Are trade-in games destroying or helping the industry?

Trade-in games - scurge or paradise?

I'm not sure how much used games actually hurt the industry, but it's clear that publishers see the secondary market as lost revenue and many of them are already taking steps to encourage people to buy their games new.  A recent example of this was when Epic Games included a certificate to download some multiplayer maps for the original purchasers of Gears of War 2.

I think the video games industry is heading towards a pure digital distribution model that will practically eliminate the secondary market for games anyway.  I think the movie industry is heading this way as well.

It is destroyingthe industry, but helping me.

I usually prefer to buy new games, unless they don't have new copies in stock.

"

I think the video games industry is heading towards a pure digital distribution model that will practically eliminate the secondary market for games anyway.  I think the movie industry is heading this way as well."

Geez, I hope not.  It is probably old school of me and quite myopic, but I love the retail package.  I want a hard copy.  I feel naked without it.  Sure, DLC is fine, but not complete games.  Perhaps older games, like VC on the Wii is the only acceptable form for me.

"

Despite what some video game publishers may tell you, the used game market is not hurting the industry.  Every game in circulation has been sold.  The publishers have been paid.  No actual money has been denied them.  The question arises when after-market opponents interject imaginary monies into the conversation.  Projections created by the publishers based off of what they think they might have made had every used game bought been a new game.  But, of course, it doesn't work that way in real life.  Not only can they not assume they'd have sold any reasonable amount of new games if there was no after market, they can't assume the number of original games would have been as high, because (as MattyFTM stated) some games are bought new with the intention of selling them back at a later date.  If publishers want to make up imaginary sales accounts, why don't they create ones in which their new games sell for as cheaply as used games and see if they need to restructure their retail pricing?  But, that would infer that they themselves maybe to blame for any shortfall. 

A second question that must be asked is why should the video game industry deserve to be treated any differently than any other non-consumable manufactory on the market?  Do you think that the depressed automobile industry wouldn't benefit if every car purchased had to be new off the lot?  How about every text book purchased by a new student?  Every DVD, appliance or clothing item?   How many people can afford to buy everything they get, fresh off the shelf and shrink wrapped?  There is just a lot of merchandise that people would be forced to do without.  Additionally, what then happens to all the people employed in these after-markets?  In this turbulent economy, does anyone want to proactively eliminate more jobs?  After all, every job lost means less purchases, new or used.

Finally, while digital distribution is a possible recourse for game publishers, it will not be their only form of distribution for a long time.  Not only is there the bandwidth hurtle to cross, but a consumer connectivity issue, as well.  According to recent reports, Microsoft admits that as many as 10 million of their console users are not connected to the internet.  I don't mean Gold Accounts, either.  I mean, they just never hooked their systems up to an internet connection.  There are many possible reasons for this including inadequate broadband penetration,  disinterest in an online experience, and ignorance about their consoles capabilities.   My brother doesn't have his 360 hooked up because he has a young child and prefers to have the least amount of wires hanging around for his daughter to encounter and wireless is too problematic for his setup.  There will always be people in similar situations where downloading games is not an option, and unless publishers decide to exclude them and their potential profits (more imaginary money)  there will be some sort of physical media for sale.

I used to buy new games only because I didn't want a scratched up game and I wanted it complete (with the instructions). Now just about every used game I get has everything and is scratch free, and if it isn't I trade it for one that is. Oh yeah, and they're cheaper, less money = awesome. I usually buy games on eBay because they're usually even cheaper than Gamestop. Are you going to pay $60 for a game thats new, or $35 for it used? It's a no brainer. Although I do understand why people will only buy new, I could care less at this point, $ is $.

A long post about used game sales not hurting developers because they have already been paid by the time games show up on the shelves

While used game sales potentially aid the industry by getting people with lower incomes into videogames, the fact that it's helping GameStop (who's poor business practices don't need to be listed ad nauseum again) maintain a monopoly on game stores greatly outweighs that. I have no idea if it's hurting the game industry per se, but it sure is fucking over the retail industry as a whole.

guess what everybody

people trade in games

TO BUY MORE GAMES
 
:O

I don't know. CrunchUK up there seems to have the same opinion as me. If I'm trading in a game, it's usually because I want another game. It may not help the developers of the game I traded (Is it traded or trode? Both sound wrong.) in, but it's helping other developers. I would assume it would be more deterimental to the industry than helpful, but as long as people are doing it it stays with us, apparently. But if we couldn't trade in games, what then? We'd still be stuck with all the old games we had ten years ago. I guess it could sorta be considered recycling, in a way.

