GameStop Exploiting Devs And Consumers

[BBA]

The world doesn't revolve around you.

As the end consumer, yes, it does.

 

[Dekoth-E-]

Sure, so long as you let me decide whether you got your money's worth out of the game as a metric I can use to decide whether to issue the refund!

-Signed, a game dev.

Sorry, but when the majority of Titles being shoveled out by you and your fellow game developers are shovelware that are barely worth $10 much less $60 and more realistically worth about $5. Then you lose any right to decide what the "Metric" or Bar should be for returns.

-Signed, Every single customer with an ounce of Self respect and an understanding of the value of their hard earned money.

 

[DarkStar_WNY]

If the gaming companies wanted to undercut GS's margins they could offer the game new for less money. It could put them out of business if they were priced accordingly, they can't operate at a loss for long before they disappear.

Selling them at lower prices wont put Gamestop out of business, sure it might cut their profits, but more likely it would just result in lower trade in prices.

If for example PC games prices dropped $10 instead of buying it for $20 and selling it for $55 for a $35 profit they would buy it at $10 and sell it for $45 and still get their $35 profit

 

[teh_chem]

This guy sounds like an Xbox One shill that was pissed when MS retracted their used game transaction fees.

Tough, live with it. Would you rather have a free second-hand game market, or would you rather people stop buying your games all together?

 

[Master [H]]

Man, from working retail, it's clear the dev in question has no concept of how to win loyalty. Yes, you're not going to make everyone happy, every time. However, they best way to win customers and their money is to be good to them. Give them a reason to return.

One thing I've noticed about Halo 4 is a decent amount of free DLC along side the paid-DLC. I've only really gotten into console gaming in the past few years, but compared with a lot of other FPS games, that was nice, and it made me want to put (presumably) Halo 5 on my short list for purchase. I'm not saying devs need to follow this exactly, but encouraging ways of having the consumer to want to come back.

It seems like some devs want to catch flies with vinegar.

 

[DocFaustus]

Ok guys I am a developer myself and I want to cover some points that most people don't realize. Big games cost 30 to 100 million to make. Not including marketing costs etc. developers normally have to make dev cost plus marketing costs which is upwards of 40 to 60% (which is completely out of the devs control). Lets use 50% for example. As example a40 million dollar game actually needs 60 million to break even. Devs don't get money until that happens. Here is how you get to those final numbers. A $60 game. 30% of that goes to the retailer. So we are at 42 dollars. The console manufacturer gets 9-10 per. So we are down to 32 dollars. That means said game needs to sell around 2000000 units to break even. Foreign sales work differently becuase the foreign rhq keeps the marjority of the money and the money sent over is used for breakeven so that is a hell of a lot less in contribution.

A lot of games don't sell that big and then people don't understand why a game they liked doesn't get a seqel.

Devs themselves are back of the bus getting money. That is why there is interest in sharing revenue. They get screwed. Gamestop makes money. The publisher gets money and the ev gets screwed.

Even worse there are majors pubswho do what i call indentured servetude contracts. Day one dollar one royalties. But the royalty is what is used to calculate breakeven. So that wonderful 20% royalty actually takes 5 times as long to break even. My previous example is if a publisher wants to get made whole asap so the devs might get money. This servitude contract is to force them to take the next gig probably with not as good terms.

What he is talking about is hope.y getting devs get some money at the endof the day.

So you know i launched the digital distribution games for psn when i was at sony. I believe it is in the future whn the US infrastructure can support it. According to the last round of US numbers a lot of people are still in the 4megabit and below range because they live in places where they have very little choice i isps. That makes digital a problem. I've got 30 down and it still was a long time to download Uncharted 3. So with 4 down which works out to 512k actual down a 30 gig download just isn't practicle. And that is even with planning on actually getting all the banwidth.

I've been doing this for 23 years. They devs are always the one getting the short end of the stick. The greedy SOBs at the publisher see money and the greedy SOBs at retail see money and all to oftem devs get screwed.

Cheers

Thanks for the breakdown, Croaker. It appears that the industry is screwing over developers. Why would it make sense to in turn screw over the customer by trying to negate the First-Sale Doctrine? Wouldn't it make more sense to look for solutions within the industry?

