Digital Distribution/Second Hand Compromise Idea

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  • Cannibal 26 Feb 2012 19:13:12 8 posts
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    One of the big things against digital distribution is the death of the second hand market. I was thinking about a solution to this that might satisfy publishers today. Get PSN, Live, etc to have their own built in version of ebay for digital games. Would look something like this...

    1. You buy your game as you normally would from say the PSN store.

    2. It would have a lock in place where you couldn't sell it on for 3 months or some other amount of time. (This keeps sales of the full price version from plunging but has a trickle of "second hand" alternatives still available to the consumer after 3 months has passed.)

    3. Once the lock is removed you can put your digital copy on their built in auction service for whatever price the market determines it is worth. It will be cheaper than the full whack, but probably still a high enough return because the 3 month lock would keep supply limited. The publisher would get a small istore sized commission from the transaction and a fresh lock would be placed on whoever bought the "second hand" digital copy. Maybe the publisher could even take a bigger commission but that commission drops when it gets to a 3rd or 4th sale of the game.

    4. To stimulate the game economy they could make it that you can't redeem funds in cash but only in store credit. That way every "second hand" sale profit is reinvested back into other games on the store and everyone benefits.

    So to sum up. A new market would be opened up for consumers to get cheaper digital games. Publishers would make more money off of games over a longer period of time because of commissions and turning their consumers into retailers. Limited supply would keep their full price sales ticking. And more money is pumped into the game store because of the credit system.

    I think it would benefit most and raise profits and savings for all involved.
  • oceanmotion 26 Feb 2012 19:44:33 16,129 posts
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    I don't think so. Digital distribution gives publishers full control. The only thing that would possibly effect them is competition from other digital retailers. There is no reason whatsoever for them to offer anything like that. You have bought the item, done deal. Not like you can go somewhere else and sell it. Better priced and heavily discounted sales are the only good thing to look forward to and the best only seems to happen on the PC and mobile for obvious reasons, competition.
  • Cannibal 26 Feb 2012 20:19:35 8 posts
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    They still make more money but they make it in a different way while also minimising middle men alternatives. It's a long game rather than a short one. They are like a casino. The consumer might temporarily be ahead but in the end the house always ends up with their cash.

    Say they sell 50,000 digital copies of a game in week 1 at a cost of 50 per unit. After 3 months the initial buzz has worn off and sales slow. Under old thinking people would have bought a physical copy and traded that game in and publishers would see none of that money. They instead go the route of DLC to keep making money off of consumers after the initial purchase which is pretty inconsistent.

    With this, after that initial 3 months they get to make more money of the same consumer again. Say 10,000 of the original 50,000 buyers put their game up for auction. Publisher says it wants 10 commission on every sale and the market determines it worth 30. Publisher gets 10, consumer turned retailer gets 20 and the new consumer gets the game at a 20 discount.

    You've achieved a few things here. The publisher has not just made more money off the original consumer through commission, but also has the potential to make even more because now that same consumer has a further 20 credit to play with. You could set it up so that the selling publishers games are immediately advertised to the consumer who received the credit.

    You've also grown your market. You gain extra sales from those who are wary of DD because it is so final and have no way of shifting your game. You gain more again from those who would have never bought your game at full price and will probably auction it again in another 3 months making you even more money. You also get a cut of a market that previously the publishers couldn't touch. All in all, your game goes to work for you for much longer than it previously did under the old system. It will still be making the company money years down the line.

    And the consumer is on the surface happy because it is perceived as working in their favour. If they think they are getting value then they will give more return business with the credit that never leaves the store and they will start the cycle over again. No money is ever taken out, only put in.
  • threemoh 26 Feb 2012 20:36:11 206 posts
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    Green Man Gaming is already doing something not dissimilar to this. It's not setting the world on fire, and here's why:

    1/ It doesn't work as a business model, as the demand for used games is mainly for games that are no longer available more than it is games cheaper- if the used market didn't exist at retail, then games would reach lower prices long-term anyway.

    Digital distribution = Infinite copies = Valueless used market.

    2/ More importantly, it doesn't work as a service, as when you take away the charged language of the second hand market and the blinkers it tends to put onto gamerdom, what you're describing is ultimately a clunky rental service. You pay effectively a small fee (Full price minus resale price) to "borrow" one game for a short period of time, after which you either walk away or you "pay" the fee again for one other game for a short period of time.

    There's no value in such a service when GameTap, Metaboli and OnLive exist- these offer the same service to the consumer- instant, digital access to a range of big-name games for significantly less than RRP, and instead of pillocking around with auction services and consumer-to-consumer marketplaces and the unpredictability inherent within for the sake of one game at a time, you pay a fixed subscription cost and get access to a load of games simultaneously and then you don't get penalised for picking a dud or joining a specific title too late.
  • Darth_Flibble 26 Feb 2012 20:56:00 1,783 posts
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    If you selling 2nd hand games on digital distributed shop like Steam on the next generation of XBL or PSN, the publishers have NO right to get any of the money. Its not like its going to any 3rd party this time.

    I remember seeing Value was looking into selling "2nd hand downloads of games" but I don't any of the other publishers wanted it.
  • kosigan 27 Feb 2012 08:50:54 482 posts
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    1. Platform holders spend time and money setting up an auction system for which they get a small cut on reduced-price sales.
    2. Platform holders do nothing and get a bigger cut on full-price sales.

    It doesn't take a rocket scientist to see which they'll go for.
  • warlockuk 27 Feb 2012 09:05:09 19,223 posts
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    Games are already cheap. On launch: Rape tax. A short while after the prices plummet.
    Dungeon Siege 3 for less than 4 quid on PC at the moment ffs. If you don't wanna pay full price then wait a bit.

    The 2nd hand market's sucked of late because the games are always pricier than getting them online. It can keep on as-is for all I care but when I'm too pikey to get games at launch I'll just keep my ear to the ground for them to hit my price point.

    Ok, there's no resale to most of the things I buy - but I can honestly count the number of times I've sold stuff on one hand.

    I'm a grumpy bastard.

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