The Xbox One has completely failed to impress me. Like, at all. Mostly it was just ho-hum banality about what an awesome tv-thing it’ll be, but the one thing that actively bothered me and has me considering a PS4 – or, hell, just building a gaming PC – is Microsoft’s attack on the used game market by tying of licences to Live! accounts. Not a few people share that sentiment, but a notable dissenter is Ben Kuchera over at the Penny Arcade Report. He’s an insightful and talented writer who I respect, so I thought I’d see what he had to say in an article he wrote about how the death of second hand sales is a great thing.
Now that I’ve read it and read it again, Ben needs to spread his legs and put his hands against the wall because he’s about to get fisked.
So you can play your games on another system, but you must use your account. This is good news for households with multiple systems, or people who like to game with their friends.
Multiple accounts on a single console truly isn’t a big deal. You hit the Xbox button, switch users, and off you go. Using a single account on multiple consoles is a pain in the ass. Unless Microsoft has something impressive in mind, like a totally not creepy centralized Kinect database that’ll recognize your face at any console, the precedence is that it requires: 1) getting to the proper menu option, 2) typing in your email and password with the cumbersome controller hunt-and-peck method, 3) waiting for all the data to download, and then 4) hoping it all went off without any problems. This is in no way an improvement over just popping the disc in and playing.
It also means you can’t “loan” a game to a friend anymore, as you’d have to give them access to your entire account.[…]For Microsoft, this isn’t a problem. If your friend wants to play the game, they can damn well buy it. […]They’re not charging you a fee to play used games, because there is no longer such a thing as “used games.” Just licenses.
Ignoring for a moment that the “fee” is “full retail price”, this is a crappy attitude to have. Anecdotally, I wouldn’t have bought the Mass Effect trilogy if a friend hadn’t loaned me the first one to convince me that it was worth my time. Same thing with the Bioshock series. Loaning games are a form of marketing. When a game is loaned, another potential customer is made aware of an IP and a studio, and even if they don’t wind up buying the title that was loaned to them, they become familiar with the quality and will be more likely to buy future games from that IP and/or studio…assuming the game was any good, of course.
Selling back to Microsoft
Based on this information, it sounds like you’ll be able to “sell” your used games, but no one except Microsoft will buy able to buy them. Microsoft becomes the entity that controls the entirety of the transaction, and no lower-priced tier of “used games” is ever created in this scenario. They simply give you some amount of something in exchange for turning off your license, while anyone who wants to play the game still has to pay full price.
THERE IS NOTHING ABOUT THIS THAT IS NOT TERRIBLE!
In the present market, you as the game-seller have options: you can sell to GameStop or other corporate chain used game store; you can sell the game to a local mom-and-pop game store or even a pawn shop; you can gift or sell the game to a friend; you can sell it at a garage sale; you can put it up for sale on Craigslist, Amazon, or eBay. All of these allow you to get the most bang for your buck. If GameStop is offering you $5 for the title you paid $40 for, you can throw it on Amazon for $10 and see who bites. Or you can decide a friend would benefit more from the game and pass it his/her way to enjoy.
In the Microsoft-only model, they will have no incentive beyond good will to offer you anything but an arbitrary bottom dollar for the title you’re selling. Either take the $3 they offer for the $60 game you bought, or just deal with it, because no one is going to pay you money for a disc that they’ll have to add full retail price to once they get it home.
This is good news for a few reasons. The first is that piracy will likely be reduced. If the system phones home every so often to check on your licenses, and there is no way to play a game without that title being authenticated and a license being active, piracy becomes harder. You’ll never be able to stop pirates, not entirely, but if you can make the act of pirating games non-trivial the incidence of piracy will drop. This is a good thing for everyone except those who want to play games for free.
Yes, piracy would indeed be reduced from it’s whopping 4% piracy rate. Making life harder for pirates is not a bad thing, no argument here, but pirating on a console requires no small amount of technical knowledge and often requires both software and hardware hacks. Plus, Microsoft has already shown that they can efficiently track down pirates and nuke their Live! accounts. Given that the One is going to require an almost-always-on connection a nixed Live! account will pretty much kill the console, making piracy too risky for all but the most dedicated thieves. As Ubisoft and EA’s many DRM debacles have shown, it is not worth pissing off the majority of your legitimate consumer base with a broken product just to make life harder for the few that are going to go outside the law…and will likely hack around the DRM in any case.
