Used games and the phantom "Publisher Buyback

I just finished reading this article about the "secondary games market", aka, Used Games. Well reasoned, it reminded me that I've had something to say about this for a while.

The Phantom Buyback

At PAX East this year, I attended a "Legal Issues in Gaming" panel run mostly by lawyers, several of whom represented big game publishers. At some point in the the panel, they asked for a show of hands "how many of you buy used games?" I raised my hand. Then they asked, "How many of you think the publisher or developer should be getting a cut of that sale?"

My hand went down and I was frankly shocked at how many stayed up.

Now I'll admit, I consider myself (maybe narcissistically) to be more informed than the average bear concerning intellectual property issues. This is a very clear case of first sale. Once you've packaged up and sold something, it's not actually yours anymore. If I choose to sell it to Game Stop for $20, and then they turn around and sell it to someone else for $40, that's the market working the way it's supposed to (but the less said about "the free market" the better).

To every publisher or developer who thinks they should get a cut of that sale, I would ask, how much of that $20 I got from Game Stop came from you exactly? And while we're at it, how many publishers actually run their own buyback programs for used games to compete directly with this model? Why settle for a cut of that resale price when you could have the whole thing?

My guess is because they don't like the entire concept of competing on price and having several used game outlets would open used games up to something most intellectual property never has to worry about - commoditization. Since copyright is essentially IP monopoly, most IP creators have gotten used to the idea of being able to name their price. Competition in the used games market (for both buyers and sellers) adds an element of instability that most would rather not deal with.

Digital Distribution or Digital Extortion?

Another point made by a panelist was that digital distribution would help this problem "self-correct". I agreed, but given the way things have been going, I think we were thinking about it in very different terms.

From my point of view, the "digital distribution" angle is very clearly happening in places like the App Store. We are seeing, in some cases, the exact same game that sells for $50 in a box going for $9.99 (if even that) on the App Store. And this is often times after additional development costs to translate to a touchscreen control system. But it's a lot easier to justify a $10 price tag when you know every sale is final (no resale of digital goods, for now at least) and the volume has the potential of hitting 200 million.

Unfortunately, I fear this is not the digital distribution you're looking for. I think he was referring to the increasing popularity of locking off parts of the game behind a single use code included in the box.

Some of you might remember the dust up when the Downloadable Content for Bioshock 2 was in fact already on the disc. Back then, many felt they were being charged for something they already paid for. The single use code does essentially the same thing. To the point where Game Stop has actually been sued over deceptive practices over the fact that stuff pictured on the box isn't actually included when the game is sold second-hand.

Bravo lawyers, bravo. You turned it around on them.

But the overarching point in my mind is really quite simple. If you don't want people to "wait till they can buy it used", you price it to move. Hell, I've bought every Lego Star Wars game new and I then sold them back but I've almost re-bought several of them over xbox live because, two years later, who can argue with $19.99? If it had been $19.99 to start, maybe I would have just kept it instead of getting $25 back from the $50 I spent. After trade and buying it a second time, I still will have spent less than buying it new and keeping it.

With a value proposition like that, why wouldn't I trade my games and more importantly, why would I care if the developer didn't get a cut of the used sale? Clearly the game is only worth $19.99, right? So why shouldn't I be incensed that I paid $50 in the first place?

Why indeed.

Should Copyright be split in 2?

I spend a lot of time thinking about the state of copyright in the digital world.  I took a few “law classes for non-lawyers” when I was finishing my undergraduate degree and one focused specifically on intellectual property in the digital age.  I found it completely fascinating.

Quick question, of the following 3 options, what is the PRIMARY function of copyright?  (in the united states)

• to prevent people from profiting from the work of others
• to guarantee creators the exclusive right to profit from their own work
• to promote the open exchange of ideas

Here’s what the United States Constitution has to say about it:

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.

You may notice the distinct LACK of a mention of profit.  I bring this up because I think we as a society have lost our way with regards to the usefulness of copyright and other intellectual properties.  The term of copyrights, back in ye olden days, maxed out at around 28 years - a 14 year term with an additional 14 year optional extension.  Ever since then, it’s been continuously extended to the point we are at currently which is long enough as to be essentially meaningless for normal people (once you start measuring things in “life of the author plus”, it is essentially meaningless, in my opinion).

