Is the Used Game Market Damaging the Industry?

[Corwin_B]

I have no problem with some kind of used market per se (C2C, or even B2C if it doesn't go overboard). But with Gamespot and its like in other countries (someone mentioned a Belgian chain, here in France we have Micromania and Score Games), a large part of the philosophy of the store is done around used games, including heavily pushing used copies instead of new copies, not stocking enough of new games to force people toward used games, heavily advertising the used section, or drawing people to the used section thanks to in-store marketing paid by publishers... Tycho at PA had an excellent post regarding this :
http://www.penny-arcade.com/2007/03/30

Used games can play a good role by supplementing price drops for older titles, and by keeping some hard to find titles available. But actively kneecapping the sales of recent games (which is when the publisher generally makes the majority of its money) is bad for the industry as a whole, I think.

 

[scooby_dooby]

Yes.

Ahh interesting.

That makes me curious about how rentals contribute a games bottom line.

We always judge a games success by retail units sold, but I wonder much money they can actually recoup from rentals?

For example, two of Sony's latest titles Uncharted, and HS have not had great sales. But my gut feeling is that they would be have excellent rental revenues due to their short length, and absence of MP.

 

[V3]

Killing second hand games is killing first hand games…
Why?
A "New"game cost around 70€, retailers rebuy it around 40€ and so I only need to put 30€ for a "New" game… but if second hand market wasn't existing, I probably buy half of the "New" games I'm buying…
So second hand market is necessary for the growth of the "New" game market

Don't worry about that, if the new users still by half what they are used too. The ones that used the second hand market before will make up the numbers and alot more.

With more expected sales, publishers can lower price or make games with higher budget. Its good for publishers if second hand market for games dissapear. For consumers not so much good. Retailers in second hand market would be the biggest losers, but they are leachers anyway.

 

[AlphaWolf]

10 used games + 10 new games = 1100€

1100€/70€ = general consumers would have bought between 10-16 news games if no second hand market existed.

...and that math doesn't add up. There are things I would not buy at all at full price. It's not just because I spent the money on something else, it's because I don't value that product at full price.

I personally don't buy a lot of used games or rent games, but I can see why people do. If a product offers of 8 hours of entertainment its hard to justify a $60 investment.

 

[dobwal]

I'm not sure legally they have any recourse.
I'm sure they tollerate them because they have to.

Manufacturers or pubs aren't legally bound to sell to any one retail chain. They could institute a number of tactics like giving priority to other retail chains and late shipping products that would hurt the retail chains bottom line. We all know that manufacturer in the least have enough power to sway retail chains from selling at above MSRP and minimize bundling.

 

[dobwal]

...and that math doesn't add up. There are things I would not buy at all at full price. It's not just because I spent the money on something else, it's because I don't value that product at full price.

I personally don't buy a lot of used games or rent games, but I can see why people do. If a product offers of 8 hours of entertainment its hard to justify a $60 investment.

Take away the used game market and those dollars that it sees doesn't totally disappear, some will makes it way into the new market. You can't expect all but you can expect some.

You might not spend $59.99 dollars on game X but six months later you might walk into GameStop and see game X a platinum hit for $19.99, which you find agreeable. However, next to it is a used copy for $9.99, which is a even better deal.

I was in GameStop just yesterday, pricing old games that I wouldn't have bought at full price looking for a deal. I looked at new discounted pricing and intentionly compared them to used prices. At $19.99 I will purchase games that Im just remotely interested in, but its a $19.99 game that is only bought if there are no used version available, which I know will be cheaper 99% of the time.

 

[AlphaWolf]

Take away the used game market and those dollars that it sees doesn't totally disappear, some will makes it way into the new market. You can't expect all but you can expect some.

And the used game market generates some money for the new game market. A lot of those traded in dollars are spent on new games. So if you take away used games you don't have a guarantee of more money to publishers.

You might not spend $59.99 dollars on game X but six months later you might walk into GameStop and see game X a platinum hit for $19.99, which you find agreeable. However, next to it is a used copy for $9.99, which is a even better deal.

Maybe that $10 is worth having a copy that hasn't been played 1000 times, and still has the original manual instead of a photocopy.

