Nice. So the game is $60, then you have to buy XBox Live for $10/month, then you have to buy each game company's online service for $10. A great deal for everyone! Except the end-user...
(Maybe they should add some biological DRM, too. The game controllers should do a DNA test on your blood, and if it detects your friend playing at your house, it should charge you a $30 "game sharing fee". It's a good idea because before, they got $0 from this. Nobody will be upset at all, just like nobody was upset with Ubisoft's phone-home-for-single-player-game technique.)
Personally, I think Ubisoft's decision with their current DRM techniques to be the most asinine choice feasible.
It is true, however, that game companies do not directly profit from used game sales.
EA is trying to profit from the money that is not being made, (hopefully) without hurting the customers that buy the game new.
The $10 for the online fee might be saved if you're buying it used, then you pay $10 for the subscription and, used prices low enough, still save money off retail.
For example, EA SPORT GAME N is $60 new, online features included.
EA SPORT GAME N is $45 used, $10 for online features, total is $55, a net win for the consumer, and EA makes some money back too.
I do think it's a questionable call, but it's an understandable one.
Yes, but the people who buy their games used do not want to pay full price or near full price for their games. They are extremely price-conscious and instead of suddenly paying $10 more for their used games for no good reason, they will just not buy as many used games as before.
It's the same mentality as the whole pirate discussion. If you are a game publisher, the people who buy the games used are not your customers. They clearly state that they do not wish to buy your product at your price point. Same with pirates, they also clearly state their preferences. Neither group is your customers.
However, people that buy your games new and sell them on are your customers, but with this move, your product becomes less valuable to them ($10 to be exact) and this probably makes a few of them not buy your game in the first place.
What EA dearly wishes to happen though is that Gamestop and similar should soak this cost to keep the used games market running exactly as before. Maybe it will, maybe it won't. At least EA is trying stuff so it will be interesting to see how this plays out.
This is not the same mentality as the pirate discussion. A pirate gets a $60 game for $0. That's a huge price discrepancy.
At used game stores like Gamespot, the difference between new and used is often $5 or less. It also doesn't matter what the retail price point is set at. The used game price point will always be lower. Since new games are currently identical to used game, why not pick up the game for $5 less? This helps Gamespot and hurts EA.
Now, more a burden will placed onto Gamestop. They will have to lower prices on used games to compensate for the new 'taxes'. If anything, this is a win for used game buyers at the expense of Gamestop (an undesirable company from the perspective of EA).
I think this is going to push the price of used games down; meaning that EA gets $10 they didn't get before, and people selling used games get $10 less.
I think everyone's looking at this the wrong way. EA already has countless flaws which people have been whining about for a long time. The further out of touch with their customers they become, the better chance other game studios have of taking a piece of their pie. I'm hoping someone capitalizes on this opportunity to show customers that at least some non-indie game studios are capable of not screwing their customers over.
This is a really bad move especially for sports games. They don't tend to have the lasting online community of FPS, RTS or RPGs. People move onto the new yearly release quickly to get updated rosters. I don't think a $10 fee is going to improve that situation at all. It will likely make it worse. The people who do spend $10 are going to be very disappointed to find out few people are playing a -1 or -2 year old sports game online anymore. Finding compatible skill/pings/maturity is tough with a big user base. Nearly impossible with a small one.
The hostility against these decisions always frustrates me. The market will sort this out, and I'm pretty sure despite all the moaning, it will fall in EA's favor. You can't expect EA or any game publisher to just give their product away.
EA is a business and needs to make money in order to sustain making AAA titles. Nowadays, there are hundreds of people working their hearts out to deliver each title. These people would like to get paid. Gamestop does not pay their salaries. EA does. Every time somebody gives $55 to Gamestop instead of $60 to EA, an hour or two of somebody's work is potentially taken at a loss to EA.
Budgets of games are not going to go down. Gamers wouldn't go for the drop in quality. The used market is not going to go away. It's perfectly rational for gamers to try and make a buck. But this puts EA in quite the quandary.
Rewarding gamers for purchasing the game new is rational and fair. Not evil. EA will make money and the gamer will continue to get well made games. Just because a feature or part of the game was once 'free' doesn't justify it always being 'free'. The market is allowed to correct itself.
Noone is expecting them to give it away, stop putting up straw-men. This is the problem:
One person buying the game and playing it for a year:
EA revenue: X$
EA cost for development and infrastructure per game: Y$
One person buying the game, playing for half a year, someone else buying it used, playing for half a year:
EA revenue: X+10$
EA cost: Y$
If X > Y as we suspect, then this is a naked cash grab. Those tend to be very unpopular. If X < Y, then the move gets more understandable, but they really should think about changing their business model so they can charge for the online experience separately.
The used game market is money left on the table from the perspective of EA. A company should not leave money on the table if it makes fiscal sense to grab it.
EA was probably 'comfortable' with the used game market as long as they were rolling in cash because new game sales were profitable enough to compensate for the used game market and piracy.
However, as budgets increase and margins tighten, EA can no longer just look the other way. EA is hurting and many times X works out to be less than Y.
