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Publishers vs. Pre-Owned

Opinion by Terence Gage on 2nd July 2010

A few weeks ago, EA announced that their line-up of sports titles this year including Madden 11, FIFA 11 and PGA 11 will launch with an initiative called Online Pass. This takes its lead from ‘Project Ten Dollar’, which was a scheme whereby consumers who bought Dragon Age: Origins, Mass Effect 2 and Battlefield: Bad Company 2 new would get some extra content and features for free but those buying second hand would have to pay the $10 fee to access the same optional content. However, games featuring Online Pass will have a one-use redemption code which activates the game’s online functionality and allows those who purchased new to access its online multiplayer options, whereas whoever buys the game second-hand will have to pay a fee to access the online multiplayer, or essentially be left with a single-player only game.

Online Pass sets a dangerous precedent for not only EA products, but gaming as a whole if it turns out to be a success. EA have said that it is their way of embracing the second-hand market, but it’s hard to see how this is anything other than a cynical attempt to clamp down on a lucrative part of the industry that developers and publishers see little to no revenue from, and at the expense and choice of the average consumer. Ubisoft have announced they have a similar system to Project Ten Dollar ready to be rolled out, and THQ have already followed suit, with a similar $5 code bundled with each copy of UFC 2010. It’s likely other major publishers will also be reviewing the situation very closely in the coming months.

Of course, one debate surrounding the whole issue is that should publishers be entitled to profit from any sales that occur after the initial transaction? Different people will have different opinions and we could put forth reasonable varying arguments all day, but ultimately there is no precedent of online multiplayer in any other industry, so there’s no equivalent to measure it against. DVD and Blu-ray sales represent probably the closest entertainment medium, but the most notable difference is that once the sale is made there is no after-market support like many games have with their multiplayer modes. From this perspective, perhaps buying a new car is the closest comparison, as manufacturers offer free warranty and service for a set amount of time, but even car manufacturers don’t demand a cut from second-hand sales, and neither are they working to stem the second-hand market.

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The disparity between Project Ten Dollar and Online Pass is subtle but crucial - Project Ten Dollar acts as a bonus scheme to encourage and reward consumers for buying games new, whereas Online Pass disables a sizeable portion of the content for anyone buying second hand, essentially restricting the game and punishing the consumer. Is this an acceptable solution, and ultimately is the consumer paying for retailer’s greed in the pre-owned sector?

But second-hand sales have been a part of gaming for a long time - certainly it was prominent in Electronics Boutiques up and down the country back as far as the SNES days - so why is it only now being cited as a major problem that needs addressing? Perhaps this is as soon as the opportunity has realistically arisen; with the consoles now able to be perpetually connected online and DLC having become prominent in the last few years, developers and publishers are now able to and having to provide extensive support post-sale to games with and without online multiplayer. Or perhaps it’s just reflective of the industry’s rising costs - with many game budgets rising to the tens of millions and sales not notably increasing on previous generations, is it not fair for EA and its peers to try and earn additional money in other ways?

And yet, rather than making the consumer pay for what is essentially a dispute between publisher and retailer, has EA approached Gamestop or GAME to thrash out deals so both parties see the benefit of pre-owned? Surely agreements could be reached - for instance, the two retailers able to offer exclusive DLC with each copy sold on their website or in their stores, or getting a month-long exclusive on certain EA games in exchange for a small cut of the second-hand profits. This would allow EA to get an accurate representation of pre-owned sales from the USA’s and UK’s biggest game specialists, whilst maintaining a healthy relationship with retailers and allowing them a consistent foothold in a revenue stream which has otherwise eluded them.

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There are further ramifications that the stemming of pre-owned might have; specifically that of trading in older games to help pay for new ones. How many readers have traded or sold Modern Warfare 2 to part-fund Battlefield: Bad Company 2? Or FIFA 10 in exchange for the World Cup instalment released just a few weeks back? If publishers remove a worthwhile option for people to trade in old games for store credit, would the sale of new games be affected? Obviously there’s no way to tell without a practical example, but this could be a dangerous situation EA are forcing us into. With the value of trading games in severely reduced, will more limited budgets force gamers to be more selective? Only time will tell.

Further issues could arise in the Xbox 360 camp - Gold Live account members already pay a yearly fee which is supposed to in part pay for server support, so does this mean buying second hand may now mean they have to pay additional fees to help fund server support?! Elsewhere, what of people only being introduced to a series because they’ve made a cheap second-hand purchase, before becoming a staunch advocate of any sequels? Blitz Games co-founder Andrew Oliver recently stated that every pre-owned sale is a lost sale to the publisher, but that’s the wrong way to look at it - much of the time there would be no sale at all if the game in question was not cheap; you don’t see Toyota complaining that every second-hand Yaris sale is a lost new sale to them, because it’s simply the wrong way to view the market, and a mis-estimation of consumers’ budgets and spending habits. Perhaps publishers should look at ways to truly embrace the pre-owned market, rather than fight against it.

A consistent and worrying trend amongst both console and PC games is that DLC and online connectivity are being abused in order for publishers to earn more money, and with all the schemes that are falling into place it’s easy to feel a little press-ganged. Before now DLC has always been used as an optional addition to games, but in the long term Online Pass could segregate the market and stifle consumers’ choice. Whether the scheme will be a success, and how it shapes the market over the next couple of years remains to be seen, but these attempts to curb the second-hand sector could have a negative impact on EA and other publishers in ways they haven’t anticipated. The future is looking awkward for gamers on a budget, and the habit of completing and trading in a game for store credit could soon become a thing of the past.

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About the author

Terence Gage is a Senior Staff Writer at Thunderbolt, having joined in April 2007.

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