Blockbuster busts our bottom(line)

Excuses: Been out of the country for four weeks in the last two months. And been very busy dealing with pressing business matters of the most annoying legal variety. Wish I could say more.

Anyway, I have a few quick comments referring to Greg's comment about Jamie's comment about an issue that's generated literally 100's of red hot opinions within the restricted walls of developer-only message forums. That topic is game rentals.

Generally, rentals were once viewed by developers as no big deal. That's because they acted as demos, and probably generated additional sales of the commercial game. But, in the last several years that opinion has changed, and it's tough to find a professional developer, educated on the subject, who doesn't think that game rentals are doing more harm than good to the bottom-line of overall game sales.

What's changed is that games are much shorter than they used to be. This means that games are being rented, and FINISHED within the short rental period. Who needs to buy a game they've finished? This single, simple fact, in the estimation of most developers I've seen pontificate on this subject (hundreds of them), has undoubtedly hurt overall game sales for short -- under 15 hour -- games. (Yes, for the longer games, this still isn't an issue, but the overwhelming trend is that games are getting shorter.)

Most reasoned developers, of whom I'd like to include myself, wish our rental strategy was more like the Hollywood system. They wisely release their movies to rental stores months after the theatrical release. This allows them to make hay while they can at the box office, and then get a new bump in revenues when their movies are released on DVDs and in Blockbuster.

By comparison, the game industry releases new games to store shelves AND rental stores on the same day. This is where we shoot ourselves in the foot! It would be far, far wiser to hold off on the rental release for at least two or three months, then treat the rental release as a new marketing push, giving the game an extra bump of exposure and life, exactly as Hollywood does it.

The only question is whether it's legal to disallow rental stores from buying games from Best Buy and then renting them without the copyright holder's permission. I do not know the answer. But, the game industry is now powerful, and can push for legal protection in this area if it wanted to. But first, it needs to be smart enough to pursue this path.

My guess is that we'll not see this happen soon. As an entertainment branch that knows how to maximize revenues, Hollywood is still smarter than us, and I don't see that changing anytime soon.

Comments

[Dan MacDonald]

Back in my highschool days I used to work for a video store. The movie industry has a number of fair use clauses that I'm sure could be applied to the games industry. I know this is true of lan centers already, they can't just go buy 12 copies of HalfLife, install counterstrike, and rent time on the machines. There are special licensing terms that they have to purchase from the publisher.

In the movie rental business when the new releases come out ( 6 months to a year after their theatrical release) on video, it costs the rental store anywhere between $60-$300 a piece for each video depending on the perceived demand. The store might sell the exact same movie in their displays for $19.95 but their rental copies cost them in excess of what often amounts to 5x as much.

[Anon]

Playing devil's advocate, who can blame someone for renting a game that can be finished within the rental period rather than buying it, especially when the price of the game isn't proportional to the playing time?

If you want to make an analogy to Hollywood, imagine if the studios stopped making feature-length films and only made shorts instead. I think it's reasonable to believe that people would balk at continuing to pay $9.50 for less entertainment.

[Scott Miller]

I don't blame the gamer in the least. They're merely taking advantage of the system, and it's smart for them to do so.

If Hollywood allowed movies on pay-per-view the day they also released to theaters, you'd see box office revenues fall dramatically, as people would pay just $3.95 for the PVP version and the entire family could watch it. This is basically what game rentals are allowing gamers to get away with, a very cheap way to play and finish the shorter games.

Hollywood is smart, though, and they wait several months before the PVP version is allowed -- they wisely milk the theatrical channel first. Publishers need to wake up to this and follow suit.

[brian]

scott, as I am sure you've read from the discussion groups, game companies cannot limit/prevent rentals of video games from third parties under the fair use doctrine of copyright law (see USC Title. 17, 109(b)(1)(B)(ii)). The only reason why movie companies could leverage rentals back in the 80s is because the VHS tapes themselves were priced at $80-$90 ea., making them decidedly NOT a consumer product to be bought individually. Unless game companies want to charge the public $150(!) for games, then they will have to either tolerate rentals or make longer lasting (but not dull) games.