So what’s wrong with having such protections?  And why would someone whose work is protected by copyright (the code used in apps) be against them?  It all goes back to the stated purpose of copyright in the first place.

The goal of providing protection to authors for a LIMITED time is to give an incentive to create.  Which then brings us to the question of WHY we want people to create.  I would hope the answer to that would be self evident.  But the idea of these protections being LIMITED is an important one because it creates something that is often taken for granted - the public domain.  If you want to know why Grimm’s fairytales are constantly being remade, or how the novel Wicked (http://en.wikipedia.org/wiki/Wicked:_The_Life_and_Times_of_the_Wicked_Witch_of_the_West) could be written without a license from L Frank Baum, you need look no further than the public domain.  This is a magical place where copyrighted works pass on to and become the property of all humanity.  The beauty of this place is that it means that anyone can use them in any way to continue the cycle of creation.

So what the hell am I talking about when I say “split copyright in 2”.  Well I’ve been thinking that maybe we should start looking at the idea of copyright through a whole different lens.  I’m starting to think that maybe we break it into “primary” and “secondary” copyright.

Primary Copyright

Primary copyright would be a lot like how we see it today, but with time limitations more in line with how things started.  Just to pick a number, let’s say 25 years.  In my opinion, if you create something with the goal of profiting from it, and you can’t make that happen in a quarter century, it shouldn’t be the job of copyright law to facilitate it.  Primary copyright would be unable to be transferred (similarly to moral rights - http://en.wikipedia.org/wiki/Moral_rights_(copyright_law)), except with regards to works made for hire or instances of corporate authorship.  This is what leads us to:

Secondary Copyright

Most of what happens in the world of copyrights today is related to licensing.  Warner Brothers buys the rights to Harry Potter, and they alone are licensed to create movies based on the books.  In my vision of secondary copyright, the type of license you can buy is a little different than it exists today.

In keeping with the stated goal that copyright is meant to promote the PROGRESS of science and the useful arts, secondary copyrights would be limited to a shorter period than that of primary, say 12 years.

In today’s world, the book of Harry potter and the Sorcerer's Stone was published in 1997.  When will it’s copyright expire?  The answer is, we won’t know until J. K. Rowling dies.  But from that day, you need only wait 70 short years and then book one (and ONLY book one of course) will pass into the public domain.  Do you see what I mean by essentially meaningless?  There’s a decent chance that less than 1% of the people reading these words right now will live to see Harry Potter enter the public domain.

Under my proposed system, the book will enter the public domain in 2022, a good 12 years from now.  Still a decent amount of time for J. K. Rowling to have exclusivity over publishing rights.

And the movie?  The rights for the first Harry Potter movie were secured in 1999 and the movie released in 2001 which would allow that movie to pass into the public domain in 2013 under my proposed system; only 3 more years.  At that time, anyone could copy and re-release the movie for their own profit.  It’s obvious why the studios would hate this idea, but why should we, the people love it?

How about these:

• Imagine a DVD version of Harry potter that has a joke commentary in place of the actual audio, MST3K style.
• Or a version that has a video AND audio commentary where you (yes, YOU) pick apart the frame composition by drawing over the pictures to describe why some shots work and others don’t.

Neither of these are legal without express written permission (and a hefty license fee) under the current system, until and unless the item in question is in the public domain.  But there is a key distinction to be made here:

in 2013, when the movie passes into the public domain, the book still has some time on the clock.  You still can’t shoot your own version of the movie based on the book and this is by design.

As I see it, the act of CREATION falls within the definition of copyright, as it is laid out in the constitution.  Sure, there could be a profit motive, but the act of creation itself is why copyright exists.  But the act of licensing is driven by one motivation: profit.  As such, I don’t think it deserves the same level or length of protection.  If you license a work, in search of profit, you get limited time to do so.  If you can’t secure a profit in that time, it’s not the job of the law to provide you with “the long tail”.

Is this proposal perfect?  Doubtful.  But I think it presents a decent first step in swinging copyright back to the track it was originally meant to be on, and away from the current “corporate profit protection statute” that it has become.

Agree or Disagree?