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Used e-books and games: worlds apart in thinking

08 Feb
Microsoft won't sell nearly as many Halo games if it kills the used market.

Microsoft won’t sell nearly as many Halo games if it kills the used market.

It’s been an ironic – and potentially revolutionary – week for digital goods. It started out with the revival of rumours that Microsoft may be looking to crush the used video game market with the release of its next Xbox console and it ended with the revelation that Amazon has acquired a patent to sell used e-books. These two bits of news couldn’t be further apart, even though they’re essentially dealing with the same thing.

In the case of video games, rumours have been circulating for a while now about both Sony and Microsoft implementing technology into their next-generation consoles – expected this year – that would make it impossible to play used products. It’s no secret that game publishers hate the used market, estimated at about $2 billion in the U.S. alone, because they don’t get a penny of it. Moreover, there’s bitterness over retailers like GameStop, the biggest player in used games, because they devote so much floor space to used games in spite of the huge marketing dollars spent by publishers on new products.

And so the latest rumours peg Microsoft’s next console as requiring an internet connection and a one-time activation code to play games, which would effectively kill off buyers’ ability to resell their games.

On the flip side, Amazon’s patent has the potential to be – if you’ll excuse the cliche and the pun – game changing. It could eliminate perhaps the last remaining gripe about how physical books are superior to e-books because you can resell them (okay, paper books also have a certain smell – perhaps Amazon is working on that too?). It could also revolutionize all digital goods.

At the core of that no-resell complaint is first-sale doctrine – the notion that if a consumer buys something, they should have the right to do what they want with it, including resell it. The problem with most e-goods so far, with the possible exception of music, has been that digital rights management locks have generally made resale impossible. Without that right, it’s been possible to argue that the consumer doesn’t really own the product they’ve bought.

Ironically, Amazon hasn’t helped itself in the debate, with instances of locking users out of their accounts and thereby denying access to products that were rightfully purchased.

Still, by enabling resale of e-books – a technology that could certainly be applied to other goods, including movies and games – Amazon would dramatically change the market for them. Wired has a good roundup of the possibilities; some observers fear the company has no intention of reselling e-books, that it merely wants to block others from doing so, but intellectual property experts see no evidence of that.

Publishers would likely hate such a move for the same reason that video game makers do – they wouldn’t get a cut of it. And with Amazon already selling e-books for less than they’d like, their products would become available for even cheaper.

The irony, of course, is that it’s been proven over decades across different media that the used market is good for the primary market because it motivates and enables people to buy more. If Microsoft and Sony do indeed move to kill used products without a corresponding cut in the price of new stuff, it’s safe to assume that gamers will buy less overall.

The solution in both e-books and video games therefore seems obvious: publishers should work with the retailers to find a solution in which they get a cut of the resale. That way, everyone wins.

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10 Comments

Posted by on February 8, 2013 in amazon, ebooks, microsoft, sony, video games

 

10 responses to “Used e-books and games: worlds apart in thinking

  1. Chris C.

    February 8, 2013 at 12:16 pm

    OK, so this is only my first impression but this piece of news makes me ANGRY TO NO END and I MUST reply to it even if my response will undoubtedly be emotional and if I appear to be mad, so be it!

    In short, it’s high time our governments put its pants on and made it CRIMINAL for companies to EXTORT money from people in such fashion as this nothing but STEALING and PRINTING MONEY, and I am NOT KIDDING.

    How so, you may ask? I sell goods. I make a profit. Now I come back in your house, take it away (after you have used it (STEALING IT) and RESELLING IT to someone else (by making sure the person who would have bought it from the original buyer would have to have to buy a COPY of it), in other words, making a PHOTOCOPY OF THE ORIGINAL BUYERS MONEY.

    We have tolerated the insane money copying through the so-called copyright (in other words the monopoly to print money in the form of software) LONG ENOUGH and it’s ABOUT TIME THE LEGISLATORS WOKE UP TO THE CRIMINALITY OF THE SOFTWARE GIANTS. Compared to Microsoft and Sony, AL CAPONE WAS A PHILANTHROPIST!

    OUTRAGED doesn’t even begin to describe how I feel. If we, as a society, do not stop that, and do not stop the hard push to control the Internet through the ITU WCIT treaty, we will have global scale civil war in the next 10 to 20 years.

     
  2. jdh5153

    February 8, 2013 at 1:45 pm

    Killing the second hand market will be a good thing for video games. It’ll be better for developers and publishers, and better for gamers in the long run. I’m excited for it and welcome the change.

    -avideogamelife.com

     
    • petenowak2000

      February 8, 2013 at 2:13 pm

      How so? What’s good for publishers and developers isn’t necessarily better for consumers.

       
      • jdh5153

        February 8, 2013 at 2:16 pm

        What’s good for consumers isn’t good for business. People will get used to it and forget about it about a month after the new consoles drop.

         
      • El Presidente (@elquintron)

        February 11, 2013 at 11:23 am

        I did a quick browse of his homepage… and it’s a splog, so there’s no doubt that this is hired comment. A shill/astroturfer for one of the consoles maybe?

         
      • Chris C.

        February 12, 2013 at 5:55 pm

        @El Presidente: I checked his website as well and as much as I can’t fathom how any real person could sincerely hold his position and the anger I feel for all the harm it causes, I cannot subscribe to the view that he’s “just a shill”. In an open society, every opinion is valid, however ill-informed and misplaced it may appear.

        In the words of a famous Canadian politician, as much as you may despise and ridicule another person’s opinion, you have to respect the person who holds it.

         
    • Chris C.

      February 8, 2013 at 5:45 pm

      Yeah, great foresight, dig deeper, you haven’t reached 6 feet yet.

       
  3. russellmcormond

    February 11, 2013 at 10:13 am

    I’d gladly give up any resale-right for digital content if we then gained clear and proper ownership rights to our hardware. What Amazon is dealing with is yet another technology built upon peoples devices being non-owner locked, such that the license can be transferred from one person to another in a way that ensures the original person can no longer access the content (their non-owner locked device will delete keys/content/etc).

    The thing to be watching in the video game industry isn’t licensing issues related to the games, but ownership issues related to the game consoles. Taking your eye off the consoles allows people to be easily confused by these fake first-sale debates.

     
    • craigbamford

      February 12, 2013 at 2:55 pm

      They’re two sides of the same coin, Russell. The complete control they have over the players is what would ensure that you can’t resell your media.

      And, yes, Peter is absolutely right. Locking down resale is a horrible idea that will just nail the coffin on the already-wounded AAA console space. Getting a cut out of GameStop is a much better idea, and GameStop has even been open to it. The issue has been publishers’ unwillingness to consider the idea.

       
 
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