Quake 4 Dowloaded Almost 1 000 000 Times

[ZenArcade]

Publishers do get revenue from rentals, don't they?

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It depends.

1. Publisher just sells a whole bunch of games to say blockbuster sometimes at a reduced wholesale price with no return policy and no share in rental revenues.

2. Publisher sells games (perhaps at very discounted wholesale or cost price or no price) and participates in revenue sharing sometimes through a 3rd party tracking system (eg Rentrak).

3. Rental chain acquires games through normal distribution channels, pays no license /rental fees according to particular countries "first sale" laws.

4. Publisher imposes rental license agreements on top of above. Not valid in all countries.

[gandhi]

It's not. If you look at the used bins in GAME, it's mostly recent games. Even in Computer Exchange, the stock for this-gen consoles is mostly new releases.

Well it hasn't been in any game I've been to..

..and the new games that you can buy used are only very slightly cheaper.

[ZenArcade]

Ok, firstly, the game industry is bigger than hollywood.

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The games industry is only bigger than hollywood IF

1. Sales of consoles are included with sales of games.

2. Those combined numbers are compared to ONLY box office receipts.

[Wickedkitten]

I suspect that the "resale" part means that you can't resell the game as a new product. I am not aware of any law that forbids anyone from selling something second hand when they have finished with it.

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Well in that case GAME breaks the law big time considering how many games they reshrinkwrap and stick back up on the shelves as new.

[Switchblade Honey]

It depends.

1. Publisher just sells a whole bunch of games to say blockbuster sometimes at a reduced wholesale price with no return policy and no share in rental revenues.

2. Publisher sells games (perhaps at very discounted wholesale or cost price or no price) and participates in revenue sharing sometimes through a 3rd party tracking system (eg Rentrak).

3. Rental chain acquires games through normal distribution channels, pays no license /rental fees according to particular countries "first sale" laws.

4. Publisher imposes rental license agreements on top of above. Not valid in all countries.

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Hmmm, you've made me realise that Hollywood is in a better position than the games industry to negotiate this stuff, because DVDs are made available to rent before they're out on sale. Or at least they used to be - not sure if that's true any more.

[BeeJay]

The games industry is only bigger than hollywood IF

1. Sales of consoles are included with sales of games.

2. Those combined numbers are compared to ONLY box office receipts.

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Ok, fine. I had the old "read it somewhere reliable, therefore it must be law" syndrome.

My dad gets this syndrome loads with "the bloke down the road". It's obviously hereditary

[metallicfrodo]

1) http://slate.msn.com/id/2123286/

"Indeed, DVDs alone now provide 59 percent of the feature film revenues of the studios,"

2) That's a strange way to look at it. You've funded the production by the time the film is made - both the cinema revenues and the DVD revenues are contributing to your profits. The DVD revenues are greater.

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1) I'm reading that differently to you. I read that as, 59 percent of total feature film revenue is generated from DVD sales. So that is sales of every DVD that that studio is producing and not 59 percent of revenue per movie. Basically we could be talking about revenue from sales of back catalogue DVDs (which may number in the hundreds of titles) to theatrical releases that year (which may only number in the tens).

To be honest it's not overly clear.

2) My point was that to make of profit you have to cover the production cost, my question was whether what you were commenting on was revenue or profit. From the link you have provided you were talking about revenue, although I have pointed out my issues on that.

EDIT: What is interesting about the figures posted in that article is that while the percentage take from the box office is significantly lower than it was a 20 years ago the amount the studios are actually making at the box office is actually more (even with inflation adjustments in place). So the DVD release is almost like free money (assuming average cost of making a movie is has not increased significantly)

[Fry Crayola]

My Old Post about Preowned being the same as Piracy:

The ideal solution would be for preowned games sold through shops (as opposed to eBay and hand-to-hand) to come under regulations whereby a fraction of the price goes towards the industry rather than straight into Game's pockets. The problem is trying to legislate it properly. I'd like to see something happen along these lines though.

And a new one about copy protection only inconveniencing the legitimate users:

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You're right on almost all fronts. Except your Amiga example. This was a case of copy protection of a simple kind - the disc doesn't get copied without cracking it. The most basic form of protection, designed simply to stop the mass market from simply copying for their friends. There's nothing wrong with that. Most people won't go to any great length to copy a game - if it fails to work, they'll give up.

The pricing issue is a different argument.

[Fry Crayola]

2. Hollywood has multiple revenue streams - cinema, DVDs, tie-ins etc. Developers have multiple revenue streams - selling games, licensing the engine, Internet cafe licensing, making military simulation versions of their games.

A lot of developers use other engines. They have nothing to license there. Internet cafe licensing doesn't apply to single player titles and I doubt we're ever going to see a military simulation of Football Manager. One might say you're clutching at straws with that lot. A game makes the vast majority of its profit on sales in the first few months.

(Oh yeah, and let's not forget convenience - what if it was quicker and more convenient to get a legit copy than to spend a day or two downloading from unreliable torrents?)

