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:
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?
Reply #2 Wednesday, September 24, 2008 11:23 AM
Charles,
This is why I'm very careful about software purchases. It's been a very long time since most retailers quit accepting returns on opened software (for rather obvious reasons), and I actually buy most of my games at retail. So I tend to make sure by researching products thoroughly that either 1) I'm not spending an amount of money I'll regret later or 2) I'm pretty sure that what I'm buying is something I will enjoy (and preferably both). I've run across the occasional bad egg over the years, but, by and large, I've not had problems with this approach.
Reply #3 Wednesday, September 24, 2008 11:29 AM
There is no good way to track what is a secondary sale and what is a pirated copy.
Neither is there a way for a developer/publisher to make money on any support on teh secondary sale. Most of the support calls that a game gets in on install and first use by one user. Those costs are built into the game. If it's resold . . support may incur those costs and not recoup.
As long as the secondary user doesn't expect support, sell or buy all you want.
But especially for lower priced games, it's just not worth it to have a license transfer system.
At some pont a system will be created where transfering license is cheap enough (for the developer/publisher) and seamless enough for the buyer and seller to make it worthwhile. I wouldn't mind a sytem where the transfer of license had a fee attached to it so that it could eat the support and invest in development, but what would be a marketable and profitable amount?
The Political Machine sells for what? $19.99US. What could the first user sell it for? Whould they have to dislose that it was unsupported to the secondary buyer? What if they didn't? Then teh secondary emails support and support say "You don't own the game (according to our records). NO SUPPORT FOR YOU!! Buy the game!" Now secondary buyer is pissed at support and post hate mail on every forum and developer goes out of business, right? Or maybe they are cool . . say they want to do a license transfer between them and the primary. Does support contact the primary to revoke the license? Dunno.
Reply #4 Wednesday, September 24, 2008 11:29 AM
I know what you mean. I bought this games because I am a big fan of the Call Of Duty Series and since this game was said to be the pioneer that lead to these kinds of games, I wanted to check it out myself. Turns out the game was a bit disappointing to me so I sorta regreted the purchase. Maybe if I had been able to play a demo (am honestly ignorant if there was one, my mistake for not checking) I may not have bothered. But I rarely find myself in this situation though. This would actually be my first time.
Reply #5 Wednesday, September 24, 2008 11:41 AM
They should also ban the secondary market in auto, homes and sports equipment. All second hand clothing stores should be immediately boarded up. The reason they prohibit the secondary market in software is because they have legally denied to you that you have any property interest in your purchase that's related to these valuable copyrighted materials. From the software makers standpoint why should they allow you to resell your licensed copy to someone for $10 if it means they won't get $20 or more from that customer.
So they write into the license whatever suits they're own interests. It's a single non-transferable license to use the copyrighted materials in most cases that's purchased. In fact the software companies became so effective at making it impossible for a purchaser of used software to actually use it, the secondary market died.
But, is what has been done legal? IMO no. Property was always traditionally deemed to be fully transfered to a purchaser including the full right to resale. How many times have you heard people gush on Antiques Road Show about the yard sale, estate sale or flea market find of a rare masters painting, book or pottery. Should the original owner be able to kill the sale of such a thing? It's never been held to be the case.
The reason the situation exsists is because of complacent and cooperative courts and legislators who go with the campaign contributions. Sure the software companies can stipulate whatever they want in their license "agreements" it's only a $20 to $50 game software. Well maybe magazines, baseball cards, and music cd makers and all the rest should learn from this bad act and start insisting they to can sock it to the consumer and just sell the non-transferable right to read the magazine, look at the baseball card and just listen to the music to the consumer. the consumer should be prohibited from reselling any copyrighted material at all.
Reply #6 Wednesday, September 24, 2008 11:50 AM
I believe that's why the Shareware/Freeware system of distribution was invented!
I am personally against any of that sort of 'indirect' value, but that's another discussion altogether.
Now, comes in, the infamous DEMO concept.
We all know what that is.
Stripped versions roaming around for ---pirates--- to crack out, it's an invitation to steal.
