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Report: Used game sales blamed for industry losses

Sunday, 27 June 2010 11:21 GMT By Joe Anderson

usedgames

The games industry is suffering from declining sales again, and analyst group Cowen and Company is blaming pre-owned games.

Speaking in a note, Cowen and Company said software attach rate for PS3 and Xbox 360 is down compared to that enjoyed by PS2 and Xbox in 2003, with the growing trade in pre-owned being the driving factor.

The company said software sales for the latest machines are down 20 percent from that of the Xbox and PS2, standing at 106m (Xbox 360) and 85.5m (PS3).

Sales of titles in their second month of release have also fallen, dropping 62 percent since 2001.

Some analysts are suggesting the use of initiatives, such as EA’s Online Pass, will help to curb used game sales.

Thanks, MCV.

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40 Comments

  1. drewbles82

    I dont buy brand new games on day one release anymore, its far to expensive, i might do for games ive been really looking forward to like Rock band 3. But theres games id love to have but just waiting a month or so, and prices come down. Older games tho i buy 2nd hand, you can look on amazon, see a game that came out 3-4yrs ago, buy new could be like 9.99, but the used could be 2.49 and be like new, or very good condition. hmmm which one would i prefer.I like 2 keep most my games just incase 20yrs later i decide to have a retro day but like the other interview on here bout online pass, if they did that with more games, that would make a lot of ppl angry. Im already angry that the pc has games u have 2b online 2 install, or even use which is annoying cuz if the net is hard 2 get on2, i mite wanna play a game 4 a few hrs or something but cant cuz u gotta b online.

    #1 5 years ago
  2. frostquake

    As a US Consumer we are now spoiled and the Genie is out of the Bottle and can’t go back in.

    Companies like Best Buy, Online Retailers like Amazon, and others are to blame. A New game comes out, and almost a month later it is More then Half off. Consumers have learned this here in the US and we now wait on all but the must have games. Blur just came out and Amazon has it up today for its Daily 24hr only Game sale, at $29.99 US.

    Also the Economy has taught us that. When money was flowing like water here, we didn’t care that we paid full price for games day one, but now that money is a trickle, we look to stretch the dollar out and get more bang for the buck, Retailers saw that we were holding on to our money and took deep discounts on Games, Now that they have done this, it is a learned behavior that can not be changed. In a sense, Retailers are totally at fault by devaluing the value of the Game Product, by telling us that in less then a month this New game will be 50% off or more.

    So in a sense, Blame the Retailers and the Economy not Consumers!

    Oh and as a side note, there hasn’t been a really good game lately either.

    #2 5 years ago
  3. loki

    Blame PC ports. Many gamers think: Why i should buy this game for Xbox 360 or PS3, if i can download it for free from torrent.
    Used games: gamer sale it and buy new game, it is much better than free PC ports

    #3 5 years ago
  4. Happy Hardon Harry

    Next Gen systems will come with a DRM system built-in to prevent second-hand sales. Each game (physical and downloaded) you get will be tied to your console.

    If Sony, MS, and Nintendo are so concerned about the second-hand market then they’d go down the digital only route i.e. no physical media.

    But, none of those firms have the balls to do it as they are afraid retail will boycott them if they went digital only.

    #4 5 years ago
  5. Happy Hardon Harry

    @3

    You’re as bright as a blackout…Blame PC ports?

    #5 5 years ago
  6. LordCancer

    attached rates for xbox 350 and ps3 are lower? for one thing the console are twice as expensive. the ps2 had many games launch at $39.99 where as current price for a new games is $59.99 and then if you like a game your more likely to buy $20 or $30 worth of dlc. one game and some dlc is the cost of two last gen games. borderlands is still $39.99 + 3 pieces of dlc at $10 each. where did the money go to buy games? activision maybe, Indonesia maybe, kids certainly can’t afford this generation and I don’t have a fucking job. Go Fuck yourself industry.

    #6 5 years ago
  7. Bulk Slash

    Maybe the answer is to emulate the film industry’s agreement with cinemas? The film makers let the cinemas have the new film exclusively for ~6 months and in return the film makers don’t release the film on any other mediums (DVD/TV/cable/etc).

