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38. Re: Marc Rein = Music Industry Oct 1, 2005, 14:58 Chris
 

Marc's reasoning is invalid. Under the current system, the value to a customer of buying one of his games is:

( value of the game ) + ( value of option to resell).

If on the other hand the resale market were shut down, the value is:

( value of the game ).

That is, demand for his games could be higher because resale exists. Shutting down the resale market would not necessarily increase his profits. Nor would a system under which part of the revenue from a used sale goes to the original developer.

Finally, the markup on used games may appear higher, but so too are the costs of selling these games. In addition to the cost of buying the game from a customer, the store must inspect and repackage the goods, and the return rate is probably higher. There are no barriers to entry into the used or new video games markets so there is no reason to expect there are excess profits to be had in either, which implies amongst other things that the profits from used sales are more or less equal to those from new.

 
 
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