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Thursday, September 23, 2010

DLC Activation Codes Have No Effect On Used Game Prices


Video game publishers have started including downloadable content (DLC) activation codes in some new releases in an attempt to discourage the purchase of used games. When sold new, games like Mass Effect 2 came with a code that would allow you to access downloadable content for the game. If you bought the game used you can still access this content by paying $15.

Publishers like THQ, Electronic Arts and Microsoft have started using the DLC Activation codes in all their new games but has it affected the used game prices? Are gamers less likely to buy a used game when the new version includes extra content? If activation codes are having the publisher's desired effect, there should be less demand for the used games and they should decrease in price quicker than games without activation codes.

Price Comparison Between Games With and Without DLC Activation Codes

Price Comparison of Games with DLC Activation Codes and Without

The data above shows the average game with a DLC activation code decreased in price $0.28 per day while similar games released without activation codes decreased $0.31 per day. This price difference is NOT statistically significant though.

DLC Activation Codes Don't Affect Used Prices

The data at this point shows that the DLC activation codes do not affect the prices of used games at all. The prices still decrease at the same pace and consumers are probably not discouraged from buying the used games.

Publishers might make more money on the deal though because they are able to sell downloadable content to some of the used game customers. If even one buyer of a used game purchases the DLC for $10, the publisher made more money on that sale than they would have for a regular used game and I bet a pretty good percentage of customers end up paying for the DLC.

Methodology

We compared fourteen games released in 2010 with DLC activation codes to their previous games. For 2010 releases, we looked at the price change from the release date to September 23rd 2010 and divided the total change by the number of days the game was out.

For older baseline games we calculated the price change from the release date to a date the same number of days from release and calculated the price change per day.

For example: UFC Undisputed 2010 was released on May 25th, 2010 at $59.99. On September 23rd, 2010 the PS3 price was $24.75. The total price decrease was $35.24. Sept 23rd is 121 days after May 25th so the price decrease per day is $0.29.

UFC Undisputed 2009 was released on May 19th, 2009 for $59.99. 121 days from May 19th is September 17th. The price on September 17th 2009 was $38.47. The game decreased in price $21.52 over 121 days for a decrease of $0.18 per day.

We tested the difference between the two means using a t-test for differences of two means. The p-value was .535 and needed to be below 0.05 to be significant.

7 comments :

Anonymous said...

Wait did halo reach have a code? I don't remember one, except the normal pre order bonuses.

mndrix said...

Surprising results. Thanks for checking the statistical significance.

JJ Hendricks said...

Halo Reach's code was a pre-order bonus. I included it because that is another inducement to encourage buyers to get the game new.

If Halo Reach is excluded it the price changes are even more similar. $0.21 for DLC games and $0.20 for non-DLC games.

Seishun said...

I don't think Resident Evil 5 Gold for PS3 had a DLC code. I think all the additional content was included on the disc itself. Can anyone who has the game verify? This could explain the large discrepancy between the price of the 360 and PS3 versions.

Anonymous said...

The Halo data skews your research because you have to consider timeframe from release. Reach has been out barely over a week, and because of this you are seeing it's initial used prices, which haven't dropped. This is the same for Halo 3 since you used the same date range from release, but if these games don't drop in price for two weeks, the average will fluxuate tremendously, just because your current timeframe is so short. ($10 different for 10 days = $1 per day drop, but it never actually dropped, that's basically where it started. In two weeks it wont change, so it goes to $.50/day, despite never actually changing). The end results between data groups will still not have a significant difference but the sum data is skewed.

Travis Hendricks said...

It appears to me that this could be good news. If consumers are maintaining steady purchasing habits in regards to used games and yet the publishers are managing to get some bones back in the process too.

That seems like good news to me. Maybe EA was on to something with their Project 10, or whatever it's called.

JJ Hendricks said...

I agree this is good news for the industry. Gamers seem to make the same decisions they would have made before but the publishers get some revenue from the used games. I would love to see revenue numbers from the publishers to see how much revenue is does bring in.

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