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Editor argues GameStop's used games practices hurt industry

Given the staggering quality and quantities of video games released throughout the second half of 2007, it should surprise few that games retailer GameStop reported one of its most successful financial results in its history.

Sales results for the nine-week holiday period ending January 5, 2008 were $2.3 billion, a 34.7 percent increase from the prior year holiday period of $1.7 billion.

“Driven by robust domestic and international sales, GameStop achieved the most successful holiday season results ever,” said R. Richard Fontaine, GameStop chairman and CEO. “Video game software sales grew by 45%, while the next generation installed base is now triple last year's base and a very positive leading indicator for future sales growth.”

The top five video games sold by GameStop throughout the holiday period were Guitar Hero III, Call of Duty 4, Assassin’s Creed, Rock Band and Super Mario Galaxy.

“Video gaming is redefining itself and attracting more players than ever as demonstrated by the growing number of Wii parties and Guitar Hero fests held not only at home, but also on college campuses, cruise ships and any place people are having fun,” added Fontaine.

According to Next-Gen editor Colin Campbell, used games account for up to one-third of GameStop’s sales and almost half of profits. Unlike new game sales from big box retailers, Campbell argues that used game dealing done by stores such as GameStop are harmful to the video game industry, costing it over $1 billion annually.

“All that money goes to GameStop, which doesn’t make games. GameStop opens stores in malls, sticks up shelving, hires inexpensive, unskilled local youth and sells product,” Campbell wrote. “Worse, the used games business restrains the market by keeping new game prices high and by depriving the publishers of investment income. In the long-term, it’s not such a great deal for consumers.”



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Which side of the fence?
By jamdunc on 1/15/2008 7:20:35 PM , Rating: 5
The problem I see here is that I can see both sides of the argument and I kind of agree with both.

Yes second-hand games do hurt the industry and without money going in, games don't get developed, well except the yearly cash-ins like Fifa etc. And how often do games actually make a profit? Isn't it actually the few games that enable the many to be made?

But on the other hand, imagine if the car companies complained about second-hand cars stating that they got none of that income so it wouldn't be allowed. I know that is apples and oranges but the principle is the same. If we aren't allowed to sell games second-hand, then does that mean we truly never own them?

Hmm, this is a tough one to decide which side of the fence to be on. I think for now I'll continue to sit on it and monitor both sides.




RE: Which side of the fence?
By kamel5547 on 1/15/2008 7:42:05 PM , Rating: 5
There are actually a couple of very good apples to apples comparisons, used CD's and used DVD's. Both are similar in vein.

That being said, I see no problem with reselling of products of this type versus any other product. Sure it deprives the originator of revenue. But why does that matter? A lot of people use the resell they get to buy a new game, and a lot of people wait for cheaper prices to buy games they otherwise wouldn't buy.

Basically the question is, is the game industry better off with no Gamestop (i.e. Best Buy and internet only) or with Gamestop. Without used games I would venture that Gamestop would shut down. This is one of the few things that Gamestop offers that its competitors do not and it accounts for a large amount of profit. Without Gamestop the entire industry would be at the mercy of large retailers being willing to offer shelf space (from a position of strength). One need only look at the wonders of CD's at Best Buy to see where that would lead.


RE: Which side of the fence?
By Inkjammer on 1/15/2008 9:30:13 PM , Rating: 2
Yeah, but when have you gone into a CD or DVD store and had the clerk try to sway you away from buying used copies over the new? Gamestop tries to get you to buy the used copy over the new if/when they can.


RE: Which side of the fence?
By GaryJohnson on 1/15/2008 11:55:44 PM , Rating: 2
The stores that buy used CDs & DVDs from customers like gamestop buys games will try to sell you the used ones. They sell the stuff for way more than they pay for it.

Actually, when I go to gamestop, they're usually trying to get me to pre-order stuff.


RE: Which side of the fence?
By kristof007 on 1/16/2008 3:20:15 AM , Rating: 2
I also agree with both sides. Here is my 2 cents though:

I am disgusted with the fact on how much GameStop makes on the used games. They "buy" your game back for a disgusting low price and then you see other used games for $20-$30. I have one particular example when I bought Battlefield Vietnam for $40 (so it has been out for a little while since the price went down $10). I really did not like the fact that it was multiplayer only so I decided to try and sell it back as a used game (since it was opened I could not return it). They offered around $12.

So I don't know. Used games are nice but how much they make off of it just unfair imho.


RE: Which side of the fence?
By Clauzii on 1/16/2008 5:40:08 AM , Rating: 2
Battlefield Vietnam only multiplayer? What have I been playing then? Battlefield Congo??


RE: Which side of the fence?
By BMFPitt on 1/16/2008 8:35:55 AM , Rating: 4
It's not GameStop's fault that people are willing to sell low and buy high. I often see games there that can be had new for cheaper across the street at Best Buy or Target while on sale (and certainly online or on eBay.)

The point is that people will buy a used game for $5 less than MSRP and sell it for 25%. Blame the ignorant customers for driving up the prices - or be glad they're buying there so the eBay prices stay lower.


RE: Which side of the fence?
By AntDX316 on 1/17/2008 4:32:51 PM , Rating: 2
i buy from ebgames through their website so alot of people r probably doing the same because they offer Bonuses when u preorder

sort of what best buy does which is why best buy and ebgames r profiting alot


RE: Which side of the fence?
By Oregonian2 on 1/16/2008 1:45:33 PM , Rating: 2
Not only is their margins larger, but more than likely new stock can be returned to the manufacturer if any goes unsold, while obviously the used stock they'd be stuck with.

The primary force against having them sell used games would probably be eBay who'd be the alternative seller.


RE: Which side of the fence?
By Polynikes on 1/16/2008 12:32:02 PM , Rating: 2
I imagine that's because the longer a used game sits on the shelf, the less likely it is that they'll sell it. Do you buy many PS2 games anymore? The older a game is, the less likely it is that someone will want to buy it.


RE: Which side of the fence?
By Chris Peredun on 1/16/2008 2:43:27 PM , Rating: 2
quote:
Do you buy many PS2 games anymore?


I don't own a 40GB PS3 - so yes, I do.

Since there's a good number of sequels coming out soon on PS3 (Resident Evil 5, Metal Gear Solid 4, Gran Turismo 5, God of War 3) people who hear about the upcoming releases might want to play the earlier ones for the backstory/nostalgia's sake.


