Lionhead: second-hand console games more costly than PC piracy

By on May 18, 2011, 7:38 PM

Game developer Lionhead has declared that second-hand sales of video games for the Xbox 360 are a bigger problem for the company than pirated video games on the PC. In other words, the resale or pre-owned games cost the company more in the long run than piracy does.

"Piracy these days on PC is probably less problematic than second-hand sales on the Xbox," Mike West, the lead combat designer for Fable III, which is made by Lionhead, told Eurogamer. "I've been working on PC games for many years and piracy is always a problem. There are a lot of honest people out there as well, and if they like your game they'll buy it. The pirates, whatever you do on whatever system, they will crack it. It might take no time... I think the longest it's taken to happen is two days. Someone will crack it somewhere and there's not much you can do about it."

Game publishers and developers do not like second-hand game sales because they don't get any money for the transaction. The party doing the reselling, be it Amazon, EB Games, or another retailer, reaps all the profits. The store stops being the middle man by cutting out the head honcho. Gamers can also obviously sell games directly between each other and then there really is no profit on the actual sale.

Game companies have tried various methods to fight back against the resale of previously-owned games. The most popular initiative is EA's Online Pass: new games come with a free code that can be redeemed to enable multiplayer or receive downloadable content. The code can only be used once, which means second-hand buyers have to buy their own online for around $10 or they won't get to use all the features of a given game.

Let's revisit piracy. West says the fact that people don't think it's worth spending money on computer games is a depressing situation. He insists that pirates are making sure there are fewer games coming out in the future and more people are out of work. He also believes that the only way to stop a pirate from not paying for a game is to have a face to face conversation with him or her, in order to explain the consequences of their actions.




User Comments: 57

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matrix86 matrix86 said:

This is something people have been saying for a while now. Nice to have actual results proving it :P

princeton princeton said:

Article won't load for me. Rest of em will. This is weird.

Also it's pretty obvious that piracy is not the reason why groups don't develop PC centric games. It's money. The only person who still believes that is TomSEA and frankly I think he has family who works for the RIAA, MPAA ect.

dividebyzero dividebyzero, trainee n00b, said:

Article wont load for me either.

I'm guessing this is the original story

[link]

matrix86 matrix86 said:

Not loading for me either. Worked fine earlier, but not anymore.

gwailo247, TechSpot Chancellor, said:

I don't believe any of this. There will be enough people playing PC games for the foreseeable future that there will always be a market. Even if it is only 10 million people, you can still make games attractive enough that people will buy them. This is too big of an economic niche just to ignore. Even if its something like Minecraft, if more big houses switch away from making PC games, then the money will just go to people who will make them. It might not be millions in profit per game, but someone will always fill the vacuum.

mailpup mailpup said:

So there is a secondary market for used games. So what? Why should buying and selling used games be any different from paintings, sculpture, music CDs, DVDs, used cars, boats, houses, furniture, books, computers, etc.? Why are games so special?

yRaz yRaz said:

mailpup said:

So there is a secondary market for used games. So what? Why should buying and selling used games be any different from paintings, sculpture, music CDs, DVDs, used cars, boats, houses, furniture, books, computers, etc.? Why are games so special?

because you agreed to terms of service

veLa veLa said:

mailpup said:

So there is a secondary market for used games. So what? Why should buying and selling used games be any different from paintings, sculpture, music CDs, DVDs, used cars, boats, houses, furniture, books, computers, etc.? Why are games so special?

Well said.

As for piracy. It's not stealing, it's sharing. For example, if a user pirates a new game rather than buying it, they probably don't have the money to buy it in the first place. Besides, this way they get a test run of the game instead of dropping up to $60 on a hunk of junk.

mailpup mailpup said:

@yRaz Well, not me personally as I don't own any console games but I understand what you are saying about the EULA. It just galls me the way game publishers feel the need to control/eliminate the secondary market (through the EULA or any other means).

