What caused the publisher pre-owned U-turn?

Publishers do not like second hand game sales.

They believe that pre-owned is killing their businesses. It is discouraging gamers from buying new games after a certain period and is money made by retailers that is not being passed to the creators.

Yet in recent months the rhetoric has changed.

Andrew House, CEO of SCEE said earlier this month: The vast majority of used sales go immediately into additional purchases, that they are not somehow being extracted from the overall game economy.”

Even EA has changed its tune – it introduced measures to discourage pre-owned sales, where those that bought a game second-hand could not play it online without paying a fee – a system it has since scrapped.

Defending the boxed games business, EA CFO Blake Jorgensen told investors: Used games are an important part of the industry. People think about the price of a game based on the fact that they can still return that game. That will keep the physical business around for some time.”

What has caused this sudden change in pre-owned opinion? A certain Xbox One PR disaster.

The best thing that has happened to retail this year
was Microsoft’s foot shooting exercise at E3. It
highlighted how consumers perceive the ownership
of their games, showed that Sony was smarter than
Microsoft and emphasised the importance of pre-
ownedgames. It also showed that the strength of
public opinion – it changed Microsoft’s policy.
People really made a difference.”

Chris Ratcliff,Game Guide

Although it was never officially confirmed, it was widely accepted that Xbox One would have some form of anti pre-owned system. Xbox One was originally designed to tie a game to a specific console. You couldn’t even lend a game to a friend with ease, let alone trade one in.

Microsoft never fully clarified the situation, but publishers appeared to have the ability to prevent customers trading in their games. And the backlash against this was fierce.

The best thing that has happened to retail this year was Microsoft’s foot shooting exercise at E3,” says Chris Ratcliff, owner of pre-owned indie bible, Game Guide.

It highlighted how consumers perceive the ownership of their games, showed that Sony was smarter than Microsoft and emphasised the importance of pre-owned games. It also showed that the strength of public opinion – it changed Microsoft’s policy. People really made a difference.”

Today, gamers’ voices are heard through Twitter, Facebook and forums – and real success in this industry is driven by giving gamers what they want.

Publishers supporting the used games market do it through pursed lips, but in the end they realise they just have to give what the consumer wants,” continues Ratcliff.

When MCV interviewed Activision at Call of Duty: Ghosts’ launch, the UK MD Roy Stackhouse pointed out that if customers wanted, they could trade in the 360 version to buy the Xbox One edition.

This goes beyond lip-service but is actively encouraging trade-ins.

As we move towards the next-gen, publishers are eager for customers to upgrade. Not just upgrading their console but also their games. They wanted to sell millions of Assassin’s Creed IV across both generations, and the pre-owned market was a way to achieve just that.

EA and Sony’s comments come shortly after GameStop said that many PS4 owners have utilised their existing game libraries to buy into the next generation,” observed indie games retailer Matthew Brady of Game On.

Ratcliff adds: Having consumers upgrade to the new formats is a vital part of retail and in many cases this will be partially financed by trading in old consoles.”

It is better to have consumers using purchased
pre-owned games and possibly paying extra with
micro-transactions than having it sat gathering
dust after it has been played by one gamer.”

Matthew Brady, Game On

Gamers like trading in. And it has genuine benefits at the start of a new console cycle. But the changing face of this industry also means that just because a game has been bought second-hand, doesn’t mean it’s a lost sale for publishers.

The rise of micro-transactions and DLC has enabled publishers to monetise games after launch. It’s far better for the publisher that the customer that owns the title keeps playing it.

It is better to have consumers using purchased pre-owned games and possibly paying extra with micro-transactions than having it sat gathering dust after it has been played by one gamer,” adds Brady.

EA removed the paywall of Online Pass as it was another barrier stopping pre-owned purchasers from accessing the very lucrative FIFA Ultimate Team.”

That’s perhaps the salient point in all this. Pre-owned is no longer quite the business killer that publishers once thought it was.