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Livingstone: Used Games "No Benefit"

$40 For That Old Thing? How Used Games Are Priced on Kotaku.AU looks at how used games are priced, talking with several used game vendors, though industry leader GameStop was not willing to comment for their article. The simple economics of supply and demand are still in play, of course, and they examine how this is determined. On a related note, Retailers 'limit UK games market' on the BBC is a GamesCom conversation with a couple of publishers about games at retail and the secondary market (thanks GamesIndustry.biz). Koch Media's Georg Larch tells them digital distribution will help publishers deal with used game sales, while Eidos' Ian Livingstone says they still want to work with retailers because: "These aren't just shops, they are a marketing tool, a window into our world where software houses can display their wares." Of course some gamers buy games at full price only because they know they can later recoup some of that cost by selling games, and many gamers use the proceeds from selling their old games to buy new ones, but apparently Livingstone sees no value in this, saying: "The pre-owned market is a serious problem, because there is no benefit to developers or publishers."

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40. Re: Livingstone: Used Games Aug 20, 2009, 13:39 Beamer
 
People don't run a business to break even either.

No, and if you break even you have no money to invest in new projects. You're stuck doing one, waiting to break even, doing another, waiting to break even, etc.


Listen everyone, you sell the most units at marginal cost. This is always true. But you don't make the most profit, you just move the most units. Profit is centered around supply and demand, which is good, as marginal cost is virtually impossible to determine with video games.
But GameStop screws up supply and demand. It sets its pricing at 10% below new as a rule. This prevents the gaming industry from playing with their pricing much. It 100% prevents the industry from lowering costs, as they know that will benefit used games as much. They lean more towards raising costs because they know they can rely upon a certain percentage of gamers that will always buy new, yet if 10% matters so much to those buying used they'll still go for it if prices fall.


The bottom, unavoidable line is this hurts you as consumers. Less revenues are going to those creating. As a result they have less money to invest in new projects and less money to risk on trying new things. The industry is instead incentivized to gravitate towards what they know will sell well, particularly new, as certain games do better this way. You have the industry wasting creativity trying to get around GameStop, and you have companies that might have stayed afloat sinking because their revenues were chipped away at via used sales widely pushed by GameStop.

Again, no one thinks you shouldn't be able to sell your games, they think GameStop shouldn't get rich on it.
And you know what will happen? Eventually the industry will find a way to really stop used game sales. Eventually they'll find that silver bullet that makes used games virtually worthless. And its all the defense of GameStop that pushed that. You won't be able to sell to your neighbor, or put it on ebay, the kind of sale no one really complains about, because that ability was lost in an effort to beat GameStop. A way may be found before digital downloads become the norm, but those will kill it. Mark my words: you'll never be able to transfer digital downloads. And this makes sense, otherwise people would just freely trade via message boards non-stop, as there'd be no barrier against it (you wouldn't even have to leave your house, just post "looking to trade Game X for Game Y somewhere and wait,) and the whole industry would crumble.
The fact that any kind of wear-and-tear incentivizing away from used sales disappears with digital downloads is terrifying to those that create content.
 
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