The CEO of a gaming company has courted controversy by calling retailers “parasites and thieves” and that publishers have more “right to survive” than retailers.
Louis Castle, the CEO of browser game company InstantAction, and also known as the co-founder of C&C creators Westwood Studios and former vice president of creative development at EA, was interviewed about his hatred of game retailers:
You accused Walmart and GameStop of thievery, do you stand by this statement?
They are, they’re thieves. They’re parasites and thieves. Because they don’t let the publisher participate in the used games business. They take all the money. They take a game from somebody for ten bucks and then turn around and sell it for $30, and they don’t give any of that $20 back to the original copyright holder.
Something would be OK, but zero is not OK.
What can publishers do about this?
There’s nothing they can do about it. Legally, the retailers are within their rights to do it. I’m not saying they’re doing anything illegal. But just because you can legally steal doesn’t mean it’s not stealing. Gambling is statistically theft – people know they’re going to be stolen from.
I was heckled by a guy who said he was from Gamestop who said, “You seem to hate retail.” He was trying to make the case that if lots of people get exposed to the game then it’s good for the publishers – I’m not sure I understand that.
If we make something like woollen blankets and we start eating the sheep, pretty soon, we have no more woollen blankets. It’s taking from the one thing that’s making you money. If we stop making games, they stop being able to sell them.
His point was that we had to do it because their margins were shrinking and they were going to go out of business. And I’m like, well, so now you’re shrinking the publishers’ margins so we’re all shrinking and are going to go out of business.
But, honestly, gamers can survive without retailers, but they can’t without people making games. I just don’t think the retailer has a higher order of right to survive than the people who make the content.
Maybe I’m wrong about that! I don’t worry about being provocative in my wording, because it’s what I think everyone in our industry feels, and no one will say it.
But traditional retailers don’t really know where their business will come from, with services like InstantAction coming along and bypassing them entirely.
It costs a lot of money to do what we do, and we can make a lot of money, but our margins are very thin. We’re not trying to replace the retailer – that’s not our goal.
The game business has not been disrupted by the internet tremendously because the process of buying the game is still about learning about it through reading about it somewhere, you go to someplace to buy it, and you get to play it afterwards.
That’s the exact opposite of what the media on the web is about. There it’s about finding media anywhere, I can sample it for free and if I like it, I pay for it.
That’s a different philosophy. You have to change your mindset. GameStop might say, “Well, where’s our place in that?” Well, you have to become a value-added retailer. It’s better to buy with a GameStop card because you get to go to that retailer and hear about the games. That’s one way.
There are lots of ways for them to survive other than taking the money out of the system that’s going to the publishers.
Publishers are the ones who are taking all the risk. They’re paying for development, pay for the marketing – the retailer has zero risk.
It’s all consignment anyway: if a product doesn’t sell, they box it up and send it back to the publisher. I’m sorry their margins are eroding, but that’s not the publishers problem. To use a loophole in the law to just gouge them is just unacceptable.
It is of course not surprising to hear a game publisher unhappy about the resale of games – the game industry has, with varying degrees of success, repeatedly sought to ban game resale and rental, with its latest efforts eschewing legal methods in favour of crippling second-hand copies by banning them from multiplayer or stripping them of DLC.
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Replace videogame with car and try to repeat that again.
Games are software media. Cars are very expensive specialty durable goods you might buy a few times in your life. There's also a significant value difference between a new and used car. They are nothing alike.
There's also movie rentals. They've been around all the time...
Imho game devs just get too greedy.
It all started with discovering that they can limit how many people use the same product and that consumers can be charged more than once through online "access codes" and "extras".
This is what killed freegames in Kongregate.
I know a good way to stop second hand sales! Make the games so fucking good no one would want to sell them back for the next game!
Word.
piracy looks pretty sweet now, doesn't it?
Walmart Resales?
I don't know about 'making games so good you won't resell it' when every game out there are $60 a pop with 10-20 hours of campaign gameplay.
Spot on with the greed.
Wow, butthurt much? So if I sell a game I don't play anymore to a friend for 20 bucks, am I a thief for not giving the publisher a cut of my profits?
anon @17:38
You are so right my brudda!