I was in GameStop just yesterday, pricing old games that I wouldn't have bought at full price looking for a deal. I looked at new discounted pricing and intentionly compared them to used prices. At $19.99 I will purchase games that Im just remotely interested in, but its a $19.99 game that is only bought if there are no used version available, which I know will be cheaper 99% of the time.

And? I don't see the problem here. As I said I'm sure the publishers would love to wring every dollar they can out of everyone. I'll try really hard to work up a tear for them the next time I buy a used game.

 

[V3]

And the used game market generates some money for the new game market. A lot of those traded in dollars are spent on new games. So if you take away used games you don't have a guarantee of more money to publishers.

It does actually. Second hand market is like the retail chains double dipping at the expense of the publishers and developers.

Money spent on new games goes back to publishers and developers for them to reinvest in more games. Publishers and developers don't see a dime on second hand games, all profit from second hand goes to retail. If the problem is severe enough like in Japan for example, you will see publishers and developers producing less and less titles for that target market and move on to target market that don't trade second hand games.

 

[quest55720]

I do sell games I no longer play to purchase new ones. I have done it since I got my drivers license genesis/SNES days. This was before it got really big at stores. I used to place adds in the paper to sell my games. I would get half my money back and go buy some new games. Most games just are not worth replaying so I see no need to keep around taking up space. Especially since I can get more in trade in the sooner I can do it. If devs want to constantly release free maps levels ect then I am going to sell most of my games. I would like to see more expansion packs over live that would give me a reason to keep the game. I don't see selling GTA4 for a while because I will be purchasing both expansion packs over live. I do not buy used games from stores unless there is a special or the game is older. I just don't see the point in saving 5-10 bucks personally on newer releases. But when they are trying to charge 59.99 for a 1 year old game and the used is 1/2 the price of less it is a no brainer. They really need to do what the movie studios do and over time lower the prices on a game.

If the used market went away I would use something like gamefly and buy the occasional gamer here or there.

I am not sure if this would be OT. Why don't we see more expansion packs for games on the PS3/360. I am not talking a couple of maps but some new missions a few new characters. If the content was compelling it would keep people from selling their games. I would love to have the option to purchase a new singleplayer/co op campain mode for halo3. A 5-10 hours were you play a side story. The story would not have to be epic or voice acting just solid the fun would be in the online co op mode. With how large scale the battle was in halo3 with a planetary invasion the side story should write its self. Sell it for 19.99 over live and I think the money would roll in.

 

[PARANOiA]

Therein lies the rub though right? Few care that the publishers and developers may be struggling, but have no problem donating to the bottom line of GameStop, and GameStop creates what exactly?

But what's the link between "publishers and developers struggling" and the used game market? The video game market seems to be doing better than ever, with most publishers raking in cash at the moment. The only situations I can think of where developers have struggled is purely an output of poor purchasing decisions by the public - Okami was great but Clover folded. Is that because most people bought it used? Of course not, it failed to generate appropriate appeal.

Edit: hell, even a "thinkpiece" like Bioshock managed to sell over a million. That's fantastic news for me and makes me proud of the gaming industry at the moment.

Who are these "struggling developers and publishers" you're referring to here?

 

[fearsomepirate]

People buy used books, cars, CDs, DVDs, appliances, guns, houses and musical instruments without the original manufacturers seeing one red cent, and those sectors of the economy haven't collapsed. It's a basic part of the rights of property ownership, and despite it indeed meaning less potential money for manufacturers, I see it as an intrinsically good thing because a world in which you never really own anything, but only have it as long as the person you bought it from says you're using it the way he wants you to use it, isn't really free. You're just subservient to corporations instead of feudal lords.

Looking for a "solution" to publishers not making money from used game sales is like looking for a "solution" to the original construction company and lumber yard not making any money off the sale of your house. The "problem" isn't that some company out there doesn't make enough money; the problem is that there are people trying to take away your rights to satisfy their greed.

If you can't make money without taking away people's rights, you don't deserve to make money.

Edit: Something is worth what people will pay. Apparently, many video games are not worth $59.99 or $49.99 to many people. The normal answer to this is to either admit the fact of the used market or price more strategically. The publishers want to simply take away our right to own and transfer property in the case of video games.

