Used Game Sales and Its Detrimental Effect on Gaming
Used games have been a cause for commotion among the gaming industry for years now. Many prefer to pay a smaller price for a previously owned title, while others believe that buying used games is like stealing.
An interesting fact about used games is that they make an incredible amount of profit. GameStop was one of the first companies to buy and sell used games. The process of offering a low value for consumers’ used titles then in turn selling the title for around $5 less than the new counterpart has proven incredibly effective. So effective in fact that some resources report that the company makes as much as double the amount of profit from used games versus new games.
The unfortunate side-effect of used game sales is that developers receive fewer and fewer sales as used game sales steadily rise. The end result of fewer sales due to used games is that the developer earns no profit from the second-hand sale. In essence, the availability of used titles attracts potential buyers of the new game and in turn lowers profits for developers.
Just yesterday, the well-known and revered game designer David Jaffe got into a heated argument about used game sales over Twitter. Jaffe argued that used game sales drastically hurt game developers, and also proposed a potential solution. David Jaffe posted the following on his Twitter:
“Gamer suffers. IF gamestop cut game makers into the deal, Gamestop could stay in biz much longer than they currently will.”
He also added:
“Used games hurt devs/publishers. Hurt devs/publishers go out of biz or find ways (dig dist; all content only on first sale) to stay in biz.”
So it seems that David Jaffe believes that over the course of time, game volume will decrease due to a lack of sales and will eventually end up in GameStop losing massive profits. He has proposed that developers receive a cut from the profits of used game sales, which will make up for the loss of new game sales. This is an interesting proposal, but one problem is that regulation of sales through sites such as Craigslist, eBay and Amazon would likely be impossible. With that said, there is no doubt that used game sales continue to accelerate as games have gotten shorter and less replayable.
The question is, what is the best way to handle used game sales so that both developer and consumer can be happy? Please reply with your opinion in the comments below.
23 Responses to “Used Game Sales and Its Detrimental Effect on Gaming”
Digital distribution would solve this dilemma, and at the same time take gamestop and other stores like them down a notch
This is a tough arguement as I can see both sides. I think the main thing to look at is the consumer. Because the price of games has gone to $59.99 I believe that gives people more incentive to go buy a used game. Why buy new when I can get the game for $29 or $39? The consumer isn’t thinking about whether a developer/publisher makes money. All they want is the game. Because gaming can be an expensive investment the games made need to be good. We all know Uncharted 2 will be awesome and lots of people will keep it (like the first one). MGS4 is a keeper. Games like Ghostbusters, Conan, The Godfather, etc don’t necessarily have that “Keeper” appeal.
If you don’t mind waiting, just do what I do, Buy them retail when they hit the bargin bins
HavenXL the thing is though many games never really hit bargain bins, and the ones that usually do are the ones that have taken drastic losses on the game to the point that the pub/dev may be hurting for cash.
I think Digital Distrobution titles need to go down in price 10-20 dollars to entice consumers for games that will have 10 or more dollars worth of DLC.
I am buying almost every brand new game I get from amazon because I usually save 10-15 dollars buying through them.
Games with lots of DLC I buy as low as possible and then buy the DLC if I enjoy playing the game alot. I did that with Burnout Paradise, Disgaea, and Singstar (which I bought new for 10 dollars a game)
Soul Calibur I got for 10 dollars and I might buy a few things for it later. However if devs expect me to pay 60 dollars PLUS DLC and stuff like that without having a game like LBP where there is a lot of added replay value and just a ton of enjoyment factors to it… then they should at least be giving me a couple hits off of that joint their smoking cause they are high as a kite.
I didn’t mind paying 60 dollars when the PS3 and 360 combined to smaller totals than the PS3 and 360, but once the PS2 dies, I’m hoping we’ll see prices drop 10 dollars a game for the simple fact that companies have way more options, way more acceptance, and that there’s no longer a that 20 dollar + cheaper option for games like Ghost Busters, Mercenaries 2, and others.
This is stupid. Do used clothing sales hurt clothing designers? Do used car sales hurt car manufacturers? How about used DVD sales? This argument can be used for almost anything.
How about used music sales?
Why don’t they go after the middle men that are the biggest leaches when it comes to money from game development? Those are the guys that contribute NOTHING to the industry yet are bleeding it dry…..no blame the gamer instead.
They cry foul when people rent games too. I’m sorry but if you’re not rich enough in the game industry then go to some other sector that pays more….like a publisher.
I buy all my games new (for the record) and I just don’t like used games (they are usually scratched or missing manuals), but this finger pointing has to stop.
I also do not believe digital distro is the answer. Throw away any actual ownership of a product you just PAID for. No loaning it to friends, no trading or selling and if your ID gets banned or MS screws up your profile POOF it all goes up in flames and you own nothing. My friends Steam account was hacked over 6 months ago and he can no longer play ANY of the games he has PAID for. Get that? The best part is the wonderful team at Steam refuse to help him fix the problem….they just ignore him. Maybe they shouldn’t authorize an e-mail change on an account unless the OLD e-mail address verifies it…nah that would be too smart.
