In which I get into a Twitter fight with game developer David Jaffe.

I hadn’t intended to, but like many things on the Internet, it just sorta happened.

For those of you who aren’t familiar with him David Jaffe is one of the guys behind a number of popular titles on the Playstation consoles including the Twisted Metal series and, most notably, God of War, a game I enjoyed immensely. He also blogs (see link above) and is known for having a big mouth in the industry, which is something I can respect being a blogger blow-hard myself. He’s not, apparently, very good at people disagreeing with him. Which is something I did this evening.

The topic is one he’s ranted on before and it’s a topic I’ve touched on myself: The resale of used games by companies such as GameStop. GameStop makes a shit load of money off used games. Some used titles make them a 50% profit over sales of a new title. That’s caught the attention of several developers and publishers who have gone on to opine, and David Jaffe is one of them, that GameStop is somehow ripping them off and should cut them in on part of the profits from used game sales.

I’m going to repost the back and forth I had with Jaffe in Twitter below the fold in part because it’s lengthy and in part to spare those of you who don’t really give a flying fuck. I’ll also post some of my thoughts on why his argument doesn’t wash with me.

First I’m going to start with Jaffe’s tweets that prompted me to get involved in the first place. This will be a bit lengthy, but here they are:

Eventually someone is gonna have to provoke the wrath of Gstop. They can’t have it both ways. Either cut game makers in on used games and rentals or suck down digital distribution.

As I’ve said often, it’s not the consumers problem/business. But if Gamestop wants games to sell they need to play ball w/game pubs or soon the shoe will be on the other foot. Better to get in bed together now or be pushed out of business sooner than later.

@ArtGreen U are rite. BUT the practice hurts my industry and so my industry is find ways to get around it. Gamers suffer the most n meantime

People like u think this is a legal issue. Of COURSE you can resell your own property. But that is not what is at stake.

Used games hurt devs/publishers. Hurt devs/publishers go out of biz or find ways (dig dist; all content only on first sale) to stay in biz.

Gamer suffers. IF gamestop cut game makers into the deal, Gamestop could stay in biz much longer than they currently will.

It’s a pointless discussion tho. History is on game dev/pub side. Just look at music biz. We’ll laugh it was even an issue in 5 years.

@Joelvamp yes games are too much. And a player has EVERY right to get the best deal, including used. I would as well.

But again-all I can say is: look @the music biz. Games will follow suit. 4me, end of discussion. Stuff to do. 5 years it is all Dig Dist.

The above struck me as something you might hear from Tony Soprano. Say, that’s a nice side bidness yuse got wid the, shall we say, previously handled merchandice. It’dbeashame if something were to, say, happen to it.”

We can already see a couple of assumptions being made here that may not necessarily be true. The most obvious being similar to an assumption made about piracy: That every used game sale represents a lost sale that otherwise would’ve benefited the publisher. That’s not necessarily true. It’s quite possible that many purchasers of used titles may not have bought the game at all if a new copy at full price was the only option. I obviously can’t speak for all gamers, but the only titles I tend to buy used are ones that I’m not sure I’m going to like. If my only option was to buy such a title new at full price then I probably wouldn’t buy it. And, no, the $5 difference between a new and used copy of a popular title wouldn’t be enough to make me choose the used over the new. If there isn’t significant savings over a new copy there’s no point in buying it used. Are there gamers out there who always go with the cheapest copy? Probably, but is that the majority of used games sales? I would doubt it based on my experiences, though I can’t back that up with hard data.

The other assumption Jaffe makes is that the popularity of digital music is a reaction to used CD sales. At least that’s what he appears to be suggesting. I don’t know what planet he’s been on the last decade and a half, but as I recall the music industry had to be dragged kicking and screaming into the digital age. They started putting out digital downloads not because B&M music stores were making a killing on reselling old CDs, but because their customers pretty much decided they were going to get their music in digital form whether the industry liked it or not. And while it’s true that the popularity of digital music sales is growing all the time it still hasn’t surpassed the revenue made by physical media. It’s estimated that’ll finally happen next year in the U.S. and the rest of the world by 2016.  The music industry is far from being digital distribution only so using them as an example for his argument is pretty silly. Is it possible that the games industry could go to distributing only via digital downloads in five years? Sure, it’s possible, but I’d be very surprised if it were to come to pass. After all the first legally authorized digital music providers hit the net back in 2001. If digital sales do surpass physical next year that’ll be almost nine years before it comes to pass, and even then it probably won’t mean the end of physical media for many more years.

So that’s what prompted me to dash off a reply. Here are the resulting tweets:

Les: @djaffe What you say is a possibility. If it comes to pass then I may stop being a game consumer.

Les: If enough others do the same then Devs still lose.

Jaffe: if the main reason you game is to own a cd, then you prob should stop gaming, yes?

Les: That’s a helluva assumption to make. There are select few games I’ve bought digital. Only things I know I’ll play continuously.

Les: Most games do not fall into that category, God of War was one of them. I played it once, it was great, I’ve not touched it since.

Les: Luckily, I can sell it. Can’t do that with digital so if that was only format it was in you’d be out a sale.

Jaffe: Ah well, c’est la vie. If not being able to sell games keeps you from playing, don’t let door hit u on way out….

I was quite surprised by that reply. Jaffe basically told me to fuck off, which seems an odd thing to do to your customers. Things went downhill from there:

Les: I’ll be sure to remember that when you announce your next title. Thanks for making my decision easier.

Jaffe: dont buy it- you’d just resell the fucker anyway.

Les: So you think getting no cash at all is better than some cash even if I resell it? It’s your own wrist you’re cutting there. Smart.

Jaffe: I think ur philosophy&unwillingness 2 Cthe bigger picture implies that all games- mine included- can fuck off. It is what it is.