[Chana]

My son rented Star Wars Battlefield this last weekend and finished it in 2 DAYS!

[Talon]

I think a good balance, at least in the meantime, would be for game developers to work towards longer games ... or at least ones with a bit more meat to them. I'm sure we all enjoy the odd "pick up and play" game, with simplistic gameplay and all, but I don't think this would be lost on longer titles. A great example of this, imo, are the off the wall 2D space shooters that, while featuring simplistic yet challenging gameplay, are long and difficult enough that seldom players can finish them within the rental period. Unless that is they're "hardcore" gamers.

Not to say direct the market away from the "casuals", as lets face it this industry has bewen built up since the mid-90s by them, but at least making the games a bit longer or genuinly fun (eg: Katamari Damacy) would certainly help matters I think. In the end though, it doesn't address the problem that's still in the forefront but, to be honest, the model gaming has at this point doesn't have a solution unless ... as suggested above, the price of games is increased to an impractical level. Of course, given the gradual increase in price over the years, I'm sure that isn't too far off.

[grenideer]

While the business model for movies is great, what really makes it work is that people can't buy movies immediately when they are released. When you pay for a movie in a theater, you own nothing - it is almost more of a service rather than a good. There is no way to rent this service (illegal piracy aside) from a third party store. In a way, watching a movie at a theater is like RENTING a video game, and getting the movie on DVD is like BUYING the video game.

To fully emulate hollywood, the games industry would need to rent games initially in some ethereal sense - think a Phantom game console with temporary on-demand games. A store wishing to offer this game has no recourse. Months later these games can be re-released in an 'ownable' format on disc, and possibly rented from stores. Of course, at this point the on-demand rentals could be much cheaper and kill any disc-rental market entirely.

Sure, none of this will actually happen. What people really want I guess is some law that says stores can't rent out games until they are X months old. But that'll be a hard sell considering the way the American market is built. Immediately, the best strategy for a developer to take is certainly online-dependent. Registering, expandable content, continual play, etc.

[Alan]

I just thought I'd point out this service from Best Buy:
http://www.bestbuy.com/site/olspage.jsp?id=1091099613227&skuId=6708903&type=product

I was sitting in a class I'm taking as this kid that works at a Best Buy was telling me about the program. The program really irks me. Basically, you pay $21.95, which goes up later I'm sure, and you can rent as many games as you want, whichever games you want... I was just thinking to myself, "Wow, that's a great way to keep a lot of the money away from the developers. I'm not sure I like this concept."

Anyway, thought I'd share that. I don't have a solution or suggestion... Just some beef with the entire situation.

[Walter]

Blah. Let's not get into this business of making longer games because of market forces, and not because the game itself warrants it. If people have the money to spend on games in the first place, they're going to buy games they feel are special and have something of lasting value (this was a point already well made in the comments on Jamie Fristrom's blog). The problem with the game industry right now, Western developers in particular, is that they're too entrenched in developing "thrill today, then throwaway" games. They've been cultivating a culture of game consumption that's about cheap thrills. Who cares how long or short your game is when the ideas aren't even worth revisiting in the first place?

This is a problem that's going to haunt the game industry even if you/we manage to get the rental system fixed up, because you're forgetting the all important used games sector. Does any developer actually see a dime from used game sales? I don't think so, and as long as you/we don't aim at providing higher entertainment, we're not going to have a marketplace that will 'entertain' the idea that games can be worth keeping.

[Talon]

Well flipping that coin on developers, many Japanese developers take the opposite too far. That is to say, lots of pointless mini-games that don't add much real substance (eg: raising cows in FFCC, Golf in Dark Cloud).

As for the rest, I wasn't suggesting longer for the sake of the market, but adding enough substance to make the titles worth it. Sometimes that means making the game longer, but usually it's simply making the game FUN. That's something many developers forget ... especially with the recent "GTA clone" fad of, "we'll make a BIG OPEN SPACE and put some stuff in it. Then we'll make the player go find stuff to do ... and it will be great like GTA!!!". Fun for the sake of gameplay is what is needed to fix it I think. The term "rental game" is there for a reason.

