EA: Second-hand sales are a "critical situation"

Sarge

Publishing giant Electronic Arts has said that it's currently trying multiple new business models to help battle the critical problem of second-hand videogame sales.

While retailers reap the benefits of selling the same product multiple times, publishers and developers don't see any income once a title hits the second-hand market. But realising it's powerless to stop retail from selling second-hand goods, EA is looking to combat the problem by capturing the consumer with online content and services.

"I'd actually make the point that for us second-hand sales is a very critical situation, because people are selling multiple times intellectual property," said Jens Uwe Intat, senior VP and general manager for European publishing at EA, speaking exclusively to GamesIndustry.biz.

"What we're trying to do is build business models that are more and more online-supported with additional services and additional content that you get online. So people will see the value in not just getting that physical disc to play at home alone, but actually playing those games online and paying for them."

The argument that the second hand business model exists in other industries isn't comparable, says the senior VP, as videogames don't wear and tear and become an inferior product as they are passed from consumer to consumer.

"In our understanding of the business model we are actually giving away the rights to play, and if you just pass it on, pass it on, pass it on, that is not comparable to second-hand sales in the normal physical goods area where you have physical wear-out - second-hand cars, second-hand clothes, second-hand books... they're all physically wearing out, so you have an inferior quality product."

"But digital goods is not actually becoming inferior in quality, so people passing that on is actually very challenging for us," he added.

EA isn't planning any confrontational tactics with the retail community, with Intat suggesting that stores should ask themselves whether they are eating into their own market by stocking so many pre-owned titles.

"It's actually also a very interesting discussion to ask how much cannibalisation do you really have on second-hand sales?

"That's such a complex subject, we're not going to be overly confrontational, we're going to solve it with better, more interesting and online offering going forward - and that should actually solve the whole current dilemma," concluded Intat.

A full interview with Jens Uwe Intat will be published on GamesIndustry.biz tomorrow.

clicky

Sarge wrote:
videogames don't wear and tear and become an inferior product as they are passed from consumer to consumer.

Well......

I've always said it and I still say it. If games go download only and I can not trade them in I will not buy anywhere near as many games. I reckon that a lot of people could do this and it would impact negatively on the whole market. People need to buy the game full price before it can go second hand.

2nd Hand is inferior. Scratches are a pain in the arse.

so the fact that they come out with a new product each year in no way means that the product becomes inferior. Total tosh, how would they like it if car companies stopped people selling on cars for newer products.

So we'll get shorter games than before with longevity being derived from how much you're willing to pay for digital content.

no company benefits twice from second hand apart from the shops, the greedy banana splits, Do microsoft get a % for every pre-owned xbox sold? no, do Time-Warner get a % on every dvd sold of theirs on ebay? no, the reason being is because they were already paid for that unit, ffs, the only way they could combat this would be liscencing drm downloads or something, but like i said it will dimish the whole community.

Actually reading the bottom bolded paragraph makes me think that EA think they are the lone saviour of the videogame market! the industry is not in any trouble over resales, some people buy a new title for £40 sell it after a week for £25 to keep ploughing into new releases, if they attempt to "stop" this, you will see videogame piracy rise exponentially.

Maybe if EA stopped making the same game every year, it might not be so critical.

Sorry, someone was gonna say it.

shas'la wrote:Maybe if EA stopped making the same game every year, it might not be so critical.

Sorry, someone was gonna say it.

Every Ip they get their hands on, they butcher in some form, it won't be long before games like Skate and Fight night get yearly updates!

chalkitdown wrote:
Sarge wrote:
videogames don't wear and tear and become an inferior product as they are passed from consumer to consumer.

Well......

Indeed, they do. The situation is easily comparable to other media, though I understand their concern, and even share it. The price benefit is so negligable most of the time that that I prefer to buy new games for a few extra pounds rather than slightly ratty second hand title that don't make any profit for the developer.

It's a shame that they don't understand the concern of the public, who don't really want to spend £30-£40 per year replacing their games, but would like up to date player stats.

JiggerJay wrote:no company benefits twice from second hand apart from the shops, the greedy *****, Do microsoft get a % for every pre-owned xbox sold? no, do Time-Warner get a % on every dvd sold of theirs on ebay? no, the reason being is because they were already paid for that unit, ffs, the only way they could combat this would be liscencing drm downloads or something, but like i said it will dimish the whole community.

In absolute fairness, I believe the shops make very little profit on the initial sales, and they have overheads.

How much money is enough money for you, EA?

Clowns. :lol:

Cal wrote:How much money is enough money for you, EA?

Clowns.

It's the nature of most western companies. The shareholders always want their profits to grow just that little more.

So do Japanese companies, obviously. But they're in it for the long-haul.

What's to stop them putting serial keys into the boxes that you need for online play, once it's used it's linked to your Gamertag, PSN ID or Friend Code and can't be used online by anyone else? Did PES 08 on PS3 have something like this? It might not stop piracy and pre-owned, but it it would certainly make it less desirable to the consumer.

Surely that'd be quite easy to implement.

Shadow wrote:What's to stop them putting serial keys into the boxes that you need for online play, once it's used it's linked to your Gamertag, PSN ID or Friend Code and can't be used online by anyone else? Did PES 08 on PS3 have something like this? It might not stop piracy and pre-owned, but it it would certainly make it less desirable to the consumer.

Surely that'd be quite easy to implement.

Would you like a friend code with that?

I don't see why EA are getting their panties in a bunch about this, I doubt they're missing out on millions of revenue, especially judging by how quickly the value on their sports titles drop.

What happened to the new EA and their grand plan to change the company's image among gamers/the industry.

IRON NAN wrote:What happened to the new EA and their grand plan to change the company's image among gamers/the industry.

I believe they are demonstrating that through a number of games.

Cal wrote:How much money is enough money for you, EA?

Clowns.

In fairness, they're just as much a business as anyone else (except for Nintendo, who exist solely to make the games I demand, when I demand, regardless of the financial outcome). When there's as big a market as the second hand games market eating into your profits then commenting on it is hardly outrageous.

The idea of combating the problem with par-per-play or other DLC is worrying though.

MCN wrote:
IRON NAN wrote:What happened to the new EA and their grand plan to change the company's image among gamers/the industry.

I believe they are demonstrating that through a number of games.

That's what I mean, they were doing so well and winning over many people with Mirrors Edge et al and then they go and stuff it up with silly statements that once again reveal their true nature.

EA: Second-hand sales are a "critical situation"

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