http://www.gamedaily.com/articles/news/mi6-used-game-sales-good-for-the-industry/?biz=1
Publishers may cringe at used game sales, but research from OTX shows that the resale market is actually a positive and helps fuel new game sales as well.
Posted by N. Evan Van Zelfden on Tuesday, April 08, 2008
The used game market is a source of consternation, confusion, and endless debate for game industry workers responsible for selling more units the first time around. At the MI6 conference in San Francisco, Eric Villain, executive vice president of Media & Entertainment Insights at research firm OTX, presented a session with some revealing truths about the video game resale market.
"We spoke to 2,000 gamers from March 14th to 17th," said Villain. They focused on the resale market. "Is it good or is it bad? For now, it's actually a good thing. And actually fuels new game sales. Used games are only a fraction of the market."
Some of the benefits that OTX identified were that used games sales create a larger reach for in-game adverting. They also increase brand equity of some titles. "Consumers of used games are really our core audience," said Villain, noting that these consumers bought many more games than those who only made retail purchases.
In the survey, 65 percent of gamers said they buy both used and new. That's 45 million gamers. 28.5 million only buy new, while 2.3 million gamers only buy used titles. Because of the large sample size, Villain said the margin of error is low.
"Gamestop has a phenomenal share of market – again, not a big surprise," he noted. OTX was able to gather information from the publicly traded company's reports, as well as data from eBay sales and other sources. "We felt really good that a conservative estimate is about 1.3 billion dollars in 2007," Villain said of the current market size.
Another element of the study involves how soon a title is sold by its owner. "Every game has different curve," Villain said, offering the example of Call of Duty 4. Surprisingly, 30 percent of players had sold the title within just one week of its purchase.
Demographic data indicated that "Sellers are guys. The buyers are more evenly split, fifty-fifty." Sellers are younger, with a median age of 26.
"What's driving the retail market is people who are buying action-shooter games – RPGs as well," noted Villain.
When it comes to the console wars, more gamers are buying Xbox 360 games than the PS3 or Wii players. They also own more games in total, because, said Villain, the Xbox 360 has been around longer than the PS3. On Wii "They tend to be less in the used and buying category."
While a number of gamers sell or trade-in their games, the new-gen consoles all have "keeper" titles too. They predominantly feature social play as an important part of retention, with Guitar Hero serving as a primary example.
Probing what else drives retention, OTX found that the top three reasons (ranked in the 60 percent bracket) were replayability, a love of the game or characters, and fun with friends. "Critically acclaimed" was actually the lowest reason with just a 14 percent response.
Conversely, when asked why gamers would sell a title, 62 percent cited the fact that the game sucked, and 59 percent said they sell because they'd already beaten the game. 43 percent said it's simply because of the need for money to buy new games.
Then there's also the hardcore collector crowd. Half of respondents said they wouldn't sell because they wanted to build a collection. A third said they didn't need the extra cash. Most sellers put their profits back into the industry, the research shows.
"What we also expect is growth in the market for 2008," said Villain. "A lot more than a year ago. In the midst of an economic downturn, I expect more buyers."