Les: I see the big picture just fine. I see is a dev who wants to limit people’s freedom to resell stuff they no longer have a use for

Jaffe: then u do not see big pic. I am always customer first. Resell all u like, I support it. I am saying stores need to cut in pubs

Here Jaffe repeats something he’s said before. He claims that he’s not against customers reselling their games, but he also wants to either make GameStop cut him in on the action or he’ll try to drive them out of business by going all digital and thus eliminating not only one avenue for customers to resell their games, but the customer’s ability to actually do so altogether. How is that customer first? Answer: It’s not.

Les: For the record I should point out that I’ve never sold to Gamestop myself, but I have sold stuff I didn’t need anymore.

Les:  [This is in response to his Customer FIrst claim] Except you just stated that you’d rather I fuck off than buy your game if I’m going to sell it. Contradict yourself much?

Jaffe: No I mean YOU should fuck off- not the concept. You simply seem like an asshole.

Les: Why, because I disagreed with you and had the audacity to say so? You don’t even know me. Great way to treat your customers.

Jaffe: No, not that u disagreed. The language you used and the attitude you used

I think this is a first for me. Being directly told to fuck off by a game designer that I actually admire. What I find funny about that is the fact that he’s the one that started in with the asshole-ish comments right from the beginning. I made two statements of a possible outcome of going all digital and his reply was antagonistic right from the start. Somehow that makes me the asshole?

For the record, yeah, I can be an asshole, but that wasn’t my intent in my original tweet. I suppose it takes an asshole to know an asshole, though, so I’ll take it as a compliment.

Les: What cracks em up is I’m a long-time fan of yours. Loved GoW and I even bought Calling all Cars. Still play it too.

Les: Language I used? I believe you were the first to start swearing. Wow, your hypocrisy is amazing.

Jaffe: I took your tone and attitude as rude, yes. If it was not meant to be, then I apologize. hard 2 tell at times on twitter.

Les: I think it’s pretty rude to try and blackmail retailers, which is essentially the argument you’re putting forth. Pay up, or else.

Les: Well, this has been very eye opening. I see you in a different light now. At least it’ll make for a good blog post.

Jaffe: I think it’s pretty rude to resell a game I worked on with 0% degradation between used and new and not cut me in on the deal.

Les: So what’s the difference between Gamestop and, say, eBay or a Garage Sale then? Who’s next for the mafia tactics?

It was at this point that Jaffe decided he’d had enough. Can’t blame him, he was taking it from more than just me during this time as several other folks were also on his ass about it. He tweeted that he was going to do a video blog about it, but appeared to have some trouble getting it to upload to YouTube as the video wouldn’t play and the post has since been removed.

Oddly enough a fellow by the name of Robin Clarke, who appears to be a video game writer of some sort, decided to take up the argument on Jaffe’s behalf at this point answering my last tweet directly:

Clarke: Scale, organisation and a biz model based on of aggressively diverting gamer $$$ from buying new to spending in their system.

Les: So because they’re successful at it they should be punished? WTF?

Clarke: Nobody’s saying that. Just that retail giving pubs a raw deal encourages pubs to cut retail out altogether.

Les: How is it a raw deal? How is it any different than a used car salesman selling a used car for close to retail if it’s not that old?

Clarke: Bad analogy.

Les: How is it a bad analogy? Because it refutes your argument or because one is a game and the other a car?

Clarke: Because they are businesses that work in incomparably different ways. Comparing one aspect in isolation is meaningless.

Les: Do they now? A used car dealer buys used cars and sells them at a profit. A used game dealer does the same. How is that different?

Clarke: Gamestop isn’t a “used game dealer” for one thing… Anyway, we’ll see who’s right one way or the other in five years.

I have to admit this last tweet made no sense to me. GameStop sells used games. That makes them a “used game dealer.” Yes, they also sell new games. Most used car dealers are part of a dealership that also sells new cars and, yes, I’ve had the used car dealer direct me away from buying a new car to one of their used ones. That’s how we ended up with the 2004 Honda Civic.

Les: So, in other words, lacking an effective argument you’re just going to pull the “wait and see” approach. OK, I’m good with that.

Clarke: No, but I can see that you’re convinced that you know better than ppl who’ve worked in games for years, so stepping back. gg

Les: Ah, argument from authority fallacy. That’s an oldie but a goodie. In short, I don’t agree with you and you know better.

Clarke: I don’t presume to, but I’m assuming DJaffe has better data on how well the publisher/retailer relationship is working out.

Les: Perhaps he does, if so he hasn’t shared it, and it’s very presumptuous to assume I have no knowledge of the situation.

And that’s how I managed to piss off two game developers in one evening.

So you may be wondering just what my point is with all of this nonsense. It’s simple really: Video games are subject to the same First-sale doctrine as music, books, and movies. As such I fail to see what it is about a video game that makes it special compared to other forms of media and/or merchandise that can be legally resold as used. Jaffe apparently agrees with me on that point as he claims he’s all for people being able to resell the games they’ve bought, though it appears you should fuck off if you’re just going to resell one of his (or at least I should).

Where we disagree is over whether or not anyone should be able to make a profit in the resale process, which is essentially what GameStop is doing by using the old adage of buy low and sell high. I don’t see what GameStop is doing as being any different than car dealerships selling used cars or used book stores selling used books. The issue Jaffe and other publishers seem to have is that GameStop is making a decent chunk of their revenue from the practice and, quite honestly, it’s got them feeling a little greedy.

The folks over at Gamasutra did three articles on GameStop back in April of this year which attempt to shed some light on just how much the company is making from new versus used game sales. The first looks at GameStop’s revenue and gross profits, the second new and used software sales and the last how much of the market they control. All three are worth a read.

There is no doubt that GameStop is a force to be reckoned with in retail video game sales. As of fiscal year ending 31 January 2009 they had global revenues of $8.8 billion of which $2.3 billion was gross profit. The perception in the game industry seems to be that most of that can be attributed to their used game sales which GameStop aggressively promotes to its customers.

According to the Gamasutra articles it breaks down like this:

Depending on the year, used product accounts for somewhere between 41 and 46 percent of GameStop’s gross profit. In the last fiscal year, gross profit on used product almost reached $1 billion for the first time in the company’s history. (The exact figure was $974.5 million, or 42.9% of the company’s total gross profit.)

