Since K has a lot more expertise on the video game industry, I'm going to do a series of interviews to capture his thoughts. First up: there is a certain national specialty video game chain that is the place where <cough> Game lovers <cough cough> Stop to pick up the latest releases. ^_~ Let's call them, ah, GGS (generic game store).
A: So tell us, K. Why the bone to pick with GGS?
K: Well, I don't hate GGS in its entirety. I appreciate that they're a specialty store that gets games on release days and even go to them to put down pre-release deposits. I just have a problem with their used game policy.
A: And what's wrong used game policies?
K: Their particular policy ensures that GGS makes money hand over fist, but it keeps developers from seeing high sales for a lot of their games.
A: How does the whole scheme work then?
K: All their marketing practices are centered around used games (tons of promotions on the web, email, and in-store). Tactics they've been known to use:
- Selling used games ~$5 cheaper than the unopened games (tons of profit)
- Asking customers at the register if they would like to buy a "discount" (aka used) version instead
- Putting used games on the main display shelves instead of new games
- Allowing customers to swap used game purchases within 7 days if they don't like them (but not for new games)
A: Like a parasite that kills its host, huh?
K: Well, if you're a video game company, what's your incentive to make new games? You've got an x% chance of making an A list title, tons of overhead to pay for marketing and TV ads, and now no one's paying for your game because customers just get the used versions and then bring them back for others to buy. It's a glorified rental system, with the GGS leech profiting from it all.
A: What's been the gaming industry's response?
K: The gaming industry and most professional orgs (like ESA) have all attempted to get GGS to stop exploiting used game sales. Since GGS is the only one making tons of money from used games, they see no reason to stop even though it's harming developers and publishers. Selling used games would be reasonable in small numbers, but their practices border on exploitative. And they've made it flat out clear that they don't care if it hurts the market that supports them.
A: How come what they're doing isn't illegal?
K: Nothing they're doing is illegal, per se. The problem is that GGS is taking such an excessively large slice of the pie. Unfortunately, there doesn't seem to be any particular reason to stop until they've driven a bunch of small developers out of business. They value profit over long term sustainability in the video game industry.
Bottom line: buy new games rather than used! And please buy games, period, rather than pirating them. We'll have another post on that subject later. ^_~
Part 2: Response to "How Buying Used Games Can Hurt Developers"