[Richard Terry]

I think one possible solution lies in the movement towards online or broadband based games. As we move towards Video or Entertainment on Demand, I think that consumers will be more willing to accept playing new games online. (I.e.downloading a new game into your console instead of going to Best Buy and purchasing a copy.) After a new game has had a good online run, it could be released to retail stores and video rental places. This method could backfire if consumers perceive that they have been "blocked" from owning the game by Digital Rights Management (DRM.) However, if game companies added value by releasing the game to the retail channel with additional content or improved gameplay, they may be able to get away with it.

[PaG]

A partial solution to this problem would be to price games at a sensible level. Right now, new games cost about twice as much as any other mass-produced entertainment (books, CDs, DVDs, going to a movie theater, TV). If you have the choice between renting a game for 5$ or buying it for 50$, with the only advantage being owning the box, most people will rent. If the games were 20$ then more people would buy them (and piracy would reduce, giving yet more sales).

"We can't sustain the industry with a 20$ price-point!" you say, "Games cost 30 millions to create". Well movies are profitable at a price-point lower than that and they cost 3 times as much to make. Sure movies are more mass-market, but you can't expect gaming to become that mass market as long as it's priced so much over the "impulse purchase" price.

Another solution to the rental problem is to develop games for PC instead of consoles, since you can't rent PC games. Of course, piracy is a larger problem on PC... It's the same problem here: if your customers want your stuff but you don't offer it to them at a reasonnable price, they'll find another way to get it.

[Brian]

Piracy is also much easier these days, easier even then in the PS1 era. With internal hard drives or installable hard drives on 2 of the 3 major consoles, People can rent and copy games ad infinitum. Longer games could actually encourage that kind of behavior. Why buy a game when you can rent it, copy it to your hard drive, and play the whole thing through at your leisure? And once the hard drive is installed, you have every reason to copy every game you can get your hands on.

It's not just the rental structure, it's also the increased ease with which data can be copied in the modern world.

On a side note, I'd argue that games are actually far longer these days than they used to be. Does anyone remember how long any non-rpg console game used to be? Try dusting off that old Nintendo or genesis and actually playing the games. You could finish most of them in an hour or three. They had to be that way because there wasn't a save function. When I was a kid I used to rent stacks of games, play through them all over a weekend with my friends, and then return them. Even into the PS1/Saturn era, there were lots of games you could finish in one sitting. Nowadays, any game you buy is going to be 10-20 hours of play time, or more.

[Mr. Nosuch]

Look at the bright side of rentals. At least crappy games are guaranteed a certain amount of sales BECAUSE of rental shops buying stock. After all, if each Blockbuster buys 1 or 2 copies...

Rest assured, trying to use laws to protect a sagging business model is the recourse of the desparate. Innovate, don't legislate. It's the business model, silly.

Rentals are big part of console gaming because it fills an important need in the market at the right price. Trying to stop rentals doesn't mean more sales. People are very choosy with their gaming dollars, and it's hugely simplistic to think that rentals are eating sales. I can think of lots of games that I've rented that I would never have bought.

Even trying to restrict rentals will only alienate customers and increase the motivation for piracy. What's next, trying to restrict the used games market as well?

In any case, shipping CD/DVDs is old schools. Games as service is the way it's going, especially as broadband continues to increase its penetration.

It drives me bonkers that the day a game is released that I have to run around to buy a box containing a DVD, knowing that the whole business model exists only for DRM. The game is just data, why can't I buy/rent it NOW, from my console/PC and download the darn thing?

Single player games with little replay value don't warrant $50 for 10-15 hours of diversion. I am much more inclined to buy games that have a social online compenent (and my purchase tends to lead to additional purchases among my gaming buddies.) Game designers who take advantage of making their games social experiences, even in small ways, will find people willing to pay for the experience, and you can take advantage of viral marketing of friends selling friends.

I know I've personally been responsible for getting 4 XBox consoles, with Xbox live, and 16-20 games sold. Because I want to have fun with my friends, who are scattered around the country.

[Scott Miller]

-- "Trying to stop rentals doesn't mean more sales."

Among developers I've seen talk about this subject, the general opinion is not to stop rentals, but to reasonably delay their availability for two to three months. This solution makes total sense to me.