Piracy always been so sweet that even baby Jesus couldn't resist putting it into his mouth! God be my witness, there's no sweeter thing the Creator has brought to us in this world!
Do you hear it, bruddas!? It's the sound of Angels ringing their bells from above!
Let us sing to praise Our Lord for bringing us his holy Pirated Content! Hallelujah! HALLELUYAH!
HAALLELUUUYAAAAHHHHHHHH!!!!
YOOOOOOOOOOOOOOOOOOO!!!
now entirely sure, but at least during the 90s and early 2000s large video rental stores had to pay a form of royalties to film studios for renting. Blockbuster for instance had to buy their movies for much higher prices than standard home release prices. Then they switched to a new system that gave a small return to the studio per rental.
OH for fuck's sake. I can't believe what I'm reading from some of these comments. Jesus... Gamers NEVER stop complaining that video games are rushed, that video games are incomplete, that X is buggy, etc. They complain that games "Cost too much" and that there's "Not enough content." "Zomg Reused engine? Lolwut?"
You know what? Maybe if you'd stop fucking pirating and stop fucking buying second hand and the developers didn't have to cut corners to make a goddamned living, maybe we'd have decent games, ever think of that you asshats?
To call game developers "Greedy" is a bit of a stretch. Anybody who's not busy developing God of War or Halo Reach is taking a big fucking risk in making their game.
You may think they're making enough money, but they certainly don't. http://itechworld.info/videogame-industry-has-suffered-11500-job-losses-since-late-2008-source-gamespy-com/
12000 job cuts in a year?
You go ahead and point your finger at the Developers and call them greedy, but remember that three fingers on that hand point back at you.
movies and games aren't the same thing, you can't get a ton of people in a dimly lit room with one system to play a game, but you can get people to watch a movie in that same room.
I think most people are referring to the publishers and not the developers, aka the topic of this article. Just a little fyi.
"You know what? Maybe if you'd stop fucking pirating and stop fucking buying second hand and the developers didn't have to cut corners to make a goddamned living, maybe we'd have decent games, ever think of that you asshats?"
Developers have to cut corners because of stupid publishers, e.g. Crackdown 2 was rushed with the speed of light for no reason that anyone can understand. A lack of content is often a result of developers wanting to one-up each other in the pursuit of "epic" and "emotionally engaging" narratives that nobody gives a shit about.
Also, almost every business that sells physical goods has to deal with the second hand market. Developers and publishers are just whiny, greedy primadonnas who can't survive in a free market environment, or would like to make people believe they can't.
Sure, developing a good game can take more input than writing a book or making a movie but it doesn't mean people will pay exponentially more for it.
A well designed, simple game can easily outsell top-notch high gear "epic" space marine alien shooter of the year.
Not every business is evenly profitable. The game devs have to understand that they're NOT, they're NOT on the same level as movie makers.
John Romero failed to see that, and this CEO fails to understand that as well.
hello Darkrockslizer im a pirate, and im calling you a FUCKING RETARD.
renting is nowhere near the same as reselling. and up there with the car post, NO WHERE NEAR THE SAME
back in vhs day, i was told they had to pay for a licencing price for each movie, which was 120+$ i dont know if it is true or anything but it may have been. same thing with games from blockbuster. but think of it, blockbuster has how much shelf space and rents how many movies and they are still struggling to stay around, and places like gamestop post record profits due to reselling games.
and games, unless you care about instructions or cases, are all the same used, there is no degraded quality.
lets say a publisher sells 1000000 new copies, but gamestop sells 4000000 of that game over the consoles life time. FUCK that they make at least a 50% profit margin off those games, some amount should go back to the developer.
and i pointed out im a pirate for a reason.
if i like a game, like dragon age, i buy it new, if im meh about a game, i pirate it, and keep playing that till either im board or it comes way down in price and i can get it new for 20$. the point is, i wouldn't buy them to begin with, they actually lose less money because of me than gamestops fucking them
"i wouldn't buy them to begin with, they actually lose less money because of me than gamestops fucking them"
Then whether you buy used from gamestop or pirate it, devs don't get shit from you in either case.