Also your post seems to assume the product created was a good and valuable product (worth the purchase price). Good games valued at 60 bucks are not the norm, they are the exception. And therein lies the rub; in the gaming industry, 60 bucks is the price for a AAA super title and 60 bucks is also the price for a buggy piece of shit. The only difference between the two (for PCs anyway) is how long the game stays at that price point.

So, I go buy a game on day one. Get home, play the damn thing for 6 hours and either beat it or lose interest. I sell it to recoup some of my losses. Now some other sucker can play the POS. You want to get more primary sales? Make the game so good I want to play for hundreds of hours (Borderlands)..... or has replayability (Witcher), or is good or unique enough I want to show to my friends when the come over (Limbo or AntiChamber).... Anything of value really.

 

[DocFaustus]

Cars deteriorate over time; video games do not. Not a valid comparison.

You are right, this isn't a valid comparison...

With cars, you are protected by the lemon law. You also get to test drive it first, to see if it fits you.

With many other physical items you can return it simply because you are not impressed with the quality, is defective, wasn't what the client was looking for, or in many cases, no reason at all. This is true for tools, building materials, televisions, and anything else sold at big box stores. Even food at a restaurant can be returned. In all of these cases, the developer/creator/manufacturer is responsible for assuring quality. Why not games?

I'll make you a deal: I will happily give up the car analogy, if you can get game developers to stand behind their product.

 

[LeninGHOLA]

You can't download a car. But, you can overclock it.

 

[Croaker]

Thanks for the breakdown, Croaker. It appears that the industry is screwing over developers. Why would it make sense to in turn screw over the customer by trying to negate the First-Sale Doctrine? Wouldn't it make more sense to look for solutions within the industry?

Also your post seems to assume the product created was a good and valuable product (worth the purchase price). Good games valued at 60 bucks are not the norm, they are the exception. And therein lies the rub; in the gaming industry, 60 bucks is the price for a AAA super title and 60 bucks is also the price for a buggy piece of shit. The only difference between the two (for PCs anyway) is how long the game stays at that price point.

So, I go buy a game on day one. Get home, play the damn thing for 6 hours and either beat it or lose interest. I sell it to recoup some of my losses. Now some other sucker can play the POS. You want to get more primary sales? Make the game so good I want to play for hundreds of hours (Borderlands)..... or has replayability (Witcher), or is good or unique enough I want to show to my friends when the come over (Limbo or AntiChamber).... Anything of value really.

Hi Doc Faustus, I am breaking my vow of silence because you have placed civil response and argument up that I can respond to.

Yes it seems that I assume that the game is good. In my career I have always been responsible for good product. My games include Descent 1 and 2;4 Star Trek 25th Ann,, Judgement Rites and Starfleet Academy; flOw; Flower; Everyday Shooter; and I got Sound SHapes and Unfinished Swan off the ground before I left Sony and also had a hand in God of War III. I also brought in Bioware to Interplay.

Every developer should be trying to make a great game. There are 4 typical problems at the publisher level.

1. Poor green light, review processes, and focus testing. These should be weeding out projects that are going south before they ever get to manufacturing ( A good example is the most recent MoH). I respect the hell out of Peter Moore because he had the courage and willingness to kill the last two NBA games from EA because they were crap. This should be happening more often. Unfortunately Wall Street doesn't care and wants quarterly releases no matter what.

2. The"I don't care if it is shit, shrink wrap it and ship it." We can do a day one patch. First I find a day one patch offensive. I have often taken a bullet with management to get the game out right. This attitude leads to poor responses to games. Look at the disaster area for the most recent Sim City to uise as a prime example. The head of the studio took the bullet for Senior Managements ship it now actions.

3. Movie licenses. These deals are often late in the movie development cycle and devs are given stupidly short times to make them, often less than 1 year (Fantastic Four). The game suffers for it but the publisher doesn't care because it has a license. Or the other thing is that they just want to crank out mediocre titles as fast as possible because of the name ( look at the Nickalodeon titles for THQ). Devs often take these deals because they need the need the work and unfortunately they take the blame.

4. Widgets. Management really doesn't understand crap about games, but marketing has come up with "a need in the market" but don't want to spend money. They go to an unknown developer in Eastern Europe, give no guidance, and just shit it on the market. They just want something anything to sell. Again the devs are paid crap and the publisher makes a crap ton.