Perhaps a future solution will be to release a game only via Steam, and not release a boxed retail version for several months.

Developers cannot be expected to simply make games longer, because for many game types, the creation of new, highly detailed content requires enormous effort, money and time. Each level in a game like Doom 3, for example, most likely takes 3-5 man-months.

Something needs to be done because developers and publishers are both losing money on many games under the current system, and this will only hurt the entire industry if it continues.

[Jake]

A million points to PaG and Walter. Making play once, throw away (or sell back to Gamestop for $10) games and charging $50 a pop (or, as the Internet has recently been speculating, $60!) isn't going to motivate anyone to buy instead of rent. Trying to stop the bleeding by twisting the arm of rental stores or something seems like the dysfunctional solution you come up with when you're in denial of, or have no interest in fixing the primary problem.

[Talon]

http://www.wallstreetwebcasting.com/webcast/dr25/elbo/

Considering the topic at hand, this is worth a listen. EB talks about used games for at least 10 minutes.

[Mike Hobbs]

I'm not sure that Hollywood is the pinnacle example that we should be comparing the game industry against.
What about books? Instead of video rentals, libraries will let you take home and read a book for free! Most books can be read from cover to cover in the time allowed. Granted, for a popular recent release, there will be a long queue of people waiting to borrow it. However, if libraries were in the business of charging a rental fee, I'm sure that they would make sure to have extra copies on hand for everyone who wants to rent a book.
How do book publishers survive with this kind of competition? What would make a person purchase a book instead of simply borrowing it from the library? One reason, as noted above, is limited supply of popular books. People may not want to wait for the lastest Stephen King release. Another reason why someone would by a book is because it fills in their bookshelves nicely.
Maybe game publishers can stipulate the number of copies a rental store can have in stock. Or, they can create boxes or some other type of packaging that looks nice on display. Provide posters, trading cards, artistic cloth maps, or whatever else in the retail copies.

On the flip side, book publishing doesn't have nearly the production costs of game publishing, so maybe Hollywood is the closest analogy. Let's take the analogy further.
When a consumer goes to a theatrical release, at the end of the movie, the consumer owns nothing more than a ticket stub. Therefore, it can be considered a service. Some service models for gaming include online play, video arcades, and to a lesser extent, downloadable demos. Perhaps these can be used more effectively to whet consumers appitite.
For anyone who has seen a movie in the theater, what would compel you to then rent the movie? Usually it's because one of your friends or family hasn't seen it yet. Or, you liked it well enough to watch it again, but not so much to pay full theater price again. Taking these motivations to the game industry, maybe they should allow installs on multiple computers on the same home LAN, so that friends and family can play together. Likewise, replayability will induce gamers to re-rent the same game.
What, then, motivates people to buy a movie instead of rent it? Some people like to have a complete library, so that they can have their own movies on demand. Others simply receive them as christmas gifts from people who don't know what else to buy them. For myself, I buy movies only if they're good enough that I can watch over and over again. (My movie collection is rather small as a result.) The game industry can capture these same motivations by allowing games to be played on demand (PC games can take 30 minutes to install), making it easier for grandma to find a game you like, and making games much more replayable.

[Michael]

Perhaps an alternate solution to regulating and blocking the rental of games would be to move into a collector's market, wherein people were encouraged to keep their purchases in pristine shape and on display. Possibly the game industry could take a page from Todd McFarlane characters.

[Talon]

An interesting solution Michael, but I don't think you're factoring in just wh at videogames are. By that I mean, Todd McFarlane's collectibles aren't things that are to be played with and such; they're statues essentially. You don't pick up statues a lot. They're to be left alone.

Videogame on the other hand are handled often, the discs are eventually scratched, the manuals ware due to use and the pages form creases. The list goes on.

[ace`]

isnt there kind of a similar system in place already? valve (and id i believe) have EULAs that prohibit commercial usage and valve's answer to that is their cyber-cafe program. how far of a stretch would this be to include EULAs with console games for example or is it just a matter of legality/enforcement?