RE: Which side of the fence?
By bighairycamel on 1/15/2008 11:40:31 PM , Rating: 2
Not to mention how many games are easily available and still produced to purchase? The beauty of used games/cd/movie sales is that you can easily and readily find stuff that is too old to get new. Maybe its new to you, or maybe just for nostalgia, but it makes life easier than searching the stores or the internet for a game that might not even be sold new anymore.


RE: Which side of the fence?
By on 1/16/2008 11:15:21 AM , Rating: 2
"That being said, I see no problem with reselling of products of this type versus any other product. Sure it deprives the originator of revenue. But why does that matter? A lot of people use the resell they get to buy a new game, and a lot of people wait for cheaper prices to buy games they otherwise wouldn't buy."

Exactly. My advice to the gaming industry: get used to it, it's a free market dynamic. Used CDs, DVDs, books, games, automobiles, etc.; what are we supposed to do with them when we no longer want to keep them? The industry's answer would be to burn them or put them into landfills.


RE: Which side of the fence?
By InternetGeek on 1/15/2008 7:54:56 PM , Rating: 3
You won't see car makers complaining about used cars sales because those cars still get serviced. Which is why Toyota and alikes were smart to cash in on that segment.

CDs, DVDs and Games have no such market segment for the makers. If you resell a CD you bank the money for yourself and the new user can rip and resell. A studio doesn't actually see any money out of that.


RE: Which side of the fence?
By christojojo on 1/15/2008 8:36:05 PM , Rating: 5
Actually with downloadable content there is a chance that used games can generate profit for the developers.

As far as the car analogy goes, the repair point is moot. Cars have been around for over 100 years. The concept of used cars cutting into the market really wasn't a concern then. The makers were happy for sales and not crying over "potential" lost sales. Which,IMO a crying man's game "boo hoo, I $10 Million but I would have made $10.5 if it wasn't for those meddling kids."


RE: Which side of the fence?
By InternetGeek on 1/15/2008 8:52:16 PM , Rating: 2
I agree with the downloadable content part on games. But it does require additional invesment from the Game maker. Just not as much of an invesment but its still money coming in. Game maker, though, makes more money if you buy a new copy and then buy the additionals when compared if you bought the used games and then got the additionals (even if new/downloaded).

100 years ago there weren't enough cars on the streets for used cars to even be a threat. There's a valid economic reason for which some auto makers decided to jump into the used cars segment. Sales of new cars may go down for a while for any given reason, but you will always need to service your car: smash repair, overhaul, general repair, replacement part, etc.

I wouldn't buy a used game because I'm a conservation maniac. I want my material to look as good as new. I have CDs as old as 12-13years that look just as new. Not even the case is scratched. So yeah, this is game makers being greedy.


RE: Which side of the fence?
By Alexstarfire on 1/15/2008 9:02:29 PM , Rating: 3
The argument they use is completely retarded. You can say the EXACT SAME THING about any product we buy. Things like used keyboards, mouses, portable consoles, cell phones, and tons of kid toys and board games. The manufacturer never receives money and the products don't need service. If they hate used games so much then they should just get out of the business. I'd never give up my right to resell a game I OWN. Actually, you technically don't own it anyways, you own a license for the right to use the game.


RE: Which side of the fence?
By Christopher1 on 1/15/2008 10:59:20 PM , Rating: 1
Actually, no. Court have ruled that when it comes to movies, music and games, you do own the movie itself, not a license to use the game.

When it comes to OPERATING SYSTEMS, if someone was to challenge the license only assertions of Microsoft and Apple, they would win and it would be ruled that they are buying the operating system itself.

Really, it is simply time to say that when you buy a software product, game, music or movie, you are buying that thing itself, NOT a 'license to use the product'.
That license thing is something that is open to abuse by the media companies and has been abused by the media companies in the past.


RE: Which side of the fence?
By Murst on 1/16/2008 10:16:21 AM , Rating: 2
quote:
Court have ruled that when it comes to movies, music and games, you do own the movie itself, not a license to use the game

Really? Can you provide something to back this up? Your argument does sound rather crazy.

You certainly own the media that the song/movie/game comes on, but stating that you own the game itself (and all the rights which come with ownership) is hard to believe - even illogical. The only thing you have with your purchase is the right to play it for your own private use. The second you would try to reproduce and sell it (a right that most certainly comes with ownership) you would get fined or jailed. If you tried to license it to someone else (also a right that comes with ownership), you would also face penalties.


RE: Which side of the fence?
By BMFPitt on 1/16/2008 9:48:45 AM , Rating: 2
quote:
I agree with the downloadable content part on games. But it does require additional invesment from the Game maker. Just not as much of an invesment but its still money coming in. Game maker, though, makes more money if you buy a new copy and then buy the additionals when compared if you bought the used games and then got the additionals (even if new/downloaded).
It might take 100-200k copies just to break even on some big-budget games (not to mention having to deal with physical media, logistics.) A lot of downloadable content out there (not to asy all of it) was probably made by one guy in a few days. 1000 people buy a song pack for Guitar Hero and you've probably made your money back.

And who's to say that every person that buys a used game would pay for a new one? I know I have a fair number of DVDs that I wouldn't have bought for more than $5.


RE: Which side of the fence?
By AlexWade on 1/15/2008 7:55:54 PM , Rating: 5
Except that one part of the argument they fail to take into account is the amount of people who won't pay full price for the game to begin with. If these people aren't willing to pay full price, then the net loss to the video game industry is $0, because there wouldn't be a sell to begin with. For my copy of Metroid Prime, I decided to wait until I could get it used because I didn't want to pay full price.

This is just the video game industry trying to be greedy.


RE: Which side of the fence?
By BigToque on 1/15/2008 8:44:23 PM , Rating: 2
What you are not taking into account is that over time these games drop in price. Someone who isn't willing to pay $50 for a game might be willing to pay $30 for the gmae when it drops in price.

I can see the concern that the industry has, although I don't side with them. I am free to sell my property, and those who buy it from me are free to resell it as well.


RE: Which side of the fence?
By glitchc on 1/16/2008 1:23:31 AM , Rating: 2
Yes, but this holds provided that a price disparity still exists after the new copy drops in price. For instance, if a new copy is the same price as the used one, say $25, buying a new copy is a no-brainer (as I suspect most people conclude). On average, this is not a realistic scenario although it has been known to happen.