For 30 days, or limited time we get to enjoy "something" worth our attention - after which a decision must be taken; Buy or uninstall.
I simply hate the fact that i MUST regret any two decisions that i would eventually take for a reason; like it or not, my investment was enforced down my throat.
So, knowing about the above comments, my answer to this question would be...
No. Bite the bullet, and go on.
Refunding ANY software for any reasons, is a huge business loophole. Transfering rights to drive a used car for a price paid to the original owner is one basic principle to our economic systems nobody can deny or object to - that's a given. Taking a second hand OS (pirated, maybe - somehow) from a clean cut reseller, installing it on a PC, using it in all 'good conscience' is waaaaaayyyy different.
I've got me drawers full of Diskettes & CDs - bought off the shelves.
I own(ed) the right to use any as i wish --forever--.
Because, i am an honest person.
Reply #7 Wednesday, September 24, 2008 12:15 PM
So they write into the license whatever suits they're own interests. It's a single non-transferable license to use the copyrighted materials in most cases that's purchased. In fact the software companies became so effective at making it impossible for a purchaser of used software to actually use it, the secondary market died.
But, is what has been done legal? IMO no. Property was always traditionally deemed to be fully transfered to a purchaser including the full right to resale. How many times have you heard people gush on Antiques Road Show about the yard sale, estate sale or flea market find of a rare masters painting, book or pottery. Should the original owner be able to kill the sale of such a thing? It's never been held to be the case.
The reason the situation exsists is because of complacent and cooperative courts and legislators who go with the campaign contributions. Sure the software companies can stipulate whatever they want in their license "agreements" it's only a $20 to $50 game software. Well maybe magazines, baseball cards, and music cd makers and all the rest should learn from this bad act and start insisting they to can sock it to the consumer and just sell the non-transferable right to read the magazine, look at the baseball card and just listen to the music to the consumer. the consumer should be prohibited from reselling any copyrighted material at all.
The comparison between games (software) and normal physical property is common, but inherently flawed and cannot be logically used.
If you re-sell a piece of physical property, you can no longer use it. You physically pass it on to another person.
If you re-sell software, guess what - you can keep it on your drive, and you can keep it working. Even if the serial is stripped from your account denying you access to patches, it still won't deny you access from launching the game.
In the case of physical property, the manufacturer is impacted much less because for any one purchase, only one "consumer" at a time has permanent possession of said property. Likewise, for any physical property, things break and the consumers have to go buy new ones. They have to pay to have their cars serviced, houses repaired, replacement parts, so on so forth.
In the case of software, because of its inherent nature, the above no longer holds true. There is no way to guarantee that a re-sale is a complete resale, as in the original buyer is denied all access to the software. Even if there's authentication on game launch, there are still cracks to bypass it. As such, it's not a true re-sale and the developer/publisher is essentially jipped because whereas for a physical product any two people have two buy two of them for use at the same time, for software only one person now has to buy it and two can use it at the same time. As Zubas also points out, support for games is free for the consumer, but costly for the developer/publisher. Game sales offset that cost. You don't pay to get a patch for the game. You don't pay for upkeep of Impulse or game servers (unless it's an MMO). You pay a one-time fee, and that's it. With Stardock's system, you never even have to pay twice, ever, in case something happens to your original disc.
This is why physical property and software are so inherently different that such a comparison and rationale has absolutely no place in the argument.
So no, at least with Stardock's system, re-sale of software should not be allowed.
Reply #8 Wednesday, September 24, 2008 12:24 PM
Forget about what's in most current EULAs. They can be changed.
Let's look at the Stardock model: You register your game and it's tied to your account. This means you can DL patches and even the game itself indefinitely, as long as you're logged in to that account. That's pretty much it in a nutshell, is it not? If I'm confused about that or if I've missed anything, feel free to correct me.
