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Why gaming retail practices are destroying the industry

Luis Santos and Jubei Raziel sit and discuss the politics of the gaming industry.
Luis Santos and Jubei Raziel sit and discuss the politics of the gaming industry.Photographed by Jubei Raziel

Ever remember back to how excited you used to get after seeing a preview about an upcoming game you’ve been anxiously waiting for? Can you recall the long anticipation as you closely followed all the rumors and interviews about the game right up to its release? If you were a kid, it had you on your best behavior just to make sure that your parents were buttered up before begging them to buy you the game. If you were older you made sure that you saved enough money and time to be in line to get it on the very first day.

$59.99. How can you forget? It’s been the retail price of every new video game for as long as you can think back. And after you bought the game you ran home staring at the packaging the whole way there. Then it was the glorious unboxing followed by the fastest manual read ever before carefully and slowly inserting the fresh new game into the console or computer. And when you began to play nothing else in the world mattered. The countless hours of challenges, enjoyment, frustration and accomplishment filled your days until you beat the game. Everything about it was memorable and perhaps even epic and you shared it with all your friends.

Today things are a bit different. The gaming industry has evolved into a multi billion dollar annual business. Gaming consoles and computers are incredibly advanced along with the games that are produced by tons of talented developers and companies from around the world. During this gaming evolution the implementation of downloadable content was eventually introduced. Initially it was brilliant because up until then there was no way to fix bugs within games and update them actively. The game you originally purchased was always the final product. There was never a thought to adding or fixing a current game. You simply had to wait for the sequel. Thinking back now, who knew then that DLC was going to change the gaming industry forever.

In Q3 2013, according to the NPD Group, consumers spent about 1.75 billion dollars on gaming DLC. This is more than physical games software (which came in around 1.3 billion dollars) and more than used game sales (which came in about 436 million dollars). On the surface it may appear that consumers are just simply purchasing games if you examiner closer there’s another growing trend within the sudden surge of DLC.

DLC has quickly become a way to bring game add-ons, unique content and expand the game beyond what was originally created. Nowadays it has blown into a multi billion dollar business on it’s own. In 2013, the United States game sales reached 15.39 billion dollars. 7.22 billion of that was DLC followed by new physical games and then used games and rentals. Why are people buying so much more DLC than actual games? Well if you dismiss actual full game purchases, the bulk of that money comes from consumers buying pre-orders, game add-ons, season packs and exclusive content on top of their original game purchase.

But why are consumers buying DLC on top of a purchased game? Do games require DLC now in order to sell? How did DLC become more profitable than games? The answer to these questions may be alarming because it reveals questionable industry practices that seem to be fueled by non-other but greed. More importantly, these issues need to be in the forefront of consumer awareness and interest.
A scary reality is that DLC may very well be killing the gaming industry. But let’s take a closer look on why.

Pre-orders:
The popularity of pre-orders has skyrocketed. By technically locking-in purchases before the game even launches lends a hand on early profits and sales for companies. In order to increase pre-order sales, developers and companies make them more attractive by offering exclusive content and/or merchandise for those who pre-order a game.
This is a clever business strategy because if the game receives poor reviews or is not well received by players, sales are not initially harmed. Pre-orders are such a big business now, that “editions” of games are also announced along with tiered prices months before the release. Consumers are marketed to purchase the most expensive edition as early as possible with terminology such as “Limited Edition”, “Guarantee your copy today” etc.
It has essentially become more than the game as figurines, memorabilia, books, DVDs, DLC and other content are factored into the game purchase which rakes in more revenue for developers.

Season Passes:
The availability of season passes for games now are everywhere. The only thing more impressive is the gimmick of it all. This practice clearly aims at squeezing more money out of consumers in advance for additional content in which there are no refunds, quality assurance, timeline or guarantees and that all sales are final. Further more, gamers do not even know what they are purchasing until said DLC content is actually pushed out.
To make season passes attractive, developers announce future individual DLC for the game and the price for each DLC “package” versus purchasing all future DLC as a bundle at a discounted price. In some occasions developers may provide exclusive content and early availability to DLC to those who buy season passes for the game.