[Anon]

The law does not exist to help you turn a profit at the expense of other businesses, manipulating it to do so can only get you bad press.

I think the leaf that should be taken from the film industry is directors, the director puts his arse on the line and if he makes a lemon then it suddenly becomes much harder for him to get funding.

[Jake]

I've noticed recently that there are some "for rental only" DVDs in rental stores. I have no clue what the difference is, but has something like that been brought up for games? Of course Hollywood Video would never go for it because they double double dip by selling off their Previously Viewed rental games in the GameCrazy section of their store (does Blockbuster have something similar now too?) but, yeah...

[Anon]

If you do a short game that has no multiplayer part and no editor for custom missions/levels/maps/scenarios than it shouldn't cost more than the rental. If you have one of that features or even both you don't need to waste a thought on this issue. That's my opinion.

[Anon]

I think used games are just as big a threat. You can buy and sell used videogames on ebay and basically end up playing videogames for free if you're half-way smart about it.

[Craig]

Has anyone thought about turning this on its head? The problem isn't that people are renting games - it's that you're not being paid for their rentals. I could definitely see a seperate EULA specifically for rental copies which gives you a percentage, or even a flat monthly fee.

Of course, most of the industry would have to decide to do it simultaneously, and have to get a certain EULA-breaking court judgement thrown out... but I think that's the solution, not restricting game release, not making it illegal.

After all, you want to make money, right?

[Aaron]

Hmmm... I'm wondering if there is another way to turn this around and make it a positive for everyone. Maybe it would be possible to have a sort of extended demo provided for rentals.

Here's an example. If I had rented Final Fantasy 7 from Blockbuster and the rental copy allowed me to play for a reasonable length of time, say until Aeris was killed, and then ended, I would have been at the game store buying that game in under fifteen minutes, and the game store is thirty minutes from my house.

So these light rental versions would be available to the rental store for a reduced price because they are designed to drive sales. So Blockbuster gets to cut the price of the rental slightly as well (or they get to increase their profit margin slightly). The player still gets a good deal for their rental price, even playing seven hours of a game for $4 is better than the hour and a half you get out of a movie.

Plus, if the player truly enjoys the game, the rental store generally would have full versions of the games for sale, and could offer a discount to players who had rented the game. So lets say I rent the game and love it, I come back to Blockbuster and buy the game, but I get $2 off because I had rented it from their store.

Now, I know that when compared to the movie model this doesn't make much sense, I would hate to rent a movie from the store only to find out that at a critical moment the movie cut out and recommended I buy the DVD. But with that being said, I think that a lot of players wouldn't even care, the key would be giving the player enough bang for their rental buck.

In addition, this could potentially open up a new market within the game industry, as you could have smaller companies whose sole purpose is to deliver highly enjoyable rental versions of products. It would be much like the companies in the movie industry who specialize in just trimming movies down into action packed previews.

Since I'm not really an industry insider there are probably dozens of holes in this plan that I haven't thought of, but even still, at first glance it seems like it might be something worth trying.

[AdamW]

to anon - people have been buying second hand everything for hundreds of years and there's still a perfectly viable market for first-hand goods. The second hand market is generally less reliable in terms of the quality of the product you get and the support you get for it; it's much harder to locate a specific product on the second-hand than on the first-hand market; and buying second-hand generally involves more effort (buying something on eBay involves more effort and more insecurity than walking into Best Buy and snagging it off the shelf). You're also very unlikely to be able to get the Hot New Thing second hand. Nope, the second hand market is mostly complementary to the first-hand market and there's no way you can (or should, in any decent social theory) be able to "crack down" on selling things second hand. I agree with Scott - rentals are far more directly in competition with the new game market. (Though I also agree with other posters that this being the case says something about the quality and replayability of the games in question; I wouldn't be a very happy customer if the solution to the "this game can be finished and forgotten in two days, so why buy it?" problem was "let's block game rentals!")

