Yes and No.

They techinically violate the laws of a number of states... including where your from... but at the same time, you'll never win a case on it because governments don't want to upset the status quo buisness model.  Which is why most of these weird newer IP stuff goes on... to protect a money for product market in a world where things can be copied with no effort.

If you were jesus and you started giving away free fish you copied from red lobster.... people would not be throwing you in jail.

Basically how the laws are written... espiecally from your area... laws are written so that after the exchange of money for goods has been made no further contract details that can be inforced on you to not have your product.

How they've interpreted this in the way of computer games is... while if you disagree with the EULA about how to use the game... you don't have to use it.  If you disagree with the EULA... you've STILL GOT THE CD.  Even though by not agree withing the EULA you can't even download or use the software... it doesn't violate the law because you don't have to return the Cd...

Which is of course... silly.  It would be like buying a TV, then reading in an EULA that you can't legally USE it. 

Although while the official stance... often times EULA's are struck down in courts anyway. In the US for example rather EULA's are legal are not totally depends what court and what judge you have.

Since the laws quoted to strike them down always apply but aren't always enforced. Basically in the case of EULA's judges ignore the laws unless the EULA is particularly unreasonable.

I never install any of my Wii games on anything. I just use the CD.

Instead of buying second hand games at a reduced price. Consider buying that game new at a discounted price at a later date. Still a new game sale counts and helps out the developers.

I am hypocrite on this issue. I do not practise what I have preached. I do buy second hand games as much as new games. I trade in second hand games for new games. Trade in 3 old second hand games for 1 new game- too good of an opportunity to give up on.

A new game purchase is better than a used game purchase. Taking off the plastic seal and opening the game for the first game. Is always a good feeling for me, especially for a new AAA game.

I conclude AAA games should be bought brand new. The game developers deserve it. Gamerankings/Metacritic get it right most of the time. Budget restrictions will decide on whenever we can afford to pay $60 for a new game.

Lets put it this way, I just picked up Bioware's Mass Effect...1.  I think I bought it new but I am not a big fan of shooters or sci-fi but a fan of Bioware.  So I waited until the price bottom out and then bought it.  Sequels tend to do that.

And even though I don't agree with them or business model, I rather to go without then steal stuff like that.

Okay, let's examine this with a larger lense.

The automobile industry also has a second hand market, and despite several companies having enormous issues recently (GM, Chrysler), no one is blaming the existance of a second hand market. Almost everyone agrees that these companies' problems are caused by their own poor choices and failed business initiatives.

That not good enough for you? Okay, how about the movie industry, which has a vibrant used DVD market? How about books, or music, or jewelry, or guns, or electronics? How about second hand clothes? Used houses? All of these industries have second hand markets, and none of them are crying about it. It's the nature of any industry.

The actual problem is the one you've already highlighted -- game development budgets have "skyrockted, costing as much as $100 million for some game developments."

The problem is, everybody seems to like spending all that money. They want to make big, expensive productions, and now that they've started doing it, they certainly don't want to go backwards. So instead of doing that, they're looking for a scape goat, and they've settled on used games. Despite the fact that it's a market which exists in virtually every other comparable industry, with little or no complaint.

It's like going 200 MPH in your car and then, when your engine rapidly breaks down, you complain that it was built poorly by the designers. In reality, your engine is no different than anyone else's: you're just a fool for driving so fast.

Just curious, what don't you like about them or their business model?

I'm not completely dismissing your point (your point about development costs is valid), but let's look at each of the examples you gave seperately:

Cars/clothes/electronics: they deteriorate with use, much more so than games, which makes new items much more valuable than used ones when compared to games

Books: they also degrade with use more than games, they're much cheaper to make than games (I mean in terms of fixed costs, not the ongoing costs of producing copies)

Music: as with books, recording an album is also much cheaper than making a game, and CDs tend to sell for a long time, which makes them less risky than developing games for music publishers. For the actual artists, they're not the main source of income, concerts are.

