Reselling Digital Content

[jfrost]

I don't understand why Steam would give me trade-in credit for my license. They gain absolutely nothing from me if I decide I won't play the game again. On the contrary, they might will have more costs. Unless they crank up the prices across the board to offset it...

To be sure, a system like this exists, Green Man Gaming does trade-ins. I still think it's bullshit.

[MrPopo]

Oh, I agree with you that it doesn't seem to make business sense for them the way things stand now. For it to work the legal agreement between Steam and the publisher is that Steam buys a license for the software and can then use that however they wish. If someone buys a game from Steam at launch Steam would purchase the license at the time of sale and immediately apply it to the person's account. If the person then sold back the license to Steam then Steam could sell it to someone else. I believe that right now licenses are non-transferrable in the agreement Steam has with publishers, and there isn't much incentive for publishers to change that contract. But if such a system existed I do have a handful of games I would like to trade back for credit.

[irixith]

The only way I can see reselling digital games is for the retailer (i.e. Valve) to implement a system for digital games identical to the way Gamestop's system works. Buy back the license for an amount based on demand for the game, and resell it for more than they bought it for but less than full retail.

That, and obviously allowing users the option to sell and trade their licenses freely amongst each other. I think it's entirely possible to do, and have been rather surprised no-one has capitalized on it yet.

[KDub]

It doesn't make much sense to me. There aren't limited materials like a physical game, a digital game is just files on a server. A company like Steam to buy back something they essentially have an infinite amount of doesn't gain them anything.

What they could do though is allow the consumer to sell the content and a fee gets paid to the company. So if someone wants to buy my licence to play Half-Life 2 at a discounted price I lose the ability to play the game, they gain it and Steam and I get a cut of the money.

[irixith]

The supply of files on a server being infinite isn't really the issue though -- it's that they sold us a LICENSE. A tangible. We should be able to trade that license as if it were a physical thing, because that is what we were sold.

[Hobie-wan]

What they could do though is allow the consumer to sell the content and a fee gets paid to the company. So if someone wants to buy my licence to play Half-Life 2 at a discounted price I lose the ability to play the game, they gain it and Steam and I get a cut of the money.

Or, Steam just sells it to the next person normally. If they buy it now at the higher price, good for Steam. If they buy it next sale, fine. There's no point in trying to treat a copy (or license) that's already been to someone different than a new license since there's no physical object.

[jfrost]

The supply of files on a server being infinite isn't really the issue though -- it's that they sold us a LICENSE. A tangible. We should be able to trade that license as if it were a physical thing, because that is what we were sold.

Perhaps, but people here were saying that Steam could give trade-in credit for us if we forsake our license to play the games.

Alright, but our doing that doesn't really increase the supply of copies Steam has available, because their supply is indefinite. It makes sense for GameStop to rebuy our games, because each game they get is +1 in the inventory. Each game Steam "trades in" doesn't net Steam anything they didn't have in the first place. Why would they pay us then?

[MrPopo]

But Steam does buy a license from the publisher for each copy they sell. So for in-house games there would be no business value, but for games by third party publishers they could cut costs by doing this.

[Ivo]

Alright, but our doing that doesn't really increase the supply of copies Steam has available, because their supply is indefinite. It makes sense for GameStop to rebuy our games, because each game they get is +1 in the inventory. Each game Steam "trades in" doesn't net Steam anything they didn't have in the first place. Why would they pay us then?

I think the point is that this is in a context where they are forced by law to allow users to transfer licenses (a law which I agree should exist), then Steam does get something by offering some value to get the license back - it prevents someone else from getting that license, which may mean that someone else buys it from them instead.

Imagine they provide a very easy way for users to sell licenses to Steam, it may enable them to undercut "other users" in the value they offer (e.g. because with other users you may have to deal with external payments like paypal or something, people like convenience and are willing to sell cheaper in return for hassle-free transactions). Add to that a system where they pay for the licenses in "credits" that are locked to be used inside Steam.

So something like that is a plus to Steam, when compared with just allowing users to transfer licenses between them. Of course if they aren't forced by law they would just rather to keep things as they are now.

Ivo.

[jfrost]

But Steam does buy a license from the publisher for each copy they sell. So for in-house games there would be no business value, but for games by third party publishers they could cut costs by doing this.

Does it work like that? My guess was they just sold the games with a contract that stipulated a cut for each copy sold for each part.