NeoFryBoy said:

mailpup said:

@yRaz Well, not me personally as I don't own any console games but I understand what you are saying about the EULA. It just galls me the way game publishers feel the need to control/eliminate the secondary market (through the EULA or any other means).

They're just trying to get paid for a product they made. The "secondary market" destroys every chance they have of making money from that item.

wizardB wizardB said:

mailpup said:

@yRaz Well, not me personally as I don't own any console games but I understand what you are saying about the EULA. It just galls me the way game publishers feel the need to control/eliminate the secondary market (through the EULA or any other means).

Eulas have never been tested in court by any software company because they know they would get their asses handed to them by any semi competent lawyer

captaincranky captaincranky, TechSpot Addict, said:

In other news, Ford Motor Corporation just announced they were declaring bankruptcy due to sales of second hand Ford vehicles.

Guest said:

I have a better solution, make the stupid games cheaper to begin with. What cost would you lose with a cheaper new product price vs the cost of having people buying and selling used games if it's such a big deal to these guys. They always just want more money.

Darkshadoe Darkshadoe said:

captaincranky said:

In other news, Ford Motor Corporation just announced they were declaring bankruptcy due to sales of second hand Ford vehicles.

Exactly the example I was gonna use.

Archean Archean, TechSpot Paladin, said:

Pretty close call wizard, but I do agree to one important factor, courts in many countries don't give a damn to any 'fine print' conditions/terms (and EULA is sort of similar in this way); so there is every chance they will loose in the court of law. The major issue is, Govt. around the world instead of 'protecting' their citizens, are saviors of corporations and their interests, otherwise these entities won't be able to harass people like this; now, this is a pretty sad reflection of times we live in.

Darkshadoe Darkshadoe said:

neofryboy said:

mailpup said:

@yRaz Well, not me personally as I don't own any console games but I understand what you are saying about the EULA. It just galls me the way game publishers feel the need to control/eliminate the secondary market (through the EULA or any other means).

They're just trying to get paid for a product they made. The "secondary market" destroys every chance they have of making money from that item.

If an Xbox game is being sold, traded, etc to a store like Gamestop, It already was paid for once (unless it was shoplifted, but that is another story). The developer was already paid for that individual game already. If you sell your house to person X and they turn around and sell that same house to person Y, are you entitled to some of that money? This is the same exact thing. Game devs.have the same sense of entitlement as people who pirate their games... they want something for nothing. Dev's excuses like "we just want paid for our work" is just as sad and lame as the pirate's excuses for piracy.

BlueDrake said:

@yRaz Where is there a ToS or EULA saying you have to keep that copy? Sure it's in the manuals and such, but are stores like EB Games, Gamestop, etc going to stop refunding? Not anytime soon, and companies won't bother making deals with the stores either.

If you buy a new game, play it for a while and want to return it. Name how many stores accept "electronic goods" like games return, after they have been opened and played period. These "second hand" stores are there for this reason, and if the companies want to get up in arms about it then talk to the stores.

Don't just slap the customers with stupid limits, being we won't care and will find a way to sell the game. Unless say it came with some exclusive DLC or something, that was limited to one time use you've got little to stand on guys. If they added more reasons to games, or not made them so high priced it'd actually be worthwhile.

You expect people with wishes to buy a game, slap down $50-60 on a game to suddenly hate it and not get a refund? That would be like testing a car or truck for a short time, feel it's not for you and want to return it or trade-in? "Sorry we're not allowing that now, because the companies don't get a profit."

Many wonder why pirates are so common, things are not always worth the money for most consumers. You slap down a fair chunk of money on a game, then suddenly feel it's not worth it but you don't get a full refund anyways. Who's really ripped off in the end? Go get a game at Walmart or somewhere, play it for a while and take it to Gamestop or EB Games. See how much of a "refund" or "trade-in" you get for it.