[AdamW]

aaron, I think that's a great idea. One problem is that it's a lot of work for companies (I read a post yesterday mourning th decline of the playable demo, which has mostly happened for cost reasons, and I think this would be even more expensive than simply ripping out Stage 1 and putting it on the cover of PC Game Slave Montly), and the other problem I can see is that it relies on your game having good enough player engagement and a good enough plot that playing the bit of the game you don't get in rental is worth it to the player. This was always one problem for shareware games - "hey, I played episode 1, looks like episode 2 would be more of the same with green graphics instead, why don't I just go grab episode 1 of this *other* game for free instead of paying for your episode 2?" It would certainly work for the Final Fantasy games, as you described, because they're fantastic games with engaging storylines and you really want to know what happens next. Would it work for Generic Dumbass Blockbuster Action Game? Maybe not so well. Even if I enjoy Dumbass Blockbuster Action Game well enough, if it looks like stages 6-10 will just be the same as stage 1-5 with a few different enemies, that's probably not going to be enough for me to go out and buy it after I play stage 1-5 on rental. I'll just go rent Competitor #1's Bigger, Shinier Dumbass Blockbuster Action Game instead.

of course, if your idea is widely adopted and encourages better games with more depth of plot and more engagement of the player, it'll be brilliant and you'll deserve medals. :)

[Aaron]

Well Adam, I can pretty much assure you that if my idea works I won't be getting any medals! If I'm lucky maybe someone will send me a free copy of their game. I agree that there is definitely the potential for the more action based games to falter in this plan. And yes, it would be more expensive to produce. But of course as with any business if the return on investment is big enough almost anything can happen. I mean, if someone had told me six or seven years ago that I would be getting a free DVD with my box of cereal I might have laughed. I'd have kept laughing right up until I sat down in front of my television eating Corn Pops and watching my free copy of "The Mask".

I think the business model could work especially well with dumbass action games, actually. Fighting games could simply limit the number of playable characters, while still allowing the computer to choose the ones the player doesn't have access to. Then the fighting fans would want to get it just so they could beat the hell out of their friends with different moves. The same would apply to racing games and cars, or tank games and tanks, jet games and jets. As with so many things the idea would mostly hinge on clever marketing. Blockbuster could offer an "Action Packed Party" deal, for example, where the player rents three of the action games that are all four player games (as described above) for about the same price as a single full game rental. The key here is to start warming people up to the idea of thinking of these shortened (almost demo) versions of the games as actually being worth MORE than a full version rental.

It may sound a little unethical, but the truth is that if at the end of the day the customer has a great time with the games and feels like their money was well spent, then it's all good. A nice example is the restaurant beside where I work. It's a pretty expensive restaurant. In fact, I have only eaten there once, for a staff Christmas party.

This restaurant sells shots of Glenfiddich 1937 Scotch Whiskey for $1200 each. When you are done with the shot glass the restaurant lets you put your business card into it and then it is prominently displayed in a display case with the bottle. Now, to me, someone who likes whiskey now and then but doesn't have over a grand to blow, it seems kind of ridiculous. But the customer feels like they are not only buying something rare and special, but are leaving a tiny legacy in that restaurant. It's all about knowing your target market and tailoring the experience to suit them.

So what is the target market at a rental store? Hardcore gamers? Occasionally, but mostly the target market will be people just looking for a quick fix, or parents who want to keep their kids busy while they try to watch their movie. Basically the rental market is much more wide-open than the clientele at your local EB Games. The key would be to play to that diversity. How? That's the part I'm not sure about. I'll sleep on it, it's getting late... And I've already hogged way too much of this page with my random babbling. =)

[Nils von Barth]

Law reference:In case anyone's still reading: as far as I can read relevant copyright law, it says: "you have the right to resell music and computer programs ("first sale"); you do not have the right to rent music or computer programs (109.b.1.A), except hardware and video games (109.b.1.B)." Maybe there is some deep or international principle at work here, but my reading is that the music industry has power and the video game industry doesn't, so the law bans the rentals of CDs but not video games. It seems clear that such a law could be changed, and likely should, but apparently Nintendo and Sega tried and failed to get it changed.

Likewise, most DVDs/videos have an FBI warning that claims that public exposition w/o licensing is illegal.

