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Friday, January 20, 2006

Secondhand Games, Secondhand Originality?

secondh.jpg The UK Guardian, which also runs the excellent Guardian Gamesblog, has posted an article on the boom in secondhand video game sales, subtitled: "The market for 'pre-owned' games is thriving, but publishers warn that cut-price sales put the development of innovative genres at risk."

Particularly interesting is a statement by a Sony spokesperson, commenting: "We recognise the secondhand games market is part of the revenue mix, for retailers at least... However, if it continues to grow, it could potentially starve us of the funds necessary for research and development, and therefore, developers will be less willing to take a risk on new and genre-diversifying titles. It's this creative diversity that makes the games industry so popular, and without sustained funding from new software sales, this could be at risk."

So... should secondhand games be a furtive, underground act instead of the overt profit machine it is for even U.S. outfits like GameStop right now? Why is the secondhand video game market so much bigger than music and movie markets? And will anyone try to crack down, as has happened in Japan - even though secondhand titles are 30% of the market there, according to comments from Capcom's Kenzo Tsujimoto at GDC 2005?

Comments

In regards to the flourishing secondhand game market, there's probably a few reasons:

- Simple answer: games cost more. Gamers don't want to pay as much to buy a new game, and they want to sell to minimize the cost of a "spent" game.
- Piracy is also, I think, a pretty big factor. Acquiring illegal copies of music and movies is far easier due to availability, and the effort required to use a pirated game (burning a copy, executing a crack, modding your XBox, or whatever) stops a lot of people. It's effort vs. prospective cost.

Also, I think (at least in PC games) that with the increase in multiplayer gameplay, online verification will be more and more common. This is already in use with dubious results, such as Valve, where you have to pay extra to get a new key, which is common for used games. (Nevermind if someone illegally used your key, as is the case with me - now I have to pay again for a game I already bought???). Nevertheless, I'm sure that people will pay a bit extra to buy a new game rather than save some money with the hassles of a used game that needs to be "re-assigned", or whatever. Again: effort vs. cost, and count on those gamers to be lazy and pay extra to avoid effort. Except in this case the game companies can exploit that fact.

Price price price.

I buy maybe an equal number of second-hand and new DVD movies. When it comes to games, the ratio is more like 75% used/25% new.

Why so popular? Because games are so stupidly expensive, particularly here in Australia, where it is cheaper to buy foreign games and pay for them to be shipped over than than to buy them within the country (along with the added bonus of not having to wait three to six months for a local release). Also the courts here recently ruled that mod chipping is legal, and that region codes only exist so that companies can charge higher prices in different countries (for instance we pay $100 (US$74) for new games), and now for next-gen games they want to jack up the price even further! Talk about shooting yourself in the foot! It's no wonder the second hand market is thriving.

I would rather buy a new game over a used game as to be sure of the quality, but new games simply aren't affordable to buy frequently throughout the year. If the cost was cut in half (to like, you know, a reasonable price), i think sales would skyrocket, used game sales would take a hit (since there would be little difference in cost, and people would probably see it as worth wild spending the little bit extra for the guaranteed quality), and any loss taken on the reduced price would be made up by extra sales (well, at half price you would have to sell twice as many copies, so I might be asking a bit much, but we can always hope).

Heck, it might even help reduce piracy – I know a lot of people that download games simply because they cant afford to purchase them. No, I'm not saying that that makes it right, but I am saying that if the COULD afford them then they would have much less incentive to download them.

Sorry, getting a little of topic, but I think it's all related in this wacky games and retail industry...

I cant see the industry getting very far with this to be honest. People buy 2nd hand games because they're cheap. Some of the best console games I've played I got from bargain bins and second hand. Though I do find it interesting that places like Thailand sell games new dirt cheap because of rampant piracy. I bought Prince of Persia (PC) new for 10 Euro's, manual is in Thai, but the game's English. I got a copy of Advance wars 2 for the GBA for 16 Euro's.

I think publishers will always want more cash, and will try to strong arm people to get it, just as I reckon that they will fail to kill it off. If all else fails it'll just go underground.

If they want to become a mass market product, they'll need to charge mass market prices. I buy DVD's like I buy sweets, they're an impulse purchase, "Ooh, look!" Buying Games is an expensive and considerably more involved process.

Although I can see the industry logic, I also think the availability of second hand games has the reverse effect: it promotes experimentation and risk taking among consumers. At a critical mass, this would drive a higher demand for innovative titles, as opposed to sequels or more 'mainstream' games. This type of effect was evident with the rise of Napster, Kazaa, etc; as the cost of the media came down (to free in this case) consumers broke out of mainstream radio selections to a greater or lesser extent and sought out new or unsigned bands, or just bootleg or rare material from the bands they liked. As the Australian post, games in NZ are very expensive. Games on TradeMe (our eBay) sell for much cheaper; I can get 3 used DS games for the price of 1 new game.

I am a student in interactive media design (read: game design) and I work at what I think is Americas second largest second hand game retailer (game crazy) and I can tell you that my store makes money hand over fist on used games. I’ve literally seen the same game bought new, traded in, bought used, traded in again and bought yet again within a week.
The problem is that the developer and publisher only got paid once for what the market bought thrice, no wonder publishers will be charging more for next-gen, they only get one chance to make their money; the first purchase. In my opinion retailers should recognize that if they deprive developers of revenue that should be due them, then the retailers are starving the developers and forcing them to find new distribution models which will ultimately hurt the retail side.
For the industry to grow at its full potential there needs to be a second hand sales model, as opposed to out-right piracy, and developers need to get paid (they work very hard on that I.P.). My solution would be to somehow track used game sales and give the developers a portion of the revenue, the problem with this is that (and my hourly wage will prove this) retailers are: greedy, greedy, greedy. I highly doubt that any retail chain would enter into such an agreement voluntarily, which leaves two options; lawsuits and regulation. Such was the case in Japan.
I think that this issue is extremely important but I don’t believe that laws should be passed. I believe that retailers should realize that they are biting the hand that feeds and they should do what is right morally and for the industry. I would also encourage developers and publishers to stop doing business with such companies, denying them the ability to sell new games unless they are willing to enter into some such type of agreement. Bottom line: PROTECT THAT INTELECTUAL PROPERTY. Just my opinion thanks. - dan

I think that everyone should be careful for second hand games and accessories. It is a risk to buy second had games because of the quality. However, recently, I found a site with really cheap prices for game accessories and DDR games. This site is the Game Stuff Inc. website: www.gamestuffinc.com

Very good reading. Peace until next time.
WaltDe

I enjoyed reading this post. Great site.

I think that the the gaming industry would do better if there was a stop to piracy.

Here is another site where you can buy brand new games at a reasonable price. They alot of rare games also. The website is: http://www.gamegalaxxy.com

There is no way people buying used video games is going to hurt the market. Too many people want the new games that just come out. I think more there is a scare tactic being used just for the sake of money.

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