    For the games industry it’s sort of the other way around, but maybe retailers could agree to not sell second hand copies of a game for a fixed period after launch, like 2 or 3 months. In return, the games industry doesn’t release the game on Steam/XBLA/PSN for the same period.

    After that time the game can be sold online and the retailers can sell used and they can do battle over price.

    In general I don’t have a problem with used games, but it’s reached the point now where it’s become the primary business strategy of retailers. They’re biting the hand that feeds them by being overly aggressive on trade-ins and used sales. All they’re doing is accelerating their own demise by giving the industry a reason to expedite the transition to online only delivery.

    As it is, it already looks like we’re going to end up with games that lock themselves to a system and cannot be sold on (i.e. 3DS). Which as far as I’m concerned will be a disaster for long term collection/archiving of games because you’re reliant on your console/handheld/PC never breaking.

    #7 5 years ago
  8. LordCancer

    if games are locked to the 3ds or even future console im done, ill retreat to steam. fuck everyone else.

    #8 5 years ago
  9. Freek

    It all comes back to one simpel fact: outside of a few mega franchise most of the general public is not prepared to pay 60 dollars/euros for a game.
    So they find ways around that; piracy, second hand sales. It doesn’t matter what the games industry does untill it deals with that simpel reality: 60 bucks is too much. The consumer has spoken.

    #9 5 years ago
  10. Happy Hardon Harry

    @9

    Exactly, my days of paying £30/40/50 notes for a game are long, long gone. Now i don’t pay more than £20 for my games.

    #10 5 years ago
  11. Bulk Slash

    If prices are too high for consumers I think the real question becomes what can the industry do to reduce the cost of development. Things are only going to get worse on the next generation of systems where detail levels will be even higher.

    #11 5 years ago
  12. kkzooi123

    I see alot of Xbox green

    #12 5 years ago
  13. drewbles82

    what i use to do was buy a game, play it 4 ages, then buy a new one and play that. I ended up with loads of games uncompleted. So now i concentrate on one game at a time, complete it and get as many achievements as i can 4 it, then go onto the next game. By the time ive got thru a few, i might get some new ones which by then will be a lot cheaper. Works out great4 me.

    #13 5 years ago
  14. drewbles82

    I also dont have a job. DRM would ruin things big time cuz the amount of times where a friend recommends a game, but cant show it you on your system, also what if your console breaks or you have more than one in the house, u gotta have a copy 4 each console. Going digital would also be a huge bad idea as retailers then would only really be selling the hardware and accessories.
    Im glad i wait for things to be cheaper, Fallout 3, 39.99, then all those DLC as well, looking at prob almost 80.00 for the lot. I waited and got game of yr edition cheap for like 17.99

    #14 5 years ago
  15. OlderGamer

    I just spent 25ish usd on steam. Got Witcher, three other hack n slash rpgs, two puzzle games, and Grid. Steams weekly sales blow outs are amazing. That is value.

    And value is why people buy second hand games. It is just that simple. People can’t buy what they can’t afford. Very few games today are worthy of 60usd. And like you guys have said too, add in 20-40usd for DLC, and your game price is up near 100usd. It is costing me 300+usd a week just to feed my family. Gas prices are still through the roof. Taxes aren’t going down, add in there collage tution(wife) and two teens poised for collage. And in the end that new video game isn’t looking like such the big deal anymore. We can wait a few months for the price to drop. We can buy it used. we can game on the PC. Or we can just go with out it. This is an entertanment industry. It is a luxury.

    So people buy second hand games? Have a law that pays the pubs a royality for every game sold at retail(used or new), and problem is solved.

    #15 5 years ago
  16. hitnrun

    Yawn. Every time a company can’t sell enough of its games, it starts blaming the used game market. It’s like the console version of “Piracy!!!”

    The problem with this theory is that it’s disprovable with a simple thought experiment: just pretend used games were banned. (In the US, at least, they’re protected by the law, but just imagine for the sake of argument.) What would happen?