When you buy a product they have made their money on it. When you resell it you make a small portion of that back, but they’re crying because they want some of the 2nd, 3rd and 4th sales profits from the game. Listen Mr. HeaduptheAss developer…that guy who just bought that used game wouldn’t have paid full price for the game in the first place and you get 2 (count ‘em 2) bonuses:
1. This guy is not a pirate, but an honest person who at least will pay for his gaming. He is willing even at a small level to support gaming.
2. Someone who may end up with some product loyalty and will probably buy MyNextGreatGame #5 when it comes out.
Ever since hacing my PS3 for about 6months ago. I stopped buying used games. I don’t want my PS3 to suffer reading scratch disc that sells $5 less than a new/un-used product. Plus, I would want to help the devs so that they could give me more games that I would want to play.
IMO, if the developers would want to get a cut from used sales, they should only target retails like Gamestop, and Gamecrazy. Auction sites such as ebay should not be affected. For the reason that mostly real people who bought and own that game is selling. They just don’t want it anymore.
I don’t really understand why a $2 differential from a new game good? Although there are some $10 differential, which I believe that it should be at least.
I usually look for great deals of games which Target, BestBuy, and Ebay mostly have. There are alot of better deals out there than what gamestop is doing with their used games. You just have to look. Used games are really hurting the developers and publishers. Although I would RECOMMEND buying used for ACTIVISION’s Games!
PEACE!
i do think used games are hurting, i only buy used when the price is a huge reduction from the new.
idc i spend $10 every day i work on gas & bout 5 on food plus payin bills
i hate spending $60 plus tax on a new game
my money goes to gamestop
saves me money using my edge card on used games
i only buy new if its a game i want on release day or they cut down the price
I almost always buy games new, unless I either can’t find a new copy or if I hate the developer/publisher. Blizzard-Activision, I’m looking at you.
No need for name calling robotron. And I really don’t think the developers care about the little money places like gamestop makes on games. If everyone bought used games then think of this… theoretically ppl can buy 10k copies of one game. Then those copies get sold and bought and sold and re-bought over and over again. This is the idea of buying and selling used. Do you think devs can make a living off of selling only 10k copies of a game? And under your argument, if everyone was in it to make more money and became publishers, who would DEVELOP the games?
With less ppl in the development field, then, there is less competition for the bigger companies to compete against. Also, with some devs being smaller, they play a big role in innovation for the gaming scene. They are forced to be recognized somehow so they try do do what it takes to stand out. We need these companies around (even if a lot of the time they mostly don’t produce quality stuff). On top of that… how do you think big name devs started out as? If they all quit as devs when they were small then where would we be now?
Ppl will always sell lower if they absolutely don’t want a game anymore. I propose that to combat this problem, games should have a point in reaching a certain amount of sales that the price drops automatically (ie: greatest hits). A lot of games don’t reach this point anymore. Sometimes even “blockbuster” hits fall short as well. But even if most games start at 59.99, if they dropped to 49.99 after “x” amount of sales, and then 39.99 after “y” amount of sales, I’m sure devs will be happier overall. Granted it might hurt a little for those games that do sell well at 59.99 for what seems like forever, this would benefit the industry as a whole.
This should also lower the re-sell value of games. Thus, places like gamestop will be forced to buy for less and sell for less. This might even prevent some ppl from selling back to places like gamestop. I, personally, don’t like the risk of scratched up games, missing manuals er even warped games (not even if it was like $20 off. Not worth it for me).
I understand that this won’t stop places llike ebay, craigslist er rental places like netflix (that honestly is a great deal). But I do feel this would greatly help devs getting the support they need financially and for the sake of the numbers game to keep track of how well the game is doing.
pirates are what hurt , the price of games at full retail is insane already. You can’t tell me developers, publishers, distributors don’t get rich. Hell retail should be getting the benefit of used sales though they stick it to gamers going and coming they got to make bucks too and gamers know other avenues.
Like I heard someone say before as long as devs make DLC that is worth a damb it does not matter how many hands the game reaches everyone of them will want the DLC and the devs get payed continually. I buy new more often then I should.
Nothing is going to stop digital distribution. It will happen and if Devs have their way it will happen soon. They want all the control and I don’t really guess I can blame them. If they sell me a disc, they can’t really stop me from selling the disc to someone else. But if there is no disc, the problem is at least partially solved from their end. The loser in that case might be platform manufacturers who may have to sell massive amounts of storage space with their consoles/PCs. Any way you slice it, the consumer is gonna see their costs go up. That’s how it always works.
I agree with the DLC idea. I was thinking games should start cheaper to account for DLC prices cuz I’m not tryna spend $60-80+ to fully enjoy a game. But, problem with that is that not everyone will make D’C. Some games just come right out the box with every possible level/color scheme/weapon/etc. And why should they lower the price of a game unless they know for a fact that “x” amount of ppl will purchase them to make up for what they are losing out on if the game is lowered in price.