DVD: This is the best example you gave, but DVDs are not the main source of profit for movie studios as far as I know, whereas game sales are almost the only source of revenue a game publisher has. Their life would probably be easier if there was something analogous to cinemas for games.

Houses: The fixed costs here are ZERO, a home builder only spends money on materials and labor to build a new home. This is the diammetrical opposite of games, which are expensive to develop and cheap to make a copy of. Bad analogy.

Jewelry: same as houses.

A bit of reality here:

* Used game sales is NOT the same as piracy, and is not worse.  One thing here is that the money from the used game sales usually goes to buy more games, so the money is recycled.  Also a set number of seats to play is available via the used route, so to have more people play, they have to sell more new copies.  Contrast that with piracy, where the number of seats to play increases, AND the industry gets no money from that. 

* Why should someone who buys something be stuck with it, and not be able to unload it and get something else?

* Games with great replayability don't end up in the used bin.  If someone keeps play it, it doesn't get traded in.  So, developers need to end up making games that are replayable and make people less inclined to trade it in.

* Why is how the industry spends its money, and has an inability to manage its costs, MY problem?  Why should I have to end up spending over $60 for something with little to no replayability, to help an industry that spent Avatar-level costs to make a game?  Why is that my concern?  Who said you have to spend $100 million to produce a game?  Who told you that?  The fact you have to go bling-mad with production costs to get marginal return is whose fault?

* Game prices are NOT based on how much a game costs to make, but what the market is willing to pay for a game.

By the way, unless developers have some sort of royalty agreement with publishers for ongoing sales, they make their money once a game gets out the door.  They are hired contractors by firms that get hired to do work, and then are gone.  They may get money by providing downloadable content.  But, beyond this?  Well, it doesn't work that way normally. 

In short, the industry needs to give people reasons to hold onto games and not trade them in.  This includes not putting out a sucky game, or making it is so that is replayable.  In my case, I was able to get $30 for Brutal Legend (which I had no intentions continuing of play) which I was able to apply to Mass Effect 2 at Toys R Us?  Think that used games hurt sales?  Well, Mass Effect 2 got a sale when it did, because I could dump Brutal Legend.

Ok, so it is noble and on the right track to want developers and publishers to get compensated for game sales.  One option is to enable used games to be able to be resold and compensated for this resell.  Maybe have a few other rules on how long it is before a used copies of games go onto sale.  Yes, we can work to make this bettter for the industry.  HOWEVER, I think it is folly to say it is worse than piracy.

And the industry tends to be cute in how it wants to grab profits.  First, get rid of piracy.  Next, complain about used game sales.  After that will come about complaining about game sales period, and all games should be on a rental basis, in that you pay $60 for a month's play of a game and then you have to pay another $60 a month for more play.  After all, how can developers afford to support a product unless they keep getting paid for it?  Watch, that will happen next.  It will come, if you want to whine about game sales.

There is a risk of a possible crash, if current safeguards break down, and people move onto other forms of play besides videogames.  I believe the Wii has shown that the path of increased production value is a no-win situation.  You get ever decreasing returns on investment by pumping more and more into better voice acting and graphics and storytelling above all.  The videogame market can't afford to become like the movie industry, because it doesn't have opening box office to generate sales, and then the home market.  The videogame industry is straight to video deal, and that means pusing $100 million to make a game is unsustainable.

I don't see that a crash like the 1980s will happen this time, because videogames are part of life for too many people.  However, one can expect a strong correction, and a reevaluation of how the game industry works.  Look for more DLC, massive multiplayer, ad sponsored games, and other such approaches becoming the norm.  Look for MMOs to end up being a place where high production value happens.  And hopefully look for low cost novelty to pop in, with maybe more being in motion control.

Don't blame the used game market for this at all.  Do blame an industry for deluding itself into thinking it needs to become like Hollywood, when it isn't able to support a Hollywood approach to entertaining people.