All of these points lead to crappy games getting into consumers hands and personally it pisses me off.

I am not advocating killing first sale policy. Nobody seems to understand that. I do not begrudge the mom and pop shop at all. I do have problems with a major retail outlet making it their primary business model. I am tired of going to a Gamestop to get a new release and have them pushing the used version for five dollars less so they can make a crap ton on it and the people making it see nothing. Netflix, Hulu, and Amazon prime either share in revenue or pay hefty fees per year to get their content. Back in the day Blockbuster paid for "fat units" for rentals to compensate to a degree Hollywood for potential lost sales. When Blockbuster started game rentals they demanded new content and paid stupid "fat unit" prices. The Clay Fighter special edition they paid $485 per unit. I know this because I was at Interplay at the time. As far as I know Gamefly when it started did not share revenue like Netflix. They just obtained games through what ever channels and rented the crap out of them. This may have changed so I am not sure if that is still true.

I am not saying you shouldn't swap games with friends either. I am not for DRMing hard media titles, My attitude about this cost me a job at Microsoft much earlier this year because I vocal about it in my interview. They just wanted me to say it was a brilliant idea.

The reason I am for some of revenue sharing program is the fact that they are driving small devs often out of business. Hell major publishers, even if I have issues with the management, often take out their bad numbers for their poor decisions on quality, both just bad games and games shipping before they should, out on the developers in the companies, not the assholes that made the bad decisions.

Cheers

PS: For those of you who are going to say that I am doing good, you are wrong. I am working for a small dev these days. Shortly after I came on board we had a consulting gig we got screwed on by a major company in China. We lost 500k due over night and 250k a month for the next 18 months. Pretty much the attitude was good luck in our courts. To help things keep going I took an 80% pay cut to keep the doors open. During that time I have burned through my savings. You can say I am stupid but I believe in the project I have going and the quality of my team. Having a good team is hard to find when thins are tight.

 

[rudy]

I am not advocating killing first sale policy. Nobody seems to understand that. I do not begrudge the mom and pop shop at all. I do have problems with a major retail outlet making it their primary business model. I am tired of going to a Gamestop to get a new release and have them pushing the used version for five dollars less so they can make a crap ton on it and the people making it see nothing.

I agree with most of your post but I think it is unfair and short sighted to say things like someone should get a pass just because they are a small mom and pop shop or single person. Rules should be across the board and fair. After all the small mom and pop shop in the absence of a big player like game stop will grow into a big player like gamestop. In fact it does not matter if game stop sells a used game or 1 person sells it on Ebay, the end result is exactly the same, the publisher and studio get no money either way. And this attitude is what causes tons of loop holes and rube Goldberg mechanisms in US law / economy.

 

[Disposed]

So basically what you are saying is capitalism ruined everything for developers?

The big underlying tone i see from that long post is that too many studios are either working on shit to begin with or are too quick to accept shit jobs from publishers. On top of that because the majority of games pushed out are shit we the consumers should be footing the bill for the developers to stay in business to churn out yet more shit?

Gee why do so many turn to piracy?

The fact that rental companies had to bow to such insane bullshit is laughable, you trying to make the argument that everyone should have to do the same now is bullshit. You can come up with whatever bullshit you want to justify it but at the end of the day all that shit does is hurt the consumer. If a dev studio cant turn a profit you fire the leadership and start negotiating better you dont say fuck it lets make the consumers pay more for nothing.

 

[LeninGHOLA]

What are you ranting about? The whole message is that the middlemen are hurting both the consumer and the devs.

 

[Snowdog]

I am not advocating killing first sale policy. Nobody seems to understand that. I do not begrudge the mom and pop shop at all. I do have problems with a major retail outlet making it their primary business model. I am tired of going to a Gamestop to get a new release and have them pushing the used version for five dollars less so they can make a crap ton on it and the people making it see nothing. Netflix, Hulu, and Amazon prime either share in revenue or pay hefty fees per year to get their content. Back in the day Blockbuster paid for "fat units" for rentals to compensate to a degree Hollywood for potential lost sales. When Blockbuster started game rentals they demanded new content and paid stupid "fat unit" prices. The Clay Fighter special edition they paid $485 per unit. I know this because I was at Interplay at the time. As far as I know Gamefly when it started did not share revenue like Netflix. They just obtained games through what ever channels and rented the crap out of them. This may have changed so I am not sure if that is still true.