JayT1806 said:

Reselling games is our right as a consumer. Game developers have no right to prevent this. Im not buying something that can only be used once. I am buying software with a CD-KeY, and that key is property that I own and I have the right to sell that key to another person if he or she wishes to buy it.

If you want to boost your sales, make a good game and people will buy it new.

Guest said:

So if I buy a game and then decide it sucks and don't want it, tough luck for me?

ET3D, TechSpot Paladin, said:

Used games are good for the game makers for two reasons:

First of all they introduce games of these developers to people who otherwise might not have bought them due to price (since they can buy the used game cheaper). If these people like the game, they might then buy the sequel at full price when it's released.

Secondly the person who sells the game to the store gets money which most likely goes into buying other games. This allows the seller of the used game to buy more games than he'd otherwise buy.

Guest said:

The fact is, they're greedy bastards, and they just wanna make more money any way they can. Just listen to the whining. To them it's "losing money" for some reason. But it's not their money to begin with. I'm really, really sick of hearing about these companies crying like babies over losing things they never had. And comparing the resale of games to piracy... really? If they wanna make more money, then they should make better games!

I can easily envision a future where consoles work more like steam, in which case they will make a lot more money. I'm not at all saying I want this to happen, but this is probably where we're heading. They'd be even happier if we would pay per minute of game-time. Yeah. You'd have to sit there with your VISA plugged into the gamepad and cry yourself to sleep at night because you can't afford to play more. Oh glorious future, I can't wait.

I recently bought Darkspore on Steam. A new and expensive title. I hate it. I hate it. I can't stand it. It's bad. That was 49,99? wasted. Now it's just another word in my games list. I wish I could give it away to a friend that might actually enjoy it, and thereby see some minor value in the investment, but I can't do that. At the very least, I'd like to break the disc, burn it and defile it. But I can't do that either. I can't even remove it from my games list. It's always there, staring me in the face, laughing at me. A constant reminder to never buy Darkspore ever again. As if I ever would.

Cota Cota said:

Guest said:

It's always there, staring me in the face, laughing at me.

Epic Guest is epic. Don't worry you are not alone since almost all gamers buy a game that wasn't wort it.

Personally after buying Mass Effect (wich i dont liked not even a bit) i decided to get back to download games from the captains ship play them a week or two and is its good buy it at my next payment, if one day some greedy lawyers call me to court, i will be pleased to tell them "dont worry, i deleted it because it sux" and then use the Chewbacca defense.

Tedster Tedster, Techspot old timer....., said:

Boo-hoo. Sorry. Once I buy a game it's mine. And lately I've been BUYING a lot of used games. I really don't want to slam $60-70 on a new game only to discover it sucks, or I finish it in 3 days. I'm not getting my money's worth. Some things are best bought used. Video games are one of them.

hitech0101 said:

Guest said:

The fact is, they're greedy bastards, and they just wanna make more money any way they can. Just listen to the whining. To them it's "losing money" for some reason. But it's not their money to begin with. I'm really, really sick of hearing about these companies crying like babies over losing things they never had. And comparing the resale of games to piracy... really? If they wanna make more money, then they should make better games!

I can easily envision a future where consoles work more like steam, in which case they will make a lot more money. I'm not at all saying I want this to happen, but this is probably where we're heading. They'd be even happier if we would pay per minute of game-time. Yeah. You'd have to sit there with your VISA plugged into the gamepad and cry yourself to sleep at night because you can't afford to play more. Oh glorious future, I can't wait.

I recently bought Darkspore on Steam. A new and expensive title. I hate it. I hate it. I can't stand it. It's bad. That was 49,99? wasted. Now it's just another word in my games list. I wish I could give it away to a friend that might actually enjoy it, and thereby see some minor value in the investment, but I can't do that. At the very least, I'd like to break the disc, burn it and defile it. But I can't do that either. I can't even remove it from my games list. It's always there, staring me in the face, laughing at me. A constant reminder to never buy Darkspore ever again. As if I ever would.