He doesn't plan to buy anything used if you had carefully read his post. He said he'd buy it new if he liked it, and if he was only okay with it, he'd wait until the new (unused) copies have dropped in their prices and buy it new at that point. No mention of him buying used.
Make games people don't want to sell after 1 week FFS and you won't have this problem.
Darkrockslizer, I'd just like to point out that developers are not publishers.
Publishers get far too much money for doing fuck all. Developers don't get enough money for doing nearly all of the work.
I'd be perfectly happy with developers getting money from used game sales. Unfortunately, they very rarely do, instead it all goes to the publishers.
Eh, this is no surprise for me.
Buying used is BAD. Like objectively worse worse than piracy. Because of instead simply not paying anything at all as in the case of piracy, buying used entails paying someone while STILL not supporting the developer which is the entire problem with piracy. The result is someone other than the developer making a profit, and you having less money to actually support the developer.
So instead having 1 problem as in the case of piracy(not supporting the developers), buying used has 3 problems(not supporting the developers, someone else making a profit off the developers' expense, and you having less money to actually support the devs). In modern age were the actual media of the game is more or less worthless, there is no concevible grounds that allows for used game sales to be acceptable(and moral), while piracy is deemed unacceptable(and immoral). More damage is done buying used than pirating, and if you going to buy used at all, simply pirate, and save the money for game you really care for.
In any case, this illustrates the problem with the business model for Video Games, and all other media; They monetize a worthless aspect of the product(copies, which are easy to come by in the digital age) and falling to monetize the parts of the product that has value, the content and their labor. Until the model changes, Video Game developers and other media will continue suffer, and I can point to companies that are already suffering deeply from this flawed model(Squire-Enix comes to mind).
The problem with this argument is that people who sell their games back to retailers use that money... to buy more games, so you really can't equate it to piracy. If you cut that feedback loop, maybe you'd increase your profit margin from the casual gamer, but you lose business from the hardcore gamers.
They don't need to get money from used games, they've already been paid for by a person. That's like giving them money for nothing, because there's not another game in circulation, it's the same game that had already been sold.
The anon of 18:33 18/08/2010 is forgetting one thing.
It's far more likely that the loss of jobs has to do with the execs cutting corners to meet the targets laid on in their contracts so they can get their nifty bonuses.
So if according to their contract they have to make 20 million in a year, and the game sells for 18 million. Well, cut enough staff to make up the remainder in wages, insurance etc, so you can get your 4 million dollar bonus.
Take a look at how big business does their business these days, look at the money trail and the bonuses awarded. And it becomes fairly simple really. Course they won't ever want to admit to that, so they need to find scapegoats. Oh it's the bad economy, oh it's piracy, oh it's second hand resale etc etc etc.
It's like the whole Japanese decrying of the whole scanlation/fansubbing etc thing. Meanwhile they refuse to release most of their stuff to the West, because it would lead to problems that they don't want to deal with. Like people taking umbrage at their raping game aimed at an 18+ audience, etc.
So if you refuse to sell me anything, how can you make a loss, if I get a copy from someone else.
Now if you're willing to sell me stuff and I get a copy through someone else, yeah, then you've lost some income, but if you even refuse to do that. Dividing zero still equals zero.
if they can lower the 60 price range to 40. like the street fighter and blaz blue series im sure there would be more people trying to own new copies rather used ones. i thought that 40 $ price range was revolutionary.
not only that, they can get more cash through dlc.
You dumbasses act like buying used is some kind of crime. Buying used increases the demand for new games indirectly, because people will have no choice but to buy new if there are no used games left, and trust me: even if you don't buy a used copy, the very next person who wants that game will buy the used copy.
Besides, if they don't make an engaging game with replay value, they're just shooting themselves in the foot when a bunch of used copies pop up.
Totally unrelated, but this baffles me.
Lonesnipa posted a comment, people rate it up to 0.8. Darkrockslizer replies on that same comment, with "word", it gets 1.0.
Even though, Lonesnipa's post contained more words, and was the original conveyer, Darkrockslizer gets a higher score with the same message, and by just agreeing?
Logic, where is it? Not on Sankaku.
"The problem with this argument is that people who sell their games back to retailers use that money... to buy more games, so you really can't equate it to piracy. If you cut that feedback loop, maybe you'd increase your profit margin from the casual gamer, but you lose business from the hardcore gamers."
