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32. Re: GameStop Interested in Digital Resales Jul 27, 2012, 08:05 Beamer
Car manufacturers actually LOVE the used car market:

1) It allows them to keep car prices very high, by catering mostly to those with a lot of money. They don't have to worry much about the very bottom of the segment, where margins would be slim.

2) It allows for leasing. You need to do something with those off-lease cars, and leasing is very profitable as it allows people to spend more on cars than they otherwise would.

3) It allows for certified re-owned, which keeps dealers flush with cash and very, very happy.

4) It allows buyers to rebuy frequently by selling their old car to someone without as much cash. Rather than having two sales, one with low margin, they get another higher margin sale. Also frequently people buy a better used brand than they could afford new, so someone that would be considering a Nissan buys an Infiniti, from an owner that goes out and buys another Infiniti.

5) It keeps raw material prices down. Cars have a ton of raw material. If cars were disposable, because when you were done with it you threw it away, raw material prices would go up with demand. Again, it damages margins.

6) Used cars and New cars are very different. Used cars smell funny. They have ambiguous issues. They can't be guaranteed in perfect condition. They often aren't warranteed. Things go wrong with them. They're objectively worse than new cars, plus there's a bit of a pride thing about buying a new car. All things being equal, people prefer new cars because they're different than used cars.

Not a single one of those arguments apply to games.
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