A more real scenario tends to be a new copy of $30 and a used one of $25. Then some buyers with a higher price threshold will pick new, while others will pick up used or not buy at all. It all depends on the buyer's budget. Note that used still sells if it fits within the budget and it sells where new would not have sold anyhow.


RE: Which side of the fence?
By masher2 (blog) on 1/16/2008 9:41:09 AM , Rating: 3
That also fails to account for the fact that a person who knows he can easily resell the used game when he's tired of it may be a bit more inclined to shell out that $60 in the first place.


RE: Which side of the fence?
By eye smite on 1/15/2008 8:13:20 PM , Rating: 4
I don't see what the issue is, game companies have already sold the game once and made their money off of it, so them whining to me is just greed. How long have people been buying used cd's and the dreaded RIAA never whined about that. The gaming industry needs to shutup and QQ cause I can assure you most of us have no sympathy for them wanting to sell the game twice or them not wanting to see it sold aa a used game. Sorry, they lose, end of story.


RE: Which side of the fence?
By Christopher1 on 1/15/2008 11:01:51 PM , Rating: 1
That is the exact thing that I say as well. The game companies have already made their money off the game when it was first sold, so they have gotten their money from the consumer.

If they really want more money, perhaps it is time to rethink the idea of making a game $50 dollars when it first comes out, and go to a more reasonable price of $20 dollars so that everyone who wants the game can get it from a 'first sale' type place like Best Buy.


RE: Which side of the fence?
By mofo3k on 1/16/2008 9:18:57 AM , Rating: 2
Maybe the Game developers should offer some sort of a buyback system. That way consumers could still get some money back from a used game and the developers could either sell it "Refurbished" or destroy it to keep prices up on new games.


RE: Which side of the fence?
By jajig on 1/16/2008 6:21:50 AM , Rating: 2
I remember quite a lot of whining about used CD's (before the Internet) the record labels just never managed to get anywhere with their complaints.


RE: Which side of the fence?
By Screwballl on 1/15/2008 9:20:57 PM , Rating: 2
If anything, it is keeping new game prices lower in order to keep them competitive and within reasonable price of the used games. If the publishers knew there was no used game market, you can watch the new game price probably inch closer to the $100 mark within a few years.
Another big shocker: these stores generally have all items on hand during the holiday season. People go there if they want something gaming related. I know the local stores ordered as many of the Guitar HeroesIII and major ticket items as the local walmarts did (have friends that work at each).
Also, 1/3 to 1/2 of the used game market is not new console games but older games such as PS2, Gamecube, Xbox, etc that the major retailers are not selling anymore (or if they are it is 3 or 4 titles, or in the clearance bin).


RE: Which side of the fence?
By RedStar on 1/16/2008 9:27:14 AM , Rating: 2
are you serious? ..used game prices are determined by retail prices and not the other way around. But i am amazed some will buy a used game for just 5$ less then retail. lol :)

Now if people rightfully said no way ..used games would be 30% of the cost of new game. :)


RE: Which side of the fence?
By Screwballl on 1/16/2008 1:18:00 PM , Rating: 2
depends on the game.... the popular and rare games do cost a few dollar less than full retail but other game, even if popular, if the market was flooded with them then their price will be $5-15
I picked up almost 20 Gamecube games for around $50 for my daughter


RE: Which side of the fence?
By wordsworm on 1/15/2008 10:05:35 PM , Rating: 2
Unfortunately, if you're following the EULAs of companies like MS and Adobe, you'd realize that you don't own the right to sell back your software. If these companies can do that, then I can't see why the gaming companies can't do the same.


RE: Which side of the fence?
By MrTeal on 1/15/2008 10:51:40 PM , Rating: 3
The difference is that the car company is selling you the physical car, software companies sell you a license to use the software, and the disc is just the delivery medium. They haven't really done much about it with consoles, since you've always needed the disc or cart to play the game, and so if you do sell it to someone else, you can't keep using it.

Give it a few years. If the Sony and other game companies have their way and Steam-like services becomes more prevalent, even on consoles, the used game market might start drying up. If you get bored of God of War 5: My God Can Beat Up Your God on your shiny new PS4, good luck transferring it onto a flash drive and bringing it into Gamestop so they can give you $5 and a kick in the balls and sell the thing to the next schmuck for $45.


RE: Which side of the fence?
By AlexWade on 1/16/2008 8:33:47 AM , Rating: 2
Well, the main difference is that computer software can still be installed even when you sell the disc. Not so with video games, once you unload the disc, the game is gone unless you buy it again. Games get around this by checking for the original CD, which is just about hacked on the internet (because lets face it, CD checks are annoying). Other software gets around this by activation.


RE: Which side of the fence?
By Proteusza on 1/16/2008 5:06:00 AM , Rating: 2
It could be argued that you dont really purchase the DVD containing the game, but a license to use the game. So, it doesnt matter what DVD you use, so long as you use your CD Key, because you purchased a license and were given a DVD so as to use your license immediately.

Nonetheless, said license should be transferrable. Its a difficult situation - undoubtedly it is harming the industry - but I dont believe you should be able to restrict consumers rights like that. As you say, imagine if we werent allowed to sell our cars!


RE: Which side of the fence?
By Kougar on 1/16/2008 8:42:33 AM , Rating: 3
It should be pointed out that in many cases those kids/people that trade in used games turnaround and use the cash to buy new games. So in effect the secondary game market actually does feed back into the new game market to a small degree.

This may be why used PC games went out of style, game developers figured out they could greatly reduce second-hand game sales by locking keys to individual player accounts. There is not much incentive to buy a used PC game when you still need a new key to play online (or even at all).

I think it's just a case of greed. They can't pull the same stunt they did on PC games with console games. The secondary game market doesn't only consist of players that avoid buying new so they can buy used, far from it. In many cases people are only going to pay as much as they feel the game is worth, and would therefore only ever consider buying it at $10-20 instead of $60.


RE: Which side of the fence?
By initialised on 1/16/2008 9:51:16 AM , Rating: 2
Technically you do not own the game, you own a license to use the software within the EULA. Just like with a car, you own the materials but you do not own the intellectual property used to make it.