I am not saying you shouldn't swap games with friends either. I am not for DRMing hard media titles, My attitude about this cost me a job at Microsoft much earlier this year because I vocal about it in my interview. They just wanted me to say it was a brilliant idea.

While Gamestop is everyones favorite target, this is again something of red herring. Only the lazy buy or sell their games at Gamestop. I have bought sold/traded used games and it was always private individual to individual, where you get much more for your sale and pay much less for your purchase.

From what I remember of the Microsoft plan, it essentially moved us from a individual to individual model, to forcing us to use "approved" used retailers, mainly Gamestop. So the same outlet Devs always complain about, would be exactly the one they forced us to use. No slight irony there.

The reason I am for some of revenue sharing program is the fact that they are driving small devs often out of business.

There are unquestionably problems with the economic model, of the video game industry, but I haven't seen one shred of evidence that getting a cut of used sales would solve any of them.

This looks much more like grasping at straws, for more revenues to make that broken model work.

 

[rudy]

So basically what you are saying is capitalism ruined everything for developers?

The big underlying tone i see from that long post is that too many studios are either working on shit to begin with or are too quick to accept shit jobs from publishers. On top of that because the majority of games pushed out are shit we the consumers should be footing the bill for the developers to stay in business to churn out yet more shit?

Gee why do so many turn to piracy?

The fact that rental companies had to bow to such insane bullshit is laughable, you trying to make the argument that everyone should have to do the same now is bullshit. You can come up with whatever bullshit you want to justify it but at the end of the day all that shit does is hurt the consumer. If a dev studio cant turn a profit you fire the leadership and start negotiating better you dont say fuck it lets make the consumers pay more for nothing.

I always find it funny that you tip all the blame on the studios and never the consumers, you know the consumer has plenty of choice to not play or buy the game until the price comes down to what they think is reasonable, this has worked perfectly fine for steam and many DRM based PC games for a while now. It can work fine for consoles too.

 

[Disposed]

What are you ranting about? The whole message is that the middlemen are hurting both the consumer and the devs.

Im not being hurt. New game prices have stayed the same and i have the option of selling my games and buying used. In no way is this bad for consumers.

 

[Disposed]

I always find it funny that you tip all the blame on the studios and never the consumers, you know the consumer has plenty of choice to not play or buy the game until the price comes down to what they think is reasonable, this has worked perfectly fine for steam and many DRM based PC games for a while now. It can work fine for consoles too.

So once again its somehow our job to change our buying habits for the sake of developers? Such brilliant reasoning...

Ill give you a tip, its the developer and publishers job to cater to consumers not the other way around.

 

[LeninGHOLA]

Im not being hurt. New game prices have stayed the same and i have the option of selling my games and buying used. In no way is this bad for consumers.

Oh, I wasn't saying used games sales hurt the consumer. I will say GameStop and their policies do, though. I love the idea of being able to trade and sell used games.

 

[Snowdog]

Oh, I wasn't saying used games sales hurt the consumer. I will say GameStop and their policies do, though. I love the idea of being able to trade and sell used games.

You are not in any way forced to use Gamestop to buy/sell used games.

But you might have been under the Microsoft plan.

 

[LeninGHOLA]

You are not in any way forced to use Gamestop to buy/sell used games.

But you might have been under the Microsoft plan.

Oh, I wouldn't buy a console anyway. I'd rather research a paper using the old BlackBerry web browser. I'm just pointing out that the Gamestop policies are exploitative and do nothing to promote a healthy marketplace. I don't agree with publishers taking a second cut from used sales, either. I truly think the best thing that can be done is to force publishers to adapt to the trends.

 

[LeninGHOLA]

*the current market trends.

 

[Disposed]

Oh, I wasn't saying used games sales hurt the consumer. I will say GameStop and their policies do, though. I love the idea of being able to trade and sell used games.

