The End of the Used Games Market?

Ok so I'm sure this topic's been discussed a billion times on these forums....buuut I'm relatively new, so I haven't gotten to hear a word. And it's my blog so I do what I want!

The game market is a sort of anomaly in the structured economic retail world that we live in. For starters, it sells a product that is easily transferable from one party to another. What I mean is that once one person buys a game, then they can easily finish that game and then allow all of their friends to borrow it so that they may finish the game. This isn't a unique quality, of course, because books are the same way, but it is an important concept.

Second, and possibly most important, is the used games section of every game store. Used games are what drive your local Gamestop, or what have you. When a person buys a new game, the game publisher gets a cut of the price, and the store gets a fraction of what is being charged. However, when a person buys a used game, 100% of that sale goes to the store. Now, they do have to buy back the game in the first place, but when it's a brand new title, the most you can generally hope for is $35. So, they then get to collect pretty much full price on that game, which makes up for the buyback.

"Gee, Brian, this is all pretty basic information. Who actually cares?" No one really....but I have a minor in economics, so this kind of stuff FASCINATES me. I told you all this to lead up to today's market. Game companies are trying a new strategy: they've decided that multiplayer games can actually turn more of a profit for them if they actually attach an activation code to play multiplayer features online. This is free if you buy that game new, but if that game is used, you are going to have to muscle out an extra $15 just to experience the online world. "Yes, Brian, we all know this. Get to the point!" OK FINE.

Doing this, game companies have essentially devalued their own games. With that new lawsuit that took hold in California, Gamestop needs to not only warn the customers of the added expense, but they are forced to lower the prices that they charge on these games just so that people will still have a reason to buy used copies. Remember, that's what drives most of their business, so they need to keep the used market going. However, that means that when a person trades in a brand new multiplayer game, Gamestop will almost assuredly give you at most $20 for it. So what this all amounts to is that the game you bought is now losing a hefty portion of its value right out of the box. This, in turn, decreases the income of Gamestops across the board. Why is this, you ask?

Let's relate back to my first point: games are easily transferable. When it comes to single player games, people can easily just trade them off and beat it one by one. This is the case for me and Skyrim. I have yet to buy, and probably never will buy, Skyrim. This is because there is no rush to get through Skyrim. Regardless if I pick that game up immediately when it comes out or 10 years down the road, it will essentially still be the same experience. I can wait for my friend's disc. If I figure out that a multiplayer game is awesome later on, though, I can't just wait for my friend's copy. I have to play it now, so that people will still be having fun in the multiplayer and that experience will be a positive one. As of now, that means that I go to gamestop, find the used copies of the people who only wanted the single player, and get that game for 10 bucks off.

With this new code system, though, they can't discount me on the code. I'll essentially still pay for the entire game either way, so why would I waste my time with a used copy when I could get a brand-spankin-new copy with the same cash? Because of the necessity for everyone to have their own copy of a multiplayer game, these are the ones that really sell in massive quantities. People are constantly wanting used copies so that they may get into the fun. Single player games could ideally be enjoyed by the masses with just a few copies. If you take away the used multiplayer market from your Game store, all they'll be able to rely on is single player games and subscriptions to magazines; hardly a constant cashflow there.

Whew, epic rant. this will never be read. But I'm ok with that because I just like to release my thoughts from time to time. I won't pretend to be an expert on the game market, and this only pertains to hard copies, which is also slowly losing relevance. There are probably flaws in my logic, but I'll of course listen to criticisms with an open ear. If you have the courage to muscle through this, then I sincerely thank you for reading.

Until next time,

Brian Stas

2 Comments
2 Comments Refresh
Posted by Euphorio

Ok so I'm sure this topic's been discussed a billion times on these forums....buuut I'm relatively new, so I haven't gotten to hear a word. And it's my blog so I do what I want!

The game market is a sort of anomaly in the structured economic retail world that we live in. For starters, it sells a product that is easily transferable from one party to another. What I mean is that once one person buys a game, then they can easily finish that game and then allow all of their friends to borrow it so that they may finish the game. This isn't a unique quality, of course, because books are the same way, but it is an important concept.

Second, and possibly most important, is the used games section of every game store. Used games are what drive your local Gamestop, or what have you. When a person buys a new game, the game publisher gets a cut of the price, and the store gets a fraction of what is being charged. However, when a person buys a used game, 100% of that sale goes to the store. Now, they do have to buy back the game in the first place, but when it's a brand new title, the most you can generally hope for is $35. So, they then get to collect pretty much full price on that game, which makes up for the buyback.

"Gee, Brian, this is all pretty basic information. Who actually cares?" No one really....but I have a minor in economics, so this kind of stuff FASCINATES me. I told you all this to lead up to today's market. Game companies are trying a new strategy: they've decided that multiplayer games can actually turn more of a profit for them if they actually attach an activation code to play multiplayer features online. This is free if you buy that game new, but if that game is used, you are going to have to muscle out an extra $15 just to experience the online world. "Yes, Brian, we all know this. Get to the point!" OK FINE.

Doing this, game companies have essentially devalued their own games. With that new lawsuit that took hold in California, Gamestop needs to not only warn the customers of the added expense, but they are forced to lower the prices that they charge on these games just so that people will still have a reason to buy used copies. Remember, that's what drives most of their business, so they need to keep the used market going. However, that means that when a person trades in a brand new multiplayer game, Gamestop will almost assuredly give you at most $20 for it. So what this all amounts to is that the game you bought is now losing a hefty portion of its value right out of the box. This, in turn, decreases the income of Gamestops across the board. Why is this, you ask?

Let's relate back to my first point: games are easily transferable. When it comes to single player games, people can easily just trade them off and beat it one by one. This is the case for me and Skyrim. I have yet to buy, and probably never will buy, Skyrim. This is because there is no rush to get through Skyrim. Regardless if I pick that game up immediately when it comes out or 10 years down the road, it will essentially still be the same experience. I can wait for my friend's disc. If I figure out that a multiplayer game is awesome later on, though, I can't just wait for my friend's copy. I have to play it now, so that people will still be having fun in the multiplayer and that experience will be a positive one. As of now, that means that I go to gamestop, find the used copies of the people who only wanted the single player, and get that game for 10 bucks off.

With this new code system, though, they can't discount me on the code. I'll essentially still pay for the entire game either way, so why would I waste my time with a used copy when I could get a brand-spankin-new copy with the same cash? Because of the necessity for everyone to have their own copy of a multiplayer game, these are the ones that really sell in massive quantities. People are constantly wanting used copies so that they may get into the fun. Single player games could ideally be enjoyed by the masses with just a few copies. If you take away the used multiplayer market from your Game store, all they'll be able to rely on is single player games and subscriptions to magazines; hardly a constant cashflow there.

Whew, epic rant. this will never be read. But I'm ok with that because I just like to release my thoughts from time to time. I won't pretend to be an expert on the game market, and this only pertains to hard copies, which is also slowly losing relevance. There are probably flaws in my logic, but I'll of course listen to criticisms with an open ear. If you have the courage to muscle through this, then I sincerely thank you for reading.

Until next time,

Brian Stas

Posted by doobie

i mostly game on the PC so the second hand market is just not that important to me. and those instances when i do buy a console game i find that amazon is nearly always cheaper than GAME second hand copies.