No, and yes, respectively.

Second-hand sales do not hurt business because of the way economics works. As you know, people buy products based upon what price they are. You have the hard-core gamers who will purchase everything at full price, the budget-minded who will wait until everything drops to a budget price, and everyone in between. Now, imagine two scenarios:

1) The secondary market exists (otherwise known as the status quo). Publishers make oodles of cash off of successful retail releases for the first several months after a game's release, then the secondary market kicks in and starts to drive down prices. Say that Publisher A releases Game X which starts out at $50. It attracts a certain number of buyers initially. Retail stores initially stock it for $45 used; this attracts few people, as there's not many trading Game X in. Then it drops down to $40 used as more and more people trade it in; this attracts more buyers. Then it drops down to $30 used, which attracts even more. And so on. Eventually, a few years down the road, to keep up with demand, Publisher A releases a Greatest Hits version of Game X at $20, which spawns a whole new market for Game X, and drives used prices down to a point where there's again little benefit to buying Game X used. Finally, Publisher A abandons Game X in order to work on other products, since it's no longer profitable to keep producing it in line with falling secondary-market prices.

The benefits of this situation: The market works perfectly, benefitting everyone. Those who want the game right away can have it right away at a high price point, and everyone else benefits from the eventual price drops. In addition, the new customers attracted to retail stores by the lowered price point of Game X may become interested in Publisher A's next game, Game Y, as they look around the store. In fact, they may be so psyched about it that they decide to purchase it new; in essence, the low price of Game X acts as free advertising for Publisher A. Finally, in the majority of cases, if Game X happens to be bad, then its price will fall rapidly due to the ability of consumers to return a bad game; this creates an incentive for Publisher A to put more effort into developing Game Y, and creates a "failsafe" for consumers who buy a bad game to get part of their money back.

The drawbacks: Publisher A may not make quite as much money as they would have were they allowed to price-fix their games.

2) The secondary market does not exist. When Publisher A releases Game X, they fix its price at $50. After the initial rush of hard-core gamers buy it at $50, Game X stays at that price for a long time. More budget-minded consumers who hear about Game X are then forced to pay $50 for the privilege of playing it, or not at all. Over time, the price of Game X drops, but much slower than it would have if used prices had forced the price down more. As a result, Publisher A continues to profit heavily off of sales. This discourages Publisher A from putting money into publishing their next game, Game Y, for a while because doing so would be a financial risk and a discouragement from buying Game X - and why do that when you can just coast on sales of Game X?

The benefits: The publisher makes a bit more money.

The drawbacks: Market forces act slower than they normally would. As a result, most consumers are forced to pay a higher price for Game X than they normally would. This means that they have less money to spend on other games, which drives the quantity of games released down. Also, because there is no failsafe for consumers who buy a bad game, Developer A concentrates less on the quality of Game X; once someone purchases it, after all, they're stuck with it, and word of mouth isn't always a deterrent to bad game purchases. Finally, the increased profits from Game X discourages Publisher A from publishing other games so quickly after Game X's release, so the release of new games slows to a trickle. In other words, while Publisher A benefits, everyone else suffers.

This scenario illustrates why restrictions on the secondary market are almost never good for the free market - and why you should support even chain secondhand stores like EBGamestop with your patronage. The secondary market benefits gaming as a whole, and I'm wholly grateful that it's as developed and refined as it is.

The reality is that $60 is too much for the average joe to pay for a game. A person who works for an hourly wage -- say $10 bucks/hour -- will have to spend a day's wages on a game. They simply can't afford and don't desire to spend $60 on a game that has 6-8 hours of gameplay time. Heavenly Sword, COD4, Stranglehold, and so on -- Games that basically cost $10/hour to play. Of course these people are going to look for used deals and other discounts to get that game...

Then there are the people like me. I can very much afford them, but I'm a cheap bastard. I wait until there is enough used stock to push the price down and then use my discount card to get it cheaper. For instance: Gears is currently $39 used at Gamestop. I'll use a discount card (-10%) plus a coupon (-10%) to get it for $33. 10-12 hours of gameplay in that one (without multiplayer) means the gamer paid about $3/hour which is tenable. Add to that the occasional deal that GS will run where they do a buy 1 get one 50% or B2G1 free on used and it gets real cheap, real fast, to expand your library...

So, in short, used games do benefit those that can't otherwise justify the price tag. BUT a lot of people that CAN buy games at full retail price and likely WOULD buy the game at full retail new don't do it because there IS an alternative.

My opinion is that the game companies need to first, control their IP and specifically ban the resale of the software in their end user license agreement. They need to pursue it legally until they get it removed from retail... At the same time, they need to lower MSRPs somewhat and start ratcheting down the price over time. There is no reason for gears to be $59.99 new any more. At $39 new, a whole lot of new buyers will pop up... maybe even $29... cheap enough to add to your library and keep it there rather than trying to recoup your "investment".

i like them--i am a firm believer that unless you play a game offten..or it hits that sweet spot...trade it in---i mean your are not enjoying the game let someoen else have the fun

but i have to say this--i think it does hurt the dev/publishers of tehe game simply b/c thats one less new sale they could hve had

I don't think you could prevent resale in the EULA.

EULA themselves likely wouldn't hold up in court since they're adding terms after the contract has already been made. (You've bought the product.)

Thats why most EULA only state stuff that was already illegal.

when i had my megadrive i always went to the market in the near by town to buy pretty much all my games (don't think i bought a new MD game) i could usually get them for about £10-15....and i think the most i paid was £25.... bare in mind though that they are proper second handers, in that they had either no box or a ruined box, and in fact were probably 3rd or 4th hand.

When i had my N64 i usually got games from a shop called Games2u in Huddersfield, which was primarily second hand games.

My GC i think i have 3 or 4 second hand games.... 2 of them i got from Blockbuster, but the rest were new because for some reason i didn't like the idea of second hand discs....I have always been quite precious with all discs like CDs/DVDs etc, and i have seen what a lot of people discs look like even after only a month or two.

I think a lot of people are like KN above, especially for a short game like Heavenly Sword, which is why it's going to really struggle to make money. I personally would never pay $60 for a 6-8 hour game. I'd pay $10, or basically, I'd rent it. But most people will opt to rent or buy used which is why it's not doing great in sales despite being one of the better PS3 games.

The only real answer to this for the industry I think is to give their games crazy replay value. Look at Halo 3, SSBB, or GH 3 there won't be many used sales for those games because people are going to hold onto them to play over and over again. That benefits everyone.

Secondary-market economics aren't reducable to something as simplistic as, "one used sale = one potential new sale lost." See my post above.