Another Patent from Sony Concerning Used/Rented/Borrowed Games

[RC Cola]

This one appears to be a little better than the last one, although, depending on how it is implemented, is still just as undesirable from a consumer standpoint:
http://appft1.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PG01&p=1&u=/netahtml/PTO/srchnum.html&r=1&f=G&l=50&s1=%2220060069752%22.PGNR.&OS=DN/20060069752&RS=DN/20060069752

For an explanation on the patent, read this (I didn't even read the link I gave above):
http://www.neogaf.com/index.php?option=com_content&task=view&id=29&Itemid=32

For even more clarification and/or interpretations, here's the forum thread at NeoGAF concerning that article:
http://www.neogaf.com/forum/showthread.php?t=118192
(Panajev2001a and maybe a few other members like TTP seem to understand the patent and its possible usage best).

I'd try to explain it, but I don't think I fully understand it myself. In any case, it seems like there could be a shift in how we buy and play games in the future if Sony (and possibly others) use the business model mentioned in this patent (could be as early as this year, when the PS3 launches...though services like XBLA and Steam kind of do so already). Seems like it could really help out developers, but the restrictions placed on consumers could be a bit too much to really warrant such a move (at least in the present).

Of course, much like other patents, there's nothing actually saying that any of this WILL happen, at least so soon (and in the exact implementation mentioned in the patent). I think Sony patented the tech for the PS3 controller back in the 90's or so IIRC.

BTW, I'm not sure exactly why Pana used the word entitlements in that article (as well as the forums). I don't believe that the patent uses that word, but if that is what Sony is calling this, then it seems almost for certain that the PS3 will be using at least some of the ideas in this patent (see past PowerPoint slides where "Entitlement Management" was one of the features of the PS3, listed under "Commerce").

Just another possible thing we might find out more about at TGS I guess.

[JunkyardDwg]

I'll admit there are some interesting parts to it that aren't too bad...but on a whole and depending on the way it's implemented it sounds like crap. Just looks like Sony's trying to pad their wallets by screwing used game retailers and consumers alike.

[RC Cola]

I don't mind them screwing used game retailers or retailers that offer rentals. Unless they started giving a percentage of their profits to developers, I don't really care if they are screwed (might even want them out of the way sometime down the line). Of course, depending on how you interpret the patent, it might be possible for this model to be used while not even really hurting the used game and rental businesses (might even help).

I'm more concerned about how the consumer might end up being screwed under this model. It might be possible that things could turn out to be even better than they are now, but it seems MUCH more likely that things would turn out to be worse...possibly much worse (this is a big corporation implementing this...and one that has screwed over consumers before in other copyright-related issues).

Even if this doesn't happen exactly as stated, I'm pretty sure things might start heading down a similar path (already has to some degree). It is an interesting topic to read about and discuss IMO.

[DaDakota]

I'll admit there are some interesting parts to it that aren't too bad...but on a whole and depending on the way it's implemented it sounds like crap. Just looks like Sony's trying to pad their wallets by screwing used game retailers and consumers alike.

The Used game market is hurting developers BIG time, if you go into EB games, they make 90% of their profit from used games, which cuts back on shelf space considerably....and thus they buy fewer games, and consumers get less NEW choices.

It was not a big deal when people were doing it at a garage sale, but if we can get some of the pie of that massive market, you bet we are gonna go for it.

:D

DD

[KePoW]

The Used game market is hurting developers BIG time, if you go into EB games, they make 90% of their profit from used games


let me ask you a hypothetical question then... why isn't gamestop/EB making a lot of money from new games? is it because most new games suck these days or what?

I mean if there was good profit to be had for gamestop/EB in new games, they would obviously stock mostly those right?

[RC Cola]

I don't think it is so much that they don't get much money from new games. It is more about the profit margins from used games being MUCH higher than new games. Think about how much EB/GS give you for used games (not very much, at least compared to say eBay), and then they turn around and sell the games for $5-$10 less than the new price. Some games probably switch hands from the stores to consumers several times, and the stores might end up getting at least $5-$10 profit every time.

The more used games they sell, the more profit they end up making from what I could tell. Especially if people take in-store credit, but don't ever end up using it.

[mogrod]

I didn't really read any of those links, but it's a bunch to do about nothing if they are going after used game stores. I predict they will all be extinct within 10 years.

The process has already started with XBOX Live and the Marketplace they have now with the 360 where you can download games. Eventually, though it might be in the next generation of consoles, technology and internet speeds will be substantially better paving the way to downloading games will be the ONLY way to get new titles. Just my thinking anyway.