Well you should have read game reviews there are tons of them out there.Piracy can be reduced if games are cheap people will spend money rather to miss out on online content.

If games are cheap to begin with the resale value will be less too so people won't mind putting in a little more money to get the original instead of second hand.So in the long run cheaper games will be more profitable than expensive titles which end up in piracy or second hand sale.

stewi0001 stewi0001 said:

boo the freakin hoo yea well guess what it's how gamestop is still in business and guess what gamestop also sells your freakin products so get over it....

oh yea any one want to buy a fork from me? oh wait the fork company will cry...

blackbellysheep said:

If you're telling me that the hard earned money i spent on your game means i don't own it and can't resell it, will you buy it back from me when i'm done with it, cause this argument seem really lousy IMO, what makes this process of me buying from you and selling it when i'm done using it if i know i wont need it again, any different from anything else i buy and sell on ebay or anywhere there is a need, how greedy can these companies be, imagine COD-BlackOps sells over 200Million lets just round it at $30 buck for sake, that's like 6Billion $ or there about.again how greedy can you be..just my opinion no need to curse me out.

Tomorrow_Rains said:

I bought Battlefield 2142 a while back.. Opened it.. Installed in, Put in the CD key (Rejected) Called EA and they gave me another one (Rejected) Called EA and we tried four different codes. All rejected. EA then told me, That since i had bought a used game (It just came out that day) i had to pay $25 to get a secure CD key. hahaha, i returned that pile of crap so fast, i ended up just saving the money instead. I never since purchased an EA game. F*** EA.

Trillionsin Trillionsin said:

As piracy is bad, I am still willing to pirate games... if it's good enough, I buy. If they have a demo, I do that and etc. Usually resort to pirating for silly games with no demos. Usually older games, too.

As for this article... it's just silly. They get their initial payment. WHOPPING $60 usually, just to play a game for awhile. Maybe if they werent so expensive they wouldnt sell them off so quickly for the people waiting to play the used games. I know that I KEEP my most favorite games, even if I dont play them again. I have every Armored Core series, from PS, PS2, PS3, one on the xbox, and one on PSP. Wonder if anyone even knows what game I am talking about.... other than that, I still have MGS4 and GTA4.

MilwaukeeMike said:

captaincranky said:

In other news, Ford Motor Corporation just announced they were declaring bankruptcy due to sales of second hand Ford vehicles.

Don't forget auto companies make far more in financing than they do in actual car sales.

MilwaukeeMike said:

I dont' think anyone yet understands what this is about. Stop freaking out about greedy companies again...They're not saying it's illegal, immoral, or wrong. Their exact words were 'Don't like it.' It just cuts into their sales. That's it. Think of it like the 2nd hand market is the same as a competing game studio, just one more factor affecting sales. If the game is awesome, more and more people will want it AT THE SAME time and resales won't be possible. If the game is crappy, it'll get traded around. Incentive for better games.

But wait... there's more! It may lead to a change in pricing models. Gillette invented the 'cartridge' payment model for their shaving razors... buy the razor for cheap, and then make the blades expensive. Like how WoW is like $10 for the game and $15 a month. We may see more of this, especially with everyone's xbox/PS3 online already.

Unless there are more people lke trillionsin who steal it anyway... then maybe they'll just stop making them.

Guest said:

ahhhh but if you read the EULA you cant resell the game its forbiden

Benny26 Benny26, TechSpot Paladin, said:

captaincranky said:

In other news, Ford Motor Corporation just announced they were declaring bankruptcy due to sales of second hand Ford vehicles.

+1

Exactly. I also agree with Mailpup.

