Should people have the right to resell games as grey or secondary market material?

discussion moved from "I won't use Impulse"

Wednesday, September 24, 2008 by warreni | Discussion: Personal Computing

Coelacanth said on September 23:

[quote]
Quoting warreni,
.
This is just being melodramatic; of course you can give it to a friend. He won't be able to get updates, but so what? It's a perfectly functional piece of software. Unlike many games rushed to market today, patches are not required to make it playable. As has been pointed out before, you paid for what was in the box when you bought it. You're getting the updates, in effect, for free. Now, people reasonably expect bugs to be fixed and balance to be tweaked when they purchase a game. However, when you give your copy to a friend, your friend isn't paying Stardock for the man-hours or IP assets involved in updating the product.

 


I've seen this argument a few times now and I disagree with it. Why shouldn't you be able to sell that piece of software to someone else and have the serial key (and thus access to the updates) go with it? At that point, it's off your system. And what difference does it make if someone else gets the updates? It's no different than if you kept the game and updated it yourself. I fail to see the logic of that argument about the man hours or the IP assets. This is really the only thing that currently bothers me about Stardock's business model.

 

 

 

 

I moved this from the original topic as the moderators are clearly tired of that discussion and I expect it will be locked soon.

Coelacanth, the problem with your argument is that the EULA for most software these days specifically prohibits the resale or transfer of the software license by the original purchaser. The rationale for this is that the company distributing the product only makes money on it once: when the original sale is conducted; why should the company subsidize your efforts to make a few bucks back by continuing to support the product for a third party?

 

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ZubaZ
Reply #81 Saturday, September 27, 2008 5:56 PM

Any or all of you feel free to open a Google search for "define: greed"
Profit != greed

Dr.Gonzo
Reply #82 Saturday, September 27, 2008 6:08 PM

Not by definition no, but there comes a point, would you not agree, where the line certainly blurs? Can you _have_ greed without profit?

ZubaZ
Reply #83 Saturday, September 27, 2008 8:15 PM

would you not agree, where the line certainly blurs?
Sure there's a point.  But that point is for the market to decide and I don't think this discussion is anywhere near that.

CobraA1
Reply #84 Saturday, September 27, 2008 9:08 PM

Any or all of you feel free to open a Google search for "define: greed"

I would never, ever, use Google as a dictionary. I usually use dictionary.com because it always includes definitions from real, respected dictionaries such as Webster's, Random House, or the American Heritage dictionary.

Can you _have_ greed without profit?

Sure you can. Greed is a desire for more than you deserve. It's a desire, an emotion.

You can be poor and be very greedy, or you can be rich and not be greedy at all. Greed is not a measure of how much you have; it's a measure of how much you desire.

American Heritage Dictionary - greed  

An excessive desire to acquire or possess more than what one needs or deserves, especially with respect to material wealth: "Many . . . attach to competition the stigma of selfish greed" (Henry Fawcett).

Webster's Revised Unabridged Dictionary

Greed

Greed, n. An eager desire or longing; greediness; as, a greed of gain.

 

Campaigner
Reply #85 Sunday, September 28, 2008 4:59 AM

No, there shouldn't be a secondary market for software.

ZubaZ
Reply #86 Sunday, September 28, 2008 11:54 AM

No, there shouldn't be a secondary market for software.
because  . . . ?

mrakomo
Reply #87 Sunday, September 28, 2008 12:38 PM

Campaigner
No, there shouldn't be a secondary market for software.

 

I strongly disagree. If the software costs a lot of money, the secondary market or the possibility to transfer the licence can be usefull. Hovewer if the price of the license does not exceeed let's say $50, it does not make any sense.

kryo
Reply #88 Sunday, September 28, 2008 1:19 PM

Your contention isn't that the software company make any money on the resale but that they increase initial sales because the inital buyer knows that they can dump it with good concience or that there will be a market for the used game and they'll be able to dump it at all?

That's the thought, yeah. I know it's true of me, whether it's true of enough people to make the whole thing work for the publisher I'm not certain, but I think it'd be interesting to find out.

 

People buying games more because they know they can easily dump them early on results in a wash for the devs, at best. Bear in mind that the closer to retail value you're reselling a used copy for, the more likely the buyer would have bought a new copy were the used one not available. As a result, the increased sales to people who don't want to keep the game are likely entirely offset (or more) by the loss of sales to those people's copies when sold off shortly after release.

Personally, this is one of the biggest gripes I have against specialty stores that rely on used sales. Selling older or hard to find used games is not such a big deal; given the low prices or lack of retail availability, there's probably little loss there.

