Epic president talks about DLC and used games market

By on November 11, 2008, 5:21 PM
Developers and manufacturers make absolutely no money from the second hand market, which is usually the norm for any sector from used cars to used computers and other gadgets. For the games industry, however, this is a “huge issue.”

In a recent interview with gamesindustry.biz, Epic Games’ president Michael Capps talked about this problem and predicts that the future of DLC (downloadable content) may be geared towards consumers who rent games or buy them used. He goes on to explain that Epic's primary retailer makes the majority of its money from second hand sales despite being a specialist games store, and while he refuses to blame gamers for this, it’s understandable that they want to compensate for missed revenues.

This is all well and good but later on he claims some developers are toying with the idea of charging a $20 fee to those who buy used games in order to let them unlock the full game – basically reducing it to a demo if they don’t. Capps isn't necessarily advocating this kind of move, but it shows how keen developers are growing on taking a cut of the lucrative used game and rental markets. The full interview with Michael Capps is available here.

User Comments: 5

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viperpfl said:
It's funny cause these same people in there own life would buy and sell used goods but when it comes to there own business it's a whole other ballgame. Buying, selling, and trading used goods have been going on for years. The product has already been purchased, so why should the owner benefit from the money again when someone purchases or sells the item used? The reason why the used game market has become so popular is because of the $60+ price tag for games. I have noticed even the heavy gamers don't want to pay that much. People playing games, especially the casual gamers, don't want to pay that much for a game and then in a short time don't play it anymore because they got tired of it. I have dozens of purchased games PC/Xbox sitting on my shelf because I got tired of play them. Some games go back to Windows 95/98 and they will only play on that operating system. The newer games I should be able to sell or trade to at least get something back what I paid for them.
tengeta said:
And this is what people said DRM would do.These companies now feel like all manners in which they can make money over the lifetime of a product is not only right to do, but a right that is god given to them.If forcing a fee to use the full features of other things was even CONSIDERED like with used cars, or think about this one: houses, people would be going off everywhere with lawsuits. You didn't sell it the second time? sorry buddy but your loss. Books, movies, and CD's have been bought and sold used for years. I don't think I have even heard those greedy record execs say anything like charging for a used album... thats how low this is.It is so disturbing to see the gaming industry continue to take the darker turns that the music and movie industries have already done, they one distanced themselves from those two things in entertainment because they saw them as corrupt, but obviously see too much potential profit these days to care. Seriously tell me I'm wrong, tell me there aren't games being hyped to hell and back to make you spend $60 on release day. Video games will die this decade, at least to anyone who wants them to be fun AND innovative like they used to be. Go play your Guitar Hero, if I wanted something that repetitive I'd just twiddle my thumbs. Its cheaper isn't it? I could turn on some music while I do it. I've already lost interest in buying another console... ever, as well as putting any upgrades into my PC's for playing newer games. I was hoping the industry would catch itself while it was falling, but now they just grabbed a ledge and let go.Second hand sales are not lost revenue, it is just straightforward greed to consider that money lost, let alone expect there to be a fair way to gain compensation for it. Honestly, I dare the industry to try some of these ideas, because if you thought the DRM complaints were a nightmare... oh man.
gbe300 said:
I think this move is silly. While I see why they want to do it and I agree with them this is losing them massive amounts of sales this is not a good way to do it. I think what they should do is focus on Downloaded versions of the games... ie direct to console types of distribution. This would help reduce costs as they do not have to have middleman to sell the game and take a cut as well as manufacturing costs, packing costs and shipping costs. And in this way they can justify the elimination of used sales. Our games cost us $60 due to the amount of cost that goes into creating a game these days. Do not blame the game makers for wanting their share as the used market does completely hurt their bottom line. I would say this is very different then a used car due to the fact that games are met to be played and shelved. This is their nature. But when one sale can be passed around to multiple people they do lose a lot of revenue to produce the next game or even just stay in business. What will help is if they stop with the old distribution model and reduce costs. Much like drug companies millions of dollars are wasted in the process and increases the costs at the other end for the consumer. Some of this is warranted but too much hurts the company. Reduce costs, cut out the middle men and game costs will come down. Digital Distribution will also help them net a bit more cash since they game will be a lot hard to pass around.
Xempler said:
They are not losing revenue in my opinion. They sell a product at a particular price point and make a certain percentage in profit. Just because it's resold by a consumer does not mean they are entitled to another piece of the pie.This is why I am totally against DRM technology. These greedy companies have total control over a piece of software you purchased with your hard earned money and just like the government find creative ways to empty your pockets while filling theirs.Guaranteed if they implement this, you'll see a further rise in the problem of piracy
kenm said:
It would also help if they made it a little more attractive to stores to sell new copies instead of used copies. As a former store owner I know the average mark up on new video games is only a few dollars per copy. Where the average mark up on used games is about 100%. If a store can buy new copy of a game for for around $56.00-$57.00 and sell it for $60.00, or buy or trade in a used game for $15.00 - $25.00 and sell it for around $54.00 - $56.00 which one would you try to sell more of? Now I don't know what big box stores pay for their inventory, this is about normal for smaller privately owned stores.
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