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Terry Smith
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  • Lichfield , Staffordshire
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Second hand lost sales
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It’s not new that EA are running something affectionately known as “Project Ten Dollar”, and if you’ve not heard of it – Let me explain.

If you buy a console game published by EA new, then you get a nifty little code in the case that you can activate and either get some DLC, or access to online features, whatever that particular title has to offer. However, say you buy the game second hand. That code is no longer of any use, and to access the features you would have had access to if it were brand new are going to cost you ten dollars. Pretty straight forward, and pretty reasonable.. Sort of.

The intention is to “cut out lost revenue from second hand sales”, which (And this is where it differs to piracy) is a genuine issue. If you buy second hand, you don’t give anything to the developer/publisher, you only give to the establishment you bought the game from. So, taking Game (A national game store in the UK) as an example:

They “buy” (Usually for store credit, but cash is an option (though cash value is lower than store credit value)) your unwanted games off you for, let’s say it’s Saints Row 2, and they “buy” it off you for £24, and put it back on sale at £30 (Actually what happened to my copy of SR2 for 360), that £6 goes straight to them, nowhere near the developer/publisher.

Now, I know what you’re going to try and say “Oh, but just because they bought the game doesn’t mean it’s a lost sale” – It’s an argument that works for piracy, because there’s no evidence that the pirate in question would genuinely have bought the game if there was no option to pirate it. In the second hand sales world, though, that doesn’t work – Because people are actively handing over money for the product, albeit to a different person than for a new game. The developer/publisher has lost a sale as a result of the second hand copy being bought. There’s no question over it, whether the buyer had waited for the price to drop or whether they had bought the new game at the cost there and then, it is a lost sale to the developer/publisher. To think otherwise is simply wrong.

THQ have said today that they “feel no sympathy” because when someone buys their games second hand, they “feel cheated” – And there is a reasonable ground for them to feel that way – Someone is playing their game without paying them. There is a copy of their game in circulation that they received nothing for. It is a legit copy, but it’s not provided them with anything.

Let’s suppose some numbers here.

Publisher A publishes Developer B’s game, they produce 400,000 copies of the game. They ship all 400,000 to Distributor C, and within a week those 400,000 copies have been sold. Now, say 150,000 copies are returned and resold as second hand games. So, there are 250,000 copies of the game sold and not “traded in”, and 150,000 available for, say, £10 less than retail. They’re going to sell faster because they’re cheaper. The Distributor isn’t going to order 400,000 for week two – They already have 150,000. It’d be awful business sense to buy another 400,000 when you have 150,000 already. If you only wanted 400,000 at any one time, all you’re going to order is at most 300,000 (Some people will only buy new). That’s 100,000 sales lost already. A quarter of the total sales lost because of second hand games. Doesn’t sound like a lot, but when you’re fuelling a development studio, a quarter of your sales disappearing is a big concern.

Their solution: Require one time use codes that can be bought by second hand buyers. It creates a revenue stream that at least recovers some of the losses they feel from second hand markets.

THQ saying they, essentially, don’t care if second hand buyers lose out is not an unreasonable, unfeeling statement. Buying second hand does hurt their revenue, and since you’re not giving them anything for your copy of the game, they aren’t obliged to give a toss what you think. Pay them, and they’ll care, don’t pay them, and they won’t.

The age old argument “Oh, but I can’t afford release prices” will come up – It always does – If that is the case, wait for the price to go down. At least you’re then giving the developer something, and something is better than nothing.

My point: If you’re upset that THQ have no sympathy for you having to pay them to use the full featured game, then consider that you have basically bought a game, waved your middle finger at them, and then demanded free stuff off them. They’re not going to be receptive to that. No one would, and if you find someone who would, you might want to get that person sectioned as soon as humanly possible, they are quite clearly insane.

Aug 24, 2010 . 12:36:46

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