It definitely has a negative impact, but I would not go as far as to say they are destroying it, not yet anyway. That may well change if Amazon.com take a lead in the trade-in service, with one they are about to start in the US. If that proves successful, and is rolled out worldwide, with their clout they could impact developer revenue severely.

How could it be helping it?

It's really simple.  More used games sold means fewer new games sold which means less money for developers and publishers which means fewer games, more expensive games in the future, or lower quality games.

It won't kill the industry, but it's not helping.

They surely aren't helping, but I don't think they're hurting either. $60 games are hurting the industry.

Hey oldschool did you read this months issue of HYPER? There is a good article in there about how trade ins effect the video game industry. With out having ever research anything on the subject I would have once said that yes trade ins do have a negative effect. But havent read the article in HYPER issue #186 just release they make some very good arguments has to why it doesnt hurt the game industry but in fact help it.

1. Pre-owned game sales are what keeps specialty stores doing business. With the big boys like JB HiFi etc who often have opening day specials to undercuts the smaller speciality stores, a lot of the profits come from selling pre-owned titles. Having stores like EB, GAME and Gametraders around is going to motivate larger stores like JB to have competitve prices good for consumers because of lower prices good for game companies more sales.

2. Now that DLC is the current big thing with all games since the new console generation a second hand title doesnt necessarily mean that the game companies miss out altogether. Some one for example buys a second hand copy of The Elder Scrolls IV: Oblivion cheaply rather then buying it new is still likely to spend the money eventually on expansions such as Shivering Isles or Knights of the Nine etc.

3. Of all the game store staff interviews most said that about 85-90% of all trade in credit was used on new games or consoles and console periphials which is money going straight back into game developers pockets.

4. Without stores such as Gamtraders many old games would be difficult up to impossible to find. Because not everyone is a collector. Many people would rather trade in old games that they do not play in favor of store credits once again spent on new games (Gametraders for example estimate only 20% of sales is spent on pre owns). This gives the collector another source of material and the credit used by the people trading in goes back to the game companies.

So my vote now is for option B.

Interesting side topic (and relevant to this discussion) on digital distribution.  MB is right I figure, as while you 'own' it, you can't do anything with it, except play it.  This is the industry's definitive way of controlling the market.  If you buy and encourage digital distribution, you are in effect, supporting control of the market by the big companies.  That is a very slippery slope in my opinion (one I avoid for whole, large games).

"c1337us said:

"Hey oldschool did you read this months issue of HYPER? There is a good article in there about how trade ins effect the video game industry. 

Why yes, yes I did.  That is why I started it.  I didn't want to quote the whole article as it was mainly Australian based and I wanted to give the opportunity for community views rather than a journalist's views.  That edition makes me want to get Madworld :P

Oh, and I think MB and BiggerBomb should take it to a cage, then podcast the match :P  You have to love the passion - no criticism, just a good read.

"

"guess what everybody

people trade in games

TO BUY MORE GAMES :O"

I'll be your tag, BiggerBomb.

For those that don't understand how tradeins could hurt game makers :  Less people end up buying NEW copies of the game (which the publisher/developer gets paid for).  Gamer guy #1 buys game A, trades it in and gets game B, Gamer guy #2 buys marked up game A, instead of buying a brand new copy of game A which the developer/publisher would have made money on.  There is a certain circulation because Gamer guy #1 is using the credit towards game B, but the flow is taken away somewhat by the store selling and taking trade-ins.

I really fear a future of download only games.  Already I'm very apprehensive about the in-package code-based DLC they're already putting in console games.  Before you know it we might be registering serial codes over the net as PC gamers have been for a while now.  What I want out of a console is a disk that I can put in a box and it plays immediately if I want it to.  If my internet is down or I can't download a large file I don't want to deal with any other crap.

