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Home News Quantic Dream Loses $10 Million in Heavy Rain Second-Hand Sales

GAMING NEWS

Quantic Dream Loses $10 Million in Heavy Rain Second-Hand Sales

Posted on Tuesday, September 13 @ 16:32:08 Eastern by


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]
Related Games:   Heavy Rain
Tags:   Quantic Dream, Heavy Rain


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Comments
  • ReinhardtBII
    ReinhardtBII
    Joined: Oct 2007
    Posted: Sep 13th, 2011 at 5:43 pm
    So, what's the answer Gui? Renewable game licenses? Game registration, a la the DMV?
    0 0
  • the_original_xy
    the_original_xy
    Joined: Feb 2011
    Posted: Sep 13th, 2011 at 5:46 pm
    that's euros, not dollars. euros are worth more than dollars. 1 euro = 1.3679 dollars.
    0 0
  • tinymhg
    tinymhg
    Joined: Jun 2011
    Posted: Sep 14th, 2011 at 3:48 am
    Using your 1 Euro = 1.3679 Dollars conversion factor the range is $6,839,500 to $13,679,000. $10,000,000 fits quite comfortably in that range.
    0 0
  • Imnickson
    Imnickson
    Joined: Jul 2006
    Posted: Sep 13th, 2011 at 5:53 pm
    I understand what he means and where he is coming from but I also have an issue. No company in any industry, selling any product, makes any profit from second hand sales. I would say the used car industry is a fair comparison. Used car sales has been dramatically increasing over the past couple years and no car manufacturer is making any money off those sales either.
    0 3
  • StickyGreenGamer
    StickyGreenGamer
    Joined: Jul 2011
    Posted: Sep 13th, 2011 at 6:17 pm
    Took the words right out of my mouth. Every day tons and tons of used cars are bought and sold, with out the original manufacturer seeing a cent. The auto industry and the game industry are very similar.

    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.
    0 0
  • sliverstorm
    sliverstorm
    Joined: Jun 2007
    Posted: Sep 13th, 2011 at 7:40 pm
    The auto industry and the game industry are definitely not similar. In fact, the used video game industry is one of the most unique secondhand markets in existence, and Gamestop is making VERY real profits off of its used game sales. I'm pretty sure the point I have to make is way too big to fit into this text box, so I am going to write an article just for you and Imnickson because the issue of used games is just that crazy important.
    3 0
  • tinymhg
    tinymhg
    Joined: Jun 2011
    Posted: Sep 14th, 2011 at 4:10 am
    Well how about a better analogy instead of the car industry how about the book publishing industry. Books and games are both intellectual properties, both are sold used and no one, not the author or the publisher, sees any royalties from the sales. J. K. Rowlings isn’t complaining about used book sales, and have you ever checked out a book at a library? Games are not a sacred cow which must not be defiled by being traded on the secondhand market. Right now Amazom.com is selling it for $27.98 brand new not for the $59.99 price when it first came out, do you hear him whining about that? No, me either.
    0 2
  • StickyGreenGamer
    StickyGreenGamer
    Joined: Jul 2011
    Posted: Sep 14th, 2011 at 7:31 am
    Thank you Tiny! Piece for piece, no, they aren't similar. But as far as general business, the VG industry seems to be the only group I see complaining about secondhand profits besides the porn industry.
    0 0
  • warmaster670
    warmaster670
    Joined: Jun 2007
    Posted: Sep 13th, 2011 at 6:29 pm
    So what your saying, is that when someone buys a used card, they dont have to purchase replacement parts? or get labour done on it? those companies make money off of things like this, the game industry has to actually put money out for that stuff.
    1 0
  • StickyGreenGamer
    StickyGreenGamer
    Joined: Jul 2011
    Posted: Sep 13th, 2011 at 7:31 pm
    Unless it is a new car, odds are you are going to an independent shop to get the work done. And unless your driving a BMW, most replacement parts are made by different companies than the manufacturer.