By inperfectdarkness on 1/16/2008 10:13:31 AM , Rating: 3
a new car loses 15% of its value when you drive it off the lot. the same applies to new games.

it's been very, very hard to ween myself off of full-price games...but it's been fiscally worth it to myself.

i have yet to buy mario galaxy, ut3, orange box, etc.

it occurs to me that there's a lot of old games out there that are worth playing. and if i can download n64 games for my wii for $10, there's not a lot of justification for paying 5x that for anything--no matter how new it is.

i have a very, very hard time justifying any game that costs over $30. the only exception would be an extremely hard-to-find game (like metal warriors...which i paid $55 for).

especially for pc software, in 2 years of original release...it will either be a GOTYE, have a bundled expansion pack/s, or be value software at $10-15. possibly all three.

trust me, game companies make enough money. you will NEVER hear nintendo whining about the "used games market". EVER. it's because when you make truly high-quality...the sales numbers will be there.


You can't blame this on GameStop.
By Domicinator on 1/15/2008 7:17:24 PM , Rating: 5
I find it hard to be upset with GameStop over this. They are reselling software that is WAY too expensive new. In doing so, they are a successful company and they are benefiting consumers. That's about all there is to it. They get all the money from the sale because they're assuming the risk of all the inventory. This is not a hard equation to figure out.

I am a PC gamer, so you would think I'd be the last person to defend GameStop, but I think they're great. I've purchased 4 or 5 games from them this year, and they come off as very knowledgeable to me. The guys behind the counter actually play the games they're selling, they know all the release dates, and when your new pre-ordered title comes in, they are VERY good about letting you know. I'd much rather give them my money than Best Buy who hires the lowest common denominator and then sticks them in the software department.




RE: You can't blame this on GameStop.
By KernD on 1/15/2008 8:05:32 PM , Rating: 2
quote:
They are reselling software that is WAY too expensive new.


You think games are over-priced? Game price are the same they were 15 years ago, around 50 to 60$
Back then small teams could make a game in 6 months, now it takes large team 1 year and a half. They are certainly not over-priced, why do you think they try to add ads to games? They need more money to diminish the risk they take producing these games.

Did you ever ask yourself why they do so many tie-ins and get so many games out for the holydays? With tie-ins with movies, they get more out of the money they put in marketing. And they get them out before christmas because who buys an old game for a gift? Who wants an old game for a gift! They must get some profit otherwise, no more games for you and everyone else.


RE: You can't blame this on GameStop.
By Flunk on 1/15/2008 8:15:21 PM , Rating: 2
Actually game prices are lower than they were 15 years ago. As an example Super Mario RPG for the Super Nintendo cost $99.99, Mario Galaxy for the Nintendo Wii is $49.99. The only reason the game manufacturers can do this is that they sell more copies. But I would hardly call lowering the prices greedy.


By christojojo on 1/15/2008 8:41:59 PM , Rating: 4
Scale is what keeps the price down.

10 copies at $10,000
100 copies at $1,100
1000 copies at $111


RE: You can't blame this on GameStop.
By Christopher1 on 1/15/08, Rating: 0
RE: You can't blame this on GameStop.
By deeznuts on 1/15/2008 11:57:39 PM , Rating: 2
quote:
Wrong. Game prices are NOT lower than they were 15 years ago, in fact they are higher. I do not know where the hell you were buying Super Mario RPG from, but I bought it NEW, when it first came out, for $49.99 at Toys 'R Us.
The prices have NOT come down, and lets face facts: with the new gaming development packages, it is MUCH easier to make a game and therefore, development costs have gone down a lot.
This is so wrong on so many points. Ever take a finance/business course? Time value of money? Inflation? A game that costs $50 15 years ago would have to cost around $74 or so, today. So yes games are cheaper.

Also, games are not easier to make. Development costs have gone down a lot are you crazy? Do you follow gaming at all? MGS4 is estimated to cost around $70M. Games now cost in the tens of millions to produce. Well the good ones. Some of the crappy Wii games coming out are just to try and cash in, but I'm sure the better Wii games costs a pretty penny. Look how long Brawl has been delayed, you don't think it costs them money to delay? Game are more complex.


RE: You can't blame this on GameStop.
By Strunf on 1/16/2008 6:32:11 AM , Rating: 1
It's true that if you take inflation alone games are cheaper today but if you take into account that today a CD/DVD costs "nothing" to make and that the market is hundreds of times bigger then yes games are more expensive than they should.

And depending on the game it's far cheaper to make them cause like the prior user said there are many engines that can be used with out having to develop them, plenty of games use the Source engine, the UT engine the Qwake engine etc etc etc.
Ya sure someone has to build the engine but these companies sell the game and license the engine…

Also mind you but MGS4 is like a Halo2 or Halo3 it may cost millions to make but even if it’s plain crap everyone will dig into it, and don’t even get me started on The Sims…


RE: You can't blame this on GameStop.
By deeznuts on 1/16/2008 12:56:30 PM , Rating: 2
Games being more expensive than they should is a wholly different matter ;) Fact of the matter is they are, on an inflation adjusted basis cheaper.

It is not cheaper to make them. I don't get why you guys keep saying this. Development costs are through the roof. Even for studios that license engines. Yeah someone can make a game that is barebones based on an engine but nobody will buy it. So nobody does it.

Even Gears of War costed $10M to make, and that's not factoring in the Unreal Engine , because of course being the same company Epic isn't going to charge itself. But what game 15 years ago costs 10M, even adjusted for inflation?


RE: You can't blame this on GameStop.
By Strunf on 1/16/2008 2:36:00 PM , Rating: 2
What no one will buy a game that uses someone else engine?
No one cares where the engine comes from what matters is if the game is good... The first HL was based on the Qwake engine and I didnt see people complaining, or Qwake 4 (Doom 3 engine) or BioShock (Unreal Engine)... and there are more.

I don't deny some game are quite expensive to make but that is proportional to the market they target and fanbase , do you think Epic would spend millions developing a game without do some market research?
The fact is you can make a game for cheap, just look to the Mod community using the same tools as the developers they do create Mods that could be sold (if allowed), I would pay easily 30$ for the Desert Combat mod back in its time instead of paying 50$ for an almost identical BF2...

You guys make it look like the game industry barely made it... yet the fact there are more games and companies in this market than in the past can only mean there's plenty of money to be made there.


RE: You can't blame this on GameStop.
By KernD on 1/16/2008 7:41:12 PM , Rating: 2
Your distorting what he said or misread?
He said
quote:
Yeah someone can make a game that is barebones based on an engine but nobody will buy it

Not that using liscenced engines means nobody will buy your game.