And of course they’re making money off the consumer! How else would they survive with all the money they spend on staff/R&D/etc? How else could they afford to bring us the most up to date (er even beyond that) technology so that we enjoy the games we play. Anyone who complains that video game companies are greedy for making money off the consumer has got to actually stop and think about that one.
As for disk-based er downloadable games… technology fails. I will always choose disk over DL if possible because I will always want a hard copy. My backup disk so to speak
These people seem to be operating under the assumption that consumers are made out of money and paying $60 for a video game is nothing to them. WRONG! If I’m going to spend that much for a game, it’s going to be some really extraordinary title that I’ve been looking forward to for months. Not this run of the mill stuff with mediocre gameplay and a short campaign. I’ll wait until I can find it from one of the sellers at Amazon for a reduced price.
And I’m simply not going to buy games via download – My 80GB hard drive is half full already and I’ve only had my PS3 for a couple of months. And this stuff with developing a game, then selling two-thirds of it for full price and trying to get more money for the rest of it through DLC – forget about it. It just makes me mad. I’m sure they get some sales from people who are really interested in that particular game, but they lose a lot more sales from people like me.
What they need to focus on is making their games stand head-and-shoulders above the rest, not blaming everyone else – except themselves – when they don’t make enough money.
When you turn the argument around, I don’t see anyone suggesting that Gamestop should be given a cut of digital distro titles, right? It sounds absurd in that direction. I can buy/sell a car if I want and the manufacturer doesn’t get any money. Isn’t there even a law on the books in the US saying you have the right to resell a physical product (maybe it’s under the fair-use doctrine)?
I even think DD is going to get a fistful of knuckle-based reality when it becomes popular – if you can prove that the intent of DD is to remove a right from the people, the courts aren’t going to like that a lot. At least courts in countries that aren’t run by corporations, anyhow…
@capt. fodder:
EXACTLY! I understand what David Jaffe is saying and really like him, but does he complain about used car sales as well? I don’t know of any company that gets a part of the sales when someone sells a product they bought. If I have a garage sale, should apple get some money from me for selling my iPod?
Used game sales can help increase profits of developers in the long-term in several ways. Let’s say we live in a world, like todays, where each consumer buys a mix of used and new games and there are casual gamers who are more inclined to buy used and “hardcore” gamers who want to purchase titles when they are released new:
- Availability of cheaper used games encourages more casual gamers to purchase consoles. These individuals INCREASE the potential market size for new games because they previously did not even have a console.
- Over time, greater percentages of these “casual gamers” convert into becoming “hardcore” gamers who purchase more titles new on release date and are less price sensitive.
- Previously, developers had to retail price new games at $40-$50 to maximize profits because they had to appeal to the more price sensitive consumers as well as people who would readily pay $70 to get a hot new game. Now, if only “hardcore” gamers who do not care much about price purchase new releases then developers can charge $60+ to hardcore gamers. They don’t get any profits from casual gamers and sales may be down but overall profit can be greater as long as the margins from the “hardcore” market are sufficiently high.
- Because of used games, other channels may be pressed to adjust their mark-ups. For instance, retailers may require less mark-up profit on new games because they use these as a way to entice buyers of more profitable used games. This allows the developer to charge more to the retailer and ultimately increase price. Licensing fees to consoles may also adjust somewhat. If SONY/ Microsoft are realizing benefits from increased adoption of their consoles due to used games, they may be willing to drop fixed licensing fees in order to encourage software development — which ultimately drives the success of their products over a longer 10 year horizon.
I feel bad for Gamestop. It must be tough knowing everyone hates you.
One solution might be better special editions, or even doing what Atlus does and throw in a ton of cool stuff like art books and soundtrack CDs with even the basic version of their games. Especially now, publishers need to incentivize buying a new copy rather than a used one.
If there’s any success with the PSP Go! and its downloads, expect high-end gaming to go the same way.
he has a point but the consumer inside of me want s to buy lower costing games
Forgive me but I don’t think there are enough “HARDCORE-imma-pay-full-price-to-support-the-industry-instead-of-complain” gamers out there who devs can make a profit off of to compensate for “casual gamers. Really guys, times are hard. We all know that. But if you can’t afford to buy games and complain that even the $5-10 you save buying used isn’t enough… maybe it’s time you guys put down the controller and get better jobs to pay for your hobby.
I’m just saying guys. Those of you that are complaining about the gaming industry saying all they can do is complain themselves and point fingers, you all are basically being the same way.
But yes! Including a “special gift” that most likely won’t be sold as with the game would be a great reason to buy them full price! For example, more companies should do more Pre-Order exclusive content like DLC that usually is an extra $10 value. Or for games bought at full price, yet not pre-ordered, maybe throw in a shirt (ppl are less likely to sell this) er something else. No soundtracks, no keychains, posters, etc. Those ppl will easily part with along with the game. But whoever it was that suggested that has the right idea!
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