Change the law: The obvious and optimal solution is for the law to say "you don't have permission to rent video games, unless licensed by the copyright holder" -- then developers or publishers can decide on what terms to license rentals (Scott would probably love this: it could give developers more leverage "Well, if you promote our game a lot at retail/give us a good cut, maybe we'll let you distribute the rentals too...").

Assume rentals: sell for $$$: The opposite solution is to accept it, and reverse the release order: sell short, single-play games for $500 or $5000 each at first (so they'll only be rented, and the developers/publishers make money b/c Blockbuster has to pay so much to buy it), then later drop the price to $20 or whatever so those who want can buy it. This is effectively "using the video stores as your theatres". I'm completely serious: if a game can reasonably be finished in 10 hours and the developer/publishers really think it's worth $20 or $50, and you can't restrict rentals legally, sell it for $2000: Blockbuster can rent it out for $50/2 day rental and make money in 3 months. [If you argue: "Who would pay $50 for a 2 day rental?", ask instead: "Who would pay $50 for a 10-hour game?"]

This has rather unusual consequences, but it seems the only solution if you can't restrict rentals (but can restrict copying; if you can't restrict copying, but can restrict modification, you can have advertising; if you can't restrict copying or modification, the only solution that I know is the Street Performer Protocol, namely "get paid before you release").

Long games or very replayable ones can continue to be sold as usual, and rentals can serve their "demoing" function.

[Gavan Woolery]

Nils response seems legitimate (although his pricing models might need some adjustment). Anyway, here is another idea: a tax could be imposed by publishers for rentals. So, say for every $3 rental sold by a video store, publishers take a dollar, or some such similar model (the tax could be adjusted as necessary). Another solution to this problem is that people should be making longer games (putting millions into a 10 hour long game is ridiculous...this isn't movie production), or better yet, games with lots of replay value (which Blizzard, for instance, does a good job of). Just a thought...

[nicola]

does anybosy here ectually know of any website with specific laws regulating the games console industry???these laws have to have been passed in the last 5-10 years!!! please help me

[Patrick]

I live in the Philippines, and piracy are very rampant here because there are no game rental stores. So people buy pirated games because:

1. Game price is too expensive for average earner.
2. It's very hard to get access to original games. Pirated games are more accessible.
3. They want to avoid the risk of buying crappy games.

The best way to fight piracy is to lower the price of videogames. It's the only way to reach mass market. If there are videogame rental stores here, renting original games, piracy will get lower, because people will get use to using original copies and forget about accessing pirated copies.

So Rental stores in a way help fight off piracy. Publishers and developers should also have profit sharing depending on how many people actually rented their games instead of requiring Rental store to pay a one time high cost to the publishers for letting them rent their game. This will be more fair to both parties. Why would a rental store pay a publisher for a one time licensing to rent if nobody ever rented their games because probably it got a bad review from the press.

In order for the game industry to flourish, publishers and developers should work hand in hand together with the rental/pre-played store instead of thinking how to eliminate each other. What should we be more concern about is to fight pirates the commits piracy

[Patrick]

To prove my point the videogames / video movies rental store help in combatting piracy, An example in the Philippines, once there was a large video movies retail chain here in the Philippines. When rampant dvd pirated movies penetrated our country, the video movie (VHS/DVD) rental retail chain went bankrupt and closed their different stores one by one. Philippines movie used to releases local movies more than 30 times a year, but now that trend went down and now was able to release local movies around 15 times a year only. This cost a lot of jobs in local movie industry.

This proves that we rather have a rental store rather than piracy ruling the market.

[Patrick]

Rental store helps promote your industry, without the cost of too much advertising. You just need to know how to tap revenues from Rental stores. Don't treat them as a threat but as partners.

[Patrick]

The large video movie retail chain I was referring that closed down because of piracy, is actually a rental movie chain. just to make it clear.

[Patrick]

Let's just concentrate the battle against pirated copies instead of rental stores that use and promote use of original copies.

[Patrick]

Consider this, you are lucky in the US, because you have access to original copies through rental stores, here in the Philippines most people has more access or has to settle to pirated copies than original ones. And most people can't afford the high cost of imported games from the US if you consider the minimum wage here. You are still lucky.

