Pre-Owned Game Sales Strikes a Nerve

More industry grumbling about the impact of used video game sales by major retailers. UK publishers are making vague threats to “do something about it.”

First, let’s be clear: this problem is not unique to games. Most durable physical products have an after-market; many even have dedicated resellers. Think about used book stores, second-hand furniture outlets, etc. Can you imagine IKEA complaining about the resale of its furniture?

To defend their position, some game industry veterans are claiming two distinctions: 1) games require technical support, which costs money to provide, and, 2) primary retailers in other industries don’t support pre-owned trade (i.e. Barnes and Noble does not sell pre-owned books.)

Both of these defenses fail upon cursory inspection. While PC games may carry a notable tech support burden, console games aren’t quite so troublesome. More to the point, electronic goods (such as stereos and computers) are often resold and carry an arguably greater tech support burden! The consumer electronics industry manages this problem with a nifty little thing called a time-limited warranty.

As for primary retailers supporting pre-owned trade … how about Amazon? You can buy most anything used or new, right from the same page. And how is this even relevant? You think people can’t find used games if they really want to? Is eBay a well-kept secret?

Let’s not forget that one of the primary drivers behind the pre-owned game market is price. Specifically, the high price of new games. What’s a guy with $30 in his pocket to do? Maybe instead of griping, game publishers should consider offering a few more decent, lower-priced games. (It would help expand the game market, too). And if compelling online services that enhance gameplay (and extend the life of the game) are introduced, consumers might never be willing to sell their copy in the first place.

It would be great if all users felt so thankful for games that they were willing to buy them first-hand. I personally make a point of doing so in order to support the game industry. But enough wishful thinking. People feel entitled to buy and sell used goods. If game publishers clamp down on the practice, they risk offending the mass market in the same way that music publishers managed to. “Those who fail to learn from history…”

Rant finished. Some related information: Best Buy started evaluating pre-owned game sales back in September (probably because EB reported over 40% of its profit from the category.) Also, see GamerDad’s I’ll Resell If I Want To. Mark Reins (Epic) wants retailers to share resale profits with developers — and the incentive he’s offering is…? (“It’s better for the industry as a whole” probably won’t impress retailers.)

4 responses to “Pre-Owned Game Sales Strikes a Nerve

  1. Diamonds are one example of durable physical goods with no aftermarket, which is almost entirely due to a brilliant (heh) advertising campaign by De Beers in the 1930s that imbued the gems with high emotional value that prevented reselling them. If publishers manage to create a similar non-tangible value around games, the problem will be solved.

    Check out this very fascinating read on De Beers.

  2. Nice. Another thought: give consumers good reason to voluntarily forgo their right to resale. I.e. digital distribution. I’m willing to buy a game via Steam (and not be able to share it with friends) in exchange for the convenience of not having to visit a store or wait for the game to arrive via mail.

  3. Cool ideas, I sort of take issue with the notion that resales are a bad thing that need to be prevented. I believe that game resale enables the game industry to have higher-priced games. People buy the game at $50 because they’re expecting to flip it for $20 and thus it only costs $30 to them. If they didn’t have that option, they might not buy it. Of course, this means that the game industry is making half as many sales, but they’re making twice the profit on each sale. Plus there’s always the idiots (like me) who will never resell their games, nor buy used ones. Also, a used game can act as a sort of advertisement. I bought Dark Cloud used, and because of it, bought Dark Cloud 2 retail.

    To sum up my armchair economic opinion, I think that the resale market for games provides substantial beneficial side effects that outweigh the cost of lost sales.

  4. Check out this article on the game industry’s status. In particular, a comment by Robert Blum asserts that the next generation of games is likely to shrink the market because of their high price. Also, Lost Garden is an exceptional games blog that I’ve been meaning to alert you to.

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