I think in the console space, anyone who goes this direction any time soon will face a brick wall.  The downloadable market is growing fast, but it's still not a fraction of the retail disk market.  Resident Evil 5, for example, has over 250,000 people registered as beating the first chapter within just 2 days of the release.  That's just the people always connected to the net with their 360 and with Live Gold and beat the first chapter.  Games like Castle Crashers which cost much less took months to get to that level (and CC is one of the best selling downloadable games).  If the future MS, Sony, and Nintendo platforms don't play all old downloaded games from THIS generation, I think they can kiss that future goodbye, or at least a very long ways off.

As far as used games : hurting the industry slightly, but necessary as respect to customers

It is little arrogant by some companies to want to control the product after it has been purchased.  Imagine how you would feel if GM/Ford still had rights over your car after you paid for it?

The 'used' market has existed in every consumer marketplace since the dawn of capitalism.

"c1337us said:

"Hey oldschool did you read this months issue of HYPER? There is a good article in there about how trade ins effect the video game industry. With out having ever research anything on the subject I would have once said that yes trade ins do have a negative effect. But havent read the article in HYPER issue #186 just release they make some very good arguments has to why it doesnt hurt the game industry but in fact help it. 1. Pre-owned game sales are what keeps specialty stores doing business. With the big boys like JB HiFi etc who often have opening day specials to undercuts the smaller speciality stores, a lot of the profits come from selling pre-owned titles. Having stores like EB, GAME and Gametraders around is going to motivate larger stores like JB to have competitve prices good for consumers because of lower prices good for game companies more sales. 2. Now that DLC is the current big thing with all games since the new console generation a second hand title doesnt necessarily mean that the game companies miss out altogether. Some one for example buys a second hand copy of The Elder Scrolls IV: Oblivion cheaply rather then buying it new is still likely to spend the money eventually on expansions such as Shivering Isles or Knights of the Nine etc. 3. Of all the game store staff interviews most said that about 85-90% of all trade in credit was used on new games or consoles and console periphials which is money going straight back into game developers pockets. 4. Without stores such as Gamtraders many old games would be difficult up to impossible to find. Because not everyone is a collector. Many people would rather trade in old games that they do not play in favor of store credits once again spent on new games (Gametraders for example estimate only 20% of sales is spent on pre owns). This gives the collector another source of material and the credit used by the people trading in goes back to the game companies. So my vote now is for option B."

You do know that stores like GameStop and GAME are the reason why stores like EB and other smaller electronics chains (not to mention individual mom-and-pop game shops) have been bought out and shoved out of business, right? It's killing any chance of a competitive retail industry, which is the exact opposite of what keeps prices down. Why do you think GameStop gets away with such low trade-in prices?"

Zombies will destroy us before we destroy the games industry. Then Valve will be laughing at us all - Left 4 Dead was a training simulator for their team...

First off, excellent defense of the capitalistic market, old school.  I know it must have pained you, but the naiveté in Ujio's post had to be addressed.  Because video games are a digital medium that can be modified without the "owner's" knowledge, the publishers already have an element of control that is not available to other product manufacturers.  A recent example of this control was the Gears of War on PC certificate error.  People who had purchased the game legally could not play the game since a the DRM license on the game expired.  DRM is in it self a form of control over digital media.  Of course, it is used to battle piracy (save that topic for another time) and the PC is a different beast than a console, but it still serves as an example of the control that publishers wish to maintain over your games.  I don't know if it's been completely fixed, but there was a time in which if your 360 broke (and whose didn't?) and Microsoft sent you a new one, the games you downloaded wouldn't work if you weren't connected to the internet.  Thus, Microsoft had control of where you played your games.  Public outcry forced some changes, but I'm not sure if the old grieveneces still exist.  And, every publisher still retains the intellectual property rights to everything in a game, as well.  There used to be a site called NinjaHacker.net devoted to fan created custom content for DOA and other similar games.  Tecmo sued them claiming the hack violated the Digital Millennium Copyright Act.  This wasn't a question of piracy or unfair profit, only of who maintains control over a product after it has been sold.  Eventually, the case was settled between the website's creator, its hosting provider and Tecmo.  The details of the settlement, to my knowledge have never been made clear, however the website does not exist anymore.  More after market control, and in this case of a console property.  I admit, the boundries of the copyright protection and fair use are murky, purposely so.  It's another arguement for another topic in the future, but it still serves as an example of the control publishers with to establish over products ad infinitum.  By denying consumers the ability to resell the games they've already legal purchased, video game publishers wish to increase the amount of control they have over your "ownership." 