If you have bad gameplay and graphics, no mater how much money you saved by using someone else's engine, the game won't sell.

We don't make it seems like they barely make end's meet. The fact is that the ones that are alive today are the ones that were smart enough and studied the different genre's market (or abused gullible sports fan).

Soo many companies died because they had only bad selling games, those that had good and bad survived because the profit of the good ones covered the loss of the bad ones... and they learned and dropped bad genre and franchise. That's why you mostly see FPS, RTS and MMO today on the PC, and platformer only on console. That in turn is the cause of the fast ports.


RE: You can't blame this on GameStop.
By RedStar on 1/16/2008 9:23:04 AM , Rating: 2
well said.

Seems alot of people do not understand why prices can be "high" when the sales volume of the product are low (blockbuster if a million units sell? pfft ) and development costs so high.

I have been PC gaming since 1986, where stick cga graphics/no sound would cost you 86$ cdn. But someone had to fund the gaming industry. :)


By Red04Cobra on 1/16/2008 9:56:51 AM , Rating: 1
Lets not forget that fact that back in the olden days of gaming the games were produced on carts that held the data. That's a big part of the reason that some games were more expensive than others. Doesn't anyone remember the NES and SNES games that cost $30-$50 more because of having more hardware in the cart for more capacity? It's a moot point with the advent of CD/DVD media which costs very little to produce.

Yes we are paying the same or less than games that came out 10-20 years ago, but we've also lost the high production costs of the media as well.


By wallijonn on 1/16/2008 11:22:59 AM , Rating: 2
quote:
You think games are over-priced? Game price are the same they were 15 years ago, around 50 to 60$


15 years ago some games "lasted" about 100 hours. I played Zelda: Ocarina of Time, Turok, and Dragon Quest VII, for well past 100 hours, over 30 days of gameplay. Tomb Raider Legend lasted a whole 8.5 hours. God of War II 'lasted' me 24. I hear Ico ran 6 hours and Halo 3 ran 20. 15 years ago that would be called "shareware."

I am not paying $60 for a 6 to 20 hour game. Can you say "Rental"? You can be sure that game developers have visions of rental stores being prevented from renting out their products. They want everyone to buy, instead, preferably "blind" buys.

With the emphasis on on-line play providing lasting value (so long as there are servers still running the game), the single player portion has decreased in length.

15 years ago $50 to $60 was not the norm, it was only for the most exceptional game. Today it is the norm. Today. mediocre games give you a break, they'll sell them to you for only $40.


RE: You can't blame this on GameStop.
By Inkjammer on 1/15/2008 8:59:54 PM , Rating: 2
I beg to differ.

Gamestop charges near retail prices for used copies of recent releases. They do it in an effort to win over consumers (read: teens) who crave the latest and greatest, people who don't have a lot of income and/or need to save to every dollar possible.

A while back, I went to grab a copy of Gears of War for a friend's birthday shortly after it came out. Retail, Gears of War cost $59.99, bt the used copies were selling for $54.99. A $5 savings for the consumer. Whoop de freakin' doo. All the profit for the sale goes right into Gamestop's coffers. The developers don't see a dime.

It sells because somebody wants to save $5. In that manner, Gamestop re-sells and undercuts the manufacturer, publisher ordeveloper. And no, it's not the simple reselling of used games that's the problem. It's the fact it's sometimes impossible to find a brand new copy of the game in Gamestop that's the problem. Gamestock keeps low stock of popular titles on the shelves to ensure they sell out fast, forcing consumers who shop at Gamestop to have no alternative but the used titles. And strangely, they almost always seem to have use copies when they don't have new.

And therein lay the problem. Gamestop undercuts its own suppliers.


By xsilver on 1/16/2008 1:48:32 AM , Rating: 1
And the problem lies also with the fact that gamestop have huge incentives to do this. I dont know how much they pay to buy your games used but I suspect it be somewhere in the vicinity of 33-50% (more likely 33? someone here should say)

and they re-sell the game for 80-90% of retail price? thats lunacy!
I think game makers need to take a leaf out of valves book and produce games in an episodic system. That way, no games will cost $70mil to produce and you will clearly see after episode 1 if the game is worth developing further or not.
Also you will have less delays between development and shipment of the game (look at DN:forever) New games wont be running old and dated engines.

The producers can also help by being on the ball in reducing the price on games, there is usually a huge delay from a title being a "new" price to being in the "value" price especially for pc.
I think there are 3 types of customers that need to be satisfied
1) customers that believe the hype and prefer to buy the game new
2) customers that believe the game may be good but are not willing to pay full price
3) customers that only buy games when they are priced VERY competitivly

A good majority of costomers are in group 2 and gamestop is specifically targeting these people.
Publishers need to assess whether they can gain more of a slice of this pie by reducing prices earlier.


By wallijonn on 1/16/2008 11:37:44 AM , Rating: 3
quote:
A $5 savings for the consumer. Whoop de freakin' doo. All the profit for the sale goes right into Gamestop's coffers. The developers don't see a dime.


If you buy the game new you cannot return it for a full refund. If you buy it used you can get a full refund within 7 days.

If the game can be beat within 7 days and you return it for a full refund it amounts to a free rental, you "saved" $7.

I can usually tell within 30 minutes of game play whether or not I will like the game. I suspect that you can too. And if you don't like it you should be able to return it for a full refund. If you do like it, then return it for a full refund and buy it new. That would cost you an extra $5, which is still $2 cheaper than renting.


By TheGee on 1/16/2008 1:54:09 PM , Rating: 2
I beg to differ as well!
When you say all the profit from the sale goes to Gamestop. Hasn't the developer already got their returns on their investment from the original sale? If they got a cut of any subsequent sale do you think it would make the cost of new games less? Dream on brother!
The developer has already factored in recovering the development costs or he shouldn't be in business!
I rarely buy new games because recent games' playing times are extroadinarily short and not worth the per hour cost. It also means that I am off the upgrade treadmill as well and my 8800GT suffices for all my games!
All power to Gamestop for using the free market properly. All the whiners seem to want market forces to work for one scenario but when it doesn't fit another business model they don't like it! Bloody hypercrits!!
Gamestop are in business and need to provide premises and staff which is virtually impossible on the margins of new games if you want to stay competitive and sell games to attract people into the shop!
Of course all fat people will still order from best buy et al!

