From an article on Kotaku.

Gamasutra's Paul Hyman has a gloom and doom look at the used games market and why publishers are very unhappy with the situation; the comments section is surprisingly lively, and it's worth a look.

While GameStop (the main player in the used game market) management declined to comment, but several industry types (like David Braben of Frontier) put in their two cents. On how the used game market is bad!!!!!! for the industry at large, Braben had this to say:

"... [We] don't see anything from the used-game sales, which is one reason why the price of new games throughout the industry remains artificially high," he says. "I mean, the industry has to make all its money from the first sale since we don't get a penny from the subsequent dozen or so sales of that same game."

The used-game market may also be negatively affecting the quality of games, he notes. "Five years ago, a great game would have sold for a longer period of time than for a bad game — which was essentially our incentive to make great games."

"But no longer. Now publishers and developers just see revenue the initial few weeks regardless of the game's quality and then gamers start buying used copies which generates money that goes into GameStop's pocket, nobody else's."

I don't think that used games are the cause. They were around last gen and they didn't raise the price on games then. Cause of the price increase is the reason why I buy more used games this generation so far. I wish developers and Gamestop could come to an agreement. If not developers are probably going to go to unnessecary measures to try and put a dent in used games sales. We've already heard some small talk about it. Frankly as I said already I'm in full support of used games. Especially if prices on games stay like they are.

Many lols

Used games have been sold for as long as I have been gaming, so they could not be responsible for a price hike.

Note that it is only PS360 games that received the price raise, so the raise must in fact be due to higher PS360 development costs

LOL

They've got cause and effect a little mixed up there. Used games wouldn't be a big deal if the new games weren't so expensive. People wouldn't feel compelled to trade in their games right after purchase if it wasn't $60 new and then a $25 trade-in. Cut both those figures in half and the used market has a lot less throughput, with lots more new game sales.

I actually think it's the other way around!... Because of the high prices people that tend to play a lot of games and don't want to hurt their wallets too much buy more used games!... So do I! It's their fault, shouldn't bring a game on the market for 65 euro's!

Wanna know the solution? Make better games. Better games = more sales and less trade-ins.

I'm sorry but this is more bitching over something that the developers have complete control over. If EA didn't come out with a new Madden every year, there wouldn't be 23567676 used ones on the shelf at Gamestop.

If developers made better games, I wouldn't have the desire to trade-in my Horsez for Wii.

No, if there was no resale market, a lot of games would never be played in the first place. That, or pirating or renting (or both) would increase. I'm sorry, but some devs are just greedy bastards. If you make them well in the first place, they will come. If not, Social Darwinism will eat you up like a hot dog at a carnival.

New generation starts out with a smaller install base, so you'd expect to sell fewer units then when you had a large potential audience. So to keep revenue up, they raise the per unit cost.
I've also noticed gamne prices have been dropping a lot quicker, and I don't just think it's the economy. They can sell at a high enough volume that they can still make money at $40.

I was NEVER able to find a good used AAA Gamecube game. People would buy those games and hang on to them for years. Why was that?

Developers can figure it out. Games cost $50-$60. Why in the hell would someone pay that much for a game, just to turn around and trade it for $20-$30 a few days (if not the very next day!) later? Make games that people want to keep forever (I have games I may never play again, but the playthrough was so good, they will stay on my shelf forever) and you won't have to worry about an after market.

The biggest cause of a £10 'price hike' in the UK this year is the merger of Game and Gamestation, which is why I never use them and never will again.

And thinking about it, if you make games so good and so re-playable people don't want to trade them in (COD4 / MK Wii ?) you're going to get higher sales because there are no preowned ones to buy (rather than hundreds of preowned GTA4s!)

It would have a negative effect on some sections of the market and some positive I guess. The issue is that games are perpetually returned and resold like a rental but without royalties. If you like some genres which involve an average length single player experience and they would suffer from the rental market more than games which are really long or have a compelling multiplayer option im guessing.