So, with that in mind, why can't a person just deactivate the game key from their account prior to deciding they want to sell the game? They sell the game to a second party and that party then registers the key to an account that they make. I see no real problem with this and I can't see why that's not a viable option. If I'd kept the game, I'd still be using the bandwidth to DL patches (or possibly the whole game) and still have support. If I transfer (or in this case, deactivate it and then someone else activates it), they now get the patches and support. Net effect is Stardock still supports the same title. I'd also think that once that secondary sale registers the game and gets patches (and possibly support if needed), there's a gvery good chance Stardock might end up having another customer. Net effect could well be they end up selling more software.
I'm not seeing how pirated copies are a concern, since if you must register your game key to get patches/support, if someone has a pirated copy, where are they going to get a key? If they try to use a key that hasn't been unlinked from a previous account, then they'll not be able to register the game and therefore not get patches/support.
Reply #9 Wednesday, September 24, 2008 12:29 PM
Reply #10 Wednesday, September 24, 2008 12:29 PM
See my post above. Even if the key is stripped from one account and transferred to another, that person can still play the game. They lose access to patches, sure, but patches stop coming eventually anyway, so it's not much of a loss. Whereas the publisher (Stardock) now gets to support a brand new "customer", without seeing any purchase from him.
Edit: Zubaz, stop quoting the same things! You're freaking me out here.
Reply #11 Wednesday, September 24, 2008 12:51 PM
"The comparison between games (software) and normal physical property is common, but inherently flawed and cannot be logically used.
If you re-sell a piece of physical property, you can no longer use it. You physically pass it on to another person.
If you re-sell software, guess what - you can keep it on your drive, and you can keep it working. Even if the serial is stripped from your account denying you access to patches, it still won't deny you access from launching the game."
Not sure I buy into your comparison. Music CD's are in fact a direct comparison, the copyrighted material on the CD, I don't own either. But, I can resell it and I could make a copy of it first before re-selling. All these objections you raise for my other examples don't hold for music CD's which you've ignored.
My point was this if the software industry can do this why can't the magazine industry do this also. Put a great big old license agreement just behind the front cover and say I've purchased a single non-transferable license to read the magazine. Same thing with the music CD put a license agreement on it and say I've purchased a single non-tranferable license to listen to the music.
This entire legal concept of non-transferable licensing is new and got it's stride in the 1980's and 1990's. In fact there were secondary markets for the resale of software that died because of these attempts to impose further restrictions on consumers.
If I purchase the license to use a copyrighted material that is still within the definition of the law a property I own. The fact that the software industry has imposed prohibitions on my legal right to re-sell this property interest in my opinion is illegal.
Furthermore, to use the arguement that a person could illegally still make use of that which they sold as a justification for outright prohibiting the sale has never been upheld by courts as overiding someone's property interest rights.
I could make a copy of a VCR based movie and sell the original. The secondary market in original Hollywood VCR movies was never crushed like this just because someone could do such a thing. Same thing has been true of records and tapes.
This idea that the seller can force what is transfered to the buyer to be non-transferable has never before existed in the law. The reason this situation exists is because my rights within America's traditional property laws have been swept aside in favor of what the software industry have gotten from its lobbying of the Congress.
Reply #12 Wednesday, September 24, 2008 12:52 PM
Not sure I buy into your comparison. Music CD's are in fact a direct comparison, the copyrighted material on the CD, I don't own either. But, I can resell it and I could make a copy of it first before re-selling. All these objections you raise for my other examples don't hold for music CD's which you've ignored.
Music CDs don't have any support costs associated with them. So it still doesn't work.
Same with your movies example. Copywrited material does not automatically imply that you're buying a license. If you buy a DVD/VHS, you're buying the actual disk. You can make copies and sell the original, sure. But again, there are no continuing support costs associated with movies.
Moreover, movies/music discs are in the $15 range, whereas games are in the $50-60 range. There's a bit of a difference on how much money the manufacturer/publisher loses out on
Reply #13 Wednesday, September 24, 2008 12:57 PM
The point is understandable and completely makes sense. Still, I think it's unfair that one should have to keep it forever simply because such a product can be reproduced in an illegal manner by the person who owns it or someone who is able to do it for them. Again, it's understandable, but at the same time unfair that in the end only the seller gets the benefits while the consumer gets stuck. Of couse, one always has the option of avoiding the product all together but that to me is not a solution, simply a lame argument that fixes nothing.
