Archive | January 2015

DLC, pre-owned games and the anti-consumer behaviour of the games industry

So I haven’t written anything in forever now. I’m going to babble a little bit about my views on how the games industry is currently working.

For years now, the games industry has been all about DLC. Season passes for everything, even games where it makes no sense. DLC is a bit of a double edged sword, it can be a great tool for adding to or improving games and giving customers more experiences with a game they love, or it can be a tool to try and squeeze another few dimes out of consumers. Sometimes the line is vague and hard to see, sometimes it’s clear as day.

DLC became the preferred way for publishers to get some extra pennies out of consumers after purchase as the pre-owned games market grew to take sizable chunks out of their profits. Ideally, supporting a game post release with DLC should be an incentive to consumers to keep their game and not trade it in, thus lessening the impact the pre-owned market has on the sales of a game. In reality, DLC has become more like a way for publishers to capitalise on a few select customers who will buy anything they put out and recoup a little bit of the losses they take from everyone who busy pre-owned instead of new.

Pretending that the DLC craze wouldn’t exist if not for used games is silly. However, pretending that some of the blatant cash grabs we’re seeing isn’t a direct reaction to the diminishing profits of game sales is equally silly.

It’s all cause and effect and just placing the blame on corporate greed is to oversimplify the issue too much and miss the point.

I think Tycho from Penny Arcade described it best a few years ago when he said the industry is like a mexican standoff between Consumers, Retailers and Publishers. These three groups always have goals that conflict directly with each other.

Consumers want as many games for as little as possible. Retailers wants to sell as many games as possible but keep as much of the money for themselves as they can. While publishers also want to sell as many products as they can while keeping as much of the profits as possible. Each group will do whatever they can to achieve their goals, regardless of if its to the detriment of the others (and ultimately, to the detriment of themselves).

Every conflict we routinely see in this industry (used games, piracy et), and the reaction to that, is a result of these opposing goals. It’s a funny dynamic because all three groups need each other, and have to work with each other, but will jump at any chance to screw the others over for their own gain.

The used game market “problem” could be easily solved if publishers and retailers could come to an agreement to share the profits from used game sales.

At this point, retailers will do anything to get you to buy used, because they keep all the profit from used sales. And publishers will do anything to make you buy new, because they need their cut to stay profitable. If retailers just got to keep a higher percentage of the profits from used games sales than new games, (as opposed to all of it) while still giving publishers their (slightly smaller) cut, they would have incentive to deal in used games and would be able to coexist with mutual profitability. Which in turn would lessen the amount of BS we consumers have to deal with as a result of the power struggle between publishers and retailers over the used games market.

Of course, instead they are now fighting to the end in the name of short term profits while everything they’re fighting over slowly burns around them. All the while complaining about the state of the industry, somehow oblivious to the fact that it’s a direct result of their failure to work together.

There’s a lot of really smart people in the games industry. But the games industry is dumb. That is all.