A second point that has been raised concerns the level of liability a Gamestop or GAME has over the prosperity of a smaller, locally owned business.  Are we assuming then that the reason Gamestop is responsible for their demise is because it sells pre-owned games, and therefore, local gamestores can't compete with a national chain store?  Are we then admitting that the only relevant source of income for these "mom-and-pop" gamestores is their after-market merchandise?  Wouldn't they be hurt equally if game publishers disallowed the resale of video games?  Doesn't the "bad guy" role then shift from Gamestop to the publisher?  Who profits in the end?  Wal-Mart.  If Gamestop and "mom-and-pop" stores have anything in common, its an inability to compete with Wal-mart.  I believe that is why Gamestop turned to pre-owned sales in the first place.  And now that Amazon, Bestbuy and FYE are in the pre-owned media business, whatever demon-like powers Gamestop has over your locally owned gameshop will dilute as that power is multiplied by greater competition.  To that end, I believe that everyone is a winner, or at least that is my hope.  For the consumer it can mean not only will they receive larger credit for their used games and therefore have more money to turn into new purchases, be they new or pre-owned games, but it can also mean that they will have the opportunity to enjoy many more games than they would have otherwise.  This excitement usually creates buzz for follow-up titles and can increase the sales of new games.  In other words, if you picked up Uncharted used and were delighted by the charming characters, challenging gameplay and rousing storyline, you'll probably buy the sequel at first chance.  Now, that is a fuzzy generalization, I admit, and I am usually against such speculation however if other people are allowed to make such leaps of logic then I should I play by a different rule set this time?  But, the truth of the matter is no one can really say what you will actually do at the time when the opportunity presents itself. 

A final point that has disturbed me is how we are defining the games industry.  It seems that we are limitiing our definintion to that of the game developers and publishers.  However, the industy is much larger than that as it includes everyone from the ESRB to retailers to Giant Bomb.  But, if we choose to narrow the focus of our conversation to just how publishers and developers are effected by the video game after-market, what perceptions have we arrived at?  Some believe that by eliminating the pre-owned sale of games, it will force consumers to buy new, full priced games when they do buy games.  That in turn creates more money for the publishers, e.i. Microsoft, Sony, EA, Activision, etc...and they will then choose to continue to fund developers to produce new games which then consumers buy at retail and the cycle continues.  It's all very good for the publishers.  Of course, the developers are still in a subservient role.  Crystal Dynamics saw layoffs following the release of Tomb Raider: Underworld despite its sale of 2.6 million units.  It was said to have underperformed expectations.  What I am trying to illustrate here is the fragility of believing that if "A" leads to "B" the result is "C", a.k.a good times for all.   Not only can outside forced effect the structure of the market, the self interests of facets within the structure can redirect the outcome, as well.   Much like the economics of underpants gnomes, unquantified assumptions are ambiguous and their desired results untrustworthy.

Trade-in Promo's for NEW games.

Trade-ins is a double edged sword, for the developer anyways. It is used to boost new game sales, while it hurts the games value-over-time.

Truth is though, Gamestop is able to survive because of Trade-ins, they don't get the big chunk of a retail copy, they make their money from Trade-ins.

For the consumer, I don't support the $59.99 price tag. Its way too high, and isn't justified (look at PC game prices for the same game).

If Developers and Publishers want the consumer to buy new games, they need to make them more affordable than it is right now.

The percentage of console games purchased compared to PC games and Handheld games in my library has been in a decline. I wait-out for severe price drops and deals before I buy most games.

If the Publishers want me to buy more games, I'd say go back to PS2 era pricing.

I generally don't buy used copies, for my own reasons not in support for developers or anything, but I see it as a viable option for many people who don't find the retail price agreeable.