In the end, it's all about how much money the producer of the product can make, one way or another. It's never really about the consumer.
Reply #14 Wednesday, September 24, 2008 1:04 PM
It's a wash. If I keep the game, you're still going to incur support costs for me for the game. If I sell the game, those costs are just transferred to the other person.
Annatar: how about if you strip the key from your account, the game no longer functions on your computer? Although likely this is not a viable solution.
I see what you're saying, but really, once the game is no longer supported, you'd have to admit most people will probably have uninstalled and moved on to another game. But there may be a percentage that will decide to install it again and play. This means they must either install from the disc and DL all the patches or DL the up to date game from Stardock. That means support costs right there. However, if the game is deactivated from their account and sold to someone else and they DL the patches, that support cost for you is just offloaded to them. Same net effect. But the benefit for Stardock is, with the current model, that secondary customer has to install Impulse to get the patches. This exposes that person to Stardock's other products and potentially creates a new customer for them.
No, that's not a guarantee, but it certainly is viable. It's a similar thing to how Stardock got me as a customer. Not from a second hand sale, no, but due to finding out their stance on DRM. When I found out their titles shipped without DRM, I immediately went out and bought Sins as a way to show my support for their attitude. This, after having never really looked at an RTS game before. The benefit to Stardock was I liked the game a lot. So, due to that, I bought GalCiv2 with the first expansion and plan on grabbing the second expansion as well. I've not even played them yet. And now I'm eyeing DemiGod and also looking at some of Stardock's software available through Impulse.
Again, that's not because of a secondhand sale, no. But it could certainly have occurred due to that as well, especially since, if I sell the game to another person, the only way they're getting patches is through Impulse, which exposes them to all kinds of other great Stardock titles and software.
I don't know, I guess you can worry about losing some money indirectly through support costs, but I'd think the benefits I outlined above would be well worth it.
As a closing word on this: I don't even sell my old games. So this isn't a self-interest issue for me.
Reply #15 Wednesday, September 24, 2008 1:09 PM
Sure, you can look at it from the one sided view. But then, you can also put it in perspective, and consider both the benefits and the drawback's of Stardock's system, rather than just the drawbacks. There are quite a few things you can do with Stardock's system that you can't do with others that do allow you to re-sell games easier.
For example, if you buy a non-digitally distributed game, if you ever lose the disc or cd key you have to buy a new one. Not so with Stardock, since you can just re-download as many times as you like. This is all at no cost to you, but at a cost to Stardock.
So you decide if it's worth the trade off. Lifetime assurance that you'll never have to worry about losing a cd key/disc, combined with better-than-most update support versus not being able to re-sell. It isn't as if Stardock does the exact same as any other publisher, but adds this restriction on top of it. No, they offer you a perk, and a drawback. They spend extra money on support, and in light of it want to make sure that they know where that support goes.
How 'unfair' that is depends on each individual.
Not really. If you had installation issues, they spent money helping you fix them. If you had patching issues, they spent money getting it fixed.
If the new owner has installation issues, they now have to spend money on the same support that you already got. It's not like they're simply transferred, there's a liability. A risk that they re-incur the same expenses with the new owner that they already had with you.
It may not seem like much, but look at the big picture. Between all of their products, and judging by forum registrations, let's say they have 3 million product users. Even if it costs $5 per person on support, imagine if all 3 million users at one point or another resold their stuff. All the money that Stardock spent on support for the original 3 million now have a chance to be re-incurred with the new 3 million - with no extra revenue to compensate.
Extreme example, yes, but designed to show that even relatively small amounts of money mean a lot with a sufficiently large user base, and they do have to budget for it.
---
This kind of thing doesn't exist anywhere else. As I said above, music, movies don't have any support costs. The studios make them and sell them, and wash their hands of it. There are no costs to maintain it. For electronics, tools, cars, houses, whatever you always pay insurance/warranty. You buy a new shiny TV and want some guarantee of getting a replacement if it breaks within a year or two? You buy a warranty. The manufacturers can afford this from the fact that fewer people need replacements/fixes than the number that pay for the warranty. It's the same in the insurance business. But game publishers have no such system. They have constant out of pocket expenses on support, and the only way to recoup them is original game sales.