You suggest they change their business model. That's exactly what they have done. Reward gamers for purchasing the game new while not increasing the price of the game at retail while punishing the used game market which does not fiscally support EA.
The tone and popularity of this sort of reply really bothers me. The grandparent is the best explanation of the actual business decision in the entire thread. How was any of it "straw man"?
Trying to get paid for your product when someone uses it isn't any more of a "cash grab" than any other company selling any other product for money. In other industries when a maker sees no share of the sale of his work, we usually find a way to call what happened to him what it is: theft.
If EULAs were enforced, the situation would be different since the "non transferable license" would maybe kill the commercial used games market.
The way it's marketed, and has been for a long while, is that they're selling only one product: The Game, and possession of The Game entitles you to use their online servers.
With this move, they're trying to split it up into two products: The Game, and Online Access, but they don't make the distinction when you buy the game new, only when you buy it used. This borders on violating the first sale doctrine, because the product becomes crippled or partly used-up when you purchase it, for no good reason.
I can understand EA perfectly, they wish very strongly that they were in the business of selling services on a per-month basis, but they are in the commodities business where they sell stuff, and their rights to dictate what can and can't be done with said stuff expires when it's sold.
There are a few companies (Autodesk?) that try to maintain that their commercial software licenses are non-transferable, but they usually get told to stuff it when they try to stop people from buying old licenses. I am slightly worried and curious as to why you seem to think that non-transferable commercial licenses are a good idea?
Non-transferable licenses are a great idea because makers should get paid for their work.
It's unfortunate the courts have ruled against this when the delivery medium (the disk) is sold on a store shelf. It's like making a movie theater let patrons resell their tickets to be used for a later show.
I expect the eventual result is that everyone will move their content online. See the rise of Steam, XBLA, and soon services like OnLive.
The GPP sets up a strawman argument by saying that people are expecting EA to give their product away for free. No one is expecting that at all.
To address your point, they are getting paid when someone buys and uses their product. Currently the $60 price tag includes usage of the game servers for a single person. If that person sells the game why should the new owner have to pay an additional cost? The old user is no longer using the servers and as far as EA is concerned their cost didn't change.
In other industries it's theft? I've never bought a new car so all the used cars I've bought have been theft? What about used cars that still had original warranties intact? Should I be forced to buy a new warranty since I wasn't the original person who purchased it, even though it's tied to the car?
I don't think it's theft at all. It's perfectly rational for a gamer to buy and sell used games. But it's also perfectly rational for EA to try to make as much money as possible from the used game market which completely undermines its business.
I suspect the used car market is also a thorn in the side of auto manufactures. They probably carry higher prices at retail to compensate for the used market as much as possible (assumption). That works for them.
EA could do the same thing and raise the prices of its games to $80-$100. However, they have options. EA would rather shift the cost from 'good' gamers buying new games and go after 'bad' gamers buying from the used market who are only indirectly customers.
Why is this wrong? In the end, somebody has to pay for what EA produces.
In the end, somebody has to pay for what EA produces.
What? Absolutely not! EA are free to offer their products at whatever price point they see fit in an attempt to recover their costs for producing their product, as long as they do so within the applicable consumer protection laws. And people are free to accept their offer and purchase their product. Sometimes they succeed. Sometimes they don't.
EA is selling one ticket for a ride in a car, not the car itself.
Just because courts have ruled that the ticket coming on a disk means you can resell the disk, doesn't mean EA has no right to find a way to tear the ticket.
If suckiness of existing players is any indicator of what market is ripe for innovation, then game publishing seems to be the frontier market. I dont know of any other industry that works against their customers interests with as much precision and passion as the game publishing industry. Between Ubisoft, Activision and EA its hard to decide whom I hate most.
Ive not seen movie studios, publishers, record labels do the following yet
a) Require constant internet connectivity while you watch a movie.
b) Hold onto the bonus that is due their employees - http://www.physorg.com/news191742223.html
They're going to lose a lawsuit over something like this in the near future. I'm not sure what law they're breaking, but going out of your way to cripple products to increase your chance of sales has got to be illegal somehow...
I wouldn't be so sure about that. The only bit of law I've ever heard of that stands in the way of this sort of thing is the first-sale doctrine, which says that you can sell copyrighted works without permission from the copyright holder. First-sale doctrine has become pretty toothless with the advent of DRM and software that is 'licensed' rather than sold.
Companies have a broad ability to cripple their products in pretty much whatever way they see fit. Consumers have a discouragingly persistent willingness to put up with restrictions that are not in their best interest. People will whine about this, but then most of them will go out and buy the games anyway.
I don't get why people commenting on this article feel that EA is in the wrong here. EA makes nothing off the sales of used games yet currently incurs the cost of providing online services.
The original buyer already covered the cost of online services provided. Reselling doesn't cost EA anything (it is no different than if the original buyer had just kept playing the game).
It would be different if suddenly two players could play at the same time, but this is like lending a book to a friend... you both can't be reading it at the exact same moment.
The two problems I see with your analogy to books is that books don't have an ongoing cost for infrastructure maintenance which online services do. I wouldn't put it past EA to figure out the cost of services provided with a game diminishes over time with one owner, but if someone new were to pick up the game and start playing then they would be incurring a heavier system load than originally forecast.