[Patrick]

People just need a justification for the price you give them on the product you are selling. Price your games properly, maybe that's one way to battle piracy. If a company is going to profit $20 on each product but would only sell 100 copies, why not profit only $1 and sell 1,000,000 copies. you make more money, you eliminate piracy, you reach mass market.

[J.]

You're talking more about the problem of undeveloped countries whose citizens don't have enough disposable income to buy much entertainment. I'm pretty sure most Western-based entertainment producers expect people from your country to pirate everything. Nothing against you personally, though.

The only fair way to include third-world nations in a market segment would be to lower the price of every game for everyone on the planet, and that's not going to happen. You might as well say that we could end world hunger if the price of grain was a penny a hundredweight, everywhere. While that's true, that would involve breaking at least one economy.

[Patrick]

here's an example, in western countries when you watch a movie in a theater it cost around $10, here in the Philippines it's only $2 and that's in a legal way. You're standard of living in western countries are much higher than ours, so when Hollywood export their movies here they lower the price. It's what you call balance, adapting to the market. They lower the price to adapt to our living standard. Most videogames are pirated in China, they just import them here. What I'm saying if publishers and developers do the same to most 3rd world countries like what Hollywood does, then maybe half of piracy will disappear. Face it, a lot of people turn to piracy because they can't afford. Most of them are produce in countries where minimum wage is low, or when publishers ignors them entirely.

[Patrick]

Getting back to the rental subject, why don't publishers use rental store like what Hollywood do with theaters. Rental store can rent out the games first for maybe 2 months , some profit goes to the publisher. after a 2 month run of rental, publishers can release a retail version. like what they do in movies. just an idea. thanks.

[AdamW]

I caught something interesting on John Romero's website last night - apparently, id were smart enough to sell Chinese pirates 'rights' to copy Doom for $1 per copy. id makes a bit of money, pirates feel legitimate. Every time I read something about id, it's something smart. :)

[Scott Miller]

Developer friend Brian Hook posts a Gamasutra article on the subject.

[J.]

Hook's article reminded me of Oliver Stone bashing DVDs recently, saying that they turned movies "into supermarket items."

http://us.imdb.com/news/sb/2004-12-01#film5

[AdamW]

Sheesh, Oliver Stone's a bit off, isn't he? You can walk into stores all over the world that sell a good deal more than 5,000 CDs, but the good ones still seem to sell perfectly well. (Along with the naff, but then, naff movies do well at the box office).

Besides, didn't he get the memo? Given the reviews of his last effort, he'd better HOPE people start buying more bad movies :)

[jen]

bad movies are oh so good >:^)

[Greg]

Under UK Copyright Law computer and video games are protected with the same rights as literature (as of 1996 I think), which includes prohibiting lending for financial gain (renting) video games without permission from the producer. However no one is presently enforcing this, which is why Blockbusters and websites like www.swapgame.com are (probably) operating illegally - though they (probably) don't even realise since they (probably) simply ported the concept direct from the US to here without realising the differences in the law.

That said, until the gaming industry gets its shit together it's pretty unenforceable anyway, so you only have yourselves to blame in the UK. You *could* be collecting royalties for rental.

Take movies as an example. They have a collective licensing body that you can go to, say "my business is going to do this - how much is the license?", pay your bills and trade safely and legally. No one gets hurt and the movie producers get their money for the rental of their titles, which is fair enough.

There is no such body for the gaming industry as yet, thus making it pretty damned near impossible to get yourself a license to rent, even though technically you need one. In fact at a certain point Nintendo were just completely denying rental rights in the UK, but they got in trouble with an anti-competition committee for that. Were there such a body then you guys would be able to immediately collect payments for game rentals in the UK (and probably the whole of the EU - not a small market!) - you would also be able to lobby the US government with the money generated and hold up the EU as an example of effective copyright control. And rental companies would be happy because they'd be able to trade legally, easily.

So in short, pull your fingers out and get your heads together! You're losing revenue and you don't need to!

[PaG]

Couldn't a "for personnal use only" clause be included in game licenses? Wouldn't that prevent rental stores from renting your game? If so, then you'd only have to sell them special versions with a broader license (for a bigger price or a cut of each rental of course).