The buying and selling practices of GameStop are no worse than pawn shops and they have been at it for generations. GameStop is not exploiting anyone. As for pushing used over new is the same shit I deal with at gnc and a lot of stores, they will always push the higher profit margin item first.

 

[Snowdog]

. I'm just pointing out that the Gamestop policies are exploitative and do nothing to promote a healthy marketplace..

Which policies? They offer an optional service. If it isn't priced fairly you don't use it. It is simple as that. Is buying a game at Bestbuy better because they don't offer to buy used games?

I really think they get unfairly vilified for this.

Gamestops days are numbered anyway. Devs chasing them for a cut makes no sense at all. It is just blind desperation, of an industry with a broken business model, chasing another soon to be casualty, of market forces.

Gamestop used revenues are shrinking and that trend is only going to accelerate.

5 to 10 years from now when most of the purchases are digital, and there is no used market to speak of, who will Devs/Publishers then scapegoat for their shaky business models?

 

[rudy]

So once again its somehow our job to change our buying habits for the sake of developers? Such brilliant reasoning...

Ill give you a tip, its the developer and publishers job to cater to consumers not the other way around.

If we want good games yes, and those of us who prefer to keep games rather than waste time we don't have, trying to get the most we can on the used market really do not care. Would you rather we have some sore of communist regime that dictates the quality and price of games?

The reality is almost all of everything that is wrong in the world is the DIRECT fault of consumers whom are too self centered to ever hold back on a purchase or be willing to trade for a better business model.

Consumers want used games like the PS4 XBone fiasco they got them now they can all shut up and eat down $60 release games for another generation and waste time buying and selling used games. Me personally I will hold out for the right game at the right price I can click to buy from my computer without ever going anywhere or wasting my time looking for and packaging up a disc or fill my shelves with useless boxes.

And I for one would be happy to know that my money is going directly to the people who actually make games not some random clown who never contributes anything but forum flaming.

 

[haste.]

His analogy is awful? A car dealership is not an auto manufacturer. How can you say the real money is in used?? The real money is in the financing deals, services and add ons not used sales, not even close.

I left servicing out because it did not pertain to the subject. Yes, the bulk of the overall money a dealership makes is through the service department (your add-ons are included there). But we were talking about used and new sales of a product and the dealership makes exponentially more money off used sales than new.

Financing not so much. You can get a couple points if you are running indirect lending with local banks/credit unions and a spiff if you use the manufacturers financing division. The actual dealership does not finance anything, so you are not even close.

 

[DocFaustus]

Hi Doc Faustus, I am breaking my vow of silence because you have placed civil response and argument up that I can respond to.

Yes it seems that I assume that the game is good. In my career I have always been responsible for good product. My games include Descent 1 and 2;4 Star Trek 25th Ann,, Judgement Rites and Starfleet Academy; flOw; Flower; Everyday Shooter; and I got Sound SHapes and Unfinished Swan off the ground before I left Sony and also had a hand in God of War III. I also brought in Bioware to Interplay.

Every developer should be trying to make a great game. There are 4 typical problems at the publisher level.

1. Poor green light, review processes, and focus testing. These should be weeding out projects that are going south before they ever get to manufacturing ( A good example is the most recent MoH). I respect the hell out of Peter Moore because he had the courage and willingness to kill the last two NBA games from EA because they were crap. This should be happening more often. Unfortunately Wall Street doesn't care and wants quarterly releases no matter what.

2. The"I don't care if it is shit, shrink wrap it and ship it." We can do a day one patch. First I find a day one patch offensive. I have often taken a bullet with management to get the game out right. This attitude leads to poor responses to games. Look at the disaster area for the most recent Sim City to uise as a prime example. The head of the studio took the bullet for Senior Managements ship it now actions.

3. Movie licenses. These deals are often late in the movie development cycle and devs are given stupidly short times to make them, often less than 1 year (Fantastic Four). The game suffers for it but the publisher doesn't care because it has a license. Or the other thing is that they just want to crank out mediocre titles as fast as possible because of the name ( look at the Nickalodeon titles for THQ). Devs often take these deals because they need the need the work and unfortunately they take the blame.

4. Widgets. Management really doesn't understand crap about games, but marketing has come up with "a need in the market" but don't want to spend money. They go to an unknown developer in Eastern Europe, give no guidance, and just shit it on the market. They just want something anything to sell. Again the devs are paid crap and the publisher makes a crap ton.

