On the Second Hand…
There has been… a rumour. Within the video games industry, of course, this has about as much clout as it does in Hollywood, but let’s overlook that for a moment, shall we? Because in this case the rumour isn’t fanboy wishing or wilful misinterpretation but a worrying indictment of today’s games industry – an industry, let me remind you, which is now bigger and more profitable than cinema. The rumour in question – as reported by Edge Online and a number of other gaming news channels - concerns the successor to the Xbox 360 and in particular how the platform will deal with second hand/pre-owned games. Or rather, claims “a source”, how it won’t. Yes, apparently the Next Xbox (or the Xbox 720, or whatever we’re supposed to call it these days) will employ an undisclosed mechanism which will bind all games purchased to their original owner, thus preventing trade-in and second-hand sales.
Now before we begin let’s state the obvious caveat: these “facts” (note inverted commas) were attributed by Edge to “a source”. This is a journalism trick as old as the hills and should generally be translated as “we made this up in order to increase our circulation”. Note also that the nature of the mechanism that will supposedly achieve these blocks on pre-owned games has been left undefined. Why? Surely if the source is privy to such top-secret information they can tell us how this insidious act will be instigated? All in all it’s fairly likely that this story is entirely fiction, but the fact that so many gamers have swallowed it hook, line and sinker is, again, an indictment on the industry and this, more than anything else, makes it worth discussing.
Let’s be honest here: games publishers hate the second hand market. Much like their stance on peer-to-peer sharing, they are convinced that it's destroying their industry, robbing them of their rightful profits and forcing their directors to give up their hard-earned six-figure bonuses. Nobody would question their right to protect their copyrighted software from piracy - even if Columbia University’s Think Tank has proven that peer-to-peer sharing actually increases sales over time - but there is a world of difference between intellectual property theft and buying a second-hand title: one is a crime, and the other is a market mainstay. No matter how many people are willing to pay £40 and upwards to secure a title on release there will always be those (like me) who prefer to wait a few months and then grab it pre-owned (or in a sale) for half the cost or less. It's simple economics for the most part: a few minor scuff-marks aside there is no difference between a brand new video game and its second-hand counterpart. Unless you absolutely have to play it the moment it's released, why would you pay over the odds to have it sooner? And more to the point, if you buy pre-owned then you're able to afford more video games.
But the publishers have their own economics to worry about and they think that people like me are spoilsports. It was this line of thinking which prompted EA to begin including exclusive downloadable content with their new titles a few years ago: if you bought on release you got a one-shot code which afforded you extra levels, extra in-game items and abilities or bonus materials which would otherwise be absent from your gaming experience. If you bought a second hand copy, however, these codes would be spent, giving the new owner a choice between paying for and obtaining these items via download, abandoning their purchasing habits in favour of brand new copies or simply doing without the extras. To my mind this approach is actually ideal and on balance nobody felt cheated: in truth, most of these extras were cosmetic at best and added nothing fundamental to the gameplay experience. It was also invented after EA had learned a harsh and painful lesson: previous attempts at controlling the pre-owned market - by hobbling their PC titles with a limited number of online-verified installations - had resulted in a partial boycott from their customers and a noticeable loss in profits on titles like Spore and Mass Effect, forcing them to patch the software to remove the restrictions. But much like the film industry and their insistence of sticking with the 3D format - even though it’s now causing movies like Dredd to fail at the box office – big industry tends to take a blinkered view: nobody would be surprised, therefore, if Microsoft did choose to go down this route. Now let’s examine why this would be a foolish move.
A second-hand gamer is patient. They are happy to wait longer to play titles because they get them much cheaper, allowing even short games to appear better value for money. Put simply these gamers very rarely buy new titles, instead preferring to browse eBay, CeX, the pre-owned shelves of their local games emporium and, naturally, the high street sales to get their gaming fix. A new-purchase gamer, however, is impatient. They will preorder games or buy them immediately or shortly upon release, wanting to take part in the community discussions, leaderboard tables and achievement races from the getgo - or, more often than not, simply for the bragging rights. These people do not buy many second hand games. These people are not the market that publishers are trying to quash. These people are their bread and butter, and there is rarely any crossover. A second-hand sale made is not a brand-new sale lost. They are not the same thing.
What second-hand gamers do like to do, however, is buy downloadable content. DLC is not subject to the same resale value as video games themselves, forcing everyone who wants to experience it to purchase it from their console's online store. DLC also has very little in the way of overheads, making it far more directly profitable that the sale of the original game disc itself, and we buy it by the fistful. I don't know about you, but if I've saved twenty quid by buying a game pre-owned I'm going to feel far less reluctance to part with six or seven quid for a mission pack or add-on. As long as it's not horse armour I'm going to be happier buying extra content than if I'd parted with thirty or forty pounds for a title. Second-hand gamers also try a far larger quantity of titles than that primary market: when a game only costs a fiver or a tenner you’re much more likely to take a punt, aren’t you? And if we’ve played and enjoyed a game that we’ve discovered as a cheap thrill we’re far more likely to buy the sequels (even brand new!) and, once again, invest in all of that lovely DLC. We are, quite frankly, an untapped goldmine - if publishers provide the content, we'll hand over our cash, and that way everybody gets what they want.
If these rumours are true – and again, I think that unlikely, but if they are – Microsoft will be leading the industry in a fairly dark direction. As a pastry-haired princess once said, "The tighter you squeeze your fist the more [we] will slip through your fingers." And with the growing popularity of PC download services like Steam, which might not allow second-hand sales but allow gamers to get the titles that they want at a fair price and on their terms, instantly and on demand, one wonders whether the console market is heading for another crash.