[DaDakota]

let me ask you a hypothetical question then... why isn't gamestop/EB making a lot of money from new games? is it because most new games suck these days or what?

I mean if there was good profit to be had for gamestop/EB in new games, they would obviously stock mostly those right?

Because it costs EB games say $40 for a game they can sell for $45, whereas the used games they buy for $5 and sell for $25.

See any difference?

:D

DD

[JunkyardDwg]

The Used game market is hurting developers BIG time, if you go into EB games, they make 90% of their profit from used games, which cuts back on shelf space considerably....and thus they buy fewer games, and consumers get less NEW choices.

It was not a big deal when people were doing it at a garage sale, but if we can get some of the pie of that massive market, you bet we are gonna go for it.

:D

DD

let me ask you a hypothetical question then... why isn't gamestop/EB making a lot of money from new games? is it because most new games suck these days or what?

I mean if there was good profit to be had for gamestop/EB in new games, they would obviously stock mostly those right?[QUOTE]

Well if developers want a piece of it w/o screwing the consumers then that's cool. I just want to be able to buy used games for cheap in whatever form that may be (through retailers or through a system like this). And cheap would be the optimal word. Half my games I "discovered" used as I wouldn't have known of them or wouldn't consider buying them new...but after buying them used and loving them I'm hooked to the franchise and would consider purchasing "new" sequels.

And I think partly why places like Gamestop don't make money off new games is because smart gamers/buyers know that you can get better deals elsewhere. The past couple of new games I've gotten I bought at Fry's at a $10-15 discount.




I think the thing about this system that sticks out in my mind is the borrowing and gift-giving of games. Why couldn't I give my game to a friend as a gift or let them borrow it for free. And for that matter, if I wanted to play my game on someone else's console, theoretically I would have to pay to do it. Course they may not go that drastic a route but still.

[DaDakota]

Ultimately what the publishers/developers would like to happen is that games are NEVER sold used, but the price would drop over time.

Kind of like when a movie hits the dollar theater.......maybe after a year or two it could be released on disk as a Classic or something.

It is a dangerous line though, as you don't want to piss off too many gamers, it would open up the playing field for an unknown to step into the void and say....nah...our games are going to sell the traditional way...and then Sony and MS would lose tons of marketshare, or at least COULD lose tons.

DD

[RC Cola]

Well if developers want a piece of it w/o screwing the consumers then that's cool. I just want to be able to buy used games for cheap in whatever form that may be (through retailers or through a system like this). And cheap would be the optimal word. Half my games I "discovered" used as I wouldn't have known of them or wouldn't consider buying them new...but after buying them used and loving them I'm hooked to the franchise and would consider purchasing "new" sequels.
Ideally, this would still be possible, although you might find yourself getting your games from other individuals rather than say Gamestop, EB, etc. (though it might still be possible for them to sell used games). Basically, you work out a deal with someone else to "transfer" the authorization to play the game from his/her console to your console. I'm not sure, given the wording of the patent (or the feasibility of things), if that means that the transaction must be done through the network, or if the only thing that needs to be done through the network is the transfer of rights (basically cash vs credit card/prepaid cards). There seems to be a transfer charge that one or both of you might have to pay, although that can be factored into the transaction I suppose (price for used game + transfer charge = final price); there might not even be a transfer charge, although I imagine that there will be in order to maintain this service, as well as to give developers a small piece of the pie.

Strangely enough, I suppose the seller of said game could still actually play the game on his/her console in this example, although it would be running from the HDD in "demo" mode...whatever that means. Also, he/she will get some points for "sharing" the game, which would be used for something on the network (themes, pictures, microtransactions, etc.). Kind of like a Collector's edition versus the regular verion I guess (people who want the extra stuff will pay for it; people who just want the game will pay less).

Of course, if developers are getting more money per game sold (and more games sold), they might be more willing to lower game prices more so than they have in the past (especially since there would be an increase in revenue thanks to in-game advertising and microtransactions). Basically what DaDakota said.

There was also the idea that there might be an incentive to buy games new. I don't think this was addressed in the patent or the article, but I guess it would be possible for the system and network to know if the game you're playing has never been played before (IOW, it is new). Perhaps they could persuade people to buy games new by either giving them more bonus points, or perhaps giving you free themes or whatever (basically microtransactions for free).