Once that secondary market is removed you can suddenly profit from every copy of your game sold, and as profit margins rise it’s possible we’ll see prices drop. Some stodgy publishers will likely stay with the $60 model, but they’re dead companies walking already. The smart companies will see this opportunity to play with pricing and see what works and what doesn’t.
As profit margins rise, what we’ll see is that successful publishers will make even more money. Consumers are used to paying $40-$60 for a new title, and since that is what the market will bear there is zero incentive for anyone to lower their prices by one cent. If anything, the elimination of the secondary market ensures that prices will remain what they are because you as the consumer have no options. If you’re undecided about Modern Warfare 6.5, your only option is to pay full retail price. So, if your consumers only have the option to pay what you demand and the market has already proven that they’ll pay what you’ve demanded in the past, why on earth would a sensible profit-focused company lower their prices at all, especially since now they don’t have to? It’s more likely that companies will start experimenting with higher prices before lower and see just how far they can push the consumer before they experience backlash.
Shortages, artificial and otherwise
Also, the idea of artificial shortages will go away overnight. The next time a GameStop clerk gives you shit about not pre-ordering, tell him to get stuffed; all you need to do is find a disc to install the game and then buy the license. Microsoft doesn’t even need to host the game files at this point, one person could buy a copy of a game, everyone installs it and buys a license, and suddenly ten people have purchased the game…
Ok, rude. GameStop has some pretty abominable corporate policies and business methodologies, but the clerks are beholden to said policies if they want to keep their jobs. Getting chided for not pre-ordering is tacky, but seriously, what are you doing going into a game store for a title that was just released and not being prepared to walk out empty-handed given how ubiquitous pre-ordering is?
As for “artificial shortages”, that implies that game companies are deliberately holding on to copies of games or that stores deliberately under-order. Game companies and retailers judge profits on the very short term, which is part of why Tomb Raider sold millions in a month and was still deemed a failure. There is literally no benefit to creating an artificial shortage for a product whose profitability can be analyzed in weeks and will take a sharp dip in consumer demand in mere months and even flatline within a year. This is confusing GameStop and EA with Zales, who have a product that has been and will be in demand for centuries. Diamonds are forever; video games have six months.
That’s neither here nor there, though, as acquiring a hot title that’s sold out in stores will STILL require you to track down someone who owns a physical copy of the game. Unless Microsoft goes purely digital (which seems unclear at this point) there will still be shortages, they will just be slightly less onerous than before. Incidentally, one market that this will affect are the gougers who buy a hot holiday title and then sell it for an obscene markup on eBay. Hate all over GameStop all you want, but they still provide a useful service. The gougers deserve to be hung out to dry.
Other digital media
These aren’t crazy ideas. You can’t sell your games on Steam, nor can you buy “used” Steam games. The same with iTunes. And e-books, with some exceptions.
The word that should accompany all of that is “yet.” Managing the transfer of ownership of something that can effortlessly be duplicated and technically doesn’t “exist” except as digital code is still kind of murky. PC users haven’t been able to sell games to stores for a long time now, thanks to piracy, so PC users are pretty well established in the mindset that whatever they buy is theirs forever, for better or for worse. I suspect that this is why there has been little outcry from Steam users about being able to sell back their games or transfer ownership to another user, but just because something is how things “are” doesn’t mean that’s how they “should be” or even “will be.”
As for iTunes and ebooks, what would need to be done would be to find a way of transferring ownership of files in a way that doesn’t cause the labels and publishers to have a stroke about all the evil consumers who are just waiting to steal their products. Barnes & Noble tested the waters by allowing Nook owners to “loan” ebooks to other Nook owners, and if Apple could find a way to allow iTunes users to sell back MP3s you can bet they’d devote an entire wing of the mothership to make it happen.
I realize I’m being incredibly cynical about all of this, and I would love to be wrong and for the Xbox One to wind up being the most magical thing I’ve ever plugged an HDMI cable into. For me, though, this would require placing a lot of faith in the console makers, the game publishers, and the retail stores to have my interests at heart. And I don’t. Not a single one of them.
All three – hardware, publishers, retailers – have at various times and to varying levels of offense treated their consumers as annoyances that they have to suffer through to get to their money. I get that’s how things work in a capitalist society, but it means they get no benefit of the doubt from me until they’ve proven what they’re selling doesn’t screw me over in the end, and right now Microsoft is all but telling me to lube up and pass the poppers.