Tue Sep 2, 2008 11:24AM EDT
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Electronic Arts isn't content with the fistfuls of money it earns on the video games it sells. Now the company says it's working on ways to grab money from second-hand sales of its titles, calling used copy sales a "very critical situation, because people are selling multiple times intellectual property."
Now never mind that U.S. law only gives EA the right to profit from its games the first time they are sold. (In law this is known as the "doctrine of first sale" and it's been part of copyright law since 1908.) EA is arguing that video games should be exempt from those laws because "digital goods is [sic] not actually becoming inferior in quality, so people passing that on is actually very challenging for us."
The situation is clearly dire: Electronic Arts had revenues of $3.7 billion this fiscal year, up from $3.1 billion in 2007. Tough times. Tough times.
Let's consider the issue rationally. Of course the reason so many people choose to purchase used copies of video games is the exorbitant amount of money they cost in the first place. If EA is serious about increasing new copy sales, the solutions are obvious: Either lower the price from the usual, absurd $60 per title, or make games so compelling that users will insist on having them new (and refuse to ever sell their old copies). For many gamers, the only reason they're willing to shell out $60 for a new game title is the knowledge that they'll get $20 or $30 of that back a few months down the road when they sell it to another player. Price gouging has been part of the game industry for years, and that's an issue that's actually getting worse. (Only a few years ago, $50 was the top price on a console game. When the Xbox 360 hit, $60 suddenly became the norm, though most Wii titles are considerably less.)
Fortunately, it looks like EA is not going to try to take a legal approach to halting second-hand sales but is planning to build a new business model that leverages "additional services and additional content that you get online." Does this mean the company will move toward no longer selling physical media sooner rather than later, so there's nothing that the gamer can actually resell? (That's an eventuality all digital industries will have to face someday, but it's one which scares them immensely due to the fears of piracy.) EA is mum for now. It's, as they say, "complex."
Until you figure it out, EA, I implore you: Quit your whining about used games and have a little empathy for your cash-strapped customers.
Join in the discussion. Here you'll see the comments in the order they were posted.
I never buy a new game. Ever. $15 is about the most I will ever pay, and that is only for a game I really want.
Chris, Agree with your conclusion, but your analysis of their situation isn't exactly fair; you need to be looking at profitability rather than revenue. High revenue doesn't always equate to a healthy company as seen in GM with $38 billion in revenue but actually $15 billion in losses or pretty much any of the airlines... Would EA be better off if it reverted to the $30-40 games of a few years ago? I can't say. But it certainly would make this consumer happier and more likely to just buy games rather then renting them.
Boy oh boy, First it's food prices, then Gas prices. Now game prices. Well for the game I play on my PC. TW08 Golf. It was worth the $10.00 I paid for it. Had I paid their normal $29.95 for a stupid down load. I would have shot myself. The game SUCKS. It's not worth the money. So I don't care if EA drops off the face of the Earth. their not making a PC TW09. All us saps that bought PC games from these IDIOTS, can go fly a kite. HEY! they found a whole bunch of suckers that will pay upwards of $60.00 a game. This Attitude will put them out of business. bobo42
wow, ea needs to like not be so whiny, i mean, they should start lowering their games back to 50$, and more people will buy newer games, that and have older titles, but still brand new, decrease in price faster than they do now
It's funny that the image you chose to attach to this story is from the "Space Invaders" game because this is a game that was developed 3 decades ago, yet it still generates revenue. As a lover of vintage video games, it just amazes me that they are still selling these games. I have several disks of them that I play on my PC. Must be pure profit by now. So, is it possible that all video games can look forward to such longevity? I agree; the video game industry does seem to be in gouge mode instead of giving its customers a really good reason to keep coming back for more. Take heed from the music industry, EA.
EA use to be good but greed have taken over, even their game quality have falling, if they keep this pace up soon it will back fire at them just like the music company no body will want to pay anything and start to find a way to download games for free if this have not already happen.
@albloch69 - That's not exactly true. The company is specifically worried about sales, not overall profitability, in its complaints about used games. (That is: If there were no more used game sales, there would be no real impact on the expenses within the company.) EA is in fact having a rough year, profits-wise, but that says more about its internal mismanagement than it does about sales -- and since EA is alluding to worries about used sales cutting into new, that's a more appropriate data point to analyze. Still, your comment made me think... I wonder what would happen to GM if used vehicle sales were banned...
Greedy, greedy, greedy.
I only buy my games used, usually months if not years after they first come out. About the only thing I keep up and current is WoW and some other MMORPGs. That is the way EA should be looking at - giving away a MMORPG for free and just charging people a monthly fee to use it. They could make that $3.7 billion every MONTH with a hot game.
1 Posted by m_knopp on Thu Sep 3, 2009 7:32PM EDT Report Abuse
They are just trying to do what the music, movie, and book industry are trying to do. Make people pay for every single time they every do anything with any form of intellectual property. These idiots have obviously never heard of blowback. They will one day push enough people far enough that the public will remind them that intellectual property is not physical property and there are no intrinsic rights for copyright holders, only the rights the public gives them. Oh, and I actually wish they were taking this to court. I would love to see the courts uphold the doctrine of first sale, and tell these greedy S.O.B.s where they can stick it.