Thursday, May 22, 2008

"Artificial Scarcity" of Games

Gamasutra published an article today by Matt Matthews which suggested that "artificial scarcity" would benefit the game industry.

The gist of this idea was that game publishers should copy Disney, who make their products available for only a relatively short time before yanking them from the market for 7-10 years. Something similar to this for games, the author says, would allow publishers to increase their prices since there'd be fewer games to choose from. And the benefit to consumers for this reduction in choice would be fewer "bad" games crowding out the good stuff.

While I applaud the author's willingness to suggest improvements to a system, there are several questions worth asking about this particular idea.

First and foremost, how does this proposal benefit consumers? What's the incentive for consumers to participate in a scheme that's clearly more about artificially inflating prices for the publisher's benefit than about satisfying consumer demand?

To this criticism that unnaturally restricting consumer activity would be bad for business, the author says, "The numbers behind the current digital markets are nebulous, to say the least. All we know are that prices are generally low and the truly high-quality titles get lost among the mediocre-to-poor." Really? Leaving aside the question of whether the prices of games (digitally distributed or otherwise) are actually "low," are gamers really unaware of which games are good and which are not? If that assumption is false, what's left of the argument in favor of artificial scarcity?

On balance, this proposal strikes me as another in the line of short-sighted tamperings that, like wage and price controls, create more problems than they solve because they're never as efficient over the long run as free markets.

Hands off, please. Let publishers provide good information about their products, and then let consumers and publishers negotiate freely on price.

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