I'd argue eBay sells more used games than GS.

While it is a fact that studios have closed, its definitely not a fact that it was due to used gaming or piracy.

Its because they likely went over budget on many different games and never made money.

There is a reason why a company like Nintendo can remain in high profitability for so long while only having two viable platforms at any given time yet they never complain about used games... in fact they don't even care about them.

Not exactly... a subscription based will be the next step.

30-40 bucks per month, play as much as you want. It will be tied to your Xbox Live membership and PSN+... Will happen within a few years to compliment retail/digital sales. 

Gaming will become a service within the next 10-20 years.

Maybe this is why as much as anything else. PC gamers just aren't as susceptible to it, and mod communities will always provide free alternatives anyway.

And we've seen in the past that at least Microsoft doesn't like to let people give away DLC for free even when they want to (Left 4 Dead 2, for example) because it "devalues content" or some such nonsense.

Its not because it devalues content but that may be the "PR" explanation.

They had this policy in place on the 360 since launch as any update that goes through Xbox Live has Microsoft paying for server bandwidth and performing QA on it to make sure it doesnt break anything. This was a big deal in 2005 when the console launched. In 2013 they are offering cloud services for free to devs so I don't see this being the issue at all moving forward. 

What do you suggest should happen moving forward? How do we embrace technology and keep the old spirit of gaming alive? How do we fix the repetitve and predictable "AAA" gaming? Does it need fixing to begin with? Am I just Riggs Murtaugh at this point when it comes to gaming?

Just like the oil industry had everyone blaming SUV drivers for high gas prices, so too do greedy developers have everyone blaming used game sales for their financial woes. First of all, we need to establish what they consider "reasonable" as far as profits per title and I will guarantee its ridiculously high. The reason for this is that you have a few people stuffing their pockets at the top and the small amount remaining goes to the bottom 95% of the team. Used game sales hurt the industry no more or less than used car sales hurt Ford or Toyota or book trading hurts the publishing industry. The other problem here is the development cost per game...I mean 30, 40 million? Really? Another issue here is cost per game at retail..a person is far more likely to pay..say 20 dollars for a game than they would 60. Maybe they should reevaluate the pricing structure in the first place....how much or a games profit go to the publisher? So much to consider but blaming used game sales is just laughable anymore....

It's a worse explanation than the reality, if so. I can get on board with the idea that it costs MS something to deliver it to you. Not so much with, "Ugh! If we let them give this to you for free, you'll just think everything should be free!" Which is basically what they said.

I kind of feel like I keep saying this over and over again, but I suggest making going digital a very compelling option. Steam did it, and they did it on an open platform without killing off or degrading the retail experience. Everyone who is a loyal Steam customer today was lured there by Valve's carrots, not beaten there with sticks. There is no reason that Microsoft can't continue with the retail market for those who want that option while simultaneously trying to convince people to go digital by being price competitive, something they have steadfastly refused to do this generation. Maybe that's because they haven't wanted to piss off retailers, or because their use of spacebucks made them settle into a very rigid 400 MSP/800 MSP/1200 MSP/1600 MSP pricing scheme, but the latter is going away and if the former is the case, well, they were willing to start squeezing them out this generation anyway. So fuck it, go whole hog on making people want to download their games. They could get even more creative by making games timed digital exclusives for the first month or so, which would send digital sales through the roof and get people who are hesitant about going digital to give it a shot for perhaps the first time. Or giving all digital versions free season passes. Or any number of possible other incentives.

I'm not sure any of this fixes how predictable AAA games are, though, because like I said, I don't think the homogenization of AAA games is all that related to used games in the first place. The companies who are guilty of this will always continue to chase trends and ape the last wildly successful thing until forever. It's about maximizing profit, and with or without the used games factor, AAA games will still be absurdly expensive to make so they will always try to make them a "sure thing".

It's not an especially hard nut to crack, but it requires some thought to understand the problem. I have always thought that the "used game" market was a simplified rental market. Put another way, the only difference between Gamestop and Gamefly is Gamestop's larger retail presence. Their services are essentially identical.

