GameStop on used games

Check out this quote from a CNET article on used game sales:
“The used-games business does not cannibalize sales of newer video games,” Daniel DeMatteo, GameStop’s vice chairman and chief operating officer, said in an interview. “As a matter of fact, it does somewhat the opposite.”
I have one thing to say about that.
There has been an incredible amount of discussion on this issue in the development community, and while it may not be the only reason for declining game sales, it is CERTAINLY not helpful. If DeMatteo has some sales data that prove his point, I’d like to see him share it with the community.
In the film industry, a percentage of used / rental revenue goes back to the publisher. If this was the case in the game industry I’d be more of a fan of the concept. A few devs/pubs have it written into their contracts (apparently) but for the most part all of the revenue from used / rental goes to the store. That’s just miserable for devs if people are buying games used and no royalty stream is coming back to them. I hope that you will join me in purchasing games at full price so that the devs can make some money for their efforts. And then we can all complain together about the incredibly high prices of games – but that’s a discussion for another time.






3 responses to “GameStop on used games”

  1. MarzTech Avatar

    From the developer’s side of things you could say “where are the royalties”? But the problem remains that the initial full price sale satisfied the publisher’s pocket book. What GameStop and others are doing would be considered more of a “service” to redistribute unwanted media.
    So how can a publisher profit on the old games when GameStop drastically reduces the chances of a new retail box version being sold? Perhaps they should take note of Nintendo’s “Revolution” model. I’m not sure how all the licensing agreements with 3rd party developers will be worded, but I’m sure all but the Tengen produced titles will get their cut. SCEA / SCEE / SCEJ could then work a similar “downloadable” service that would allow for a revenue stream for Sony and it’s 3rd party developers / publishers. Obviously this could only be cone on the PS2 w/ HD (Possible HD retail bundle) and the PS3. Maybe an HD add-on for the PSP could let you load old games and play as well.
    Ok, very long winded, but the jist is this. Post consumer redistribution of legal bought merchandise will never go away. The only way to profit on older media may be to repackage / reinvent to way the media is distributed.

  2. jay Avatar

    I always purchase new games unless the game I want is no longer available new at retail. That being said, I realize that not everyone is able to behave in this way.
    Used media provides a valuable service to its industry by increasing access to the copyrighted works and thus creating a larger consumer base. In other words, more people play games when more people can afford to play.
    It may be better to allow Lucy to grow up playing used games that her parents can afford, than to force her from the market by requiring full retail price.
    I also agree wholeheartedly with the point that MarzTech made: post-consumer redistribution of copyrighted works is here to stay, as it is protected by the very same copyright laws that protect the copyright owners (called “the first sale doctrine,” or Section 109(a) of the Copyright Act). Instead, the industry should be focusing on new methods for delivering content and, like MarzTech pointed out, some companies already have.
    Interestingly, digital distribution of content is not presently protected by the first sale doctrine, and so it may be in content producers’ and publishers’ best interests to move away from traditional tangible media if concerned about the secondary market.
    Some consumers may be more willing to pay full retail price for a game knowing the first sale doctrine allows for its subsequent resale, thereby lowering its effective price. Therefore, unless the cost of games via digital distribution is made more affordable than tangible media, some consumers may not embrace the new model.
    If the cost to enter the market is kept low enough to compete with used games then the issue of the secondary market should become moot.
    Sorry for my rambling, but there may be something of value in there somewhere. 😉

  3. CMelissinos Avatar

    While post-consumer redistribution may be here to stay, and is ok, it doesn’t change the fact that game developers still come up on the short end of the stick. Unlike music or movies which have alternate revenue making routes, packaged games have one primary route. Movies hit the theater first, rentals and dvd sales second and pay-per-view third. What avenues do games have? They hit the initial release and rental at the same time.
    Fine to create a larger consumer base, but if they are purchasing goods that you don’t make money off of, do they matter anyway (from a revenue point of view)? It is great that people can get access to games at a lower price point, but that does not change the fact that developers suffer. The person purchasing pre-owned games contributes $0 to the developer’s bottom line. Until the industry figures out how to make revenues off of additional channels of distribution (or redistribution), expect the prices to remain inflated. I agree with Jay that online distribuiton is one very important way to add to the bottom line.
    WRT the high price of games, people seem to forget that during the Saturn/N64 era, games consistantly entered the market at the $69 price point. Game prices went down as we moved later into the PS1 life cycle and with the Dreamcast and PS2. Given the amount of content that goes into the modern videogame, do you really think $49.99 (where most games live today)is too expensive?