Denis Dyack, Silicon Knights founder, has been one of the most vocal critics of the used games industry and also a heavy proponent of cloud computing methods of distribution. Speaking to Gaming Union at the DIG London 2009, Dyack showed that months away from the press hadn’t changed his tune.
“I do think that controlling IP, levels of piracy will be greatly reduced by digital distribution, and I think the cloud model as I've said earlier completely eliminates it,” commented Dyack. “It's not because of anything else, it's because the economics alone on piracy, piracy, everyone talks about ‘why are these single player games multiplayer?’ it's got nothing to do with anything else but piracy and used game sales, which to me quite frankly are very similar.”
Dyack mentioned how he felt the typical publisher relationship is changing, commenting on how there will likely be more consolidation and that they might shift over to a more funding oriented role. When asked about whether DLC and multiplayer were a means to combat used sales, he completely agreed.
“All the movement towards multiplayer and DLC are absolutely to combat used game sales,” said Dyack. “In my mind there's no question, it's like a Cold War that's going on that no one wants to talk about, but there's a real, real problem when - in my eyes - when someone's making money off a product I'm making, and I see no revenue whatsoever, no possible revenue stream. So that's what that's going, is it going to be effective? I don't think so. I think in the end we're going to have to see different models, because in the end the cat's out of the bag, and we've established, this for bad I think, this methodology of when I go into a local video game I just look at there's more used game sales than there are new games out, there's something really really wrong with that. For someone in this industry, that's where we make our money, it's very depressing.”
4 Comments
November 16, 2009
Well, Mr. Denis Dyack has some interesting, corporal-centered arguments, but let me tell you what I find depressing (and I don't think I am alone in that). I find depressing being asked to pay $59 + tax for a single game. As far as the argument "but there's a real, real problem when - in my eyes - someone's making money off a product I'm making, and I see no revenue whatsoever, no possible revenue stream" concerns, Mr. Dyack fails to mention a "small" detail: He already have made significant revenue when that person bought the game in the first place. Although initially his argument sounds logical, it really isn't (like most corporal arguments). The moment one buys something, he/she owns it and should be able to do whatever he/she wants with it (within legal limits). Imagine what would happen if every time people sell something they bought, say, their cars, the car company demands profit from the re-sale of that car. Or even worse, how would you like it to pay money to a construction company when you sell your house because the company feels that you make money off a product they made? Lets make it even better. Suppose you sell a house that you bought from a previous owner. Suppose that owner bought that house from a previous owner who was kind enough to built a deck with a pool and a playground. Do you need to pay some money to the construction company AND to the person who built the deck with the pool? I can go on all night, but I am sure you get the point...
November 17, 2009
Interesting point. It seems that restricting the rental or re-sale market for things by legal means has never really worked in the past.
The pricing of high-end games today seems to maybe have some degree of compensation for re-sale & rental built into the price. Obviously when you have a movie with a $100m budget selling on DVD for $10 and a game with a $25m budget selling for $59, there's a disconnect there of some sort.
If you go waaay back in time during the heyday of VHS rentals (when Blockbuster made money rather than losing it), new VHS release tapes sold for like $90 a copy. That price point was obviously directed at the rental houses, not the consumers. No one had conceived of a mass-market demand for owning VHS tapes. Then a few big hits started coming out (months later) at $20 or so and they started to sell. I seem to recall "ET" was a big one at the time, probably ended up as the first tape a lot of households owned outright.
Then DVD came along and after some initial uncertainty about what pricing model (some studios wanted to price the DVDs at $89 for a rental window also), eventually the direct-to-consumer model won out. People felt $20 for a DVD they could own was a fair trade-off versus a $5 rental and all the hassles that entailed.
There's still a DVD rental market and still a DVD resale market, but because the price-to-own seems reasonable to people, neither of those markets is really a big deal and both seem to be shrinking.
What does that mean for games? Hell if I know. At what price-point would people just feel its easier to buy the game outright instead of renting or buying used?
Or do games just skip over the VHS-to-DVD model entirely and jump right to the Kindle model - electronic content that you can't re-sell or rent?
My guess is that more devices like Kindle, PSPGo, etc. will slowly break down people's expectation of the level of ownership they have over IP and Gamestop will decline just like Blockbuster and music stores have.
Since we can't legitimately restrict what someone can do with something they own legally, companies have to re-define ownership and put technical limitations on what they can do with the content.
