In an interview with GamesIndustry.biz, Quantic Dream co-founder Guillaume de Fondaumiere says that he lost "between €5 and €10 million" to second-hand sales for Heavy Rain:
We basically sold to date approximately two million units, we know from the trophy system that probably more than three million people bought this game and played it. On my small level it's a million people playing my game without giving me one cent. And my calculation is, as Quantic Dream, I lost between €5 and €10 million worth of royalties because of second hand gaming.
This exaggeration is meant as a comment to the used sales of gaming retailers and the industry's approach to the second-hand market:
Now I know the arguments, you know, without second hand gaming people will buy probably [fewer] games because they buy certain games full price, and then they trade them in... Well I'm not so sure this is the right approach and I think that developers and certainly publishers and distributors should sit together and try to find a way to address this. Because we're basically all shooting ourselves in the foot here.
Because when developers and publishers alike are going to see that they can't make a living out of producing games that are sold through retail channels, because of second hand gaming, they will simply stop making these games. And we'll all, one say to the other, simply go online and to direct distribution. So I don't think that in the long run this is a good thing for retail distribution either.
Now are games too expensive? I've always said that games are probably too expensive so there's probably a right level here to find...
Beyond the fact that 2 million units sold is amazing for an independent studio for a PS3 exclusive, I'm not sure if he has the math all right. What portion of the second-hand market is used sales in retailers and how much of it is just some guy lending his copy to his friend or relative who uses a different account? Some people have commented that his comment is just whining, but Guillaurme de Fondaumiere disagrees with the bashing his interview has generated:
I'm not whining, just opening a discussion here on a subject matter that is being discussed quietly by a lot of people in the industry right now.
I never said we should ban second hand gaming. NEVER. I'm simply pointing to the fact that developers and publishers are not gaining a cent on second hand gaming and that in my humble opinion, this isn't the right model...
You only need to look at the annual reports of certain retail giants to find out that between 30 and 40% of total games software turnover comes from second hand sales today...
How have the sales trends new vs traded evolved in the past few years since traded games were introduced? Are we selling more new games today?
[Source]
People will buy new products based off looks, name, and hype. Others will buy the used because they aren't part of the crowd that "MUST" buy.
Take a look at who makes your brakes, your air filter, your oil filter, your tires, and just about any other part on the car.
I think the video game industry is actually doing pretty well in the financial dept. compared to several other mediums. btw, the heavy rain comedy skit is great
Having said that, I am worried about what he is saying about direct distribution becoming more and more prevalent because it is already happening. I have a dozen game on steam that I own, but don't really own. I can't trade them in or let a buddy borrow one. Which is why I will always opt for the actual copy of the game, but damn if steam doesn't have some sales that are too good to pass up. =p
It's bad enough they are already trying to shove multiplayer stuff in every single game now to try and entice people to buy new, lest they have to shell out another 10 bucks for some stupid online pass.
So back to my little bracketed point - what he's actually complaining about isn't the sale of preowned games, it's the fact that once a game becomes preowned he doesn't get a second (or third, or fourth) bite of the cherry when it's sold on again.
Perhaps, rather than looking at ways that you can sell on the same product over and over and constantly make money off of it, the way forward is to make the product itself so much more attractive and appealing to your consumers that they WANT to buy brand new rather than waiting for a preowned version to become available.
That is one way that the auto industry and the games retail industry are very similar - both (usually) carry second hand AND brand new products, in order to satisfy as many consumers as possible from one retail outlet. While there are car dealers who only carry brand new vehicles, it's usually the "upper" end of the market - such vehicles that can justify the dealership's existence only by selling a new vehicle occasionally.