I think the solution is much simpler ...
People choose to sell their games back to these retailers to recover a portion of what they spent on the software, and they buy games used to save a small portion of the purchase price, to make the cost of playing videogames more affordable. If videogame publishers focused on digital distribution, past the savings from cutting out the retailers onto the consumer, and lowered their prices in general under the assumption that what they lost in the price of a single copy would be made up in volume sales, they would probably see higher revenues.
To put numbers to this ...
Suppose a publisher's revenue off of a game is $25 to $30, with the game console manufacturer taking about $10 to $15, and the retailer taking the remainder. If you can get the console manufacturer on board to reducing their cut to $5 to $7.50 and you sold the game for $20 to $25 online you would probably see 2 to 4 times the sales on the same game; and decimate the market for used games.
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