The next largest segment of GameStop’s gross profit comes from new software sales, which totaled $768 million in the fiscal year ending 31 January 2009, up from $582 million in the previous year. Gross profit on new software was 33.8 percent of the company’s total gross profit.

Because margins on hardware are razor-thin, the gross profit in that segment is tiny in comparison to the software segments. The gross profit on new hardware was only $113 million in the last fiscal year, or 5 percent of total gross profit.

This shouldn’t be at all surprising. Used products (GameStop lumps software/hardware/everything used in one category) have a much higher profit margin than new for a retailer. The average wholesale price for a new game is just $6 to $10 less than the retail price and hardware is even worse. Used games can have as much as a 50% markup if they are particularly popular or rare. Is it any surprise that GameStop would encourage folks to buy their used games? It’s pretty difficult to make a profit on sales of new games alone as is evidenced by this 2007 Kotaku article about an online retailer dropping game sales because the industry is, in their words, “dumb and greedy”:

Online retailer DVD Empire has announced that they’re getting out of the video game retail business, citing an inability to make a profit selling games under the current business model. In their explanation to current customers, they outline seven reasons why current business practices make it, in their words, “impossible for us to make money selling video games.”

The reasons? High wholesale prices on software—“they set the retail price at just $5 above the product cost (buy it for $54.99, sell it for $59.99)”—and hardware—“take a $400 console; we only make $5 on the sale—that is a .01% gross margin.”

Worst of all? Lack of price protection and rampant price drops on bad or stagnant titles.

The game industry releases many bad games, and word of mouth spreads fast to the consumer. All of those bunk games sit on our shelves. If we do end up selling them, we lose more money, due to the lack of price protection. They won’t let us return the bombs. Of course, if the video game industry produced quality games, we wouldn’t have this issue.

The only good news here is that DVD Empire is clearing out its entire video game stock at 20% off. Enjoy, cheapasses. Michael McWhertor

The fact remains that over the past several years 37% to 42% of GameStop’s revenue comes from sales of new software whereas the used market accounts for 22% to 28%. Yes, they make a good chunk of their profit from used products (41% to 46% versus 33.8% on new software), but that shouldn’t be a reason to threaten to drive them out of business unless they pay protection money. Especially when they’re not doing anything wrong.

OK, I’ve wasted enough electrons and time banging this out. I did it more because of my bemusement at being told to fuck off than anything else, but it was also a good excuse to write up my thoughts on the issue.

237 thoughts on “In which I get into a Twitter fight with game developer David Jaffe.

  1. Better yet, lets start licensing ideas for resale.  Someone should own the copyright on, say, the commutative property of addition, and every time one person tells another about it, they should get a cut.

  2. To sum it up: First Sale may cut into our profits, therefore let’s make it so that consumers can’t legally exercise that right. Nice.

    By the way, we recently got a Wii for our older sprog and the closest Gamestop is less than a ten minute drive away. You can bet that I’ll buy pre-owned games if they’re cheaper enough.

  3. Good post. I also agree with you 100%. Forcing a percentage of used sales back to the publishers is a real stretch. Once I have bought the game it’s my property and if I decide to sell it back to gamestop or whatever I don’t want to be paying the pubs % out of my pocket again. It’s quite bad for the consumer.

    I’ve always found David Jaffe’s personality erratic and strange in all his blog posts, tweets and video blogs- so I wouldn’t take it personally.

    I just checked his twitter to see if his new game could be a new twisted metal and saw him going to town again. Rather strange seeing as he seems to be a pretty good game designer (although I hated god of war 1&2, just didn’t hook me in at all like they did to most people.)

  4. Les: Most games do not fall into that category, God of War was one of them. I played it once, it was great, I’ve not touched it since.

    Les: Luckily, I can sell it.

    The developer seems not to understand that in that dynamic, used sales support new sales.  If you couldn’t resell, you’d be a lot more conservative about buying.  And yes, your right to resell is what is at stake, because demanding a cut takes out the incentive for used sales (in addition to being logically silly – they want a cut of all sales and can’t accept that it’s early adopters who drive their industry).

    I am not a gamer but this same issue seems to exist for all media; movies, books, etc.

  5. If that’s the case if I sold my bravia shouldn’t Sony get a cut? Developers can be such cry babies… funny how they keep sucking up to gamestop by offerring exclusive content.

  6. I purchased a PS2 and a PS3 over competitive systems specifically because I had friends who purchased the same system. That way, when one of them had played a game into the ground, I’d be able to borrow it—and to be able to loan out the titles I had purchased.

    This is an even worse offense, because I’m cutting out both him AND Gamestop out of the transaction, because I’m not paying a dime. (Les: Next time I ask to borrow a PS3 game, remind me to send both of them a check to help my conscience.)

  7. They are wrong about their music analogy.  It’s about providing a product to the customer that the customer wants.  The music biz guys lost sight of that, but are learning the hard way that if you piss off your customer, they will go to someone else.  Apply that to the reselling biz and the developers are the RIAA who don’t want people to get music that originally came from them unless they get a cut of the profits or the ability to control distribution.  That effort is failing in the music industry, and everyone except the RIAA knew it would fail, yet these yahoos think they can win?

    Idiots.  They are using the same bullshit the RIAA did: They should own the product even after it’s sold.  It doesn’t work like that.  It CAN’T work like that.  If they haven’t learned that, then they won’t be around in 5 years.

  8. Looks like this entry got posted on one of the gaming forums. A pretty good mix of opinions both ways in the thread, but I find it most amusing because apparently I’m an egg-headed asshole according to some of the folks there. Asshole I’m used to, but egg-headed is a new one for me.

    Incidentally, if any of the forum posters there feel like commenting here feel free to do so. I do have comment moderation on at the moment due to a troll, but I’ll approve any comments left in a reasonable amount of time.

  9. One point I don’t think I saw mentioned is that a lot of people who sell their games use the money to buy the new games.

