Wednesday, August 25, 2010

Are 2nd Markets Piracy?


Such a huge topic today, almost as bad as the piracy debate itself. This goes hand in hand with piracy into causing things such as DRM, and the latest tactics of game companies: Not including the full game at retail. A while ago one of the VG podcasts I watch talked about how some games coming out, have DLC available right away. Sometimes for free, often times for another $15. Why would they do this?

The answer is simple, they are not getting money from the 2nd Market, which by definition they never would. So, does the 2nd Market only cause damage? Or is it really as bad as piracy? Are the gate keepers of the 2nd Market the reason that things are as bad as they are now, or have they been helping game companies?

So lets take a look at what exactly happens: Company A (the developer) makes a game. Company B (the distributer aka Gamestop) sells the game. Company B purchases the game from Company A, in bulk, and sells it for the MSRP. Customer A, buys the new game from Company B. Customer B cannot afford to buy the game new, and does not purchase the game. Customer A finishes the game, and decides he's done with it. Customer A goes to Company B, and trades the game in for in-store credit. Customer A now either uses that credit to purchase new or used games, but being the Customer A that he is, he buys new games. This may not directly support original Company A (Customer A may be buying a game from another developer), but it does get money going back to publishers. Customer B, sees the game he wanted on sale used, and purchases it, supporting Company B, helping them stay in business to sell new games to people like Customer A.

Now obviously, this works fine with brick and mortar stores, and games that are on a physical medium. But we are in a digital age, and as proponents for Piracy state over and over again, it takes no effort to copy 1s and 0s. We can understand a $60 MSRP, because of the cost to get the game on disc, and ship it, and the packaging, etc etc etc. But why is the same game $60 to download? Because the download services get a cut of the sale (Apple Itunes gets 20% I believe).

So digital distribution does not result in cheaper games for Buyers, but it does guarantee revenue for the game companies. Furthermore, Digital Distribution negates the possibility of the 2nd Market. But why shouldn't I be able to sell my right to play a game to someone else? I paid for that right, so if I no longer want it, I should be able to sell it, or even give it away to someone who would not have purchased it otherwise, right? I mean, they wouldn't have bought it for full price, but for cheaper or free, they at least are playing the game, resulting in more people online to bring the "fun" to those who did pay the original cost. I mean, its not really that different whether I'm playing it or someone else is it?

But game companies want to make money from the 2nd Market. So they release DLC on launch date, so that one day (and some games have done this already), if you purchase a game new, you get the DLC for free, but if you purchase it from the 2nd Market, you have to pay $15 for the DLC. DLC that isn't really DLC, but usually on the disc already, but locked. In other words, you have to pay $15 for a lie.

Now I suggested what the benefits and actual damage of Piracy was for the game companies, regardless of how I feel about that, it is still immoral. But with the 2nd hand market, you have similar benefits, sometimes better benefits (Customer A gets money to reinvest into game companies), and you end up with similar damages to piracy (developer gets no additional money, except for DLC, which is good for them right?).

So is the 2nd Market Piracy? I don't think so. I think its very good for game companies, and their efforts to damage it may end up damaging only themselves.

What do you think?