Guest said:

so...i need the authorization of the company to sell something that i own?....no way, that is greedy and they make some bad games, and dont put cheap prices on the table? No mames no way....why they dont make their own store? why they think that i cant sell my stuff? they are trying to keep the life spawn of a product forever and with similar prices, if ford said that about their bankrupt its bcuz they oversaturated de market and the streets with Cars but they didnt care about updating their cars with a smooth tecnological thing or even trade your car for something better....they deserve that because they stop progress....you know cars and games are not like food,you dont use it and waste it every day...so even with the EULA and blablabla its not valid, they try to put laws over the laws to create a legal subsystem what an assholes

yukka, TechSpot Paladin, said:

If games cost a bit less more might buy them the first time round. £40 for a brand new game is too much money for most at the moment. Plus I am playing other games. Why spend 40 now for it to sit on a shelf until I get time to play it.

Zecias said:

mailpup said:

So there is a secondary market for used games. So what? Why should buying and selling used games be any different from paintings, sculpture, music CDs, DVDs, used cars, boats, houses, furniture, books, computers, etc.? Why are games so special?

i don't think you get the point of the article.........

mailpup mailpup said:

Game publishers and developers do not like second-hand game sales because they don't get any money for the transaction. The party doing the reselling, be it Amazon, EB Games, or another retailer, reaps all the profits. The store stops being the middle man by cutting out the head honcho. Gamers can also obviously sell games directly between each other and then there really is no profit on the actual sale.
What's wrong with commenting on this part of the article?

Guest said:

terms written on packages that the game developer has rights to money made when a game is resold are abritary but thankfully irrelevant since no court would even consider enforcing it. this is complete idiocracy that we even consider letting the gaming industry expect money from the resale of games. no other industry gets this privilege. when you buy a game you own it outright. you can resell it for whatever price you want and no one else has rights the sale but you.

Guest said:

The most games are designed to boring them fast because they want the gamers have free time for buy new games.

You can't have the pie 100% and at the same time no one hungry.

matrix86 matrix86 said:

The most games are designed to boring them fast because they want the gamers have free time for buy new games.

You can't have the pie 100% and at the same time no one hungry.

Huh? I understand what you mean in the first part, but that last sentence makes no sense, lol. I'm usually good at understanding broken English, but this one has me puzzled :P

Guest said:

Court Says Reselling Software Is Okay

Last year, we wrote about a case filed by an eBay seller against Autodesk, claiming the company unfairly prevented him from reselling used copies of Autodesk software that he had legally purchased. Basically, every time the guy listed Autodesk software, the company would send a DMCA takedown to eBay who would take it down. Each time, the guy would send a counter claim, which Autodesk would ignore, allowing the software to go back on the site. However, with so many takedown notices, eBay banned his account for abuse -- even though he successfully responded to each claim as being false. For that, he sued Autodesk. Autodesk moved to have the court dismiss the case claiming that the seller had no right of first sale because the software was "licensed" rather than sold. If that sounds like weak semantics, you've got a point... and it appears the court agrees with you. In denying Autodesk's request to dismiss the case, the court indicates that, even though the case law covering this issue often varies, it believes that the software has been sold, not licensed, and therefore the right of first sale does exist on Autodesk's software. The case should now proceed if Autodesk doesn't quickly show up with an offer to settle the case quietly (which it might). Assuming the case does go forward, it's going to be worth watching closely, as it will have important ramifications for the right to resell software you purchased.

Guest said:

Lionhead's main releases has been the past 3 Fable games, and despite being good games, I've noticed shorter game play, more dumbed down game mechanics, and more "add-ons" that are sold separate from the game via DLC with each release. Also over hype of the games in marketing after the 1st one not been good either.

Make a great game, it sells, make a medicor game, expect medicor sales, make a bad game... well...

Game industry seemed to follow the path of Hollywood. Independent studios with great games, too mega studios with massive budgets (and massive advertising) while increasingly afraid to try anything new. I think there trying to attack the 2nd hand market to compensate for a more serious issue with the game industry.

Add to it all intrusive DRM, activation servers which make the games useless if they ever go out of business or decide to not support older games. Pirate seem to enjoy the games without these restrictions, usually before the game official releases, leaving the actually paying consumer taking the heat.

