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Forums - Gaming Discussion - Second hand trade hurts developers as much as software piracy...

NJ5 on 01 February 2010
jammy2211 said:
NJ5 said:
jammy2211 said:

The big retailers, Gamestop, GAME, Best Buy etc buy games at ~ $45 per copy for a $60 game. They simply couldn't afford to pay that, or order as many copies of games as they do currently, if there wasn't a used game market to bring them the money.

^ Ummm no that part's not true. There are plenty of retailers which don't sell used stuff and are perfectly able to order as many games as they need.

 

 Not in the UK - and are those retailers video game only or do they sell a variety of media as well as video games? Cause if they've got other sources of revenue then er... that kind of proves my point.

 As far as I'm aware these stores pretty much lose money selling first hand software - once you include the costs of running the store, paying staff, taxes etc.

It doesn't prove your point. They sell more stuff and have more revenue but they have more employees as well, being bigger retailers.

I don't see how a decent games store would lose money by selling only first hand software, given that it has like a > 33% gross margin that many businesses would kill to have.

 



My Mario Kart Wii friend code: 2707-1866-0957

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Kasz216 on 01 February 2010

Gamestores don't rip me off... because I don't sell used games.

Only time I'll sell my games collection is i need to eat.  Or I REALLY hate the game.  I don't mean dislike, I mean... knowing it exists within my house bothers me to my core.



Kasz216 on 01 February 2010
Foamer said:
jneul said:

it depends if the game you buy has been looked after or not, for example if it has smudges and scratches it will not work as well as a new version.

That's physical damage though, in which case you could just take it back and swap it if it didn't work properly. Scratches on the disc do not affect the graphics, sound and gameplay of the game. Scratches on a car could mean it requires a new pain job to avoid rust.

Maybe game companies should offer the same assurance... or rather better.

I always find it funny that your not actually buying a game... but a liscense to use software... yet if something happens to your disc for some reason you have to buy a whole new liscense.

Ridiculious.



jammy2211 on 01 February 2010
NJ5 said:
jammy2211 said:
NJ5 said:
jammy2211 said:

The big retailers, Gamestop, GAME, Best Buy etc buy games at ~ $45 per copy for a $60 game. They simply couldn't afford to pay that, or order as many copies of games as they do currently, if there wasn't a used game market to bring them the money.

^ Ummm no that part's not true. There are plenty of retailers which don't sell used stuff and are perfectly able to order as many games as they need.

 

 Not in the UK - and are those retailers video game only or do they sell a variety of media as well as video games? Cause if they've got other sources of revenue then er... that kind of proves my point.

 As far as I'm aware these stores pretty much lose money selling first hand software - once you include the costs of running the store, paying staff, taxes etc.

It doesn't prove your point. They sell more stuff and have more revenue but they have more employees as well, being bigger retailers.

I don't see how a decent games store would lose money by selling only first hand software, given that it has like a > 33% gross margin that many businesses would kill to have.

 

It has a 33% gross margin if it sells every single copy of a bulk order at full price - they won't though, and as soon as that 500000 order of a 'sure hit' bombs - you can bet the retailers is going to bleed money from it. Yes they have protection in place to not make it hurt too bad, but for all the games they make money on at full price there are games they're forced to sell below what they paid for it.

 By selling more media, thus attracting a bigger market, the costs of running the store, paying staff, taxes, location rental, brand marketing etc etc is less significient as they make bigger revenue. That's why (UK example here) a shop like WHsmiths can afford to only sell first hand video games, it's just one part of a range of product - and their whole revenue doesn't rely on it.

 The video game retail industry is by no means a 'cushdy' and easy place to make money, and third parties wouldn't be selling their games with such minimal profit margins for retailers if the second hand market didn't exsist. 



slowmo on 01 February 2010

As others have stated it hurts them more in some ways as you know the customer was willing to actually spend money on a purchase.

The plus point is that the second hand market is often catered for by people trading in newer games early to get brand new titles for a fraction of the cost they couldn't afford otherwise. There is some swings and roundabouts and its not clear cut.

I never trade my games or buy preowned so it doesn't matter to me but I don't think it's right for any company to have a say in what we do with a product we have bought. I paid for something and should be allowed to resell it if I choose imo, I don't see why a company should have any less rights than me.



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AnthonyW86 on 01 February 2010

When you buy a copy of a game you pay for the right to use the software, you don't OWN the software lolz.



Kasz216 on 01 February 2010
NJ5 said:
HappySqurriel said:

It is possible that the person buying a used copy of the game might have bought it new if it wasn’t available used; but it is also possible that the person who sold it as a used copy wouldn’t have bought it if they couldn’t sell it. In other words, the the loss of sales from the used game market is hardly 1 to 1.

