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100 Million Used Games Traded Each Year In the US
We occasionally discuss the complaints from video game publishers and developers about how used game sales are hurting them, and how they've been testing out countermeasures disguised as features to compensate. Now, industry analyst Michael Patcher has released a report which attempts to quantify that damage. Patcher estimates that used game sales and trades number around 100 million each year in the US. However, despite the immense number of transactions, he doesn't think the used game market is as detrimental to sales of new games as the publishers think. "The vast majority of used games are not traded in until the original new game purchaser has finished playing, typically well beyond the window for a full retail priced new game sale. Thus, while there may be some limited substitution of used game purchases when GameStop employees 'push' used merchandise upon consumers lined up to buy new games, the vast majority of used game purchases occur more than two months after a new game is released. ... To the extent that there is a substitution effect, we estimate that fewer than 5% of new game sales are impacted."
This is insane beyond belief.
Should MSI get a cut of the sales if I sell my laptop?
Why should game companies get a cut of resell?
Even candy is labelled "no individual re-sell".
I would suppose that book publishers would love to prevent the reuse of their products too. The number of books passed on to others is most likely much much higher.
Fuck 'em.
I actually collect games rather than sell them, but I reserve the right to do with my physical copies and registered accounts what common morality affords me, broken EULAs or no.
I frankly don't care how little or how much they "lose" through after market trading. Get off my lawn.
They might as well say that competitors games hit their sale so they should have a cut from competitors sales. I can't see any justification for this whatsoever.
There are a few games a year I look forward to, whether console or PC, that I will buy on release date, and purchase for $50-$60. Many other purchases are games that may be recommended later by friends, or games that looked interesting, but not interesting enough to pay the asking price for, so I'll wait until the price comes down.
http://games.slashdot.org/story/09/02/20/0750203/Do-Video-Games-Cost-Too-Much/
We've discussed this before, and the consensus is easy to spot: many games are not worth the asking price. You'll sell more games if at 1-3 months after launch, you simply drop the price point to an appropriate range, depending on the total units you sold at launch and the total expected units. It's been proven- some games sell well years and years after release for a discounted price.
Of course, this has two impacts- if you enjoy selling games back to places like gamestop, their resell value will be diminished, as the retail price will be lowered quickly. Also, unless you have a strong opening for your game, you simply won't sell them at full retail if you have created the expectation of lowered prices shortly in the future.
I'm willing to pay $20 for new games giving the developers and publishers the profit, rather than pay $15-18 for a used copy.
Console manufacturers and game publishers are going to move towards games which are entirely downloaded.
Directly downloaded games are impossible to re-sell. So will block this "problem"
Moreover, the revenue from downloaded games is not shared by resellers and retailers. Retailers can take up to 50% of the sale price. Just to sell a box.
When publishers, originate the game, develop it, promote it and take all the risks- you can see why they resent the used game market and the burden of "boxed-goods" retailers.
C.
1) The person who bought the game new gets some money back when he sells it used, thus giving him more money to go buy another new game.
2) People are more likely to buy a new game if they know they can sell it used when they get tired of it. If they know they will be stuck with it, they will be less likely to buy. In the aggregate, lower new prices would be necessary if there were no resales. (This might end up happening if all the draconian DRM makes the "purchase" into a true rental because the game can't be transferred and might fail to "activate" in the future. Such games would be worth less.)
Penny - plain text accounting
Thank you for restating how supply and demand curves work.
It's worse than that, what he's saying is selective economics. You want to see how selective economics works? I will now prove that used game sales increase the sales of games at retail prices: Everyone today knows they can resell a $60 PS3 game for $15 to Gamestop. So when they are figuring out the price, they are assuming that the game retains a resale value of $15--much like a person shopping for a car takes note of its blue book value. So you can pretty much look at it like you're putting down a $15 deposit on the game. Everyone assumes that they are going to play the game for a week and get tired of it. Fortunately, there's a few games that are really really good so that the player either keeps playing them or grows attached to the game in a special way. Now, people are buying more copies of the game because the in-the-end cost is $45, not $60. And a few people are holding on to the game instead of trading it back in. So in a world without used game sales, you would have made less sales. On top of that, if you make a really great game and most people keep it then there are a bunch of people buying your game figuring they will resell it and don't ... and you make more cash. I still have my copy of Ocarina of Time for N64 in my room even though I don't play it.
See how anyone can use selective economics to meet their needs? By the way, all economics lessons are selective. Whether they try to be or not.
My work here is dung.
You don't have to imagine. Plenty of people lease cars, knowing they can't re-sell them - technically, they don't really even 'own' the car, all for a reduced price. Other people like me would never lease a car, though. We prefer to own the thing outright.