Book publishers also generally aren't trying to recoup $50-100,000,000 development budgets.
In that case it would be a simpler mental model for the user to just decouple the usage cost from the game cost aka the World of Warcraft model. Why let the original purchaser play as much as they want, cap their usage too (~40-50 hrs of playtime for free) and charge them for usage beyond that. Also if the cost of running servers is so high and such a big drag,why dont they let third parties run game servers and charge a fee. That way competition among game server hosting companies would bring the price down closer to what it should be in the real world.
That doesn't address my second point of recouping high development costs. Anyways, they would have to coordinate this with the platform providers which tend to keep things bolted down quite tightly when it comes to the provision of online services. Are there even any console games available for the Xbox 360 or PS3 that charge monthly fees?
>The original buyer already covered the cost of online services provided.
No it didn't
People don't constantly play games. They play them for awhile after purchase, and then their playtime peters off. If that disc stayed in the hands of the original player, the cost to EA would be near zero for most people, who might bring the game out every couple weeks when friends are over.
While there certainly are original players who keep playing games, they're dwarfed by those who stop playing, or stop playing and sell the game.
Interesting decision. I wonder if this will pay off for them. I'm fine with buying new games if the content is worth it, but many times, EA downloadable content is not.
If they require a new purchase for multiplayer and online franchises, those features better be damn enticing.
Thankfully with Backbreaker coming out, EA will have some competition in the football market before their NFL lockout is over.
I'm all for innovation and I know they are trying to maximize return, but if the content isn't up to snuff they're playing some tough odds.
Because most of them will continue to buy the games anyway. Whether a consumer is pissed off is irrelevant to EA; they have to refuse to buy the product for it to matter, and most don't.
"This is an important inflection point in our business because it allows us to accelerate our commitment to enhance premium online services to the entire robust EA SPORTS online community"
Read:
"This is an important inflection point in our business because it allows us to extract more money out of our customers"
However, are they really extracting more money from their customers if they are charging used gamers for online content?
They don't make money from used game sales, resale stores like Gamestop do.
While this is a very questionable move from a consumer standpoint, it makes business sense.
MMOs rightfully charge for multiplayer access, however they have servers to maintain and use the resources acquired to improve their game and keep it fresh.
One could argue that if EA wants to make this idea appealing to customers, they should offer new content for free for the paying subscribers of used games, or those who paid for a new game.
Then again, they may just charge us for cheat codes and "VIP" mode like they have in the past. Even if one were to buy the game new.
What I dont understand is that over the 10 years the size of the market has gone up, sales of blockbuster games have gone up, average selling price of a game has gone up, revenues via additional digital content has come in, product placement has trickled into some games, cost of servers has gone down, cost of bandwidth has gone down, cost of hiring programmers has roughly remained the same, some games have even gotten money via movie rights. What is it about publishers cost structure that pushes them to nickel and dime customers inspite of all the above mentioned factors ?
Even if the cost of hiring individual programmers has remained constant (and I don't have evidence one way or another there - we'd have to consult something like Game Developers' annual salary survey and apply the appropriate adjustments), development teams have definitely grown in size. Bigger teams mean more developers (from all disciplines), including additional management and QA staff.
There are also other cost areas to consider, such as licensing fees and devkit costs, but I'm afraid that I can't share specific numbers there.
http://vgsales.wikia.com/wiki/Video_game_costs - That suggests that game dev costs have nearly tripled over the last ten years. I also think the same timeframe saw the cost of a game go from ~20 to ~60. Admittedly I always bought games a fair bit of time after they got released, so my recollection on game costs might be biased / incorrect. Also - cost of devkits has in fact gone down. Suggested by the page that I linked to, and I know for a fact otherwise. At least the PS3 devkit and the Nintendo DS devkit are very reasonably priced.
Just look at the second hand car market for a comparison - people are generally less willing to spend money on new cars that depreciate quickly, preferring vehicles that maintain their value. Particularly people who intend to sell their car on rather than drive it until it falls apart. EA are effectively increasing depreciation on their games.
I would guess that a good number of players who sell their old games use the money to buy new games. This move will definitely push the price of EA's used games down, I would guess by close to $10 for games with significant online content. Which means that EA's primary customers (the people buying the new games) now have $10 less to invest in their new game for every old game that they sell. I can't see people increasing their spend on new games to compensate for this, so the net result could be that EA get more money from used sales, which is more or less balanced out by getting less money from new sales.
I don't play console video games, but this makes me kind of angry. I know a company has to make money ... but the recession isn't the time to spring things like this on consumers (if ever).
i don't know much about how this works, but why cant people just bypass this by creating a separate account for every game they purchase and then pass on that account's details to whoever they sell the game to
(Maybe they should add some biological DRM, too. The game controllers should do a DNA test on your blood, and if it detects your friend playing at your house, it should charge you a $30 "game sharing fee". It's a good idea because before, they got $0 from this. Nobody will be upset at all, just like nobody was upset with Ubisoft's phone-home-for-single-player-game technique.)