 

[Acert93]

Just a side note: I like Steam for the reason I know a larger chunk of my gaming dollar is going to the people who develop the games. Because I am "active" in the gaming community (demos, trailers, previews, etc) I am not as reliant on expensive publisher placement/advertising and I personally don't gain much from walking into a B&M (inconvenience for me actually). I get the benefit of installing a game anytime I want. And a system like Steam could offer a small "surcharge" to sell/transfer the account. Of course this could be abused...

I do think, eventually, a tiered system of B&M distribution at one price (e.g $70) and a ODD model with multiple pricing ($60 for new/big budget titles, $40 for niche products, $20-30 for old products) with a small "transfer service fee" could become the model console makers go. This will be an easy, legal, way to move more gamer dollars back to publishers.

 

[wco81]

Price is the reason there is a used games market.

There doesn't seem to be as big a used DVD market, because you can't recover that much money by selling a DVD used.

If games were priced half, they'd recover a lot of the used games sales. Whether they'd recover enough to offset the lower revenues from lower prices, who knows.

But look at Craigslist. People are asking $40 for used games, many of which have been offered on sale at around that price by some retail chains.

 

[AlphaWolf]

Therein lies the rub though right? Few care that the publishers and developers may be struggling, but have no problem donating to the bottom line of GameStop, and GameStop creates what exactly?

My local grocery store doesn't create anything either, but I spend about 10x as much money there as I ever did or likely will spend on games. Why should I feel sorry for developers or publishers over any other business struggling or otherwise? What makes them special? Used sales is not some new market dynamic that came about with the birth of video games.

It does actually. Second hand market is like the retail chains double dipping at the expense of the publishers and developers.

That's assuming those dollars would have went to developers and publishers if the 2nd hand market didn't exist. I think you could make a good case that the 2nd hand market keeps people interested and actually brings more money into the market than otherwise may have been there. (If you turn in some old games and get a new one, the publisher still gets paid for that new one, if you can't do that, maybe you don't buy the new game at all). Let the publishers think of it as a loss leader if they like.

Money spent on new games goes back to publishers and developers for them to reinvest in more games. Publishers and developers don't see a dime on second hand games, all profit from second hand goes to retail. If the problem is severe enough like in Japan for example, you will see publishers and developers producing less and less titles for that target market and move on to target market that don't trade second hand games.

Because the VG industry is struggling so much because of used games? Sales were up something like 50% in 2007. Should we expect they would have been 100% if not for the massive used game industry?

I'm sure there are some developers struggling to make ends meet, just like every other industry, but trying to pin it on used games, is laughable at best.

I think part of the problem is that game sales are on this flat pricing scheme and publishers need to learn when a title needs to be sold at a discount. Marginal titles need their own pricing scheme.

 

[Rodéric]

How many people do buy new games because they know they can sell them right after finishing them for half their price ?
How many people won't buy a new game because they find it too expensive, and will wait for second hand ?
Exactly why aren't movie makers concerned too much about it, while video games makers are ?

I don't really think it hurts, if they don't like it, they can make the games cheaper, people will likely prefer brand new games over second hand if the price difference is small...

Anyway I see it as a blatant way to try to reduce users rights. It's been bought, it's someone property, that person can do whatever (legal) it wants about it (use it, destroy it, resell it...)

 

[archangelmorph]

I agree that used sales is good for the consumer & that any attempt by hardware manufacturers or publishers to try to remove or limit the used games market would just be wrong.. However I'm not sure I agree that it's existence doesn't affect the industry..

I know here in the UK the biggest retail chains are GAME & GameStation (now own by GAME) & both make significantly greater unit sales on pre-owned software than on new software.. I'd guess it's relative to the rediculous pricing of games over here (predominantly due to UK taxing; e.g. £40-50 per title) but added to that the very appealing used game pricing models (2/3/4/5 games for £20/30/40 depending on the age of the titles etc..) & you have a reason why all new game software has limited shelf life..

It's a sad thing because when you look at it.. Publishers could really just follow in line with retailer pricing models on older software & encourage retailers to support lower/budget priced software at similar price points to those retailers are already offering.. It would probably help considering gamers would then have the option to either pick up a 2-3 year old title brand new at a similar price to the same title used & I think it's clear which option most would prefer..