Disclaimer: I'm a game developer working on MMOs, so used games aren't exactly a threat to our business at the moment, since you're buying an on-line account which you really can't sell - the client software is sort of incidental. However, even when I was working on single-player games, I still felt the same way. Which is:
To hell with publishers who feel they don't have to earn their customers' money just like every other business on the planet. The game development industry is big and booming, but it's also incredibly cut-throat and highly competitive, often with very slim margins and high risk. Tough nuts - we finally made it (as an industry) to the big time, and now they're complaining that their margins aren't as big as they'd like it to be.
Guess what - if there's a thriving used game market which sells used copies of your game for just a few bucks less than the retail price, maybe it's an indicator that your prices are a bit on the steep side, especially many months after its initial release. How about you drop your prices to remain competitive? Or release additional content to encourage new sales, perhaps?
I can't stand it when people whine about the reality of the marketplace like that. It reminds me of another entertainment industry that's become universally loathed because of their refusal to adapt to new marketplace realities, and instead use the force of law to bully and intimidate their customers. I hope to God my industry doesn't go in that direction. At least we seem to be seeing a backing off of those insane and intrusive DRM schemes (which most developers I know don't like either).
Irony: Agile development has too much intertia to be abandoned now.
Honestly, does it really fucking matter?
It doesn't matter if 100 used games are traded each year or 100 million. GAME COMPANIES GOT THEIR CUT WHEN THEY FUCKING SOLD IT IN THE FIRST PLACE.
I don't give a shit if it takes 5% or 95% of their 'potential revenue' away - JUST BECAUSE YOU WANT IT DOESN'T MEAN YOU'RE ENTITLED TO IT.
In the puntastic words of someone funnier than me, it's not rocket surgery. Geez.
Used games do not hurt or harm the game industry. Why? Because the consumer has a first-sale right to sell the game and the game industry has no right to financially gain from that secondary (or tertiary, etc) sale.
So when some third party profits, and you have no rights to the profits, it necessary follows that you were not harmed.
Under the game industry's logic, because my fellow employees are being paid by my employer, I'm somehow losing out on that money, because for some bizarre reason, that money should be going to me.
Or under the same asinine logic, McDonald's deserves a cut from the local Burger King's profits because it's making money that, for some bizarre reason, McDonald's thinks it deserves, even thought it has absolutely no right whatsoever to those profits.
Of course someone is going to complain about my analogies. That the game industry produced the game so therefore it has a right over the game. In my first example I didn't do my coworkers' duties, so therefore I have no right to their pay. And McDonalds didn't serve the customers who went to Burger King so therefore they have no right to those profits.
But you're missing the point. It is completely irrelevant that a particular gaming company originally produced the game. The main issue is that once it sells a copy, It no longer has any resale rights to that copy. I'll say it again, it has no right to any resale money in the same way that I have no right to my coworkers pay or that McDonalds has no right to Burger King's profits. None. Nada. Zip.
The gaming industry certainly wants profits it is not entitled to. But that is not harm. That's jealously and blind greed.
If someone says he and his monkey have nothing to hide, they almost certainly do.
buying a car second hand steals money to car manufacturers
let's forbid that shamefull behaviour and save economy
really, some companies do not deserve our money...
The world belongs to those who get up early. - I'm far from being the king of Earth then
You can resell a car as long as it works too can't you?
You can resell your TV's, DVD players, Lawnmower, Children(put em up for adoption), dogs, cats, food, toiletpaper, heck, you can even sell your poo to be procesed as furtelizer.
Its a basic right to resell your shit when your trough with it.
Its bullshit and a pandora's box if they regulated resale of anything.
Their problem is the same as with all other Big companies out there. Since the dawn of the digital age, 2nd hand sales have both massivly grown(because its way easyer to reach a massive audience to resell to) and its become much more concentrated and publicly viewable how much it turns over.
They just want a piece of a pie they never had and should never have any right of cutting in to.
They make their money with the initial original sale and that should be it.
Up until Microsoft's attempt to kill or seriously injure the PC gaming industry came out, the "games for windows" program, I would have said that PC game reselling was a 100% good thing for the gaming industry; I imagine it would be impossible with the state of EULA's to do it legally, these days.
You have a 100% protected legal right to resell the game. However, if there are technical measures in place to prevent you from transferring your activation, then you are best avoiding reselling that game entirely. Console manufacturers want to knock out resale too. I suspect we're going to have to get some laws passed if we want games resale to continue into the next decade.
(It's been four minutes since I last posted a comment. WTF? This is the thanks for helping make slashdot great? We'll take off the ads that you don't see anyway, but we'll waste your time every time you comment at the speed of thought instead of pretending to be a fucktard who can only read and write about 75 cps?)
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"