You have to look at the whole picture here, not pick out only what's convenient
Reply #16 Wednesday, September 24, 2008 1:22 PM
Run that by me again?
Theory;
- Pirate X has properly registered its LEGAL copy with the necessary principle provided by SD.
- Makes a number (fill in your favorite amount of profits here) of illegal copies which will receive the 'advantages' hinted about in the quote above.
- SD must now support a *number* of items - only one of which is the perfectly legal item.
Transfer(s) or costly support from now on?
Lost sales for SD or illegal activity having an impact on POTENTIAL business with possible consumers?
Yep, it's a wash alright.
Reply #17 Wednesday, September 24, 2008 1:23 PM
Same with your movies example. Copywrited material does not automatically imply that you're buying a license. If you buy a DVD/VHS, you're buying the actual disk. You can make copies and sell the original, sure. But again, there are no continuing support costs associated with movies.
Isn't material. Traditionally all property that is transferred to me through sale has been legally held to be fully transfered including the right to resale. Prior exceptions had typically been made with respect to liens for mortgages and autos and the like. Which must be removed once the loan which is the subject of the lien has been satisfied.
Annatar what I'm referring to is a traditional legal standard within the property law. A software company can only incur maintenance costs if they choose to do so. It's voluntary on their part as far as the law is concerned. No court would uphold that has having any legal preference to negate my property interest that was transferred at the time of the sale.
If what you were saying was legally sufficient they wouldn't need the legal device of limiting the software license to be a single non-transferable license. Furthermore, in contracts due consideration must exchange hands and there has to be a genuine meeting of the minds between the parties. I'm surprised noone has brought a class action lawsuit on the software industry over this.
In essence the software industry from a property law point of view has managed to go beyond copyright law and enforce through this licensing mechanism all real property interests to remain with them including everthing that is transfered to me. In essence even my license to use the software ends up remaining the property of the software company. It outrageous. I should have the same right with respect to the money I paid.
Reply #18 Wednesday, September 24, 2008 1:35 PM
You buy a disc. You sell the disc. New owner gets what's on the disc, no support to go with it. Seems pretty standard. You're not prevented from selling your retail Sins copy, and the new owner can play the game from that disc just fine. So, in your own words, the standard is kept.
But if a software company is not required to incur maintenance costs and it's voluntary, then the user has no grounds upon which to expect any support by the same logic, and is certainly not legally granted any support.
But your own argument revolves around registration transfer which only guarantees support for the product, not the ability to play it.
So, you do a very good job of contradicting yourself There's nothing preventing you from re-selling your original disk, and Stardock games are perfectly playable off them without needing a serial. The only thing a serial is needed for is support. But since as you pointed out Stardock is in no way obligated to provide support and it's entirely voluntary, it is completely up to them how to provide it because it is fully voluntary. And as such, the user can not have any legal reason to complain about the support limitation to only the original purchaser/registrar.
Reply #19 Wednesday, September 24, 2008 1:40 PM
Huh??? Ya right.
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Reply #1 Wednesday, September 24, 2008 11:07 AM
I can understand the argument behind the EULA, I, however, think that if one purchases a product, one should not be held to have to keep it if one does not want it. In my case, I bought a copy od Counter Strike Source recently. It comes with extra games and needs to be activated via the Steam software in order to use it. Turns out I did not find this game or the extras that came with it as appealing as Call of Duty 2 and 4. Now I am stuck with a $20 piece of software I will never use again because I can not seel it or maybe even give it to someone else because it's registered to my name. Now, to be fair I am not truly sure if Steam would allow me to transfer the serial key to someone else, but considering it can't be done in most cases and the paid that it is to activate it at all, I don't see why they would let me do it.
So, I'm out $20 on a useless piece of software, useless to me that is. Maybe someone here could help me on this.