Appzalien said:

What's next? I won't be able to sell my car unless the manufacturer gets a slice of the resale pie? Once I buy it, it's mine and I can break it, burn it, or give it to a bum on the street and they can't do a dang thing about it, it's mine. Greed, it's nothing but greedy Corporate goons who want it all and are in the process of destroying America while filling their filthy pockets with with booty. So who are the real pirates here?

Guest said:

This is crazy. So what if people sell used games. If the game company thinks people only buy used games and they don't pay full price for it the first time around they feel they are losing money? I don't pay full price anyways. I wait for a sell, or a price drop before i buy. So they don't get all my money anyways. On the other side of this, if i buy a used game and the game is awesome, i'll buy that game companies games again, if it's not, then i won't. Maybe they are worried that people will pay only 10, 15, or 20 for a game and find out it was ****, when the company was hoping they would drop 60 to find that out. I also borrow games off my friends and play them, so next i guess they will want some money from me or my friend because i used his game when he wasn't using it. Get a grip gaming companies. If i own it, then i own it. I can do what i want with it. Sony believes you don't have any rights 2 do what you want with the ps3 console, but if you spend 500, 400, or 300 on it, it's yours. take it apart, hack it, load linux on it. Where did he consumer rights go?

maddmatt02 said:

I wont ever buy any game with anything like EA's "online pass" at full price, and I will wait til used games are that much cheaper before I buy them. honda doesnt start bitching at me when I sell their car without trading it in to them so that they can make a few bucks off it. not to say that they wouldnt appreciate it if I did, but Ive never seen them hold a press conference or anything telling people they are going to start disabling the ECU on cars that are sold and you need to come to them and get a new key to match the immobilizers new code...

SNGX1275 SNGX1275, TS Forces Special, said:

In other news, Ford Motor Corporation just announced they were declaring bankruptcy due to sales of second hand Ford vehicles.

The car companies have a way to squeeze out a little more profit out of some of their 'second hand vehicles', used cars on their lots. Companies even come up with enticing terms like "Honda Certified" used cars.

Benny26 Benny26, TechSpot Paladin, said:

The car companies have a way to squeeze out a little more profit out of some of their 'second hand vehicles', used cars on their lots. Companies even come up with enticing terms like "Honda Certified" used cars.

Quite a few offer the "used trade in" deal with a big discount on a new one also.

captaincranky captaincranky, TechSpot Addict, said:

The car companies have a way to squeeze out a little more profit out of some of their 'second hand vehicles', used cars on their lots. Companies even come up with enticing terms like "Honda Certified" used cars.
Well yes, that may be true, but that's only "first time second hand". It's certainly not the $500.00 fifth hand turds with stolen Accura engines. I'm used to. You know, the ones with four 15" subwoofers you can hear coming from a block, (or more), away. I'm sure nobody's even admitting to them, let alone peddling them on a new car lot.

Hasbean said:

neofryboy said:

mailpup said:

@yRaz Well, not me personally as I don't own any console games but I understand what you are saying about the EULA. It just galls me the way game publishers feel the need to control/eliminate the secondary market (through the EULA or any other means).

They're just trying to get paid for a product they made. The "secondary market" destroys every chance they have of making money from that item.

I quite agree...last time I sold my car, Ford sent me an invoice for their cut, the same happened when I sold my old CRT, washing machine and when I sold my house the builder was wanting to charge for the building materials at the new costs not the old.

Greed, plain and simple.

EULA's are a con game. No other industry (that i can think of) demand to be paid a second time for their product.

Guest said:

I think this issue a crock. When you buy a used car, the original manufacturer doesn't get a share of the new sale profit, same with books and all other commodities. What makes software developers expect this bonus? it's not like the games come cheap...$50+ for game that may only give 30 days of playability is pretty epensive in my mind. If they made the games less expensive, I would be more inclined to buy them earlier and buy new.

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