    To hear these analysts tell it, people would be snapping up copies of Alpha Protocol, WET, and Avatar: The Game at $60. This is complete nonsense. People who buy used games, for the most part, simply don’t have the money to buy games new. Sure, everyone picks up missed gems, now and then, on the used market. If you’re talking about the engine of the used game economy however, it’s video-game enthusiasts who can’t afford to keep up with the newest releases at $60 except on their own birthday, and Jesus’ birthday. A walk into any male teenager’s bedroom in the western hemisphere confirms this.

    So by banning (or code-locking) used games, what are you really accomplishing? You’re making it more difficult to become a videogame enthusiast, for one, shrinking your market as people with little disposable income blow it on something else and stop following the industry. You’re increasing your own competitive costs – when people MUST spend full price and can’t sell their games afterward, they’re sure as hell not going to pick up some paint-by-numbers crap factory based on a 15 second commercial.

    EDIT: The used game market is an expression of the market regarding the prices of games, namely that they’re too high and too uniform. Publishers could correct the problem tomorrow by breaking ranks on the $60 price-fixing scheme. Take Blur, for example. Do you think if the publisher had moved its MSRP down to $40 or even $50 at launch, people would be dealing with the seediness and risk of the used market over a measly 10 dollar difference? Of course not. The publisher would be making the lion’s share of $40 or $50. Instead they’re making 0% of $30.

    #16 5 years ago
  17. itwa5medicks

    This is utter nonsense!!!!

    The economy is a giant domino, topple one you topple all.

    The economy has been suffering bad since 2007.

    People’s credit has been taken away, that was the number one way of buying games in the US. As the banks make more on overdraft fees instead of lending.

    These companies need to realize that they CAN have a few bad years, just like we are. Selling a 100 million of anything is a gigantic achievement, when it becomes a standard you will see everything fuck up because your trying to make the impossible a common event.

    MAKE GAMES CHEAPER! Wow the music industry never got that, look where it is right now? I don’t think the record industry ever blamed the used cd shops, nor do I think they had much of a hand. The true killer of that industry was the clueless greedy industry heads that refused to make their product affordable. Who the hell is gonna pay $17 for a cd?? Well allot of people feel that way about games.

    One thing I don’t think people realize is just how steady the video games market has been. I paid more for nintendo 64 games and genesis games ($70) then I do ps3. In fact the ps3 has been the cheapest new system…..ever. That is because the economy is in the toilet and the people in charge know that if they were to charge $70-80 per game that they would be broke.

    To save the industry:

    1. Stop fucking us, your boss..that pays you…in the ass.

    2. Stop trying to create an entertainment financial virus, ie, stop trying to hook your game up to my bank account.

    3. Stop putting untold billions in retarded games, you are your own worse enemy.

    4. Make value synonymous with video games. How come I never see a commercial where they show a guy blowing $200 at the club to come home empty handed and bored all week just to do it again? Is ANYONE bitching while theyre slamming that $10 shot about value, yet is anyone not bitching on monday when they’ve spent theyre entire check?

    Just stop doing what your doing and you’ll be fine. I feel like the video game industry is the creepy uncle leering at my wallet instead of my crotch.

    btw- the reason the games that sold 100+ million sold as much as they did was because…they were worth it! They were total game changers, GTA revolutionized the industry, gran turismo revolutionized the industry. Those two games have spawned a good percentage of the market. They were honest, they weren’t gimmicky, they weren’t an imitation.

    Instead of coming out with 10 gran trusimo ripp offs just make a better gran turismo. Instead of coming out with a 1000 grand theft ripp offs, create something totally new!

    Also if it does cost too much to make games these days, why not split the games in two? Red dead revolver could have been 2 games, the single and online. I don’t play the online, its a waste, it could have been sold separately, in fact the ONLY game I play both modes of play regularly is call of duty, which the one of wants to hook up to my bank account (greedy ugly fuck). If the games were separated, we would have a choice, you would make more money, you could stop making the stuff we don’t buy and save money. Who plays the online mode of batman arkum? NOBODY! So stop screwing me in the future for the wasteful things your packing in today.