If you really wanted to undercut the used game market, console makers should make an online rental system. 

How I'd do this:

1. This would be a service on top of Gold or PS+. It would cost about twice as much, too.

2. Games going to online rental are delayed for one quarter after a game is released so rentals won't compete with sales.

3. Once a week, you download a rental game, probably in the middle of the night so it doesn't compete with your internet use or server power. You have the game for one whole week, no restrictions, no further online access needed for the rest of the week (this is to quantize payment to developers: you pay them revenue for the 1 week units. It also helps keep data usage in line. At any point you can pick your next title or choose to renew the old one for another week. You just can't get it early unless you buy one of the titles.

4. Sony takes enough out of the subscription to cover server usage and make a modest profit (like a retailer) and the rest goes to developers (abain, like a retailer.) Developers now get revenue in proportion to how much it is played, not how many units get shipped.

5. Renew a game for subscription several times and you get a discount for purchasing it. 

Were any console manufacturer to implement a program like this, I'd leap on it in a heartbeat, even if it would tear through my data usage.

That is a very resonable approach that could work when it comes to digital distribution becoming the norm with the masses. I am sure it will play out like that actually but I am not sure it will keep the current gaming companies at the forefront of gaming... It is in everyones interest to build out these console ecosystems as fast as possible when it comes to digital due to competing ecosystems that are currently growing in marketshare and also offer compelling gaming. Microsoft fully knows this and that is probably the main reason why they lacked the finesse needed for executing what you've described above. 

To add to your incentices list, I can see Microsoft offering shit like "Mail us a disk, get digital code in your email" like stuff in a few years lol

Otherwise I think Steam, Apple and Android invading the livingroom will really put the heat on AAA game publishers and these consoles in general. 60 bucks for retail/digital version of Battlefield buys a lot of fun games on these platforms. X-Com Enemy Unknown for example got ported to iOS and is 90% the same game it was on PC or consoles for less money. The graphics are scaled back somewhat but its the same as playing Crysis 3 on a 600 dollar PC VS a 2000 dollar PC. Maybe these platforms are the future for original and awesome AAA gaming... I have yet to hear of any paid DLC or tacked on pointless multiplayer for iOS or Android games. 

I think that is because there'd be no money in it. Like PC gamers are too discriminating and have too many free options on their open platform to be roped into paying for pointless DLC, I think iOS is already so crowded and competitive that you just can't dick people around there as much as on consoles. You're competing as much for time as for money because the vast majority of mobile gamers just use it for free timewasters and the like, so when you want people who are serious about gaming to splash out any real money there ($20 for XCOM is an arm and a leg in iOS terms) you are likely to take a more respectful approach than you are when selling to console gamers who will buy seemingly anything.

But I'm always skeptical when I hear, "X is the future." Compare how much money is generated from each of these platforms. As things stand you just can't sustain AAA gaming without consoles, and if the AAA gaming market ever somehow shifted to iOS or whatever, so would all the bad practices. The problem is with the fundamental economics of the model and the mindset of the people who make AAA games, so there isn't a silver bullet like just switching platforms. Games that cost this much to make will always have a certain amount of baggage because of the sheer financial investment required, and hardcore hobbyists will always be easily taken advantage of. That's an inherently bad combination.

There is no facts in any of these threads.  What are facts is that game companies are closing left and right.  Studios have to tack on MP, DLC or other methods to get a little extra cash because new game sales are not happening as much as used.

If Ebay sells more used games than Gamestop, and gamestop has made used games a billion dollar industry then by what you say used games must have a huge impact on developers.

Even Nintendo had their blip and also Nintendo has lived off of their IP better than any othe company.  Nintendo IP is like COD.  Nintendo can also dip into that revenue stream and make plenty of cash.  Release a mario, Money, Release Pokemon, Money, Release Metroid, Money, Mario cart.  Comparing Nintendo to other developers who do not have those IP to leverage is not the same thing.  The reason Nintendo does not complain about used games because they player base purchase their console to play Nintendo games.