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Publishers Want a Slice of Used Game Market
grigory writes "GameStop's business model depends on a healthy flow of used games: incredibly '[GameStop] enjoys a 48 percent profit margin on used games.' Game publishers do not see a cut of the secondary sale because it falls under the first sale doctrine. Now, some
publishers and manufacturers want a piece of the pie. 'One marketing executive, who did not want to be identified for fear of angering GameStop and other retailers, said the used game sale market is still depriving publishers of money because it gives consumers an all-too-easy alternative to buying a new game.' Interesting picture of companies fighting for your business, and (surprise!) complaining about being left out of the money stream."
There's no Steam for the Nintendo DS. (as an example)
The Nintendo DSi has the functionally equivalent DSiWare.
While Sony and Nintendo are slowly moving towards more and more DLC and downloaded games, they don't come with manuals or boxes
You're right that they don't come with boxes, but all WiiWare and Virtual Console games that I've tried have an instruction manual under the Home menu.
The "downloadable" option isn't available for older machines - the heart of the used market
Apart from the Nintendo DS and PlayStation 2, older machines don't have any commercial developers to complain about them. There aren't any new SKUs for the GBA, the original Xbox, the GameCube, or any pre-PS2 system, unless you count the few games sold by homebrewers.
Over the years, paperback publishers have attempted to cut into the used market simply by narrowing the inside margins of their books. This forces you to spread the book open farther, leading to increased deterioration of the spine. Combine that with crappy glue, and you have a book that will fall apart after just a few readings.
I have paperbacks from the 60s that are holding up better than ones from the 90s.
The game companies get their cut at the time of first sale. The selling cost of the game already includes in the price the value to the customer of the ability to resell the product. The assumption the game companies are making is that if they lock this out, they can sell more product at the current prices, but instead what will happen is that they will be have to drop their prices some amount to account for the fact that it is less valuable to the purchasers.
This is a fairly standard element of elementary economics; for instance, see this chapter of Price Theory, where virtually this exact problem is problem number 12 in chapter two of the book.
Which just goes to show that for all the supposed value of an MBA, people in business still routinely fail to apply even the simplest economics to their own worlds.
A modern game cost what? 15 millions on average? When was the last time you paid 15 millions for a game you played?
The car manufacturing plant is a lot more than they sell the car for. Using your logic, we can see that you don't buy a car, you can drive it as a reqard for you giving money to the car manufacturer. When you sell the car, you act like a car manufacturer yourself. The problem is that you never made the car, you just use the work of someone else to make money. To me, the best word for this is normal.
Your logic is so shoddy I suspect you're a troll. If they were only selling one game, then yes, you'd have to buy it for 15 million in order to not be a parasite, but they're selling more than that.
I was just thinking the same thing. The presence of a used games market demonstrates that there are customers who prefer to buy games at a lower price. The real question is whether they would buy the game at the higher price if there were no used market (that is, they're out for a bargain) or whether the lower price convinced them to buy something they wouldn't buy normally.
If there are enough of the latter, it's worth doing.
that's a really good point. For example, I don't mind paying extra for a toyota or an apple computer in part because I know that when I sell it, I get more back too. I do take that into account when I compare prices of cars and computers. Oddly I think most people do not.
Some drink at the fountain of knowledge. Others just gargle.
The height of American corporate practice - we won't do anything to keep our customers but will spend millions creating artificial mechanisms to distort the market and end any competition for them.
The good news is they're succeeding wildly - for instance I've neither pirated nor bought big corporate music in years because I can't stand either option. Instead I just buy direct from bands for half the price in a market *not* distorted by Sony and BMG, and by odd coincidence the artist gets to keep all of it.
It turns out market arbitrage is not a constitutionally protected right.
Pug
An Invisible Entity of Vast Power whose existence must be taken on faith alone: Liberal Media
I don't think it's right to give a publisher $60 for a game that I will only get 20 hours play out of, regardless of whether or not I can sell it later. I buy a lot of WiiWare games simply because they are only $10. I really don't mind if I only play it for 5 hours when I only pay $10.
So you're willing to pay $2 an hour for entertainment, but not $3?
That's a pretty tight range. Perhaps you should buy a game for $60, play it for 20 hours, and sell it for $30, so that you can get things down to $1.50 an hour? OR, my favorite option- renting at $7.50/20 or ~$.38 an hour.
What Gamestop is doing is hardly innovative; It's the college textbook business model. Buy it used, pay about 60-70% new price. (or worse) Sell it back at the end of the semester and you're lucky to recoup 40%. Back in my college days, I often did what I could to avoid buying textbooks because of rackets like that, but sometimes there was no other way.
"It is a denial of justice not to stretch out a helping hand to the fallen; that is the common right of humanity."
Singer - manufacturer of sewing machines - had a really good trick around the turn of the century or so, I hear. Sell your snazzy new sewing machines for a ridiculous amount of money... then offer an equally ridiculous trade-in credit for old sewing machines. Then, as soon as you get the old sewing machines, destroy them utterly.
The World Wide Web is dying. Soon, we shall have only the Internet.
Most people tend to buy things they plan on keeping around for a while. I pretty much keep a computer around until I have no use for it, at which point I can hardly give it away because most everyone else has no use for it either. Cars are kind of the same way - though I do tend to get ones with higher resale value because there is a strong correlation between resale value and reliability.
I find that most of the people who are concerned the most about "resale value" are the ones who are using twisted reasoning to try to justify something they can't afford. "It's not a $60,000 car, it's a $20,000 car because I'll sell it for $40,000 in a couple of years!" I leave applying the same kind of logic to real estate as an exercise for the reader.