DLC:
When DLC becomes available for a game, consumers have the option of purchasing additional content for it. Game expansions and add-ons are common in most cases but in other cases something more disturbing has been growing. Locked on-disc content that are sold at additional costs. This presents an alarming legal issue. If a customer buys a product such as a game, they are purchasing the entire disc hence everything on it. At what point do developers legally get away with selling games that contain locked content to an unaware buyer and then exploit them for more money so the owner may have full access to it? It’s disgusting.

Premium Demo:
There is a more problematic scenario that video game consumers must be aware of, and that is the “Premium Demo” model. Where developers will allow you to try out their new title in advanced for a substantial price. Take Konami’s approach when attempting to pilot this model, with their most treasured IP, the Metal Gear Solid franchise.

On March 18, 2014 Konami released the highly anticipated Metal Gear Solid V: Ground Zeroes title. By many accounts in the media, the game can be completed within an hour. The title retails for $30 and aside from the core experience, it has filler material to try and justify its pricing. According to the developer, it is a promise to what awaits, but did it have to come at a retail price? No, as the majority of game publishers allow their consumers to try the game via free demo download or closed beta sessions. This is an attack on the consumer and it is being done in a very Metal Gear Solid kind of way, where deception and misinformation is king. If Konami’s latest test-run is a rousing success, than you can expect to pay a premium for virtually nothing in return.

While DLC is necessary, great to have and provides additional re-play value to a game it makes one wonder about a few issues that needs to be addressed.
Has DLC allowed gaming developers to produce incomplete or mediocre games in order to bank on the profitability of DLC? Do consumers feel that DLC should be included in their original purchase? Is the paradigm for the standard retail price for games outdated?

DLC was never a bad thing but how it’s implemented can be. Consumers need to be more aware of these new industry practices and more active about them whether it’s voicing their opinion, interacting with developers/companies via social media or effectively not purchasing DLC or games entirely.
Either way consumers need to get more involved because it starts and ends with them. Companies and developers can only get away with what consumers let them.

Where does the buck stop with pre-orders, season passes and DLC? Where are the regulations, quality control, laws, consumer rights and accountability? Consumers need to be protected but also educated on such matters. Times and technology have changed but not the way game sales are made. The $59.99 standard retail price days should have been over years ago but has remained for reasons unknown. I mean let’s face it. Most games are not worth that price and should not be priced at that standard.

The truth is, there shouldn’t be a pricing standard. Games should cost whatever the companies and developers feel they should cost without extorting consumers through questionable sales tactics. If they feel their game is worth $75 or $100 dollars then charge that. Don’t charge $60 and then bleed consumers’ wallet for the next two years through any passes or DLC so that you can make your investment back and/or additional profit.
If the game is worth it people will buy it. It’s true. For an example, look at the sneaker industry. Top quality and limited edition sneakers are priced way higher than an average pair. And you know what? People buy them. Why? Because they want it and feel it’s worth it. EBay is loaded with sneakers that range in the hundreds of dollars value, more than the retail price and people still buy them. Keep in mind videogames are a fraction of the cost of one of these pairs.

There isn’t a flat pricing rate for anything else in life (except maybe movie tickets in which I also feel should be varied). The bottom line is that the paradigm for video game sales is old and needs to change. Will this ever happen? It needs to because there’s a DLC crisis going on and it’s bad for gamers as well as for business. Consumers are sick and tired of being ripped off. Companies should focus on making completed quality products and price them accordingly. They don’t have to resort to gimmick sales tactics to meet their margins and consumers don’t need to be scammed in the process. Keep it simple and straightforward and everybody wins.

This article was co-authored by novelist and photographer, Jubei Raziel. You can view all of Mr. Raziel’s offerings by visiting his website at www.jubeiraziel.com