    I just don’t get the mentality of these people. The are making huge profit margins but that’s not enough – they have to get a cut of everything.

    What’s next with these people?

  10. Jaffe has posted his video rant about the topic. He addresses me indirectly and makes the same piss-poor arguments he made in Twitter:

    My irony meter broke when he described me as having a “smarmy, self-entitlement attitude” and then suggest I had said I’d pirate the games.

  11. I’m getting a kick out of the “it’s not the same” arguments though. “Used cars are different,” except I’ve been on lots of car lots where I could buy a new car of the current year or I could walk to the other side of the lot and buy a used car of the current year for a cheaper price. “Used books are different,” except I’ve worked in a used book store and the only thing that stopped us from putting new books right next to the used books was that the owner was a cheap, poor, bastard. “Used art is different,” except for, you know, the artists that put up prints of works that have already been sold next to their new works or galleries that resell art they’ve purchased from non-artists next to works by the artists themselves. Hell, I remember going into stores in the 1990s and buying used music cds from places that also sold new music, and before that places that sold used cassette tapes and vinyl next to new releases.

    Jaffe is a twat.

  12. I’ve been following the NeoGAF thread all morning and it’s been quite interesting. If nothing else I’m happy I sparked an active dialog on the topic even if it is happening off-site.

    Aside from Jaffe, I’ve seen analyst Michael Pachter show up and the folks from Gamasutra that I quoted in my entry. I did try to register an account so I could reply to a couple of points made, but it appears there’s a lengthy approval process for new accounts so I’ll just sit this one out.

    Still it’s amusing to be called a “Professional Troll.”

  13. I love hearing people give their opinions on this when they don’t even understand the basics of the game industry. It is different than other industries. Used sales for games are a lot more damaging than used sales in other industries.

    I could write an essay or some shit, but it be better if you all just think a little.
    Peace.

  14. In other words, you don’t have anything to back up your claims so rather than try to do so you’ll just hit and run.

    We’re used to that around here. After all, we’re just a bunch of idiots that never think about anything.

  15. Mmmmh, this all doesn’t worry me too much. Will be hard to directly enforce – what is a problem is the current inability to resell digital downloads. I’m not sure what the legal status of my Half-Life 2 steam download is, but I understand that I am either on a license agreement (i.e. they can yank my copy if they feel like it) or have signed away my resale rights…

    Ah well, the upside of all these stupid attempts to hamstring the consumer is: As long as these people don’t success having a law passed against doing it (reselling) there will always be competitors who will thrive by not doing such bullshit.

  16. I’m curious if he’s actually measured the damages to his industry. Please fill us in. You haven’t come up with anything except unsupported propaganda so far but I am willing to listen if you’d got something better to say, than blindly attacking those with a different take on things.

  17. I just sold several games and my DOS 3.1 floppies at my yard sale. I guess I need to write some checks.

    I made a bookshelf in my garage and sold that, too. I was happy with the price. The lady who bought it from me owes me nothing when she resells it, even if she sold it for double what she paid for it.

  18. Ingolfson:  Don’t laugh at these guys too hard.  Judging by some of the rhetoric I’ve seen, if they had the lobby to get it done by law, they would, no matter how much people like Jaffe say they think people should be able to resell games.  The reason the RIAA did it was because they thought they could get away with it.  When they didn’t, they started to fall in line.  So far, I don’t see any difference with the arguments that the gaming developers/distributors are using.

    What I find funny is that most games out there are crap.  If there were awesome games coming out every month and they were raking in the money, their argument would actually carry more weight with me, but as things stand now it makes them look like desperate people trying to do everything they can to increase their cash flow EXCEPT make a good product.

    And before you say that distributors don’t have a hand in making good games, ask anyone who bought Neverwinter Nights when it first came out.  The distributors added in some in-house copy-protection at the last moment that broke the game for a LOT of people.

  19. In all fairness to Jaffe I must point out that he’s not advocating that any laws be passed to force used game dealers to give pubs a cut of the profits. He is suggesting they do that voluntarily and if they don’t then the pubs will go digital only just to fuck over companies like GameStop.

    Which they are certainly within their rights to do if they want to cut off their nose to spite their face. I’m not saying that they shouldn’t do so if they feel that’s their best option.

    What I am saying is that I only buy digital copies of games that I feel I’m likely to play repeatedly (e.g. Left 4 Dead, which I have purchased) or that are so cheap as to make it an impulse buy (Jaffe’s own Calling all Cars). A good 85% of my game purchases are brand-spanking new copies from either Best Buy or Amazon.com and of those I keep the vast majority of them in my collection (I still have 90% of all the PS1 and PS2 titles I ever bought). The remaining 15% or so are either used or “greatest hits” discounted titles of games I wasn’t sure if I’d like or not.

    If the industry goes digital only you can expect that I will hedge my bets even more than I do now which means I’ll be buying even fewer games as I’ll be restricting my purchases either to titles I’m sure I’ll play the hell out of or cheap impulse buys. I don’t think I’m alone in that thinking and if there’s enough of us thinking the same then the industry is not doing itself any favors with that approach.

  20. My console game purchases are nearly exclusively used. I went out and spent nearly $40 buying a huge stack of awesome Xbox games when the 360 came out, as a matter of fact, at about $2 a piece using several years “best of” lists as a guide. I also have never owned a new car, buy used books, etc. I even bought a used Xbox.

    I’m interested though, in what special circumstances for games makes them break general economic rules. All of those used games that Jaffe is complaining about being sold next to new games at lower prices were already sold at the higher price or else they wouldn’t be used. Furthermore, if there was significant value in retaining the game versus selling it to a reseller there wouldn’t be very many copies to compete with new sales in the first place.