    #17 5 years ago
  18. OlderGamer

    @17

    “One thing I don’t think people realize is just how steady the video games market has been. I paid more for nintendo 64 games and genesis games ($70) then I do ps3. In fact the ps3 has been the cheapest new system…..ever. That is because the economy is in the toilet and the people in charge know that if they were to charge $70-80 per game that they would be broke.”

    While I agree that game prices have been level for a bit, I think your over looking a couple key factors.

    My PS3 launched with a 600usd price tag. None of the other major systems where ever that close to that price. Not even XB360. The 3DO was over priced, but less then that. And the Neo Geo was over priced, and less then that. W/NG it was a full arcade system when it launched, so to even compare it pricewise is a bit unfair. As it was less of a home console and more of an arcade you can use at home.

    As for game prices, your also a bit off the mark.

    I never bought a SNES, GEN, or N64 game that was 60-80% complete, forcing me to buy DLC at 10-40usd if I wanted the “full” expierence.

    Also this generation is accesory heavy. Expensive controlers, wireless adpators, blue tooth headsets, HDDs, online fees, plastic instruments, virtual points/currency etc. Of course many of those things are optional and dependant of what system/set up you have, but my poiint being they were not factors on the N64/Gen in the past.

    The truth is this industry in this day and age has found clever ways to increase their revenue. And we can all agree with that.

    I just don’t agree that there is a silver lining that claims the PS3 is somehow cheaper then other systems in the past. Neither is the xb360 for the record. Or The Wii.

    IMO the best way to play games today, is on the PC. Even if you factor in a brand new middle range RIG. Look at the price difference between games. Look at steam. Look at the depth of games like the up and coming Starcraft 2. Civ V. Look at all the xross games/ports of xb360/PC games. Again look at the insanely low prices Steam has, every week a blow out. I just got Witcher game of the year special ed, less then 7usd.

    In the end gaming costs money. It is a luxury. A hobby. And things are worth different levels/values to different people. I am, personialy, fed up with rich people in the games industry bitching about lost revenue. I am hanging on, me and my family, but things ain’t great. I am still gaming, albeit less. And I know that I got it good when compared to many others. But I also know that the games industry is a freaken multi billion dollor monster that consumes itself, and I have a very hard time finding a silver linning or feeling sorry for it.

    #18 5 years ago
  19. ivycrew707

    I wonder when Gamestop is gonna weigh in on this. I was thinking how Gamefly is gonna be affected, but Gamestop even more so

    #19 5 years ago
  20. The_Deleted

    Don’t sell games at inflated prices people obviously aren’t prepared to pay.
    Simple.

    #20 5 years ago
  21. Phoenixblight

    @20

    THat and don’t make crappy games. Thats one thing that drrives to bring it to Gamestop like I had done with Fable 2, Brutal Legend, Alpha Protocol., etc.

    #21 5 years ago
  22. Stoopid_Snot

    I am soporting the game industry
    oly buying legit games on never use torrents or buy 2nd hand.
    expensive yeah but at least i buy a disc with no scraches one and the money get shared between Developer, Publisher and retailer not only the retailer

    #22 5 years ago
  23. Elven_Star

    How about making better games instead of whining all the time? Good games sell fine. Plus, companies should stop being so greedy. 60 bucks is just too much for stupid 4-5 hour action games.

    #23 5 years ago
  24. ivycrew707

    @20 agreed, if they made demos for every game that would help, but seeing as how they’re ready to start charging for those…..used games probably help the industry, because a lot of games would never be purchased until gamers felt they could take a chance on them

    #24 5 years ago
  25. macronia

    companies are greed >> what we suppose to do … rob bank .. or get a money machine in my home … i don’t complain about 60 buck game and it worth it like GTA or FF or any game that can take too long to finish .. that’s okay but 60 bucks on MW2 for example :( that i can finish it in 3h .. i am not fan of online so 60 bucks evaporates in blink of eye .. what i do is get the game and play it >> finish it >> doesn’t want it any more so i sell it so i can buy another

    i barely get game each 2 month >> now it will be 3 month for extra xlive + code to play live … come on .. i thought i can see some discount on games for 50 or 45 max

    now everything is for rich people .. mini rich :D and less rich can’t play or watch matches or movies or any shit

    it is easier to built good PC .. get games from torrent and play many games whenever i want and every year i upgrade rig and i still play what i want
    i think it is fair

    lol and companies say piracy … u know what hackers say in their hacked games that they make people life much easier :D .. oh yes they do

    #25 5 years ago
  26. itwa5medicks

    @18

    I see where your coming from, but your arguing with yourself.

