After years of standing on the sidelines grumbling about the sale of used video games, publishers are finally starting to fight back.
Electronic Arts and Sony are leading the charge to alter the used game market in their favor. Both companies are utilizing the popularity of downloadable content for today’s titles to ensure they see some revenue when consumers opt for used games over new.
At EA, the plan is called “Project Ten Dollar”. New titles, such as “Mass Effect 2” and “Dragon Age: Origins,” feature downloadable content (DLC) that is available the same day a title hits store shelves. Buyers of new copies of the game get a one-time use code, allowing them to download the content for free. Anyone who picks up a used copy, though, must pay $10 or higher for the same DLC.
Sony’s taking a slightly different approach with its recently released “SOCOM: Fireteam Bravo”. Buyers of that title are required to activate it online to unlock certain features, including online play (one of the biggest draws of the “SOCOM” franchise). Bought a used copy? You’ll need to buy a new voucher for activation — costing $20.
The plan, of course, is to encourage more new game sales. Currently, when consumers buy a used game, the retailer (such as GameStop) keeps all revenue from the transaction, while publishers get nothing. Game makers have long argued that the practice negatively — and dramatically — impacts their bottom line.
Initiatives such as EA’s and Sony’s will likely add more friction to the publisher/retail relationship, but the real risk is the friction could carry over to the customer base.
“It’s very short-sighted, in my view,” says Colin Sebastian, an analyst with Lazard Capital Markets. “Working with the retailer to sell DLC incrementally would probably work better for them … I’ve heard of these moves before, but I’ve never gotten the sense it was tremendously successful for the publishers. I’m not sure if it will provide incremental revenue for them.”
Sony’s plans to battle used game sales don’t stop with online activation. The company last year released the PSP Go, which does not use physical media. Games for the handheld device can only be bought online directly from Sony — eliminating used games completely (and effectively removing retailers from the process as well).
To date, though, the experiment hasn’t exactly been a raging success. PSPGo sales have been sluggish since launch — and the system is regularly outsold by an earlier PSP model.
Ubisoft, meanwhile, is taking a slightly different approach that could find it’s the console space at some point in the future.
To combat piracy, the company now requires users to log in to Ubisoft’s servers every time they want to play one of its PC games. If you don’t have an Internet connection, you can’t play — and if your PC goes offline while you play, the game will pause until it can be reestablished.
Ubisoft says the system is for PCs only and it has no current plans to implement this on consoles. However, if the system proves successful, the “always connected” model could gain traction in the industry — especially in future console generations, which are expected to lean heavily on cloud storage.
For now, other publishers are taking more of a wait and see attitude, hesitant to risk upsetting customers.
In the meantime, many, like Activision-Blizzard, are relying on income from popular DLC packs (such as downloadable songs for “Guitar Hero” titles) to help make up some of the lost revenue from used game sales. It won’t fill the gap entirely, but until a solution is found, it’s a good placeholder.