A place to keep my thoughts on programming

September 18, 2010 geek, rant , , ,

Oh, you can keep the disc, but the bits ain’t yours

After writing "Maybe it’s time to stop pretending we buy software?", I talked to a couple of gamer friends about their purchasing habits. The concept of DLC that has a strong "withheld content" smell came up and whether this was a "first buyer bonus" or "selling crippled products" had no straight forward and agreed answer. But what did emerge is that pricing of games is a key factor in why used sale and purchase are considered a right. The sentiment that at ~$60 there is an expectation that the game has a residual value you can recoup should the game not justify itself as a keeper. Which, of course, itself is an indicator that our usage patterns of games are much closer aligned with a rental than purchase relationship. In particular, one friend uses Amazon's Trade-In store as a form of game rental. Depending on how many games you play, it is a better deal than Gamefly.

Now it turns out that arguing about used games and whether they are crippled or not may not even be an issue in the future. Ars Technica did a great summary called "No, you don't own it: Court upholds EULAs, threatens digital resale" of the US Court of Appeals for the Ninth Circuit ruling re: Vernor v. Autodesk. The gist is that EULAs are enforceable and that you may really only own a non-transferable license. In the light of keeping your upgrade while selling the old version, that makes sense to me. Of course fairness should dictate that you can sell your license. Then again fairness should also dictate that you don't make copies of the software for all your friends. So, given the unenforceability of fairness, software companies use draconian licensing EULAs and consumers have chosen to ignore them out of hand. This legal decision, however has the possibilities of escalating this conflict and if companies go after used game stores, used DVD stores, etc. I predict that piracy will really run rampant, as consumers will take the only option available to them in fighting rules that violate their sense of fairness.

Physical products engender First Sale Doctrine expectations

I personally have not bought a new Xbox game, relying on my amazon wishlist for those. Of all the games I've played on the Xbox, only GTA4 has felt justified of its full price. The ones I have bought were used and the ones that had no replay value I sold. After all, I had a box with a disc sitting there, so of course I can sell that box.

I have, however, bought plenty of games on Steam. It's a digital sale — I can install it on any computer when i want to play it but I can't ever sell it or even let someone borrow it. Yet I am happy about those purchases. Ok, what is wrong with me? The difference to me, if were to try to put a finger on it, lies in a combination of pricing and purchasing experience.

New PC games are ususally at least $10 cheaper. Whether you claim that this price difference is historical or because console's are recouping hardware costs, it makes a new game easier to digest. Add to that that Steam has mastered the art of the long tail, reducing prices for older games, frequently doing brief yet radical sales and even adding games not originally released on Steam along with patches and support for newer features such as cloud save game storage. Finally, with Steam (even if this is more Valve itself than anyone else), you usually get a longer life out of the game, with updates and free multiplayer.

The purchasing itself further severs the physical ownership bond you have with boxed games. Aside from a less painful price point, it's simple, immediate gratification, being able to buy a game at any time of day or night. You also generally don't run an installer, you just buy and wait until Steam tells you that the game is ready to play. In all respects the experience feels like a service not a product, which reduces the feeling that you own something that you can resell.

As a game dev, what seems like a better way to deal with the fact that only some percentage will buy your game at full price? Only make money at full sale and try to encourage new purchase by devaluing used games with exclusive DLC, etc? Or sell electronically and cut out used games entirely, but attract those not willing to pay full price by offering sales later? After all, 9 months after release $19.99 (like Left 4 Dead right now) still beats not seeing a dime.

While the Vernor v. Autodesk decision may embolden publishers to crack down on used sales, I sure hope more will follow Valve's model. After all, gamers generally don't talk fondly of publishers, but Valve is almost uniformly a hero to the community and that's while preventing gamers from selling their games. Sounds like they've got a good model going.

2 to “Oh, you can keep the disc, but the bits ain’t yours”

  1. bjorg says...

    I wish XBox did a rental model for its Games On-Demand.  Although the XBox marketplace allows you to redownload past purchases, I have never bought a full game through it (Arcade games yes, but no On-Demand games).  They are priced the same as their used counterparts but with zero resale value and they take up space on my disk (at least until deleted).
    However, there is zero chance there will ever be a rental model for On-Demand Games and even less so for new games.  The problem is how quickly revenue can be generated and having consumers pay 100% upfront beats everyday the ability to generate recurring revenue in excess of the original purchase price.
    If I were a game publisher, I'd pursue with full vigor the DLC-bonus model.  It gives my wares an extra push for new buyers and I can realize some revenue from the second hand market.  While this may erode the resale value of the game, that's not my problem as a game publisher and I don't think it will excessively affect companies that resale used games.  In the end, it will be the first time buyer who will lose an additional $5 on his trade-in, but then again, he didn't have to buy the DLC either.

  2. mike says...

    For me, games have always been a temporary experience. I don't often replay, and I don't play online, so it is one go through and that's it. The only catch is that it might take me a year or so to do the first playthrough. I very often stop, and then start again months later. So a time-based "rental" model doesn't suit me very well, but I also don't care much about "ownership".
    At the end of the day, I don't think rent vs own makes much difference. It is is all about the pricing model. And I think Steam is playing that game very well indeed at the moment. I would love to see the consoles follow their example.

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