Just being precocious chaps!


By Wagnbat on 1/16/2008 4:27:31 AM , Rating: 2
I agree this can't be blamed wholly on GameStop. This is a free enterprise market and they are simply fulfilling customers wishes by buying back games and reselling them. Now the real question should be, is there really any blame to point in the first place?

Junk yards buy cars and part them out for more than they bought them for. ALL retailers buy items from the vendors, and sell them for MORE (obviously). And unless we're getting into the RIAA and MPAA level of ownership, there is no 'license' for console games at the moment.

Like a music tape or CD, it is an item to be bought, sold, bartered, traded, etc... Blame a business for being a business? That's retarded.


...
By SirLucius on 1/15/2008 8:54:31 PM , Rating: 2
Not exactly related to the topic at hand, but I really hate Gamestop's used game policy. They'll buy a game from you for 5 bucks and then resell it for like $55. That may seem like an exaggeration but it's really not that far off. I once got $10 for a PS2 game and then saw it on the shelf 2 days later for $45. Now I can understand wanting to make a profit, but come on. Don't ream me that bad. Especially not on new games. You pay $60, sell it back for like $20, and then they resell it for $55. It would be different if they didn't give much for used games, but would give a significant discount in buying their used copy over a new one. But no, they give you a fraction of a game's worth, and then charge near retail prices for them.




RE: ...
By 460cidpower on 1/15/2008 9:26:16 PM , Rating: 3
If you sell your game back to Gamestop, you DESERVE to get reamed.

Why?!?

Because you're too stupid or too lazy to use Craig's list or Ebay to sell your used games.


RE: ...
By SirLucius on 1/16/2008 12:10:18 AM , Rating: 2
I stopped using Gamestop after that experience, but I shouldn't have to use eBay or Craig's List. I'd much rather just walk into a Gamestop, hand in a game, get cash, and go home than deal with trying to sell a game online. Call me lazy, but I feel like it would be better for Gamestop too. I know plenty of people that don't sell/trade used games there because of the poor exchange rate.


RE: ...
By aos007 on 1/16/2008 2:05:14 PM , Rating: 2
Exactly. It boggles my mind that people are accepting the "exchange" rate that EB is offering. Pretty much all games that are less than a year old are only $5 off the retail, no exceptions, even if they have dozens of them sitting on the shelf (say Halo). At which price you can often buy a brand new game at another store in the mall. Yet they would offer you only 5-10 bucks for a game. It's the customers fault, Gamestop is after the money and they charge what the market will bear. But apparently there must be millions of idiots out there as Gamestop is now so big that they will be admitted to S&P 500 index!

Not only that, but even then they are not offering you any actual money! That's right, you get $10-5 for a game they'll sell for $55 but they still DON'T GIVE YOU ANY MONEY. You get the trade in store credit! That's how they force you to spend the money in there. You bought the game there for $60, they made a $10 (or a $5, I hear margins are super low). They buy it from you for say $15, then they sell it for $55 and you spend those $15 in store (as you must) for say another $55 used game. So they made total of $105. No wonder they're making a killing.

I'd rather stuff the disk into my basement storage than sell it to EB at that price. Hell, I'd rather GIVE IT AWAY for free. Who is doing this? Stupid teenagers who don't know the value of money? Local EB is always full of what looks like college and high school students. I can understand not having money at that age but there are other options, which only involve typing up a few sentences and snapping a photo. I can't shake the feeling that if you sell to EB, you're selling because you didn't pay for it - it was a gift or stolen goods. Otherwise I can't see any excuse not to call that person stupid.


RE: ...
By KentState on 1/16/2008 3:45:22 PM , Rating: 2
The trade in values have to be that low for any trade-in system to work. For example, they may give you $10 for a game and resell it for $40. The thing to remember is that the same game my have 4 other used copies sitting next to it on the shelf. Plus, the longer a product sits on a shelf, the less value it has.

Basically there system works as such, new games resell at a rate of 60% of units traded-in so they only give you 50% of the value, games over a year old resell at 30% of units traded-in so they give you 20% of the value, and anything older resells at 20% of units traded-in so they give you 5% of the value.


eBay
By themadmilkman on 1/15/2008 7:21:18 PM , Rating: 4
If Gamestop is such an evil thing, what do they think of eBay?




RE: eBay
By kmmatney on 1/15/2008 8:00:42 PM , Rating: 2
Exactly - I've sold several games on Ebay, even that came from Ebay. I guess they can sell new game software like OEM software and make the license agreement state "Not for Resale". That would go over well...


RE: eBay
By jeff834 on 1/16/2008 2:44:51 AM , Rating: 1
For almost 2 years my sole source of income was to purchase games in bulk (PS2, Xbox, whatever) on ebay and then resell them individually on half.com (similar to ebay just fixed prices instead of auctions). I made anywhere from 20-50% profit on the games when all was said and done. Still do it part time it's an excellent way to make a little extra money. I have mixed feelings about this...I really hate Gamestop, ripping off naive little kids and never having new releases unless you preorder, but I also feel the game companies make their money with new sales and it should end there. I guess I do my part by buying all of the games I want at stores like Target and Best Buy, kind of boycotting Gamestop, but on the other hand I've made plenty of money selling used games before :)


Maybe nobody thought of this...
By sh3rules on 1/15/2008 7:38:27 PM , Rating: 2
...but how about improving the quality of the games? If a game is good it might sell well on release.




RE: Maybe nobody thought of this...
By lukasbradley on 1/15/2008 7:42:36 PM , Rating: 2
And/or have a continuing line of content and playability, where players don't want to sell it.


By The Sword 88 on 1/15/2008 10:04:33 PM , Rating: 2
I agree completey with a steady stream of dlc I would keep paying a couple bucks every couple months and not want to resell my games since they wouldnt get as repetitive


Whose Fault ??
By ViperROhb34 on 1/15/2008 8:02:29 PM , Rating: 2
I see both sides as well, but unlike the "used car" analogy.. The used video game industry is a new market. One has been around a decade ( No one really sold Atari back then or Intellivision compared to todays large numbers ) and we all know the car has been around nearly 100 yrs

I think because this is a new market.. WE as smart consumers need to start using other avenues to sell games more.. like craigslist.. etc.. a way the consumer can make a profit , sell it to someone cheaper.. and both people win.. If sell it myself I have alot more money to spend on a new game which helps the gaming industry. As it is right now.. You sell it to game stop.. because its too easy.. they give you 10-20 bucks and then turn around and sell your game for 5 dollars under the new 60 dollars version of the same game.

