Friday, March 20, 2009

Re: How Buying Used Games Can Hurt Developers

Cool beans! My blog is actually driving good dialog from the readers, specifically the post about the negative impact caused by GGS's used games sales. Apparently the topic of used game sales has been going on for the past 15 years, so I inadvertantly tackled a controversial hotspot without knowing it! Click on the comments section to read the full details, but here's a summary of the questions asked by Xbox Maven, a wife who is a gamer herself.

I really like buying from GGS because of the great deals. Would game developers rather customers not buy a game, as opposed to buying it used? Especially if the developers can get additional income from downloadable content (DLC). Plus, since GGS is a specialty games store, don't they benefit developers by holding titles on the shelves longer than stores like Walmart and Target? Also, if resale from GGS hurts developers, does resale on eBay also do the same amount of damage?

Great questions. Having a game developer in-house, I too was curious to see what K's opinion was. Apparently, specialty game stores' sales of new stuff is a tiny portion of the market, mostly used by enthusiasts. Probably 80 to 90 percent of new games purchased are sold through megastores such as Wal-Mart, Target, and the like. However, in recent years GGS has pushed so hard on their resale marketing that their used game business is beginning to compete with new game sales from the big outlets (a predicted $2 billion in 2009).

eBay resale has a much smaller impact because an individual seller doesn't have a massive advertising campaign and discount program backing him/her up. In other words, small individual sales don't hurt as much as a big organized push does. Nowadays, GGS actually orders fewer new titles because they're expecting to resell them. Where does that lead? When people can't wait for a new release, they buy it at Best Buy, take it to GGS when they're done, and then GGS profits on it indefinitely.

Yes, this is undeniably an awesome deal for the customers and GGS, but the big picture is that it's slowly hurting developers and driving the smaller ones out of business. And you can envision that less profit from new game sales means that publishers will increase game prices, which means even more customers will buy used games, which leads to more developers dropping out of the picture... O_O

Anyway, if you're interested, here are some other articles (both unbiased and biased) on the subject. I'm sure only time will tell how much of this comes to pass, but hope you enjoyed an insider's point of view!

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