    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.
    0 1
  • tinymhg
    tinymhg
    Joined: Jun 2011
    Posted: Sep 14th, 2011 at 4:11 am
    Used cars have DLC?
    0 0
  • drathbone
    drathbone
    Joined: May 2011
    Posted: Sep 13th, 2011 at 9:26 pm
    The thing about the video game industry is that there are other methods for companies to make this money and prevent (or reduce) second hand sales. In any business model you want to maximize profit and reduce overhead. You can't digitally distribute a car or offer exclusive content the way the video game industry can. I don't blame them for finding ways to get this coin that retailers are taking away from them. It sucks for consumers, but alas is the nature of the beast.
    0 0
  • GuerillaMatzilla
    GuerillaMatzilla
    Joined: May 2011
    Posted: Sep 13th, 2011 at 7:54 pm
    I didn't buy this game, I checked it out at the library, and i think it's pretty cool that our libraries have started ordering games. I think it's even more fitting for this type of story based game to be there. The whole focus of that game was the story, it wasn't action/fantasy sequences, so shouldn't they be more appreciative of all the people going out and essentially "reading" their work?

    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
    0 0
  • leavesofgrass611
    leavesofgrass611
    Joined: Aug 2011
    Posted: Sep 13th, 2011 at 7:59 pm
    Why, exactly, should they see any more money from second-hand games? Almost everything gets sold second-hand sooner or later. Furniture, automobiles(as been said), CDs, appliances, computers. Pawn shops, flea markets, eBay, amazon, craigslist, numerous outlets exist solely for the purpose of selling used goods. The manufacturers never see another cent beyond what they made originally for the brand new product. That's just the way the world works.
    0 1
  • C_nate
    C_nate
    Joined: Apr 2009
    Posted: Sep 13th, 2011 at 10:01 pm
    First, I agree with the others who are talking about the second hand market. If I buy a game and sell it to a guy at work later on or trade it in at gamestop who turns around and makes a profit off it, it is foolish for these game companies to think they are entitled to a piece of that revenue.

    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.
    0 0
  • willmacleod
    willmacleod
    Joined: Jan 2007
    Posted: Sep 14th, 2011 at 7:37 am
    Let's not forget pirated copies. Heavy Rain was one of the first games that hit download distributions when the Jailbreak went public.
    0 0
  • tinymhg
    tinymhg
    Joined: Jun 2011
    Posted: Sep 14th, 2011 at 11:39 am
    But that’s not what he’s complaining about, sure piracy is theft and is thus wrong. I have a great deal of sympathy for their piracy problems, but I don’t want to hear his whining about used game sales.
    0 1
  • slowdiver
    slowdiver
    Joined: Nov 2008
    Posted: Sep 14th, 2011 at 8:22 am
    The thing I don't get about his complaints (well, actually I DO, more on that in a moment), is where, exactly does he believe that all these second hand/preowned games come from in the first place? That's right, from someone, somewhere at some time having to buy the game brand new.

    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.
    0 0
  • slowdiver
    slowdiver
    Joined: Nov 2008
    Posted: Sep 14th, 2011 at 8:29 am
    Oh and an interesting question for Gui - you say that you lost "5-10 million in profit due to second hand gaming"? So how much profit did you actually make out of "first hand" sales? You know, the copies of your game sold on day or shortly after release, at full or near full price. Those copies that you MUST have sold in order for them to reappear in the "preowned" section of all the local games stores.

    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.
    0 0
  • felipe63
    felipe63
    Joined: Sep 2011
    Posted: Sep 14th, 2011 at 2:22 pm
    In our family, 3 people (my son, wife and myself), each with different psn accounts played the same, purchased new, copy of Heavy Rain. I know of at least 2 other households that did the same. Tell me Gui, are we supposed to buy a copy for each family member?
    0 0
  • OdiousLupous
    OdiousLupous
    Joined: Jul 2011
    Posted: Sep 14th, 2011 at 6:26 pm
    Have game developers rebuy the games from the original purchasers...idk like friggin getting a refund on bottles and cans. Give them coupons, rebates, w/e for doing it and outdo the second hand stores. Crazy idea but the game developers have nothing but complaints and what little ideas they do come up with seem to punish the people who bought their games first hand.
    0 2

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