    There’s also an issue of unique relative value that’s going missing in this – a game’s entertainment value is sometimes not something that’s unique to any given game. That’s to say, all of the FPS’s have basically the same game play as other FPS. There’s nominal unique relative value of Unreal versus Call of Duty, especially in the replay value since a lot of that value tends to be “what are my friends/everyone else playing?” I could give two craps about the precious snowflake that is Left 4 Dead, personally, but I might pick it up at a reduced price for the same reason I picked up Counterstrike years ago: Other people are playing the game. The game itself has very little value to me, the value is in the trend. Even if I thought Left 4 Dead was a lame game it might retain value, but that value would not be uniquely associated with L4D. This is what makes games different from art you’d find in galleries and more like sitcoms, by the way.

    Anyways, enough for now – I’ve been replaying my used copy of Knights of the Old Republic on my 360.

  21. What a spoiled little shit.  I thought that when business interests wanted something from each other, they did things like negotiate and make offers and maybe give up a little autonomy to form mutually beneficial partnerships.  I guess throwing a fit and making silly threats is the new business model of the internet warrior.  What a douche.

    I would like to hear his justifications though, especially in regards as to what makes his business so different from other products and media.  I think the used car analogy is a lot closer than he would like, even closer in some ways than books and music.  High costs of equipment, research and development, highly proprietary products, and high customer investment cost.  What makes his interests so special, other than that they are HIS?
     
      And his music analogy is WAY off.  It’s the NEW record store industry that has tanked.  All there is now is Barnes & Noble, Target, Wal-mart, Best Buy, etc, all huge chains that carry an extremely limited selection of big-selling albums only.  Most of the independent stores that have a wide selection, (around here in CA, anyway) now carry new and used albums, do special orders, and even old game stuff.  The labels don’t support them, and they pay no tribute to the labels.
     
      I was never a huge gamer, but over the years it still adds up to thousands of dollars.  I’m growing ever slower in my upgrades and purchases though, and the increasingly proprietary nature, along with high cost for little value, are the main reasons.  If I buy the game, especially at today’s prices, I want to OWN THE GODDAMN GAME.  If the second user is locked out of all the cool features, or can’t even play the game at all, then all I bought is a CHANCE at some enjoyment.  If the game sucks, I’m stuck, and fuck that noise. 
      I always thought that the rates paid by second handers suck, but it’s better than no option at all.  I prefer to sell to another individual, cutting out ALL retailers except the one that sold me the game.  If I get sick of a game, I can get maybe $5 or so from GameStop, and they turn around and sell it for half or more of the cover price.  Instead, I find a friend who will pay maybe $20, and we both get a better deal.  On OUR PROPERTY.  That we BOUGHT, fair and square.

      If he wants to partner up with second handers, more power to him.  But he has to offer something besides threats, and a dubious claim of ownership beyond the sale.  He is also free to make the whole enterprise online, under his dictatorial control.  From what I’ve seen, many new generation gamers don’t mind that as much, basically renting a game in perpetuity, subject to some asshole’s arbitrary rules, but it will still cost him sales.  Perhaps many millions of sales.  Not to mention other kinds of losses-the more proprietary the system, the slower and lesser innovation becomes, it seems to me.  The customer gets less for his money, and less ways to be creative with his purchase, and that’s a shame. 

      I’m open to argument on any point I’ve made, but I’m not sure this guy has any to offer.  He just seems to want to be the king of the playground, demanding extra tribute, whether the people who use the playground want it or not.

  22. The way Gamestop handles used sales is very detrimental to the gaming industry. They push the used sales cause they make more money from them. Maybe for those of you who don’t care to much about the industry itself, and just want some game in your hand(preferably one you can resell to Gamestop for 10% of what you paid), its all well and good for you. But God forbid there are people out there like Jaffe, and gamers, who care more for the developers who made a game more than some retailer who simply resells them.

    The used game market is also quite unique compared to other industries(not many retail chains make ~50% of their profit from used items). A used game works as well as a new one. Movies have theatrical releases and music has DD to offset used sales. Not to mention movies and music are lower priced products(see Wal-Mart $5 movie bins), thus people are less likely to buy used. Cars also quite different, as the value drops quickly, and is a long term good. Same goes for electronics.

    The used game market is unique, there is no reason to be ignorant. The only thing it has to offset used sales are DLC, multiplayer, and DD for some titles.

    Nobody is calling for making used games sales illegal, just simply something so that Gamestop doesn’t push used so hard, which is what a publisher royalty could do. You may claim that such royalties would hurt the consumer. But how? Gamestop used prices are so close to the new version that there is no room to price hike. And they will not lower trade-in value cause then they won’t have any used games to sell at all. Their only choice would be to eat the cost.
    In fact, Les since you do not want DD so badly, you should be SUPPORTING this. If something is not done soon(which it probably won’t, but it should) than a digital download only future will come much faster. Then the only thing you will be buying from Gamestop are download codes.

  23. Johnson54:  You make no sense.

    Every “used” title begins life as a “new” title.  If game designers can’t make a good business model off of their own product the first time, what gives them the right to ask for more money after the first sale?  It doesn’t matter how much money Gamestop makes off selling used games.  Each and every game they sell was already sold at least once, if GameStop sells 100 copies of a game, that means that the people who made it ALSO sold 100 copies of the game and made 10 times the money.  Now they want MORE?

    They can go screw themselves.

    And yes.  I would rather have no games than a royalty structure for resale.  The games aren’t that good.

  24. @swordsbane
    1st of all the publisher does not make “10 times the money”. Are you forgetting that games cost money to make? The majority of publishers recently are struggling to stay in the black, while Gamestop is pulling in billions in net income.

    Secondly, what doesn’t make sense? Gamestop pushes consumers to buy the used version over the new version because they make a larger profit on it. Have you not been to a Gamestop? If you try to buy something new they have in stock used, they will almost always ask you if you want the used copy. The point of the proposed royalty would be to make it so that the profit difference for a new and used is not so obscene, so that they wouldn’t push used as much.

  25. 1st of all the publisher does not make “10 times the money”. Are you forgetting that games cost money to make? The majority of publishers recently are struggling to stay in the black, while Gamestop is pulling in billions in net income.

    So you’re really bitching that GameStop is making a lot of money, not that developers and publishers aren’t able to make a profit.  So what?