The problem with is that gamers trade a game in for 5 bucks and the retailer then takes said used game and sales them for $20-$40, undercutting new copies at a haughty profit. And what do those gamers do with that 5 bucks? By used.
"They don't need to get money from used games, they've already been paid for by a person. That's like giving them money for nothing, because there's not another game in circulation, it's the same game that had already been sold."
Every used copy sold is lost revenue for the developer. This is even arguable, people are spending money to buy the game without giving the developers a cent. The whole fucking point of giving developers money is to support the content they generate.
Seriously, who the fuck deserves the money for game, the retailers who did nothing for a game, or the people who made the fucking game?
Because that is what you decide when you buy used. Letting retailers get to double dip in profits while giving developers shit is indefeasible. Game developers make the game, they should make the bulk of the profit, not middlemen who undercut them and undermine new game sales.
"You dumbasses act like buying used is some kind of crime. Buying used increases the demand for new games indirectly, because people will have no choice but to buy new if there are no used games left, and trust me: even if you don't buy a used copy, the very next person who wants that game will buy the used copy."
It is one thing to find a game to be worth no money. It is something else to find a game worth money, then give it to someone else other than the game developers money for it. I can't understand the mentality that says it's okay that the makers get dick while someone else reaps all the rewards. You may as well support commercial piracy.
And your logic is shit. Your argument only makes fucking sense if you can buy the whole supply of used game which WILL NEVER HAPPEN. In fact, all that does increase the demand for used games and increase the amount of money a retailer will pay for a copy and the amount they'll charge for a used copy. A percentage of the userbase will sell their copy, so there is a continual supply of used games, while there is only a certain amount of new copies. A developer is better off with you buying a new copy. Always. New copies that don't sale are turned to the publisher at COST to the publisher. So not only are they fucked when someone buys used because of a lost sale, they get double fucked if they don't sale the whole supply of new games. Which used games help insure there are always extra copies of unsold new games setting on the shelf.
"Besides, if they don't make an engaging game with replay value, they're just shooting themselves in the foot when a bunch of used copies pop up."
There is a reason that movie and video game rentals exist. Most content in enjoyable once or twice so there is no need to keep a copy laying around. Story based games need to be played once and precisely once to enjoy the story, which their main selling point. Do they deserve to make less than a generic FPS, despite the face they take more time and effort to make?
And lastly, resales should be outlawed. You're not paying for the copy of the game, your paying for the content. Resales undermine sales while allowing people to access that content without supporting the developers. Which is the precise complaint lobbed at piracy. Only is the developers not being supported, someone else is making money off their content instead of them.
Piracy>used sales. Fact.
Second Hand sales should be outlawed.
"Second Hand sales should be outlawed."
Because it would be convinient for corporations? Consumer rights come first. If video game publishers are having problems because of used game sales (which is probably bullshit, but nevermind), maybe they should try figuring out why so many people don't want to pay 50-70 euros for their games.
It's also cool that my previous comment got modded to -0.8 without anyone posting even a single counter-argument. Fucking retards.
Agreed, last Anonymous. I agree totally that corporations should stop whining and DECREASE THEIR PRICES! Then maybe people would be able to AFFORD to buy more than one game A YEAR in some cases.
"If video game publishers are having problems because of used game sales (which is probably bullshit, but nevermind), maybe they should try figuring out why so many people don't want to pay 50-70 euros for their games."
It doesn't matter what price the games are, if you see new and used in the game store, the store will price used games to undercut the new games. Anyone would want to save $5 by buying the used game instead of the new one. The consumer doesn't care who gets paid, just as long as he saves money.
Selfish son of a bitch
Oh, grow up. So, basically, everyone here who says re-selling of games should be illegal wants to close all the libraries and used-book stores because those scumbags are stealing money from authors by letting consumers buy second-hand goods, or even letting them read the books for FREE? Just think of how many books would be sold if libraries didn't exist!
How many readers here purchased textbooks second-hand instead of new, or have visited a library and checked out a book, or did research? Any one who did and says re-selling games should be illegal is a hypocrite.
The game designers are just unhappy because they can't figure out how to make money off that secondary market, so they want to make it illegal.
