Are used games killing the market?

[kn]

Bodhesatva said:

kn said:

Bodhesatva said:

Just out of curiosity, why can the Jewelry, Movie, Gun, Book, Car, Music, and Appliance industries all thrive with bustling second hand markets, but games cannot? Given that practically every other comparable industry has a used saler market they live in harmony with, it seems like the problem is the Games industry, not second hand sales.

Here, let me lay this out with a math-ish analogy. If you see Industry [A] is losing money, and you pinpoint Issue [X], Issue [Y], and Issue [Z], you might claim that Issue [Y] is causing the losses. Without any further information, making conclusive statements isn't possible.

However, if you see Industry , Industry [C], Industry [D], Industry [E], Industry [F], Industry [G], and Industry [H] are doing fine, even though all of these industries also have Issue [Y], then it's fairly clear that Issue [Y] is not a dominating factor.

And again, that's essentially the place the gaming industry is in. Every other industry can not only survive but often thrive with a second hand market. So why can't video games? Either video games are super special and it's not fair to compare them to any other industry in the world, or there are other predominating factors which are much more significant and are the real cause for publisher's struggles. I'd propose again that the latter is more likely.

 

You are talking physical goods vs. Intellectual Property. A washer and dryer continues to provide value until it dies. Most video games are playable only so many times before it is time to move on...

As far as books are concerned, I would most certainly say that used books cut into new book sales. I am an avid reader... Multiple books a month. Why buy new when I can go to Half Price Books and get stuff quite a bit cheaper for the same experience? I actually buy hard backs when I can -- often cheaper than "new" paperbacks and keep them in my collection. Why? Because new they are ridiculously expensive.

 

No, I'm not talking physical goods. Of the examples I gave, Books, Movies, and Music are all intellectual properties: I can add to this list application software (products like Windows OS or Adobe Photoshop) which are also resold.

What I gave you was a list of a wide variety of industries -- some of them sell big products (Cars, Appliances), some sell cheaper products (movies, guns). Some sell physical goods (Jewelry, and Houses, as another example) while others sell IPs (Games, Movies, Applications, etc).

And yet, despite the fact that these industries vary wildly and have vastly different products, they all manage to have thriving and succesful industries. All of them, except video games, apparently.

You are absolutely correct that used books cut in to sales of new books: so why are book makers not crying foul? Why are they still making money and continuing to march on? Why is no one arguing that the second hand book industry needs to be destroyed? Because everyone agrees its acceptable, or even good, for the industry. It's part of every market. This should highlight the difference for you. Everyone agrees that used sales in ALL of these markets have some effect on new sales. So why is it such a big deal in video games, when it all these other industries live in harmony with their second hand markets?

Again, the answer is that the business model gaming has developed is flawed.

 

I certainly understand and appreciate your argument but video games, specifically console games, have a very limited audience. The number of people that are willing to buy a used Finding Nemo is enormous and selling that video used probably doesn't cut into overall sales (as a percentage of total) nearly as much as selling used copies of, say, a $60 game for a console with a 10-20 million localised userbase. I think there are enough unique things about the video game industry that it can't be compared easily with other "second hand" marketplaces. Regardless, it is Intellectual Property and if the developers decide to put a "this title cannot be re-sold at retail" in the license agreement, put the little disk in a bag, and sticker over the envelope so, once broken, you've agreed, it's their perogative. I truly think something like this is coming in some format or another over the next 2-3 years... We'll see, I guess. Greed often triumphs over sound reasoning.....

Edit: Also, I do want to make a clear distinction between Intellectual Property and property in which you take title on delivery.  The two cannot really be meaningfully compared as the IP owner holds all right and title and the buyer of said IP -- that book, game, software, etc. is bound by the copyright agreement, license agreement, etc...  That sort of changes the balance of power in a second hand market (if the IP owner wants to).