    What doesn’t make sense is how this is killing the industry.  Does the money GameStop makes somehow inhibit the amount of money the game designers make?  If I buy a game from GameStop used as opposed to buying it new from the retailer, does that hurt the industry?  Is the industry in such bad shape that it can’t make enough money to survive off of initial sales?  You’d have to bring out a lot of evidence to convince me of that.

    I got an idea: Make games that people will buy and then not want to resell.  Make it interesting enough to last longer than a few hours.  Make it stable enough so that people don’t get so frustrated they give up.  That might help a little.

    But don’t go begging for more money just because not enough people are buying your game.

  26. Yes, it does inhibit the amount of money they make…Doesn’t take a genius to see that. Gamestop intentionally orders fewer new copies of games as well so that they can push used sales. It is a wide known fact throughout the industry that Gamestop uses dirty tactics to push used game sales. You really must not be a gamer nor understand the industry, as this show “And yes.  I would rather have no games than a royalty structure for resale.  The games aren’t that good.”

    “I got an idea: Make games that people will buy and then not want to resell.  Make it interesting enough to last longer than a few hours.  Make it stable enough so that people don’t get so frustrated they give up.  That might help a little.”
    This just absolutely cracks me up. No matter how good a game is, there will be people who trade in to Gamestop for a few bucks.

    “But don’t go begging for more money just because not enough people are buying your game.”
    Uhh…I guess you are missing the point. The point is people ARE buying their games and they are not getting any money for it.

  27. @swordsbane: Sorry, but all this shows me is that they can only see themselves fitting into the industry in one way or competing in one way. They have no idea about how they might approach the problem differently other than taking shots at someone else’s model.

    @Johnson54: Well said.

  28. Doesn’t take a genius to see that. Gamestop intentionally orders fewer new copies of games as well so that they can push used sales.

    In other words, GS makes a profit on product returns. They may or may not entice customers to buy a pre-owned copy instead of a new one, but that pre-owned copy has to come somewhere in the first place.

  29. The majority of publishers recently are struggling to stay in the black, while Gamestop is pulling in billions in net income.

    So since the American car industry is in the tank, we should limit the sale of used cars? I grasp at what you’re saying, but it’s lame entitlement pleading with absolutely no fundamentals based on logic, economics, or the law.

    The point of the proposed royalty would be to make it so that the profit difference for a new and used is not so obscene, so that they wouldn’t push used as much.

    Except that any royalty expense would be passed along to the consumer. If people are buying too many used cars, the proper response isn’t to levy a penalty on consumers buying used cars so that the people making new cars can cash in on it. What would happen? Gamestop raises prices, continues business as usual, sales in general drop, game industry raises prices in response. It’s basic economics.

    But let’s step back: Part of the problem with game titles is that they’ve got a built in planned obsolescence. A game developer doesn’t want or need a title that sells once and everyone’s perfectly satisfied with it. The big producers, like EA, are making titles to sell future titles. Maybe you’d like to argue that game publishers should be legally obligated to produce games which have no such ticking clock on them, so that consumers wouldn’t sell games to resellers after 8 hours of gameplay? Maybe games should be sold as a matter of hours of gameplay? Publishers could get ~$5 per hour of gameplay, plus a flat $5 for multiplayer content, refundable if no one plays multiplayer?

    That’s nonsense, but you seem to be familiar with the territory.

    Maybe for those of you who don’t care to much about the industry itself, and just want some game in your hand, its all well and good for you.

    Maybe your special pleading makes a good case to people who care more about game industry pocketbooks than the law, common sense, or basic economic principles, if that’s the case then all is well and good.

    not many retail chains make ~50% of their profit from used items

    And yet most pawn shops, EBay sellers, Used car dealers, used book sellers, and even salvage companies do. Again, what the fuck is so unique about game developers?

    The used game market is unique, there is no reason to be ignorant.

    It’s not unique. Stop being ignorant.

    Not to mention movies and music are lower priced products(see Wal-Mart $5 movie bins), thus people are less likely to buy used.

    And yet both music and movies are comparably priced in terms of both production expenses and entertainment value/hours. Where’s the Wal-Mart bargain bin for $5 games? Oh right, there IS one (those value titles and 3-in-1 boxes, etc), and it gives first sale profits to publishers.

    Yes, it does inhibit the amount of money they make

    Well boo fucking hoo, I’m sure the music industry wants their check from the gaming industry for all the people spending money on video games since the 1980s instead of buying their latest albums too. You are not entitled to make money off of your product. Not ever. No, not ever ever.

    Come on, work harder. If you’re going to try to make a go at it here you’re going to have to at least work as hard as than the creationists and peanut butter anti-evolutionists.

    PS: You know what would probably kick Gamestop’s ass? If you could “sell” back your used games to the publishers for future credit on newer games, built into a kiosk sort of thing in Wal-Marts and Best Buys. Take in your used games and they scan them in to credit your account, toss them into the woodchipper in back, remove the step of having people go to Gamestop entirely. Instant cash for crap game reselling for publishers.

  30. This just absolutely cracks me up. No matter how good a game is, there will be people who trade in to Gamestop for a few bucks.

    Of course, but you spend a lot of time telling us the industry is unique, but no explanation why you think it should act like the others.  The point is to make a business model that works with the industry, not change the industry to suit the business model.  THAT’s why I make the analogy of the RIAA.  Not because the music industry is the same, but that the attitude of the game publishers/designers is the same as the attitude of the RIAA.

    Uhh…I guess you are missing the point. The point is people ARE buying their games and they are not getting any money for it.

    I don’t think I’m missing the point.  I just can’t find much sympathy of an industry that’s killing itself, but trying to blame others.

  31. I liked God of War as well, one of the better games I have played. I suppose it is no surprise that someone can be immensely talented in one specific field and yet be rather clueless otherwise. Les was completely right.

