Used games sales – good or bad for the industry, and do we care?
There’s a debate raging at the moment about whether used game sales are harming the industry or not. Many game developers and publishers, such as EA, think they are, but many others do not. Michael Pachter may not be most gamers’ favorite person, but on this score he’s come out on our side. I knew he was a good guy really.
Video games, like every other form of entertainment media, are ripe for the second-hand market. Once you’ve played a game through and got everything you want out of it, the obvious thing to do with it is sell or trade it in. And if you’re buying an older title, buying used can often save you a tidy sum of money.
The games industry itself isn’t a fan though, and you can, on the face of it, understand why. It considers used game sales as lost opportunities, that each person buying a game second-hand is a person who isn’t going to buy new, and consequently isn’t putting any money into the industry.
Pachter has a different opinion on the subject, and in a report published by Wedbush Morgan, where he is an analyst, Pachter explains why he actually think used game sales are an important element of the industry and pusher of new game sales. According to GI.biz, he said:
The vast majority of used games are not traded in until the original new game purchaser has finished playing – more than two months after a new game is released – typically well beyond the window for a full retail priced new game sale.
If trade-ins occur at GameStop, they should position the trade-in customer to buy more new games than he/she would otherwise normally purchase. Because the average used game value is around 20 per cent of the new game price, we think that used game trade-ins fuel incremental sales of over six per cent of total new game sales, suggesting that the cannibalization from the used game ‘push’ is more than offset by the benefit from used game currency.
Pachter also revealed that the used game sales sector of the market now accounts for around 100 million units per year in the U.S. alone. That equates to around one-third of all games sold and provides a revenue stream of around $2 billion annually.
If Pachter is correct in what he says then the games industry should be very thankful for the second-hand market because it gives gamers more cash in their hand to buy new games. On top of that, there is the fact that most people buy used titles that they just weren’t keen enough to buy at full-price. So, rather than taking away from sales figures, it’s an important element of keeping the industry healthy.
I love the fact that Pachter has effectively pulled the rug out from under the publishers argument that the used games market is harming the industry. It clearly isn’t. But even without this reasoning, isn’t it a consumer’s right to trade or sell a product that, at one time, was bought new? I’m just grateful I don’t live in Belgium.
Related Posts:
12 Responses to “Used games sales – good or bad for the industry, and do we care?”
Leave a Reply:
You must be logged in to post a comment. Don't have an account? Register today!
June 30th, 2009
Typical EA
June 30th, 2009
It doesn’t matter anyway all games will be downloaded so you can’t sell or let friends borrow your old games.
The next step is a chip inserted into the base of the brain that prevents people that aren’t the legal purchaser of the game play it.
July 1st, 2009
As usual the industry is crying wolf. That is the same logic the music industry applies to illegal downloads. Each download is considered one lost sale at full price. The fact that a percentage of those downloads would have never been purchased in the first place, and a further percentage will actually lead to the downloader purchasing more music is ignored. The same applies to games. What about the number of new games that are purchased at full price, because the purchaser expects to recoup some money in the resale afterwards. Or, like you say,how about the number of games that are purchased second hand that would have never been considered by the purchaser at full retail price, to whom I would count myself.
July 1st, 2009
Well Personally i have buying used games.
its a rip off, for example:
New: Killzone 2 – $59.99
Used: Killzone 2 – $54.99
I also like to have all my games in mint condition including the game case. ANd i Hate when Gamestop employee try to force ppl to buy their used stuff. but that just me.
Also “Full Downloadable games Only” is not coming this Gen, we are still going to see DVD and bluray games for the rest of the PS3/360 lifespan
July 1st, 2009
I have a few used games and as long as they are in good condition when bought that is fine for me. Mostly (about 95% of time) I buy new. Maybe not when the game first comes out at full price though.
Are used car sales killing the new car industry? Of course not. Its not like its going to get to the stage where only one person is going to buy a game and then pass it round the rest of the gaming world. If the software houses are worried that they are losing revenue then how come they are throwing bigger and bigger budgets at game development?
They can’t be doing that bad can they?! Like Rimmer said, not every pirate game (or used game for that matter) would translate to a full price game purchase.
Not sure if you mean buying full price games or used games are a rip off Roca but from that comparison I would say used is the rip off. I have heard of people going into Game with a ps2 and a load of games and getting paid little over a pound per game. Then its on the shelf for £20. The game shop does well from used games, but maybe we should also feel a little ripped off by used game sales.
July 1st, 2009
^^ exactly
July 1st, 2009
Yeah, I buy about 95% of my games new. There mostly games that I’ve been waiting for and pick up as soon as they are released. I do like having the option of picking up and older game at a discount though.
Usually the newer used games are only a few dollars less, but games that are a few years old, can be bought used for about 1/2 price, while they still might be sold at full price if bought new.
I think it probably does hurt the game industry somewhat, but I don’t think the impact is as large as some people make it out to be.
July 1st, 2009
This is partly the games industries fault anyway. They release the majority of games over the Christmas period forcing buyers to choose between games. This is really frustrating because you end up setting down a game you would have easily bought at full price during the year had it been released and then end up buying 6 months down the line for a fraction of the price.
July 1st, 2009
Yup. They do the same thing every year. They trickle out a few good games here and there until October… then there are at least 5 triple A games on each console for the next three months.
July 1st, 2009
I can see why companies like EA aren’t happy, but tough titties to them!
In saying that though, nothing gets my man chowder bubbling more than breaking the seal of a brand new game.
July 2nd, 2009
its more than 5, its rididculous!!!
the las 3 months of the year look like this:
(PS3/360)
-Bioshock 2
-Assasin’s Creed 2
-Army of Two: 40th Day
-Battlefield: Bad Company 2
-Modern Warfare 2
-Need for Speed Shift
-Brutal Legend
-Tekken 6
-Uncharted 2: Among Thieves
-Mass Effect 2
-Ratchet & Clank Future: A Crank in Time
-Forza Motorsport 3
-MAG
-Splinter Cell Conviction
-Demon’s Soul
-Grand Theft Auto IV: The Ballad of Gay Tony (expansion)
-Ninja Gaiden Sigma 2
*and we all know all the the great PSP games coming out, and if you also have a wii then ur looking at Super Mario Bros and Metroid: Other M*
July 2nd, 2009
@ roca,
Fuck me, that’s a lot of games. I’ll be trimming the fat a little and not picking up Tekken 6, Army of 2, Battlefield, Assassins 2 and Need For Speed though. I can only whore myself out so many times before my anus loses it’s quality.