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It is. I honestly doubt you spend days at a time without venturing into civilization of some kind. You take a short detour on your travels to a shop and you purchase a sealed copy.

[Fry Crayola]

Now, you're right to point out that Hollywood has multiple revenue streams. But as I've already pointed out so does the games industry. The costs of making big films are much bigger than the biggest games budgets. And if the games industry is more reliant on retail than Hollywood is, then whose fault is that?

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It's a constraint of the medium. What do you want to do, pay to go into a room and play a game for two hours?

[Switchblade Honey]

The ideal solution would be for preowned games sold through shops (as opposed to eBay and hand-to-hand) to come under regulations whereby a fraction of the price goes towards the industry rather than straight into Game's pockets. The problem is trying to legislate it properly. I'd like to see something happen along these lines though.

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If you set something like that up, shops would have to decrease the trade-in value of games. Which means people would buy fewer new games, as it's more of a risk. And people would be more motivated to sell stuff on eBay.

If the publishers were really that pissed off by second-hand games sales, then they could prevent it. Imagine if Microsoft had said to GAME "We'll only let HMV and Virgin sell Halo 2 unless you stop selling second hand Halo".

[Fry Crayola]

Games vs movies in general is a much, much smaller market. Game rental could be handled a lot better. How about I rent a game for three days, and if I want to keep it, I can keep the disc and have the rental fee knocked off the (reduced) price?

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Because it cost the rental store a damn sight more than the cost of a regular game. He has to pay in accordance with the likely rental numbers of the title, so rentals feed back into the industry.

If you're the first guy to rent and you keep the disc, paying £20 for the priviledge, where's the benefit for the rental store? He's down a serious chunk of cash.

A lot of rental stores will happily deduct the rental cost from their retail versions they stock if you decide to buy.

[Switchblade Honey]

It's a constraint of the medium. What do you want to do, pay to go into a room and play a game for two hours?

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1. Have you heard of this thing called Internet cafés?

2. All the other revenue streams, apart from theatrical release, that are open to Hollywood are also open to games. Spin-off books/lunchboxes, technology licensing, etc. etc.

[metallicfrodo]

HMV and Virgin don't offer a used DVD selection, but GAME sells used games. Why is that? Because videogames are overpriced.

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Sorry to jump back to a point you made earlier but...

HMV and Virgin don't sell pre-owned games even though they sell games and GAME sell pre-owned DVDs as well as games so I don't see what this point proves?

[The Liberal Elite]

HMV do!

[metallicfrodo]

2. All the other revenue streams, apart from theatrical release, that are open to Hollywood are also open to games. Spin-off books/lunchboxes, technology licensing, etc. etc.

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Regardless of whether or not the theatrical release is the main source of revenue now, it is still big enough that it can cover the entire cost of production of the movie.

For the games industry they need the sales of the game to cover production costs at the very least.

EDIT: Additionally from the site you linked too, the movie studios makes twice as much from Free TV as they do from the box office release. This is certainly a revenue channel that games don't have open to them.

[Strafe]

As an aside, HMV do a pre-owned games and trade in service now. Well, HMV upper Oxford Street certainly do, anyway.

[The Liberal Elite]

Anyway, it's a moot point. with second hand games, the licence to play the game, as well as the physical copy moves from ONE person to another.

on the internet, that one copy is transferred to as many people who have a broadband connection, or, in this case, ONE MILLION (and rising) people.

There are many other companies in teh software industry other than games manufacturers that have no problem whatsoever with people selling /transferring their licence of software package X, and it doesn't harm them. in fact, it's mentioned in their EULA, and their products can cost many times that of your average videogame.

In short, bringing up the fact that the second hand game industry harms teh industry AS MUCH (or i'm sure I've read somewhere here, IF NOT MORE) than piracy is an uber lame argument.

[oli]

It's mainly an online game as I can tell - what's the point of downloading if you can't take it online?

[Fry Crayola]

If you set something like that up, shops would have to decrease the trade-in value of games. Which means people would buy fewer new games, as it's more of a risk. And people would be more motivated to sell stuff on eBay.

Perhaps. Though most people trading in don't seem to want the hassle of eBay. They want £10 off their next title, and they want it now.

Perhaps the same legislation would have to control trade-in value of games, and shops can only to accept undamaged content (i.e. they can't say the game's a little damaged and mark the value down a fiver).

If the publishers were really that pissed off by second-hand games sales, then they could prevent it. Imagine if Microsoft had said to GAME "We'll only let HMV and Virgin sell Halo 2 unless you stop selling second hand Halo".

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Indeed they could. They obviously don't see it as a problem. But it would certainly be good for the industry if the money did find its way back.

[Switchblade Honey]

A lot of developers use other engines. They have nothing to license there. Internet cafe licensing doesn't apply to single player titles and I doubt we're ever going to see a military simulation of Football Manager. One might say you're clutching at straws with that lot.

Not all of those are open to every game or every developer, no. But the most successful developers do make use of them.

A game makes the vast majority of its profit on sales in the first few months.