  32. I agree with you! Selling used games is just like selling used cars, or books! I personally buy “new” games most of the time. I usually buy “used” when there’s a rare title that I’ve always wanted to try out. It’s really sad that developers want a piece of the pie and tell their customers to “fuck off” well. I’ll speak with my wallet next time. One thing that they got correct is that the gaming industry is not like the car industry. Gamers tend to be more temperamental an will remember a company or developer who screw them over for years, and refuse to buy products even if they are good! It’s just how we are. Stubborn and blind. Cheers!

  33. I don’t see a reason why Gamestop shouldn’t make money on used game sales.  It’s a legal method of making money and so far ALL the legal arguments seem to support such a practice in most countries.

  34. Making money off used game sales is the Game Industry’s wet dream.

    They can make as many bad games as they have been and they’ll actually be more profitable than any “bestseller”.

    The whole used games fiasco shows you just how many and how far game devs and pubs have their heads stuck up their asses. They have stopped making games for their customers a long time ago.

    I hope everyone who whines about this shit goes out of business, since they clearly don’t know how to run one.

  35. I think you all have misunderstood the whole debate(including what Jaffe originally meant). He is not against the used market, but simply the way Gamestop handles it. This debate(at least everything I have brought forth) is to do with Gamestop solely. They order fewer new games to stem used purchases. They give people shit for their trade-ins. They undercut new games. They push used over new always.

    And so y’all got my views straight…I think unless sold privately, anything sold used that is some sort of intellectual property(music, movies, etc) should result in the original creator getting a cut(as long as it doesn’t lead to a signifigant price hike for the consumer). Those are my views. And I think due to the nature of the game industry, it has more reason to have it that way than other industries.

    @MisterMook hostile much?
    Most of that was addressed in one of my earlier posts. Gamestop used sales are so close to new that they have no room to increase price if such royalties existed. Car industry is nothing like games. Cars are a long term product, old cars are not as desirable as new. Wal-Mart has no bargain bins for games. They have a boxes at the end of aisles full of older games, but they are just the published-cut price. This is about newer games. How many other industries have short-term, expensive, ‘recyclable’ products? Let alone have a leading retailer essentially specializing in selling used forms? Not many. It is unique in regards to used sales.
    There is no planned obsolescence they put in what they can put in…yes EA and Acti release certain franchises every year, but that is because they are easy to make sequels to…and they sell.

    @swordsbane
    I’m saying it should NOT act like other industries. You instead sympathize with a horrible retailer that rips consumers off? Brilliant.

    As I said before, DD is the future anyway. This is all just hypothetical speaking. Legislation will never be passed because congress would never understand the intricacies of the industry. And obviously Gamestop will never agree to anything with the publishers.

    Y’all have your opinions and I have mine. If you care about gaming and the industry, you support this or DD(my preference, and what will happen inevitably) and to get better games(more money for devs). I’m confused, if you don’t support it and the games industry, who are you supporting(besides Gamestop). This is the internet though, you can’t change people’s minds no matter how long you try.

  36. think you all have misunderstood the whole debate(including what Jaffe originally meant). He is not against the used market, but simply the way Gamestop handles it. This debate(at least everything I have brought forth) is to do with Gamestop solely. They order fewer new games to stem used purchases. They give people shit for their trade-ins. They undercut new games. They push used over new always.

    No.  Either the business GameStop is in is right or it’s wrong.  Either selling used games is okay or it isn’t.  You can’t have it both ways.  You can’t say “Selling used games is okay” and then turn around and say that GameStop is wrong because they’ve found a way to make a ton of money off it, not unless they are doing something illegal or unethical.  And pushing the sale of used games is neither.

    Stop telling us GameStop is evil unless you have something other than the fact that they’re making a lot of money.

  37. The thing I don’t get is this:

    -what’stopping the developer from selling games to another chain exclusively for a couple of months, or

    -selling them in their own chain (e.g. like the Apple Store does), or

    -focusing on creating an experience/hype/incentive around new games that can’t be duplicated in the used market?

    This is a case of “I wish I’d have thought of that” coupled with an inability to imagine a re-imagining of their own business.

  38. -what’stopping the developer from selling games to another chain exclusively for a couple of months, or

    -selling them in their own chain (e.g. like the Apple Store does), or

    -focusing on creating an experience/hype/incentive around new games that can’t be duplicated in the used market?

    Not much.  This isn’t like the music industry where new technology has changed the industry.  There’s no way they couldn’t see this coming and try to do things differently.  Computer games have been around for quite a while and console games almost as long, and this isn’t a piracy issue.  There’s no way the mess the gaming industry is in is due to the sale of used games.

    Most games are crap.  Endless re-engineerings of old games, games with decent ideas but crap development, and simply games that are broke when they are sold has contributed to people
    A) Not buying games when they first come out
    and
    B) Not wanting to pay full price when they ARE interested in playing

    Games with no or little replayability are responsible for gamers not buying the games or buying them and (guess what) reselling them when they’re bored three weeks later.

    Game companies encourage customers to buy the latest game instead of work to make the existing games better.  This encourages customers to buy new games and (guess what) sell their old games.

    When the game developers have fixed these issues, maybe… MAYBE I’ll listen to them when they complain about places like Gamestop.  Although it’s far more likely that they wont have to worry about places like Gamestop.

  39. Oh and Johnson54, the idea that money has ANYTHING at all to do with how good a game is is insulting.  If anything, the reverse is true.

  40. Mister Mook-  I forgot to make that same suggestion (or something similar, anyway) in my last comment-Why don’t the publishers just compete for the used business?  If the product is, as some have said, just as good as new, then why not just get into the business instead of demanding unearned profits?  It worked for Honda and Toyota! 
    Surely they could afford to offer at least as much as a third parties can for used games.  It could be done through kiosks in malls as MisterMook said, or a “used” section in retail stores (the ones that will allow used sales, anyway-the big chains might have problems with that) or even a Netflix type of system-each game could be packaged with a postage paid envelope, returnable for some credit towards new purchases.  They could end up making another bundle off of the used sales, or at least create a position of greater strength in the market.
      Johnson54-“Dirty tactics”?  Gamestop has a product that they are selling.  They are under no obligation to sell things that don’t make as good a profit, no matter what it does to rest of the industry.  They are not running a gamer charity.  Those who only want “new” can still get it, from Gamestop, or another retailer if necessary.  As long as the customer knows what they are getting, and as long as quality is good and return policies are fair, who cares?  Or do we re-write the rules of private property for any industry that can’t survive, just so game developers can make more money without competing?
     