Actually, with all the data that could be received with this model, there are a number of things that could happen (sell your copy of MGS4 a few weeks prior to MGS5, and you'll get free maps for MGS5...or something).


I think the thing about this system that sticks out in my mind is the borrowing and gift-giving of games. Why couldn't I give my game to a friend as a gift or let them borrow it for free. And for that matter, if I wanted to play my game on someone else's console, theoretically I would have to pay to do it. Course they may not go that drastic a route but still.
Or if your console breaks (or if you just happen to have 2 consoles), playing the same game on 2 systems might prove to be a hassle (at the very least). It is this type of stuff I don't like.

I'm not sure if it would work out, but I don't see why they couldn't pair up the User ID and the Disc IDs. Perhaps you might have to authorize which systems you will end up using (doesn't Itunes do this, or something like it?), but it seems like it would be possible to play one game on multiple systems (assuming you're the one doing the playing...lending out a game might still be a problem, unless maybe you give them your User ID too...yeah, smart idea). I guess if you wanted to give someone your game, there might be a special option for that, where basically the game is sold for $0 (maybe a transfer charge, although I guess the charge could be a % of the transaction, in which case, no transfer charge here). In that case though, I don't think you should end up getting the network points for sharing since you could just keep on "sharing" and get a bunch of points (unless, maybe, there was 1-transfer limit between 2 people for getting points). This brings up the point that, considering how much relies on this system working, there better not be any bugs whatsoever.


Note that everything in this post is based on my current understanding of this model (and basically the best case scenario too). As I said, I'm not completely sure on how everything works, so I might have missed something somewhere. I'm basically rehashing things that were mentioned in the article or the forum thread, so I strongly suggest you guys read through it all, despite how much has already been said (340+ posts currently in the thread so far).

[SamCassell]

Just about every other good in the world can be sold used, even those traditionally considered intellectual property - books, music, etc. Games have been sold on the resale market for 20 years, and now they want to change it? :confused: The new game market is a huge industry, they're not losing money by any means.

Maybe, just maybe, if they didn't charge so much for new games, people would be less likely to purchase on the resale market.

[RC Cola]

Might make a better post about this later (watching UT game right now), but here's something.

As far as I know, it is VERY difficult for a developer to make a profit on a game, or even break even. Maybe DaDakota can comment on this. IIRC, I thought I saw some figures that 90% of game revenues came from 10% of the software (GTA, Madden, Halo, etc., while the average game got squat). Any kind of extra revenue they can get (be it from advertising, microtransactions, or even a restructuring of how used games are sold) can really make a difference in determining a game's success (or even a developer's success).

Charging less for a game is certainly something I'd like to see done in the industry, but it is extremely risky (much like a move restricting the usage of used games). Selling a game for less might end up hurting you a lot more than it might end up helping you (especially depending on how the royalties will end up working...not sure if/how they would be affected).

BTW, I should note that despite all I've said about developers missing out on sales of used games and people renting games, probably 90% of the games I play are either used or rented. So as a consumer/gamer, I definitely understand the appeal (price is what it all comes down to basically).

edit: As for why they're doing this now (or sometime soon anyway), I'd guess that's because the technology is there to do so. This requires a connection to the Internet (or the PS network basically), and that's something that was only started in the last 5 years or so (and even then, only a small percentage take their consoles online). If they could have done so during the NES/SNES/PS1/etc. days, they probably would have.

I don't really know enough about the other goods (books, movies, music) to really explain the differences between selling those products used versus selling games used. I'd have to know things like where the majority of their profits are made and things like that.

[Invisible Fan]

Ideally, developers should leapfrog retail stores and sell their games online through a subscription service. They could form a consortium and build a giant catalogue website, or try Valve's method. If people like holding a DVD, offer free shipping. Building upon the consortium, they could use that group to combat online piracy....

Sony thinks that we don't own the games we buy, so I'm not surprised with their schemes. The catch is that people are used to holding physical proof of what they purchase, so they can't push it as strong as they like without alienating their customers. It's like those Divx players that were shipped out 6-7 years ago where you had to pay for a movie, and then pay again everytime you wanted to watch it. Greed is good to a point....

[Rokkit]

I think you potentially slash the amount of video game buyers as a whole if you cripple the used and rental business.

[RC Cola]

Something that is, at the very least, related to this:
http://www.neogaf.com/forum/showthread.php?t=118700
http://www.neogaf.com/forum/showpost.php?p=4273922&postcount=1
This could be how Sony starts the move over to the model mentioned previously.