But when someone comes into the store and makes up their mind to buy a game new, then the clerk bribes them $5 off to give the store massive profits and the devs squat--that's the kind of behavior that pisses me off; the store is basically stealing that sale entirely for themselves.

psychoak
Reply #89 Sunday, September 28, 2008 4:01 PM

There's not a lot you can do about people being suckers.  Used game stores are like used car dealers, they're going to make the money off the transaction.  When the buyer is the one benefiting from the trade, you're losing very little, if anything.

Coelocanth
Reply #90 Sunday, September 28, 2008 4:50 PM

Do people really go for that? I know if I were only getting 5 bucks off, I'd just tell them "No, I'll pay the extra 5 bucks for the new unopened game, thanks".

psychoak
Reply #91 Sunday, September 28, 2008 5:35 PM

It's not so much the five bucks off as it is the five bucks the guy that traded in his used game made to start with.  If you went off ebay, you'd have most of the buyers costs in profit yourself, ready to reinvest in another title.  When you go through eb games or such, you get reamed about as well as you do when you trade in a car for two grand and the dealer sells it to someone else for eight.

 

If the game store paid the trader 30 bucks and sold it for 35, then yeah, Stardock loses that $40 sale, but there's $30 out there that likely went towards another purchase.  It just depends on how big of a moron the actors are.  If you sell a week old game for five bucks and the store sells it for five bucks under asking, you're a fucking idiot.

damicatz
Reply #92 Sunday, September 28, 2008 6:04 PM

mrakomo

Quoting Campaigner, reply 10No, there shouldn't be a secondary market for software.
 

I strongly disagree. If the software costs a lot of money, the secondary market or the possibility to transfer the licence can be usefull. Hovewer if the price of the license does not exceeed let's say $50, it does not make any sense.

You aren't paying for the license, you are paying for a good.  Law and stare decicisis trumps the EULA.

mrakomo
Reply #93 Monday, September 29, 2008 5:27 AM

This thread is about games, however my response was about "software". Yes, software is goods, however you pay for the right to use it.  Games are relatively cheap. And what I wanted to say: if the software cost you let's say $619.95 (the price of Autodesk Maya), it really does make sense to be able to transfer the licence. And the reseller does know, that if you dont't have the right to transfer the licence, a lot of customers would never buy it. The reseller has some other choices to make profit on you - e.g. paid support.

However games are something different. If the customer buys it, it is the end of the profit for the reseller.  If you play it or not is no difference for him. Secondary market of games is the transfer of money, but for the reseller it is no profit. If the second gamer buys the game it is the profit.

Shadow_of_Light
Reply #94 Monday, September 29, 2008 5:49 AM

i guess. not being able to "trade" your copy of a certain software..... is something in the customer's comfort.... nnot being able to trade it downright sucks.... and alot of people wont buy it.. that is IF they knew it was not "re"sellable...

the problem that we cannot trade certain products isnt the problem.... its becuase alot of people dont know it isnt resellable becuase it's not stated anywhere "this product cannot be resold becuase your personal account is forever linked to your copy"

as long as this is not clearly stated BEFORE you make the purchase, i guesss u can consider it a none-valid buying transaction.... becuase you didnt get to know all of the terms.... ofcourse.. you could search it on the internet... but that the information wasnt under your nose when u bought it

 

same goes for license agreement..... its inside the box... u dont get to read it until after you bought it.... so that would make all sold games non-valid????

and what makes it worse is that some companies actually pronounce themself to be customer friendly....

it's a strange world indeed....

mrakomo
Reply #95 Monday, September 29, 2008 6:12 AM

I don't know how it is in the USA, but in my country if you buy some software but you don't agree with licence conditions, you may return it back (in 14 days since delivery) and you get full return. It is the law. However if you use it, you may not return it anymore (if it does not work, you may reclaim it, it is something else). If you don't read the licence conditions, it is your problem.

ZubaZ
Reply #96 Monday, September 29, 2008 8:38 AM

its becuase alot of people dont know it isnt resellable becuase it's not stated anywhere "this product cannot be resold becuase your personal account is forever linked to your copy"
The game can be sold . . it just can't be updated.  There is a difference. 

JMiddleton
Reply #97 Monday, September 29, 2008 9:37 AM

There has been a secondary market for intellectual property as long as it has existed - libraries have been around for thousands of years and authors, like software developers, only get paid when a copy of their work is sold - not each time it is read!

The distinction raised in this thread is that software has an ongoing support burden while movies/music/books do not. I accept that a software company might need to charge a license transfer fee to offset this burden but I don't think the marketplace will accept non-transferrable licenses for something that costs $50.00, $100.00 or more. For most of us, that still represents a lot of money. If you have made a mistake and purchased something you aren't going to use, you want to recover as much of your investment as possible by reselling the product - is there anyone on this board who hasn't bought or sold something at a flea market or online at Kijiji or eBay?

