €10 million worth of royalties because of second-hand gaming.”
With the number of companies that have adopted a system similar to EA’s Online Pass, it does not seem to be going away any time soon. But that does not address the perceived issue that drives consumers to buy pre-owned games. “I understand why players do this,” stated Oliver, “games are expensive and after a few weeks of playing you’ve either beaten it, or got bored of it so trading it back in to help pay for the next seems sensible when people are short of cash.”
Dr. Capps also agreed, stating “I’ve always said that games are probably too expensive, so there’s probably a right level here to find. We need to discuss this all together and try to find a way to reconcile consumer expectations, retail expectations and also the expectations of the publisher and the developers to make this business a worthwhile business.” Those in the video game industry are not ignorant to the reasons behind consumer actions. But money lost to pre-owned games is not going to be fixed by dropping the price of new games, not because it would not work, but because it will not happen. With the increase in digital and downloadable content, that is where the industry’s solution to the pre-owned market will come from.