Most games do, but not Half Life 2, Quake and Quake III (where licensing the engine made more money than retail sales), Operation Flashpoint/Full Spectrum Warrior, Laser Squad Nemesis... Maybe pinning everything on a couple of months of retail sales is a bad idea.

It is. I honestly doubt you spend days at a time without venturing into civilization of some kind. You take a short detour on your travels to a shop and you purchase a sealed copy.

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Ok, but on the other hand, you can buy a legit copy of Rag Doll Kung Fu even faster than that.

[metallicfrodo]

Here is where the revenue from movie studios comes from related to different distribution channels in 2004 (in billions of dollars)

Theater 7.4

Video/DVD 20.9

Pay-TV 4

TV, Free 12.6

Total 44.7

Theater Share (%) 16.8

source

Now I would imagine a resonable percentage of the money from free TV and video/DVD is on back catelogue stuff, which is another area that games miss out on.

EDIT: for source

[Fry Crayola]

1. Have you heard of this thing called Internet cafés?

Yes, but I have never heard of people paying to play offline games. Online games are a different kettle of fish (they use the cafe's access point in replacement for their own poorer/lack of one).

2. All the other revenue streams, apart from theatrical release, that are open to Hollywood are also open to games. Spin-off books/lunchboxes, technology licensing, etc. etc.

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Technology licensing isn't an option if you don't have your own technology. Which applies to a lot of developers. But you're right on the other stuff and Pokemon shows it works. Loads of other games have merchandise - check out the dolls, books etc. out there.

Yet these marketing streams are only open as fads. A coffee cup with Jack Wade on it isn't going to sell much. And a game doesn't appeal to as broad an audience as a movie. Trying though the industry is, it can't compete.

And it's irrelevant as a game isn't overpriced anyhow.

[tiedtiger]

2. All the other revenue streams, apart from theatrical release, that are open to Hollywood are also open to games. Spin-off books/lunchboxes, technology licensing, etc. etc.

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Lunchboxes, technology licensing and so on are only marginal secondary revenues. The major secondary rev for film is television in its various forms, and DVD.

[Fry Crayola]

Not all of those are open to every game or every developer, no. But the most successful developers do make use of them.

Most games do, but not Half Life 2, Quake and Quake III (where licensing the engine made more money than retail sales), Operation Flashpoint/Full Spectrum Warrior, Laser Squad Nemesis... Maybe pinning everything on a couple of months of retail sales is a bad idea.

Ok, but on the other hand, you can buy a legit copy of Rag Doll Kung Fu even faster than that.

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Pinning everything on the first months is indeed a bad idea, and it's a product of the industries neglect of its own history together with the sharply increasing technological standards. An old game just doesn't hold the same appeal as an old movie. As we reach a plateau and move to online distribution, this will hopefully change.

[rev-happy performance]

And in this country you can trade games in 24 hours if you don't like them for whatever reason.

But like I said, that's not the dicussion.

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That said, it's the exception rather than the rule, most shops will NOT take games back, or even trade, e.g. when you break the seal.

[Switchblade Honey]

Lunchboxes, technology licensing and so on are only marginal secondary revenues. The major secondary rev for film is television in its various forms, and DVD.

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I'm 90% sure iD make as much money from technology licensing as they do from games sales. I realise they're the exception, but more developers could work to avoid becoming dependent on retail.

For example, why has no-one spun off a driving game engine into a decent, realistic driving test simulator? I think there's a couple of PC ones, but they're shit. Bundle it with a wheel and pedals for £60 - for the price of 4 driving lessons, you can practice as much as you want! Plus, the graphics aren't that important, and people will always want the latest one.

[Devilfish]

That said, it's the exception rather than the rule, most shops will NOT take games back, or even trade, e.g. when you break the seal.

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ASDA wont even take back PS2 games anymore. Last time i tried it took 3 days of going back to get a refund... You can take back a fridge that is full of shit and get a full refund!

[tiedtiger]

Here is where the revenue from movie studios comes from related to different distribution channels in 2004 (in billions of dollars)

Theater  7.4

Video/DVD 20.9

Pay-TV  4

TV, Free 12.6

Total  44.7

Theater Share (%)  16.8

source

Now I would imagine a resonable percentage of the money from free TV and video/DVD is on back catelogue stuff, which is another area that games miss out on.

EDIT: for source

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The other thing that is often forgotten about comparing movie industry to game industry sizes is that usually we compare the worldwide games industry to Hollywood (which makes the games industry look about half the size of the movie industry). In actual fact, Hollywood consists of only 35% or so of the worldwide film industry.

The games industry's a fucking runt compared to film.

[tiedtiger]

I'm 90% sure iD make as much money from technology licensing as they do from games sales. I realise they're the exception, but more developers could work to avoid becoming dependent on retail.

For example, why has no-one spun off a driving game engine into a decent, realistic driving test simulator? I think there's a couple of PC ones, but they're shit. Bundle it with a wheel and pedals for £60 - for the price of 4 driving lessons, you can practice as much as you want! Plus, the graphics aren't that important, and people will always want the latest one.

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Because there are companies that provide custom-designed driving simulators to that market already.