Digital disrtibution is a double edge sword for developers. On the one hand, consumers can easily make exact copies of your product for re-distribution. On the other hand, you have direct access to 1.5 billion potential customers (probably more by now) through the Internet - no mddlemen who want a cut of the action, no cost of goods sold, negligible distribution cost, as close to 100% margin as we're ever likely to get! I don't know what the winning business model will be but suspect it will include product placement so some revenue comes from advertisers. I'm sure many schemes will be tried over the next few years and another billion potential customers will be added to the Internet community over the same period of time.

WarlokLord
Reply #98 Monday, September 29, 2008 9:50 AM

Peace Phoenix

Most federal circuits in the United States have ruled the opposite; that boxed software is a good that is sold and not a license.


But then, second hand user isn't entitled to patch/updates since they aren't in the boxed software

Which means we are purchasing incomplete products?...

Interesting.

warreni
Reply #99 Monday, September 29, 2008 10:28 AM

JMiddleton said:

Digital disrtibution is a double edge sword for developers. On the one hand, consumers can easily make exact copies of your product for re-distribution. On the other hand, you have direct access to 1.5 billion potential customers (probably more by now) through the Internet - no mddlemen who want a cut of the action, no cost of goods sold, negligible distribution cost, as close to 100% margin as we're ever likely to get! I don't know what the winning business model will be but suspect it will include product placement so some revenue comes from advertisers. I'm sure many schemes will be tried over the next few years and another billion potential customers will be added to the Internet community over the same period of time.

Well, this isn't strictly accurate. There are still middlemen involved in this process in the form of the online store/platform provider, of which there are a much smaller number than that of software developers (I can think of Stardock, Valve, EA, Atari, ign, and maybe one or two more).

 

WarlokLord said:

Quoting Peace Phoenix,
reply 25

Most federal circuits in the United States have ruled the opposite; that boxed software is a good that is sold and not a license.


But then, second hand user isn't entitled to patch/updates since they aren't in the boxed software

Which means we are purchasing incomplete products?...

Interesting.

That tends to depend on your point of view. The way I see it, when I buy a boxed game, I'm getting the contents of the box. When someone resells a boxed game, the secondary user is (if the seller is honest) also getting the same thing. As a secondary user, you won't have the same rights and privileges for updates as the primary user, if she or he bothered to register the product online (well, this is a requirement for Stardock products, because registration is mandatory for boxed products and grants the primary user the same re-download privileges as a digital-copy purchaser).

When you buy a digitally-distributed game, what you're getting tends to vary based on the policies of the store/sales platform. You may be getting a one-time download, the right to re-download a set number of times, the right to download an infinite number of times, et cetera. The benefit of multiple downloads only comes at the cost having to register yourself as a legitimate user; in a very real sense, this appears to make the concept of a secondary market in digitally-distributed products absurd on its face.

ZubaZ
Reply #100 Tuesday, September 30, 2008 4:58 PM

I saw this interesting take on used games:

 

You would think that after years and years of evidence that a second-hand, "used" market for products increases the value of the original products that executives who create the original products would know better than to complain about resales or demand a cut of the profits -- but apparently you'd be wrong. Reader Lucretious writes in to let us know that the audio director of Bungie Studios, a Microsoft subsidiary and the makers of Halo among other things, is out complaining about how the second-hand market for video games has a huge detrimental effect on the industry, claiming that the game makers deserve a cut of all of those sales.

Except that's not just wrong, from a common sense standpoint, it's wrong from an economic stand point and a legal standpoint. It's almost impossible to come up with a rationale where it actually does make sense. First, on the legal front, the first sale doctrine is well established. When it comes to copyright products, once you've sold something, you really have sold it, and the buyer has every right to resell it -- just as they do with things like a chair or a house -- without owing the original creator another dime. Second, from an economic standpoint, plenty of studies have shown the importance of an active second-hand market. First, for buyers of the initial product, the fact that they can resell it is part of the value they put in the price. Wipe out (or heavily tax) the second-hand market, and you decrease the amount people are willing to pay for the initial product. Thus, you actually shrink the market for your product. There's also a lot more research in terms of signalling and market adoption that show that a second-hand market is important. Finally, from a common sense standpoint: you sold the game, you no longer have control over what people do with it. That's how transactions work. Would the folks at Bungie like it if we suddenly started telling them how they could spend the money we gave them for games? No? Then they shouldn't complain about what people do with their games.

 

See the realted post here: http://www.gamesindustry.biz/articles/andrew-eades-pre-owned-market-needs-reform

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