All of these points lead to crappy games getting into consumers hands and personally it pisses me off.

I am not advocating killing first sale policy. Nobody seems to understand that. I do not begrudge the mom and pop shop at all. I do have problems with a major retail outlet making it their primary business model. I am tired of going to a Gamestop to get a new release and have them pushing the used version for five dollars less so they can make a crap ton on it and the people making it see nothing. Netflix, Hulu, and Amazon prime either share in revenue or pay hefty fees per year to get their content. Back in the day Blockbuster paid for "fat units" for rentals to compensate to a degree Hollywood for potential lost sales. When Blockbuster started game rentals they demanded new content and paid stupid "fat unit" prices. The Clay Fighter special edition they paid $485 per unit. I know this because I was at Interplay at the time. As far as I know Gamefly when it started did not share revenue like Netflix. They just obtained games through what ever channels and rented the crap out of them. This may have changed so I am not sure if that is still true.

I am not saying you shouldn't swap games with friends either. I am not for DRMing hard media titles, My attitude about this cost me a job at Microsoft much earlier this year because I vocal about it in my interview. They just wanted me to say it was a brilliant idea.

The reason I am for some of revenue sharing program is the fact that they are driving small devs often out of business. Hell major publishers, even if I have issues with the management, often take out their bad numbers for their poor decisions on quality, both just bad games and games shipping before they should, out on the developers in the companies, not the assholes that made the bad decisions.

Cheers

PS: For those of you who are going to say that I am doing good, you are wrong. I am working for a small dev these days. Shortly after I came on board we had a consulting gig we got screwed on by a major company in China. We lost 500k due over night and 250k a month for the next 18 months. Pretty much the attitude was good luck in our courts. To help things keep going I took an 80% pay cut to keep the doors open. During that time I have burned through my savings. You can say I am stupid but I believe in the project I have going and the quality of my team. Having a good team is hard to find when thins are tight.

Thanks for your willingness to post and the response, Croaker. I doubt anyone here on [H] is anti developer. Much the opposite in fact, we are all pretty much pro-devs. You, being the only one willing to step up and sound off will get a lot of harsh responses, this is because we - the consumer of games - are passionate about this topic and we all want our voices heard. You happen to be the only one listening right now.

Quite frankly, I don't care about Gamestop; I have never used them. They are just the most extreme example. But would it possible for you to legally get a share of second sales from gamestop without getting a share of all other second sales like when I ebay my copy?

I brought this up in a previous post, but I think it is valid to your points as well. If you buy any item from a store, and you think it sucks, you can return it. However, games are different, you are stuck with them no matter how poorly they are made. There is no recourse for the consumer and no way to hold the game company (publishers and developers) accountable when they screw the client out of 60 bucks.

The only solution to try to recoup losses by reselling our copy. When we see developers openly contemplating removing this last option from us, we get upset. So can you think of a solution that would "recoup" money from gamestop, without hurting the customer?

 

[Disposed]

I left servicing out because it did not pertain to the subject. Yes, the bulk of the overall money a dealership makes is through the service department (your add-ons are included there). But we were talking about used and new sales of a product and the dealership makes exponentially more money off used sales than new.

Financing not so much. You can get a couple points if you are running indirect lending with local banks/credit unions and a spiff if you use the manufacturers financing division. The actual dealership does not finance anything, so you are not even close.

You seem to forget that the used lot at a new dealership exists due to them taking trade ins, all that profit from used sales is a direct result of new car sales.

 

[haste.]

You seem to forget that the used lot at a new dealership exists due to them taking trade ins, all that profit from used sales is a direct result of new car sales.

Wow man do you want to continue to argue a losing battle? You are proving my point. New cars bring in used cars and those used cars are sold at a huge profit. Meanwhile, new cars don't generate much money. Now why the hell was my analogy of how Gamestop should operate awful? I'll help you out because you're seemingly struggling here.

I said Gamestop should operate like a dealership and not make significant profits off new games. They could sell used games for as much as they want and make as much as they want. A car dealership doesn't make significant money off of new cars, but does off used cars. You getting it?

Stop trolling or trying, not sure what you are doing.