The Second Hand Market is Killing the Games Industry.

Yes, you read right, the second hand market is killing the games industry.
Normally the argument you hear on the internet is the polar opposite of this, people complaining that, through things like DRM and online activation[1], publishers are stopping people from selling on games when they have finished with them. But should people be able to sell their games when they have completed them? I’m not so sure.

One of the analogies that is normally used is that of a car, when you buy a new car you expect to be able to sell it on or trade it in when you get a new one, so why can’t you do the same with games?  Well the main reason is that the car loses value as you use it, the new owner will get the car complete with complementary stone chips, rust spots and a large number of miles on the clock, this car will no longer work as well as it did when it left the dealers forecourt for the first time, and has lost value as a result. Second hand games on the other hand, particularly now digital downloads are common place, do not loose value. The second owner would get exactly the same game as the original did, they can play the game for the same number of hours, they don’t have to preform maintenance on the game to get it to run (the disk is another matter but for the purposes of this post, disk is NOT equal to game) and this second user can get the exact same amount of enjoyment out of the game. In a worst case scenario for the developers this could mean that they would only sell a single copy of the game and everyone in the world could take in turns playing it.

This is of course ridiculous, with the amount of time that would take people would die waiting in the queue, the point remains however. If everyone who buys an original copy sells the game on, that will halve the revenue of the games company. So what if 50% of players have waited a week to play the latest game? They don’t care if they got it half price. This scenario may still be far fetched but is certainly achievable, particularly with a game that has no multiplayer. Now to all those who say “I like to sell my games to fund the purchase of the next one”. Would you expect to buy a Cinema ticket and sell it on when you got out so you can put the money towards the next film you want to see? No, I didn’t think so. Think about it, that someone else could get into the next screening without giving the film studio any money. They tare you ticket on entry to prevent exactly that. So why can’t people treat games the same? Perhaps because the initial cost of a game is so high, up to £40 for a console game. Does it not occur to you that the games would be cheaper if the publisher got money from every player? PC games are already lower than console games, perhaps if Playstation users didn’t sell Killzone 2 as soon as they completed it Sony wouldn’t charge so much for it? Maybe not, this is Sony after all, but look at PC games, half the price of console games and they get discounted quickly, is this because most of them are non transferable these days? I think this fact goes some way towards the lower costs at least. A lot of games on Steam, one of the earlier and definitely the most well established non transferable system, can be quite a lot cheaper[2], and I think this is purely because they know they can sell more copies as they don’t have to compete with the pre-owned section in Game or Electronics Boutique.
It may still have a few flaws at the moment but I think now is the time to embrace non transferable games, rather than screaming out in disgust on various internet forums, it gets the money to the people that deserve it[3] and gives us cheaper games at the same time[4].

I just found a news article that is of some relevance to the subject here.


[1] Limited activations I don’t agree with, and once activated the game should allow you to play a single player game offline. I can’t defend the decisions of EA and a few other publishers to penalise legitimate customers when the pirates don’t get the same hassle.
[2]Apart from third parties that use Steam as a way to rip people off. Ubisoft I am looking at you!
[3]Unless the publisher is being a bastard to the developer that is.
[4]Like I said, it has a few flaws at the moment, Steam weekend deals show that a game can make far more money at a reduced price though, so I expect this to change when more publishers catch on.



3 Responses to “The Second Hand Market is Killing the Games Industry.”

  1. March 20, 2009 at 14:51

    Nice article.

    I still think there is something to be said about people expecting to be able to sell the game on afterwards.

    Imagine a game costs £30, and six months-a year later it is reduced to £15. Player1 buys the game at release knowing he can sell it, Player2 then buys it for £15 second hand. If Player1 knew he wouldn’t be able to sell it on afterwards he might not buy it at release waiting for the price to come down. With the second hand market the price of the game is shared between the two rather than just waiting for the price to be reduced. It’s obviously not that simple but I don’t think it’s as simple as the second hand market being evil either.

    I don’t think we’d see game prices lower should the second hand market be killed off, since that is almost the case now with games requiring activation. Digital distribution is making this worse since some publishers don’t see the need to reduce the price, ever. Far Cry 2 for example is currently available for £17.99 retail (it went as low as £12.99) and yet on Steam it is still £34.99. Steam makes the second hand market impossible and yet it’s still a higher price.

    Sorry if this seems like I totally disagree with your article, I don’t. Some good points well made. :)

  2. March 20, 2009 at 15:03

    Thank you.
    Don’t feel bad about not agreeing, I’m not sure I agree with all the points myself, I did post it in the category “Devil’s advocate” for a reason.

  3. 3 AJ
    March 23, 2009 at 15:18

    Awesome. Agree with you totally and I have not really sold any of my games onto anyone. The only time I did was to sell my Battlefield 2 to my brother for a miniscule amount of money thus enabling me to buy a copy of Battlefield 2142 outright from the company. But also bear in mind I sold my copy as it would not run on Vista.

    Anyway with regards to console games being higher priced than PC games. Basically console developers have to pay a premium to the people who own the consoles therefore in order to get the same amount of revenue as they would on the pc they need to charge an extra 10 or 20 pounds extra than if it were on the PC. Hope that makes sense.

    Also I think developers who use Steam should really play fair. I guess though they do it because they know that if they give out cheap cheap prices no one would buy off the companies on the internet or in store but the practice should generally be there that download games are cheaper than buying them in store.

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