Now the solution is to go in the direction that few/no companies are willing to and to encourage digital distribution by passing the savings onto the consumer. If you’re no longer paying the distribution and manufacturing costs, no longer paying for localized marketing, and you don’t need to cover the retailer mark-up you can easily afford to sell a game for (roughly) 1/2 price. With the reduction in cost the game seller no longer feels the need to recover spent money, the game buyer no longer feels the need to save money on a title, and they both would buy "new" copies of the game.

Exactly... but what they seem to be doing is attempting a re-education of gamers to accept a decrease in their rights while keeping game prices unchanged. They do this via progressively more restrictive DRM (a few years ago you got unlimited installations, today you get 15 installs, in a year you get 5 installs, then 3, etc.).

They may not succeed entirely, but it's probably better for their profits than immediately doing it the way you proposed.

I for one do not agree with what they're doing, which is why, for example, I wouldn't buy a game on Steam at full price. I like Steam and its convenience, but this doesn't mean I'm willing to accept a non-resellable item for the same price. I do this as a matter of principle by the way, because I don't resell my games (or at least I haven't done so yet).

 

The positives on Steam outway the negatives... it does have a few.  Of course as previously stated... I don't sell my games anyway.

The biggest disadvantage i see is the inability to lend the game.  Of course las time i lent a freakin PC game to one of my friends he returned the damn thing in 8 pieces and said "That's the way he found it when i lent it to him."   Yeah, like he's just going to go a month and a half not telling me that's how the game was when i gave it to him.  How does one even break a CD into pieces anyay?

 

Anyway, not having to worry about the physical problems with CDs is nice.  Of course this is in the US, where backup laws aren't quite as nice as where your from.



NJ5 on 01 February 2010
jammy2211 said:
NJ5 said:
jammy2211 said:
NJ5 said:
jammy2211 said:

The big retailers, Gamestop, GAME, Best Buy etc buy games at ~ $45 per copy for a $60 game. They simply couldn't afford to pay that, or order as many copies of games as they do currently, if there wasn't a used game market to bring them the money.

^ Ummm no that part's not true. There are plenty of retailers which don't sell used stuff and are perfectly able to order as many games as they need.

 

 Not in the UK - and are those retailers video game only or do they sell a variety of media as well as video games? Cause if they've got other sources of revenue then er... that kind of proves my point.

 As far as I'm aware these stores pretty much lose money selling first hand software - once you include the costs of running the store, paying staff, taxes etc.

It doesn't prove your point. They sell more stuff and have more revenue but they have more employees as well, being bigger retailers.

I don't see how a decent games store would lose money by selling only first hand software, given that it has like a > 33% gross margin that many businesses would kill to have.

 

It has a 33% gross margin if it sells every single copy of a bulk order at full price - they won't though, and as soon as that 500000 order of a 'sure hit' bombs - you can bet the retailers is going to bleed money from it. Yes they have protection in place to not make it hurt too bad, but for all the games they make money on at full price there are games they're forced to sell below what they paid for it.

 By selling more media, thus attracting a bigger market, the costs of running the store, paying staff, taxes, location rental, brand marketing etc etc is less significient as they make bigger revenue. That's why (UK example here) a shop like WHsmiths can afford to only sell first hand video games, it's just one part of a range of product - and their whole revenue doesn't rely on it.

 The video game retail industry is by no means a 'cushdy' and easy place to make money, and third parties wouldn't be selling their games with such minimal profit margins for retailers if the second hand market didn't exsist. 

 

Reduce the gross margin to 20 or 25% and that's still enough to make a healthy profit, for a company which only spends money on rent and low-wage hourly employees. Provided you have a decent sales volume of course, because if you're selling 20 games a day you might as well file for bankruptcy immediately.

Historically there have been plenty of stores which only sold new games. Just because Gamestop is big and sells used games doesn't mean they need it to make a profit.

 



My Mario Kart Wii friend code: 2707-1866-0957

Kasz216 on 01 February 2010
d21lewis said:
What about rentals and Gamefly? We live in an evil world.

*watches Netflix on PS3*

I'm pretty sure rental copies actually get purchased for hundreds of dollars.



slowmo on 01 February 2010
AnthonyW86 said:
When you buy a copy of a game you pay for the right to use the software, you don't OWN the software lolz.


Congratulations, you've been conned by them into thinking their way.  I own the license to play that game, I should have the right to sell that license to whomever I please.  Your point is semantics, you know perfectly well what people are arguing.