Orbis might kill used PlayStation games–how dumb

The move, if it materializes, could mean fewer new games on the market

AP Photo/Sony Computer Entertainment America

If you’re a gamer, last week saw the emergence of a particularly nasty rumour–that Sony’s next-generation PlayStation will not play used games.

According to Kotaku, which cited inside sources, the next console is code-named Orbis and will be released for the holiday season of 2013. More importantly, the device will lock new games to a PlayStation Network account, thereby rendering them useless to anyone other than the initial buyer.

Sony has a history of trying to lock down its stuff, from copy-protected CDs to proprietary memory cards, which is why many are taking the rumour seriously.

It’s no secret the video game industry hates used games. When chains such as Gamestop/EB Games sell a customer a used game, publishers don’t see a nickel. What makes the studios especially angry is that they spend millions marketing their products, yet the retailers devote more floor space to used games. It’s the free-ride argument.

In the U.S. alone, this costs publishers an estimated $2 billion a year, more than piracy. It’s no wonder they’re looking to fight back, something they’ve been doing with efforts such as “Project $10,” an early form of what Sony is rumoured to be contemplating. Under this scheme, players get a one-time pass to access the online features of their new game. If they trade that game in, the next owner has to pay $10 for a new pass.

(As a brief aside, I’ve been privately bemoaning the state of video games for a few months before the Orbis rumour surfaced. At the risk of sounding like an old codger, I’ve been pining for the good old days of consoles, where you could simply pop your disc–or cartridge–into the system and be up and running in no time. Now, virtually every single game requires multiple account signs-ins, downloads and system updates. It’s not uncommon for games to take anywhere from five to 45 minutes to start up now. If I wanted to wait around and deal with never-ending updates, I’d play games on a PC.)

Anyway, if the company’s rumoured plan is true, it could be the company’s dumbest move ever, as the Motley Fool put it. The scheme, in fact, is likely to result in less money for Sony, not more.

The scenarios are simple to predict. If Sony were the only console maker to try such a move, it would be blown out of the water as gamers flocked to Microsoft and Nintendo. It’s safe to assume, then, that all three are receiving similar pressures from the big publishers, so if one locks out used games, all of them will.

Let’s do the math. If a gamer buys 10 games a year at $60 a pop and returns each one of them for an average trade-in value of $25, he or she has a total yearly net expenditure of $450. Now, if that trade-in value is taken away, that gamer is likely to buy fewer games. If the same $450 is spent, that’s only seven games a year.

That means one of two things: game publishers will either have to produce fewer games or they’ll have to sell them for less–though, with budgets on games continuing to escalate, the latter is not really an option.

Is that a good thing? Perhaps–it could mean that fewer bad games will be made. But more realistically, studios will place even bigger bets on fewer titles. That means less risk, more sequels, less originality. That’s bad. Also, with fewer games made, the effects of failures will be more pronounced. If one big-budget game doesn’t do as well as hoped, studios will close and jobs will be lost.

There’s another factor putting pressure on big-budget games: mobile games. Many game makers are finding it more lucrative to quickly design smaller and simpler games for smartphones and tablets. Such games are naturally sold for much less, usually for only a few dollars a pop, but the potential to sell larger volumes has many developers seeing dollar signs.

Large game studios are dismissive of such games as the “farm leagues” and rightly say they’ll never rival the console experience, but that’s missing the point. Just as the “post-PC” world is fragmenting computing among various devices, so too is a “post-console” world emerging. People may get their gaming fill on the bus ride back from work and feel a little less inclined to fire up the console when they get home. That inevitably affects console game sales.

The better way for publishers to limit the impact of used game sales on their bottom lines is to move further into digital distribution–whether it’s through download services such as Steam or streaming ones such as OnLive. By eliminating discs altogether, game publishers can kill off both used games and piracy in one fell swoop.

But switching completely to digital distribution would require publishers to do two things they’ve thus far been reluctant to do. First, with digital distribution significantly reducing costs, they’d have to pass on those savings to consumers in the form of lower prices–imagine buying the next Call of Duty for $30, rather than $60! Second, the studios would have to get involved in demanding better broadband access, both in terms of adoption and usage caps. They need to be able to get their wares to everyone and games are, after all, beasts when it comes to chewing up monthly data.

Given that, it’s no surprise the industry is instead railing against used games. It’s the far easier thing to do.




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Orbis might kill used PlayStation games–how dumb

  1. Except Sony has repeatedly said they’ve made the PS3 with an eye to not replacing it for at least ten years.  It was only a couple years ago that developers stopped complaining about how hard the PS3 was to make games for and started to figure it out. It’s only been in the last year or so that Sony’s been able to actually make money on the console.

    Plus they just released the Vita, which ties to it. So to think that they’re going to split their userbase now with a new console that doesn’t make money and doesn’t have any sort of back library, and just after they’ve finally got major developers looking seriously at their current console is asinine.

    Besides, for Kotaku, an inside source can be an anonymous internet poster who claims to be the nephew of the guy who fills the vending machines at Sony HQ.  Fact checking just isn’t their strong suit.

    •  Sony never stated the PS3 wasn’t to be replaced for 10 years. They said it would have a 10 year life cycle, It’s going to be 6 years old this November and probably 7 years old around the time it’s successor is released. It will still be around but all the AAA+ games will be developed for the new system. It wouldnt be wise to stick with the PS3 purely because it’s just “hitting it’s stride”.

