"For the record, I'm totally opposed to blocking used games. I think it is great for the consumer that they can buy those. We have a customer that buys our console late in the cycle, pays less and is looking for value-priced games. I think it would be anti-consumer for us to do that." - Jack Tretton, Sony Computer Entertainment of America CEO.
Mr Tretton's comments are especially poetic, particularly engrossing, and certainly pleasing as a gamer. The notion that used games are “anti-consumer” hits pretty close to home, and paints an engaging rhetoric that is obviously kind to buyers of Mr Tretton’s company’s products.
However, I’m not entirely convinced. I’m not surprised by his comments, but I don’t believe there is as strong a genuine care for the consumer as we might be made to believe, at least when compared to the prospect of a growing digital retail landscape.
Is Mr Tretton’s commentary truly indicative of consumer support, or is there just not enough drive of digital growth to truly justify the ending of retail’s most profitable business: pre-owned games?
Let’s say hypothetically that next-generation consoles completely blocked out used-games. Considering that retailers like EB Games rely almost exclusively on the sale (and exuberant mark-up) of pre-owned games, it would be a devastating blow to an industry already reeling from a seemingly broken business model.
Fascinatingly, video game retailers make peanuts from selling new products. The stores are typically small and compact, making stock numbers limited and therefore large quantities to drive profit essentially impossible. JB Hi-Fi, for example, buys in high numbers to reach a profit, justified by its large store space.
Still, the retailer relies on pre-owned games to increase profit for video games, driven seemingly by a ridiculous pricing model that punishes Australian consumers. Thankfully, a long overdue inquiry into video game pricing is set to be undertaken by the government.
The most pressing matter here is the growth of digital purchases and the affect that the blocking of used games would actually have on consumers. Nintendo is poised to offer new games for Wii U at retail and online, something Sony has already done with Vita.
If used games are blocked, it would force consumers to buy a new product, and would perhaps push someone further to simply buy the game online from the comfort of their couch. Is this notion really “anti-consumer”?
I’m personally on the fence, because I’m already conflicted by both the notion of ridiculous markups, and the prospect that video game publishers don’t see a cent from used game sales. That’s fine for a game that’s five years old, but for a game that’s recently been released and still has such a strong level of consumer awareness, the publisher is most certainly losing out on an expanded install base for a product.
There must be correlations between the lack of new franchises, an obvious lack of “original” ideas, and a growing number of sequels coming from major publishers, with the unbalanced and broken retail model currently employed by video game retailers. Piracy is a contributor, particularly for PC, as is the GFC, but publishers must be factoring in pre-owned sales into projected sales figures for their products. It would seem irresponsible for them not to.
So I’m really asking myself, what’s more “anti-consumer”: blocking used games for future hardware, or allowing retailers to sell used products with ridiculous markups? Then there’s also the notion of being especially hostile to big business, seeing as though video game retailers are relying on a market that offers absolutely nothing to the creators of the products being sold.
It seems that Mr Tretton is treading a fine line with retailers, following EB Games’ reluctance to stock the PSPGo in certain regions because of a lack of physical game copies, as well as the struggles currently plaguing major UK-based retailer, GAME. The blocking of used games would be as much a favour to publishers as it would be for the pro-digital crowd, as it would really just be a market that digital distribution could replace.
What’s really driving this “anti-consumer” rhetoric is a lack of digital competition and a pretty awful pricing structure, where the likes of Microsoft can afford to charge full price for a digital copy of a game that was released a few years ago.
It’s just especially mind-boggling that an entire industry can rely on a market as unbalanced and hostile to publishers as the pre-owned market is. Retailers have created their own market, which in turn has surely contributed to an industry that is reeling from major losses (Nintendo recorded its first loss ever last financial year) and is holding back on a new generation of hardware that is long overdue.
That, to me, seems more “anti-consumer” than the prospect of blocking (over-priced) pre-owned software, especially if it’s compromising publisher confidence and restricting the ability to offer gamers new and exciting products.
By Gaetano Prestia - Bio
Do you agree that blocking used games is "anti-consumer"? Why/why not?