November 17, 2009
Mr. Denis Dyack is a complete fool. As an owner of two popular video game stores I can guarantee that an awful lot of new game sales are fueled by the trade in credit of used games. Most of my customers would cut down the number of purchases that they make considerably if they were unable to recycle their older game library. Hard core gamers do not wait for a used copyof the hot new title on the market, they want it now. The people that would prefer to wait for a discounted used copy are the casual gaming market, and to be quite frank, they are usually not willing to pay $60 for a title. The other benefit that the used market brings to the table is the fact that a lot of games are total garbage (Terminator anyone???), being able to trade in a game that is not enjoyable or only took 5 hours to beat makes it a lot easier for consumers to justify a large purchase that may or maynot be enjoyable. If there was no trade in market most consumers would only purchase games that they know they would proberbly enjoy, this would reduce the chances that an off the wall, original title would get developed and we would be left with the typical shovelware and sequels that would eventually chock the market.
January 7, 2010
There are a lot of problems with the arguments I just read. So, I'm going to come to the defense of Mr. Dyack. First, I'll address the used car example that was brought up. The one factor with comparing reselling a used car and reselling a used video game that makes the two incomparable is the fact that when a car is bought it immediately depreciates in value. There are physical parts on the car that are being used that, with time, can and will break down. Eventually, the car will no longer be usable. A video game, on the other hand, is always just as bright and shiney as it ever was and ever will be. The game doesn't deteriorate as it's played. It stays the same. Therefore, the value stays the same. The only thing that does deteriorate is possibly the media that it comes on (DVD, CD, what have you). So, in a sense, once the game is made and produced, it's around forever. Also, when a game, or any other software program is "bought," what is actually being purchased is not the software, but a license to use the software. That's what the end user license agreement is (recognized as EULA) in every piece of software you purchase. What's inherently wrong with selling a used game is the fact that you're selling a license. What GameStop or whomever sells a new game (thus, a license), a portion of that money, of course, goes to the game developers. When you sell a used game (thus, a license) no money is being sent to the game developers. It's like a bakery making a loaf of bread that everyone can eat off of. The baker would go out of business because that one loaf could just be passed around to everyone. Everyone else could make a bit of money selling that same loaf, but the baker who made the bread in the first place is SOL. What's he supposed to do? Buy his bread back again so he can resell it too? In summary, nothing digital like game software can be treated the same as anything physical such as a car or house simply because the software never deteriorates.
As for the price tag, that's a foolish thing to bring up as well. New games go for $60 a pop, sure. But, isn't it also a problem when the same game is only $10 cheaper and used? Sure, the future buyer saves that money, but the store owner just made $50 off a game that he didn't even make. Now two people play that one game and the game company only made money off the initial buyer. That's a rip-off when that product has no end-life. Theoretically, (as explained previously) only one person needs to buy the game for everyone to enjoy and totally screw the developers because they only make money off the first buyer. The real winner is the game store. This is why I think that used games should still benefit the developers in some way. Of course, not as much because in a physical sense, we still have the CD to contend with, but with technology moving as it does, optical media last an extremely long time, especially when the game can be installed and the optical disk need not be used but for starting the game. What can happen in the future is the death, or near death, of physically bought games. We're already downloading full games on the PC and DLC's on anything that can play the game. It's much easier to produce a game that doesn't require physically making a disk, then shipping it, then storing it and putting it up on the shelf. Digital downloads in the future can possibly make the prices of the games drop simply because of the lack of overhead. Oh, and it's also foolish to think that no one is willing to shell out $60 bucks for a game. If people aren't "usually willing to pay $60 for a title" how is it that games like Halo or Call of Duty make so much money off of initial sales? It's not the A+ titles that are necessarily losing money because of the used game market. It's the smaller companies that are because their titles don't make millions of dollars. They could have just as good of games as the big dogs, but their titles end up on the used shelf the same as everyone else.
Also, about the bad games that no one would know about: Ever heard of demos? They are these great previews to games that are offered for free as a download on every major console and computer. Don't have internet? Read a review from a source you generally trust. No review? As a friend who bought it. Don't know anyone? Maybe you should avoid it then. For me, if I don't have enough information on a potential purchase, I'm not purchasing. I've only bought one game that I was truly disappointed with, but that was quite literally 15 years ago. Being a smart consumer will save you money across the board (not just with video games).
Thoughts?