Gamers need to start being smarter ! We can't blame Gamestop because they make it too easy - we're the ones still making a poor financial decision - At least when if we sold it we could sell it to someone for 40 dollars ( instead of 55 like gamestop ) and still make more !





RE: Whose Fault ??
By christojojo on 1/15/2008 8:46:21 PM , Rating: 2
I would love to buy directly from another player. The problem has been trust, the old cart systems used be broken and cons were numerous (at least in my area).


RE: Whose Fault ??
By deeznuts on 1/15/2008 11:59:58 PM , Rating: 2
There's been a used video game market since video games came out. A used atari 2600 with games in a pawn shop is a used atari game system for sale. Gamestop is just doing it more efficiently than ever, but for christ's sake we live in a free market country last I check.


I buy used
By y2chuck on 1/15/2008 8:33:05 PM , Rating: 2
I'm glab EB sells used games up here in Canada. Instead of paying $70 for COD 4 I ended up getting the only used copy for $22.

The only problem I had with a used game was Halo for the PC. It didn't come with a valid key.

If the game studios want to complain about not getting royalties, put out more games that don't suck and distribute them online.




RE: I buy used
By mmntech on 1/15/2008 8:42:18 PM , Rating: 2
I saw Guitar Hero III used at EB for about $40. That game is pretty hard to find. I should have bought it. Didn't come with the controller though, obviously.

Only the entertainment industry would count selling used items as a "harmful" sales loss. Is it just me or have they finally lost all credibility.


RE: I buy used
By anonymo on 1/16/2008 6:49:45 AM , Rating: 2
quote:
I saw Guitar Hero III used at EB for about $40. That game is pretty hard to find. I should have bought it. Didn't come with the controller though, obviously.


Only the controller is hard to find.


Silly Rhetoric
By cochy on 1/15/2008 8:30:35 PM , Rating: 2
quote:
hires inexpensive, unskilled local youth and sells product


So just like Best Buy, and just about all the like. There are no "skilled" employees there either.




RE: Silly Rhetoric
By JackBeQuick on 1/15/2008 8:34:32 PM , Rating: 2
Better unskilled youths or a vending machine?

Good arguments for both.


Odd
By Comdrpopnfresh on 1/15/2008 9:47:51 PM , Rating: 2
"Worse, the used games business restrains the market by keeping new game prices high..."

Sounds exactly like that bullcrap about pirating music.

Except buying used games is legal. If they just kept the prices of new games lower, they'd increase their profits by decreasing stores like these profits, and existence... The profits of used games stores is limited upwards because they are based statically off of the price of new games. For example- they won't charge 75 dollars used for a game that is 50 dollars new. So if the people making games sold less, it would close the gap a bit, and people would find newer games more appealing...




RE: Odd
By themadmilkman on 1/16/2008 12:19:10 AM , Rating: 2
Or if they priced their games lower at wholesale and allowed stores like Gamestop to make a profit off of new games, then they wouldn't feel the need to push the used game market like they do.


Crackhead...
By Polynikes on 1/16/2008 12:30:07 PM , Rating: 2
quote:
According to Next-Gen editor Colin Campbell, used games account for up to one-third of GameStop’s sales and almost half of profits.

I don't even see how that's possible. Used games cost less than new games, a lot of hardware they sell costs more than used games, 1/3 of sales = 1/2 of profits? Maybe if the used games costs $75 a piece. Nice try.

So, anyways, we have what's called a free market economy, Colin, and people can sell their sh*t to whomever they want. It's part of being a freedom-enjoying American. You don't see car manufacturers crying foul, do you? Ever bought something at a garage sale? How about on ebay? Right, I thought so.




RE: Crackhead...
By aos007 on 1/16/2008 4:13:16 PM , Rating: 2
Except they make only $5-10 on new games, while they net the entire price tag for used ones (minus the money they gave to the seller, but even that is just store credit and will come back to their cash register and then some).


By joemoedee on 1/16/2008 6:43:37 AM , Rating: 3
Being able to find used games, and a convenient place to trade-in games have helped drive the gaming industry.

Example. The majority of folks that trade-in a "new release" bought it, well, new. Typically they either beat the game, or grew tired of it quickly. They trade it in for 25-30 bucks, take the credit and use it on the next latest game. I see it every time I go in to a Gamestop.

By giving people an easy way to trade-in their games, it makes it easier to drive sales of other new titles.

Back pre-rental and pre-used sales, you were basically stuck if the game sucked. Now you have the opportunity to try before you buy, and also if you do buy, the title carries some value if you decide to get something else.

There's no tangible evidence that will say that used games, or game rentals for that matter, hurt sales. Just look at the sheer amount of systems, accessories, and new games that are being sold. (Even as you're nickled and dimed on every single thing. I miss the days of two controllers and a pack in game, but thats another rant)

All signs point to it being a good thing for the industry.

As a side note to remark about their staff, I'd say that the stores I've gone in usually have a good number of knowledgeable gamers working there, and also relatively low employee turnover. For a mall/retail store, that's pretty rare...




By DukeN on 1/16/2008 8:24:07 AM , Rating: 3
Yes, what a shame the customer has access to what they want - lower priced games.
I'm sorry Mr Editor, I'll send my savings back to the CEO where they are deserved.




Oh no
By FuzionMonkey on 1/15/2008 8:35:39 PM , Rating: 2
quote:
depriving the publishers of investment income


We wouldn't want to hurt the publishers, now would we?




Gamestop is good.
By ChipDude on 1/15/2008 8:36:51 PM , Rating: 2
For every sale people claim gamestop prevents you should think of all the people leaping to take a chance on a marginal game or one they might lose interest knowing they can unload it and get some money back.

I know that my kids are more willing to buy a game knowning they can sell it some significant lesser value, but its some consolation so they have bought a few that they have turned around and sold. Without gamestop I'm sure they'd have bought half the games they did.




By djkrypplephite on 1/15/2008 10:02:55 PM , Rating: 2
i dunno, maybe if EVERYONE didn't charge the same $50/$60 per game, people might be more inclined to buy more of them more often. just a thought.