The fact of the matter is that once you sell a product you have NO control over what happens to it. People can re-sell it, trade it, give it away, and you can't do a damn thing about it. Because it is THEIRS, not yours anymore.
Teri
@ Imyou 17:17 :
What I think patokite91 was trying to say was, "Ford doesn't get any of the money - nor do they deserve to - when I sell my used Ford pickup. This holds true for all manufacturers and all merchandise, not just cars and trucks."
Mr. Castle's phrase, "Because they don’t let the publisher participate in the used games business." is just a slick and euphemistic way of saying, "I just decided that anyone selling a used product we made should give us money from those sales."
If Mr. Castle's company wants to create a chain of used-game stores, there's nothing Game Stop, et. al. can legally do to stop them.
Mr. Castle acting like just another thug in a suit.
But that's not even true. When you sell a used car, it's often to a manufacturer's dealership. Pick a manufacturer, and I guarantee you the local dealer makes money off of selling their used models. Saturn, Isuzu, Hyundai, Mazda, Toyota, Honda, GM, Ford... they all have used cars on their lots.
What's more, a car that's a few years old will be worth half as much to buyer and seller alike, where to Gamestop, a game is a game - it plays the same as ever, so if the price of a new one is high, the price of the used one is $5 less, and the previous owner gets about $5 for it, but the publisher gets squat.
Also, the buyer is probably looking for a used car or a new car as their main requirement. If they're shopping for a used car, they may not even know what's available, but they know they're buying used. When I go to buy a game, I will want to get a new copy if at all possible, and will search all over the city for it before giving up, going to GameStop, and getting it used because it wasn't in their 10% shelf space they give to new games.
Bullshit! Paying the manufacturer a resale fee is exactly like taxing tax, it's immoral and illegal.
I'm sick of people thinking they're owed more than what was originally agreed upon, because it has their name on/in it.
This guy can fuck off, just like that guy who played Nikko, in GTA, who thought he deserved additional commission based on the number of GTA4 copies sold. And every other scumbag in Hollywood, who pulls this shit too.
I don't own any of these fucks a cent. I paid my part the moment I initially bought it. If is my right to do with as I wish.
And there are no 'durable' cars made these days. You get 10 years out of them, then they fall apart. You buy a cheap car and it begins to fall apart, after the 3year warranty.
No car will run for 10 years without proper maintenance.
No car will run for 10 years - True, the difference between vehicles is the cost and frequency of maintenance required. Not sure how it relates to the discussion, but I thought I'd point out the difference between good vehicles and terrible ones.
"No car will run for 10 years without proper maintenance."
This is a stupid response. It should be obvious what we're talking about build quality and not upkeep. Do some research, you'll discover that a shitload of late70s/early80s Chevy & Ford trucks are on the road today because they built RIGHT. Unlike the crap coming out of the car&truck industry today.
Wrong. The fact is that I have a new car that appears (by the specs) is going to last a good 30 years, considering the EXTREME testing that was done to see how long it would take the body to rust out.
and they're both products and should be treated as such.
That CEO is a braindead idiot. Everyone can buy and sell stuff as much as he wants and earn money with it.
This system is called trade, mankind uses it for millennia.
I honestly stopped selling my games back to places like gamestop. What they give you for your almost new game is indeed kind of criminal. On another note, since someone mentioned cars, I don't trade in my cars either, because dealers are no better than gamestop when it comes to trades.
However, I will still buy games from gamestop, same as how I still buy cars from a dealer. They're both necessary on that end (imo)
Indeed, I sell my games to people close to me if possible.
This. My story: bought Lumines for the psp close to launch on a recommendation from a friend. I paid $40 for it. I tried it for 10 minutes, and I hated it. I decided to sell it back to Gamestop so I could buy a better game. It was new, mint condition. I figured I could at least get 50% of the original price for it. They offered me $4 for it. As shitty as I felt the game was, I kept it than taking that insult deal.
What does that have to do with a garage sale or a store that specializes in used goods? Been to plenty of stores where used DVDs are sold, nobody bitches about that. No companies that sell products complain about stores buying those products off of a consumer, and then selling it back. Only video game companies do that. Sony and MS don't bitch about their electronics (consoles too) being resold but they do when it comes to their games, and I don't get that.