I know there is something like this now with the whole "Classic" (360) & "Platinum" (PS2) range but I think even more software options should, could be introduced..

 

[DuckThor Evil]

The problem with used games market is that it can easily generate more profit per copy to the game store instead of for the publisher or the developers and this can happen in a very short time period and just because we can sale our houses, cars etc. doesn't make these situations comparable.

The creator and the publisher should have the biggest cut on their own product and it's easily understandable that they are getting pissed about Gamestop reaping huge profits on their games as one copy of a game can be traded in multiple times and each time GS sells it they make a killing. I'm quite sure the current situation will not go on forever and some change will happen eventually.

The problem is that while banning used games business could be possible to make beneficial to the consumer by reducing the licenced price, I kind of doubt that the publishers will actually do that. They'll probably charge you the same price for just selling you the licenced/digital version in the future and make it only beneficial to themselves, but we'll see.

 

[Johnny Awesome]

Let consumers decide. Give them that freedom. If they are willing to pay $55 for a used copy, then so be it. Most consumers who buy used will wait until they hit $45 or lower. Some people here are acting like retailers are forcing consumers to buy used games for $55. They aren't. It's a choice.

Let's face the facts: Most published games (95% of them) aren't worth $60. The quality just isn't there. The used market allows gamers to play these games at reduced prices.

For instance, Blue Dragon isn't worth $60 to me. It's probably worth $40 to me. So when it hits $40 in the used bin, I'll go and buy it. The fact that I'm willing to buy it used means that someone else can sell their copy back to the store so that I can buy it. Two consumers win in that situation and the store does as well for facilitating the transactions. Nothing wrong with that.

You also have to remember that if the original guy was not able to sell his copy of Blue Dragon back to the store and he knows this, then maybe he doesn't buy it in the first place. Not good for publishers either.

 

[valioso]

Let consumers decide. Give them that freedom. If they are willing to pay $55 for a used copy, then so be it. Most consumers who buy used will wait until they hit $45 or lower. Some people here are acting like retailers are forcing consumers to buy used games for $55. They aren't. It's a choice.

Let's face the facts: Most published games (95% of them) aren't worth $60. The quality just isn't there. The used market allows gamers to play these games at reduced prices.

I don't think any of that actually addresses the topic at hand. Of course is good for consumers to buy something at a cheaper price a week after it gets released.

 

[fearsomepirate]

The problem with used games market is that it can easily generate more profit per copy to the game store instead of for the publisher or the developers

Why is that a problem? Game stores don't deserve to make profits? As I see it, they provide a service: they collect large amounts of games from various publishers, keep a readily available stock of machines and peripherals, and provide customers with an easy way to unload unwanted games and obtained used games. Those are services publishers don't provide. If they want a piece of a used game pie, they should start selling used games instead of complaining about the rights of property ownership and trying to find some way to infringe upon them.

The creator and the publisher should have the biggest cut on their own product

No, the creator and the publisher get whatever they can sell their product for, just like in any other market. Under no circumstances do they "deserve" to receive money every time that product changes hands. The original maker deserves only as much money per unit the market actually wants. For example, I have a 30-year-old Washburn guitar. It's probably changed hands so many times that the various music stores and owners have collectively made far more money than Washburn made off the initial sale. We call that "property rights," not a "problem."

they are getting pissed about Gamestop reaping huge profits on their games as one copy of a game can be traded in multiple times and each time GS sells it they make a killing.

And yet they don't offer a competing service. EA doesn't buy back or sell used games. Neither does Ubisoft. They don't offer trade-in credits toward new games. If you want the money, offer the service.

The problem is that while banning used games business could be possible to make beneficial to the consumer by reducing the licenced price

No, the problem is that banning the used games business would be taking away the fundamental property rights of citizens in order to increase a corporation's profits. How come people today only care about their rights when it has to do with sex, but when some greedy corporation wants to take away their property rights, they just passively roll over and die? Is that our ideal society? Have all the sex you want with whomever you want, but have every other detail of your life controlled by your corporate masters?