    You said you paid too much for the ps3. Well first off you didnt have to by it at launch, after dreamcast I’m waiting on every console for over a year to see if it works or not.

    BUT

    The launch ps3 was practically a computer, a very very nice one at that. People forget that ALL blueray players were $750+, ok? People don’t realize what kind of cd player it is either, it came with a SACD player which if your an audiophile is a big bonus, it let you install 3rd party OS!! I am probably the most pissed person besides nuclear scientists thats pissed that they removed the feature. It had bluetooth so that you DON’T have to buy 1st party marked up equipment, you can use the same ol’ headset for your phone. Plus the controllers battery lasts forever! FREE online play, PLUS internet. On top of the fact that it is a multimedia workhorse. That launch ps3 cost sony $150+ to take home, as all the feature made it too expensive for even them. When do you EVER hear of such a thing??? EVER?? I think it was the biggest gift sony gave!

    $600 at launch as steep and unheard of was NOTHING compared to the $700 3DO the $400+ saturn…..all systems that did NOTHING. Bringing the neo geo into this MAKES NO SENSE as it doesnt compare! I don’t care what people say now, when it was out… NO ONE had one. $300 per game kinda killed it for everyone outside the top 3% highest earners.

    The technology reached affordability, you cannot TOUCH a computer that can play the SAME games that a ps3 can for under $1,250. Even today…4 YEARS LATER!

    Your argument is kinda baseless. Your mad the system cost YOU so much (me…$150). Your also saying that YOU buy unfinished games for full price. I havent bought a shitty game because I do my research, I’ve been burned too many times by an industry that doesnt care.

    I think the economy is the biggest reason I’m right, because if it was better there wouldnt be the mark downs you see. But so long as sony doesnt make me pay to play online, and doesnt make games that get hooked to my credit card, I’ll be a life long customer.

    #26 5 years ago
  27. IL DUCE

    Yeah people just don’t buy games anymore because renting them is so much easier…Instead of buying a hyped up game that is supposed to be the next best thing rent it first instead of getting home and discovering you just paid 60 bucks for the shittiest game ever and then trying to return it and it’s already half the price for trade in first…this is just the economy and gamers fighting back for what publishers and retailers have fucked us over with in the past…even if it is incidental and mostly caused by the economy…don’t put out shit games not worth more than one play through and then we’ll start buying them…example: I saw alpha protocol advertised all over ESPN on tv and other internet sites etc. and almost got sucked into pre-ordering it but I held off and rented it and thank god I did because even shitty games can get plenty of advertising and while its not a bad game…it def would not have been worth 60 bucks prob more like 30 bucks since the graphics were abysmal and it is extremely unpolished and really just an unfinished game…

    #27 5 years ago
  28. Joe_Gamer

    @26
    “The technology reached affordability, you cannot TOUCH a computer that can play the SAME games that a ps3 can for under $1,250. Even today…4 YEARS LATER!”

    aaannnddd here’s where you lost it, people think PC gaming is so expensive lol. I could build a $600 PC that would piss all over the PS3 in every way.

    http://www.tomshardware.com/reviews/cpu-gpu-overclock,2659.html

    The PS3 is easily the best value in consoles but the PC is still the best value in gaming.

    #28 5 years ago
  29. Joe_Gamer

    I think there’s too big a difference between the good games and the shovelware. Some developers are pushing the envelope really hard. Making the cheaper games look even worse. With games like Mass Effect 2, Uncharted 2, God of War 3, Assassins creed 2, and Bad Company 2 selling for $60 then you see crap like Avatar, Iron Man 2, Hanna Montana: the Movie, Leisure Suit Larry: Box Office Bust, M&M’s Adventure(yes, the forking candy got a game), and Rogue Warrior(all two hours of it), also go on the shelf for $60 bucks. It’s ridiculous lol.