The developers have to find new methods, no different from the complaints of the music industry. They want things to remain the old way when methods are progressively moving forward. And that's why they are losing out on money they keep wishing they had.
I also thought that..this is no different at all.
If a game store tried to make money by only selling second hand games they're going to die anyway. Someone has to buy the game new and game stores don't sell 'secondhand' digital copies from the internet.
This guy is a fool.
Also, "That’s the exact opposite of what the media on the web is about. There it’s about finding media anywhere, I can sample it for free and if I like it, I pay for it." He should tell that to anime licencers
amen, to that second part.
You are completely wrong. I own and run a store that sells only secondhand games and we do great. There are of course people who buy brand new, and they are paying more for the privilage of playing it first and having the game in brand new condition, those who buy second hand take advantage of this fact as they are willing to forgo these privilages.
The fact is that the ability to resell the games is what gives them value in the first place! Look at the PSP Go. That isn't unsuccessful because the games are bad or unavailable, its unsuccessful because the games don't have the same value as the hard copy.
When you buy a game, you gain the legal right to play that game. When you sell a game, you are selling that right to someone else. Whether or not what you are selling is a physically tangable object such as a chair, a table, a car or indeed an intellectual/metaphysical product such as a patent, movie or game bears no difference. Companies sell patents and license them out all the time, and people sell movies that they are bored of or wish to share all the time. Why should video games be any different.
If I want to buy a Super Nintendo right now, there would be no legal way to do so if reselling video games was a crime as there are no new distribution channels. The only choice is second hand.
Anyway, if any butt-hurt developer truely believed in this philosophy, they would be obliged to find and pay the original creator of everything they ever own of anything they ever bought second hand. Bought a table at an antiques dealer? Find the guy who made it! That limited edition print off ebay, find the guy who drew it! Your car, well better ring up Audi and tell them you owe them some cash! The fact is, they have made a product and sold it, and the buck stops there.
developers -waah waah, i want more money!
me -(in terminator voice)STOP WHINING!
Games that on average have a markup of around 57.99 dollars for a 59.99 dollar game? Not to mention the increasing popularity of internet downloads like Steam..
Seriously, fuck them, fuck them up the ass with a broken beer bottle..
Seeing gamestop I thought it would be because of their more then surplus supply of PSP's with CFW (custom firm ware, run downloaded games basically) installed on them in their stores.
No game game on the face of the earth has a 57.99 dollar markup. The fact you even say that proves you don't know shit.
Selling a game at a store costs money. Takes money to print the disk and make the packaging, money to ship it to the stores, and then the price is divided up between 3 groups. Retailers get a set amount of money per game sold, console makers get a set amount(if the game is a console game), and then publishers get the rest. Which turns out to be about $1-$3 bucks on average.
http://www.forbes.com/2006/12/19/ps3-xbox360-costs-tech-cx_rr_game06_1219expensivegames.html?partner=yahootix
Learn facts before sprouting bullshit.
You obviously don't live in Australia.
devs are sure getting greedier...
this guy doesn't mind about used game sales provided they get a cut from it... how about cutting used game prices down and not selling them like new copies in the first place?
I don't know what's worse, online stores which have the same prices as a real store (but you don't receive a physical copy) or retailers which screw you by selling used games at high prices and only bring the most popular crap to your city... And yes, used software can be replaced by car, it also gets worn out with time, I won't pay the same for a used game that wasn't taken care of properly.
Ok stupid question time, how can people buy the games if they can't get it at a retailer store? I mean if we're going to buy it directly then we have to know where the company is and then pray that the game doesn't get dammaged, lost, and/or is for the wrong console.
As for replacing the game with cars it's pretty much the same, but in a different price range. I think it's more along the line of the retailer is selling your porduct, but if someone sell back to them, they can do whatever they want with it even reselling it at a bit of a higher price.
Besides some gamers do have the money to buy brand spaking new games all the time, so sometimes it's best to have a used game. Also, sometime you can only find a used game since it's a rather hard ot find game to.
Overall he shouldn't be complaining unless he wants to have his company not able to seel their games to anyone at all now.