35% wow I wonder
By SpeedEng66 on 1/15/2008 11:16:57 PM , Rating: 2
I wonder how much of that 35% was due to them selling bundle packages (system and games packages)




Re
By brent98 on 1/16/2008 12:14:59 AM , Rating: 2
The car company comparison isnt good because the car companies actually sell you the car, service it, and then when you get tired of the car you can trade it in for a new one. They solved the used car problem years ago. And now the with the "Certified pre-owned" deal the car companies keep pushing they can squeeze a few extra bucks out of some schmucks for the same piece of junk.

Anyway, I dont see why the gaming industry is wasting their energy on gamestop, it was pointed out earlier that DLC allows them to continue to make money on games theyve already sold, and in the future, they will just make you download the games directly from them and push the brick and mortar stores completely out of the equation. They will just sell you the game in little bits and pieces and encourage you to download extra levels for a small fee.




Let Consumers Decide
By Supa on 1/16/2008 2:43:09 AM , Rating: 2
Instead of accusing buying used games hurting game sale, why not let consumer decide if there is a market for them.

If the gamers want and buy used games, then there will be a market for used games, vice versa.

He made it feel like buying used games is improper way of supporting gaming industry.

---




Sounds like posturing to me.
By junkdubious on 1/16/2008 3:38:09 AM , Rating: 2
Game Stop buys its games from some distributor then resells them to us, the consumer. This stuff is not on consignment folks. What selling used games does do is compete with new game sales. Heres where the 'problem' lies. When your Game Stop and have limited inventories, you stock based on what sells or perhaps when. Rather then place larger orders for new items it would be more profitable for Game Stop to sell a 'run' of new games while encouraging pre-orders. That would minimize depreciation costs of new games becoming old games. While if am a game producer, I have a business plan that says I sell game X at some price Y for Z units to make a projected profit. Well what if people are content with buying resold games at a price lower than Y. Rather than being perfectly consumed games are just recirculated faster than the producer's forecast, and Z units are never realized. And it 'loses out' on sales, that is, the inventory Game Stop would use to replace a sold game is replaced by used ones instead. This would be the smallest violin. Cheers.




Dammit, this stupid topic again?
By xstylus on 1/16/2008 4:40:47 AM , Rating: 2
Ford isn't entitled to a kickback every time a used Ford is sold, Apple isn't entitled to a kickback every time a used Mac is sold, and software companies are not entitled to a kickback every time a used game is sold .

I would expect a major legal fight if anyone attempts to impose such.




The bottom line is
By Amiga500 on 1/16/2008 5:04:48 AM , Rating: 2
If the game was great, had good variability of levels/missions etc, had good upgradability (be that fan support from the net or expansion packs), had good multiplayer support and maybe mission editors...

Then people would hold onto it instead of trading in for another game.

Everyone (I know) holds onto the good ones, and lets the average ones go back.




Uhhh...
By iFX on 1/16/2008 5:08:56 AM , Rating: 2
quote:
“All that money goes to GameStop, which doesn’t make games. GameStop opens stores in malls, sticks up shelving, hires inexpensive, unskilled local youth and sells product,” Campbell wrote. “Worse, the used games business restrains the market by keeping new game prices high and by depriving the publishers of investment income. In the long-term, it’s not such a great deal for consumers.”


Boo Fucking Hoo! Don't like it? Open your own store and put them out of business, then all the money will go to you, which is what you want. Greedy twit.




By etekberg on 1/16/2008 7:47:54 AM , Rating: 2
If the game manufacturers don't like the sale of used games the should come out with an alternative method.

How about dirt cheap downloads from steam? Sell the games for $25 - no boxes, no cd's, no distribution - download only. I would think their sales volume would go way, way up and used games wouldn't be worth the hassle.




What about the Wii Bundles?
By bnutz on 1/16/2008 8:51:41 AM , Rating: 2
You could not buy a Wii from Gamestop unless it was bundled with another $249.99 of games and accessories. Nintendo should have never allow retailers to do this to customers, but what do they care they making money and laughing at the consumers who are stupid enough to take the BS.




whhhhhaaaaaa!
By eyebeeemmpawn on 1/16/2008 9:29:53 AM , Rating: 2
somebody call this guy the Whambulance.

Next step: lobby politicians to pass a law to make the resale of games illegal, hurting the gaming industry only hurts the children in the end, right?

Why doesn't the industry focus on making games that people want to play over an over? Oh, right, then people will buy fewer games if they can play the same one multiple times. Looks like an impossible business situation, better form a GIAA.




Game developer greed
By wallijonn on 1/16/2008 10:12:36 AM , Rating: 2
Last year everyone bought consoles. This year everyone bought games.

The developers are just plain being greedy. They all made record breaking profits and want more, more, more. They are not in touch with reality.

Many old games are hard to find. (ie, "Ico," "FFVII," for the PS2.) Some go up in value. Many go down. The developers do not re-issue old games and yet live in a Utopia where their game never change value.

I just bought a 'Playhouse' DVD. The video warning says that it is not to be lent, swapped, given away or re-sold. They are asking that you throw it away if you get tired of it. That would seem to be the model game developers wish to usher in.

Game developers want everyone to buy their games blindly. Thank goodness for the Internet and review magazines.

What the distributor thinks is that if someone doesn't buy their game then it must be because of piracy. What they fail to realise is that perhaps people don't buy their game because it is garbage.

They can't have it both ways. Gamestop sells used bad, garbage, games, too.

I tell people to rent a game before buying. That too is a double edged sword. If the game is so short that it can be beaten in a day, why bother buying? It therefore has to be so GREAT that it creates lasting memories and sentimental value.

Only 10% - 25% of games are worth owning. Another 50% are worth renting. 25% are garbage and a waste of time. Game distributors would have us believe that all their games are great and worth buying. They're not.




Amazon
By UppityMatt on 1/16/2008 10:35:42 AM , Rating: 2
I had purchased a PS3, that i owned for about a week before i decided to take it back and get a Xbox 360. I purchased RFOM with the system, but CC would not take it back because it was opened. Gamestop offered me $14 for the game. I turned around and sold it on Amazon for $44 after about 3 hours of posting it. I say to hell with GameStop and ill sell all of my used stuff on Amazon. Even after there buying fee, i think i lost $5.64 off the final price.




By Roy2001 on 1/16/2008 11:44:39 AM , Rating: 2
Sounds like used car sales except that there is no reliability issue here.




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