    What we have here is the few really good games selling well and a bunch of overpriced crap games selling not so well and somehow that’s a surprise?

    “Shit, now ones buying our games who can we blame? ooh ooh I know, the customer! We’ll blame the customer! Yeah that should work.”

    #29 5 years ago
  30. DaMan

    computer is actually the cheapest and probably best way of playing games these days, more so that 360/PS3 exclusive libraries are nowhere as good as in the days of PS2, let alone N64 and Playstation or MD/SNES. they’re basically just dumbed down PC. you can get a decent video card, a wired 360 pad and you have the same stuff. sure XBL is great and they’re comfortable but, uh, it’s expensive.

    if it wasn’t for a few exceptional games like Bayonetta, and jrpgs that I still play despite how relatively poor they became, I would probably never bought an HD console this gen. also I don’t have Windows at home anymore because I work on the Mac. don’t want to install that disaster of an OS just to run games, since I already have the console.

    #30 5 years ago
  31. Blerk

    I was in GAME on Friday and for a moment I seriously did think they’d stopped selling new games at all. Rack after rack after rack of preowned. And then… right at the back of the shop, tucked away…. a single rack of ‘new’ stuff. With hardly anything on it. And everything at ridiculous prices.

    So yeah, I think preowned is probably killing at least high-street game sales. Because it’s practically impossible to buy anything else if you go to our ‘dedicated’ retailer.

    #31 5 years ago
  32. AHA-Lambda

    yep on many an occassion i’ve had to actively search for the new games section =/

    strangely hmv are fine with their layout. Everything is obvious where it is but not gamestation/game

    #32 5 years ago
  33. blackdreamhunk

    yea i am buying less and less game these days microsfot and sony has damaged gaming as whole.

    #33 5 years ago
  34. OlderGamer

    “yea i am buying less and less game these days microsfot and sony has damaged gaming as whole.”

    I agree.

    We all know your out there bdh, but as time goes by, you look smarter and smarter, the PC keeps looking better and better. Steam is freaken amazing.

    #34 5 years ago
  35. theevilaires

    I don’t understand how people can play PC games on a tiny PC monitor. Please tell me you guys have your rigs connected up to a HDTV.

    #35 5 years ago
  36. DrDamn

    “Tiny” PC monitors tend to look bigger via the natural zoom method of sitting closer to them.

    #36 5 years ago
  37. theevilaires

    Who wants to sit close to a damn monitor ruining their eyes all slumped over in a computer chair. Its gay.

    Here’s what I recommend. Get yourself a HDTV (preferably SONY Bravia XBR 40″+) connect your PC rig up to it via HDMI or regular analog. Get a wireless key board and mouse and there you can game like us superior console gamers on the couch or love seat :D

    Step Your Game Up! PC gamers.

    #37 5 years ago
  38. OlderGamer

    I play my PC on a 42inch HDTV in my living room. I also have a USB xb360 controler pluged into it. I can stream about anything, watch netflix through it, play while listening to iTunes, IM, post on this site, etc.

    It isn’t that I stoped enjoying PS3/XB360, just that I am less of a slave to them as I used to be.

    There is going to be games that I can only get on one or the other, so as long as I can afford this game or that, I still have that luxury.

    But in the end the PC is a damn good looking set up.

    #38 5 years ago
  39. theevilaires

    I’m not kidding myself. I know a high end newly upgraded PC will kick the PS3 and XBOX360 ass at the same time, but some people here talk as if they have their mighty rig hooked to a small PC monitor.

    Thats the way to do it though. Have it hooked up to a HDTV and use either your Dualshock3 or 360 controller. Depending on where the next gen of consoles takes us I might become a PC gamer only. If SONY and M$ think they can ever get rid of disc base games fuck them.

    #39 5 years ago
  40. Joe_Gamer

    Why would you want disc base games? Do yo like loading screens or something? You’re right about the big screen though, my projector is only 720P but the 130″ screen takes some of the sting out of it, and as a bonus gaming takes less hardware.

    #40 5 years ago

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