      Sounds like you’ve taken all the developer bullshit a little too seriously, “just figuring it out”, “developers looking seriously at the PS3 now” – lol. It’s old tech and it’s been pushed to it’s limits for a while now, the big names are going to be moving on to the next thing as we speak, maybe if it’s built on the x86 arcitecture, they wont have to spend 7+ years “figuring it out”

  2. The speculation on Ars last week was that both Sony and Microsoft would have to do this together.

    And the cons mentioned in the comments included the fact that most of the trade-ins are for store credits used to buy more games (and EB, for example, usually has a “Trade in 5 games and get [Latest Blockbuster] for $10!” deals pretty much for every big release.)

    Not to mention that people who have kids with more than one console would now have to buy two copies of a game rather than have siblings share the less popular ones.

    I think it’s a bad move, and would definitely keep me from buying a next-gen console.

    It would also limit people when it comes to trying out new games.  Or even starting a series from the beginning.  When a friend told me I absolutely had to play Mass Effect, the first game was not available new, so I bought it used, and bought Mass Effect 2 new.  Then when ME 3 came out, I pre-ordered.  That’s two new games I wouldn’t have bought if I couldn’t have started the story from the beginning.

  3. Kotaku also has “sources” saying the next generation XBox will do the same thing. To be blunt, I’m going to suggest all this speculation from “sources” is either complete bunk and/or a trial balloon at best until proven otherwise by shipping hardware.

  4. Used game sales is no different than used car sales. I don’t see any of the car companies crying about how it’s unfair that someone is selling a car they made last year again for money and they are not getting anything for it. They really want to kill the industry get rid of the used game market and the ability for friends to share games. I am a PC gamer, I don’t own any of the consoles so I am use to not being able to share but sharing and buying used is part of the console culture.  I feel sorry for all gamers when this happens it will kill it for us. It will be a world full of cut the rope and angry birds and nothing else. God save us!

  5. You are an idiot. The only effect that this will have is in the trade-in market. People will still shell out money for games, and studios will still pump them out. Places like Gamestop will have to rethink their business model, but outside of that…

    Gamers don’t buy new games with a plan that down the road they will trade them in so it looks like they spent less, they do it to buy another new game. I would question your ability to do research, but then I noticed that you are Canadian and that this type of drivel is somehow warranted.

    • Incorrect.  If the Used Game market collapses it will reduce the overall liquidity in the entire gaming market.  Overall it will reduce the number of games purchased per person which will result in fewer sales.  Many gamers use their trade-ins to get new games.  This is actually easy to infer.  At some point that “used” game was actually a new game that someone decided to “trade-in” that person is someone that at least on occasion buys new games and if you remove that trade-in value from them they will have less to purchase in the future.  You will never have a Used Game that wasn’t at one point a New Game sale.

      Lets use Game Stops reported values to show just how much the industry will contract if this is done.

      Game Stop has about 2.6 Billion in Used Games sales.  46% is profit for them. Leaving about about 1.4 Billion to the Players.  They sell about 4 Billion in New Games. At a minimum you’re going to see a 25% contraction in New game sales if they were to go threw with eliminating the Used Game Market. Can the gaming industry survive as it is today if tomorrow there were 25% less sales? A 20% contraction is what we have going on right now and Sega is Laying off a significant portion of their work for, and other are just shutting their doors.  A 25% contraction on top of the current 20% would kill the industry and force it to rebuild.

      You can get a copy of the Game Stop number of Penny Arcades latest Report for March 29th if you don’t believe the values.

    • I have gotten a few games before with the mind set of trading it in if i didn’t like the game.  Not all games are great, so if you can trade them in when they still have some value is not as bad as spending $60 on crap with no return at all.  If i couldn’t trade them in, i would more then likely pass on buying it all together.  If you could do more research for all the reasons why gamers buy new games, “not just what you think, but all reasons” then your drivel would be somehow warranted. 

  6. Dear Video Game Industry,

    Cry us a friggin’ river.

    Sincerely,
    The Music Industry

  7.  A continuation of the erosion of individual property rights and individual ownership. And the industry wonders why people go to the “pirates”; same product but with all the DRM restrictions removed giving the individual full ownership and control over what they do with a game. Why would anyone want to pay full price for a game, or anything for that matter, when they wouldn’t even get full ownership of it?

  8. Never in all my time has the future of gaming sounded so bleak to me, and I’ve been around since the beginning. But this PS4 (Orbis) rumor, and Xbox 720 rumor, does not sound good to me … at all.

    Personally, I do not think we even need a new generation of consoles quite yet. Technology has taken no flying leaps forward, so why?

    Personally, and ironically, the only good system that sounds good to me in the next gen, is rather ironic, since I hardly use the current Wii now, is Nintendo’s next system. Their leap forward is just to catch up with what’s out there now. 

  9. The idea that playstation would kill the secondary market is just crazy… there is a great article on http://sonyps4.com where they go over the reasons why this would be bad… but a big part of it simply comes down to the number of people who would not be willing to upgrade to that system yet… sure someday maybe… but sony could not afford to do this is both wii and xbox did not also.

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