Silicon Knights’ Denis Dyack: Used Game Sales ‘Cannibalizes Industry’

Published 3 years ago by

Silicon Knights Logo

Have you heard of Project Ten Dollar? Even if the term isn’t familiar, its implementation certainly is for most console gamers. Most triple-A console releases, including all Electronic Arts games (SSX, Mass Effect 3, etc.), the latest Sony titles (Unhcarted 3, Twisted Metal), the latest THQ games (Saints Row: The Third), the latest Warner Bros. Interactive games (Mortal Kombat, Batman: Arkham City) all include the controversial $10 Online Pass as a way to profit from used game sales.

From a consumer standpoint, used games bring affordable prices to older games but from a developer standpoint – at least, according to Silicon Knights head Denis Dyack – used games are “cannibalizing the industry.”

In chatting with GamesIndustry, Dyack discussed the topic of used games and its effect on the industry. The Silicon Knights head reiterates his desire for cloud-gaming and digital content as a way to combat used games and generate continuous revenue streams. In short, he believes used games will destroy the industry.

He explains that decades ago, game makers would continue to earn money over the long-run from games, because even as they age, players would buy into them, earning the company what he refers to as “tail” profit. He explains that nowadays, games have to earn their money in the first three months before they vanish.

“From a consumer side, [in the last few years] we started seeing used games really come into fruition, and I believe that has caused quite a problem. I would argue that used games actually increase the cost of games.”

“I would argue, and I’ve said this before, that used games are cannibalizing the industry. If developers and publishers don’t see revenue from that, it’s not a matter of hey ‘we’re trying to increase the price of games to consumers, and we want more,’ we’re just trying to survive as an industry. If used games continue the way that they are, it’s going to cannibalize, there’s not going to be an industry. People won’t make those kinds of games. So I think that’s inflated the price of games, and I think that prices would have come down if there was a longer tail, but there isn’t.”

What Dyack doesn’t address is how used games can bring in players who otherwise wouldn’t buy their products, players who may then be inclined to purchase sequels, expansions or DLC. There’s also no mention of re-releases, whether through downloadable services mentioned below, HD collections or as we’re seeing a lot of lately, on iOS devices (see: Baldur’s Gate, Grand Theft Auto, etc.).

He also doesn’t mention that games need to be innovative or of high quality (see: his own company’s terrible X-Men: Destiny), or that money from traded in games can go towards new releases, something GameStop is quick to point out in defense:

“Remember that used video games have a residual value. Remember that GameStop generates $1.2 billion of trade credits around the world with our used games model.”

Dyack may eventually get his way regardless. Steam has become the pinnacle of digital content delivery for PC games and there’s a growing interest in digital services on the consoles, with Microsoft just recently increasing the achievements cap on XBLA titles due to their increasing size.

OnLive is cloud-gaming at its best for the current generation and if certain rumors are to be believed, both the Xbox 720 and PS4 (“Orbis”?) may not support used games.

While X-Men: Destiny was a big fat failure, and Too Human has Silicon Knights continuing their legal battle against Epic Games over the use of the Unreal 3 engine, they are working on a next-gen game for what they describe as their most popular IP, so don’t be surprised if we eventually hear word on a next-gen Eternal Darkess. Just don’t buy it used.

Follow Rob on Twitter @rob_keyes.

Source: GamesIndustry International