      Les-“Smarmy, self-entitlement attitude”-That’s fucking priceless!  I hope you laughed good and hard.  I bought a product and I wish to use it as I see fit, I’m such a self-entitled leach, living off the teats of those selfless businessmen!  Maybe I just don’t feel like shelling out $50-$60 bucks a game only to be treated like a sharecropper or feudal serf!  It sounds like he wants to be the King of Gaming Land.  He needs to realize that he is just a businessman, and nobody owes him tribute.  If he can’t hack it and fails, someone else will surely pop up and take his place.

    That would be sad, too, at least to me.  God of War is one of the very few fighting/quest games that holds my interest at all, and Twisted Metal (the whole series) is my favorite game(s) ever.  The idea was brilliant, although 1,2, & 3 sucked dog balls on graphics and physics/ease of playing.  #4, and Twisted Metal Black are masterpieces.  I wonder which he was involved in?

    Unnamed Tool-Keep the handle.  It’s perfect.

      It looks like this may become a bit of a debate, but I haven’t seen any good points or evidence to support any restrictions on after-market sales.  Just some whining, accusations of ignorance (while providing no information) and apparent greed & laziness.  For those defending the anti-second-hand perspective, please feel free to give some reasons why customers should willingly give up choices and pay higher prices…
    …  …  …still waiting…

  41. I hate to tell you but you are wrong in your argument, assumptions, and comparisons. There’s no getting through to a blockhead like yourself so that you can actually understand the points they were trying to make to you. If I were you I’d find something else that you have some understanding of and blog on that subject but this Gamestop and used game argument is not one of them you should be discussing.

  42. I hate to tell you but you are wrong in your argument, assumptions, and comparisons. There’s no getting through to a blockhead like yourself so that you can actually understand the points they were trying to make to you. If I were you I’d find something else that you have some understanding of and blog on that subject but this Gamestop and used game argument is not one of them you should be discussing.

    This looks like kind of a generic rebuttal.  It would help if we knew who this was directed at.

  43. This is a sticky issue no doubt, and I regard God of Waras one of the greatest series ever so if you only played one that’s a shame. That said, Jafee was/is acting like a little bitch, and it’s sad that he’s doing it through Twitter. On one hand I consume games more than anything else, but I still consume other media as well. I doubt there is a person in existence who will say they won’t download a song whenever they want, but movies and games fall into different categories. You can’t just get a little smidgen of the whole thing, unless of course the game is designed to be modular like that, and it’s the same with movies.

    I think the argument to be made here is that Gamestop as a whole is called out about their used game practices. Gamefly, Game Crazy, Blockbuster, etc, are never mentioned, only Gamestop. It has more to do with the company then the sales, and of course they sell the most and they should be mentioned first. Typically I don’t sell games to Gamestop and at the same tim eI typically don’t buy used games. If I do buy a used game, it’s usually one I have owned already and when I sell games I almost always purchase new games. I like to think that I support the industry, to me it means more than the movie or music industry. If you could play games on any system(Nintendo on Sony platforms, etc) we would be looking at a whole different side to this story. Since gameing consoles are such specialized devices that are uesd to deeply entertain an individual it makes the whole used v. new thing a harder area to compare to music and movies.

    In five years downloads won’t take over games, but if there was a unified system to play games, one console that everyone made one game for it would be much harder to say used games are cutting that deep into dev/pub pockets. It’s an intricate system that Gamespot can exploit, if any of us were looking to make billions of dollars we would do the same thing, even David Jaffe. He is totally wrong about the future though, no doubt about it.

    If Gamestop goes belly up in five years I will eat my shoes. DD is not going to kill retail, if dev’s think for one second that any retailer that sells games is going to give up a critical aspect of their draw to come inside, he is nuts. The only reason I usually go to Gamestop is to get a day one release, and even then I prefer Best Buy. Walmart and other stores don’t always have games on release and usually only carry the ones that will sell well.

    Gamestop exists solely as the middleman between gamers and non-gamers, a place where moms can go and be properly informed on their purchase or what they are looking for. I could drone on and on but the simple fact is Gamestop will be around for quite some time, digital downloads or not. You can also bet your bottom dollar they have a plan in place to exist whether you buy a game from home or at their store. Jaffe and everyone else better get used to it.

  44. He make the assumption that many of the used sales in a store such as Gamestop will translate directly to first adopter sales if used sales were to sudden stop. FAIL

    I can’t emphasize enough how flawed his logic is. Secondly – used cars was as good an analogy as any. See, a car depreciates in value EVEN if it was never driven…newer “cooler” cars will do that to the older models.

    The time-line for a game to be exactly the same as the day it was launched disappears much more rapidly. This is due to this gen’s obsession with multiplayer. Of course exceptions exist – and maybe those titles should remain at full price. But a large majority of titles simply lose their appeal as soon as the online community jumps ship to the next title. But retail CAN’T reduce the price in a semi-efficient manner because Publishers won’t cut their price.

    Now, if as he suggests that he is not motivated by greed or grasping for coin in a hurting economy – then the publisher should sell the games to the retail chain at a reasonable price so that all prosper.

    Lastly, I think from his demeanor and vocabulary that he is angry. He feels entitled. IT IS THE DEVELOPERS RESPONSIBILITY to create content that leaves individuals no desire to sell their fresh new copy of X.

    He also has the opportunity to create content that is compelling early adopter DLC that CAN”T be resold.

  45. (40YA): @swordsbane: Sorry, but all this shows me is that they can only see themselves fitting into the industry in one way or competing in one way. They have no idea about how they might approach the problem differently other than taking shots at someone else’s model.

    Businesses are in it for the money and not for altruistic purposes.

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