Are used game sales harmful to the video game industry?

Video_Gaming_Industry

Someone opened a question in reddit concerning used game sales, and the usual privileged moralizing was not slow to appear in force. This whole discussion is a prime example of how people go against perfectly fine practices for no other reason than that they perceive them to be a danger to their hobby…because those providing such hobby tell them so.

It’s no secret that the video game industry simply hates the used game sales, with as much and possibly more passion than they hate piracy. That hatred is of course misguided as much as it is when focused against piracy, but you can’t honestly expect much more from brain-dead executives who think that used game resellers are ripping them off. However one would hope that actual gamers, who are the ones benefiting most from a thriving second-hand market, would be more positive.

And to an extent it is, usually the highest comments are supportive of second-hand markets, but I’m seeing more and more upvoted comments and posts, condemning used game sales. Granted, a lot of this hate goes specifically towards GameStop, which people do have significant reasons to dislike, but then again, you also get a lot of comments strongly against used game sales for no other reason than the usual “It harms the developers”. The following is an archetypical comment:

Let me preface this by saying I’m very strongly against used game selling, as the basically the entire profit made from used game sales goes to the retailer.

These two are very, very similar, and shouldn’t be treated as separately as you are treating them. The key difference between piracy and used game purchases boils down to the buyer. When someone buys the game used, they aren’t supporting the developers, however they are still paying at least something for the game.

Pirates, on the other hand pay nothing. Pirating a game is playing a game illegally. That is it. Pirates can try to justify their actions all they want, saying they are just trying the game or will buy it later. This does not change the fact that they are playing the game illegally until they pay for it. There are no exceptions, no excuses for playing without paying.

One additional point is that you are assuming that people who frown upon piracy approve of used game sales. This is very, very rarely the case. Both are detrimental and would be best eliminated, it’s just that one involves taking something for free and one involves the slightly shady business practices of some stores.

And Finally, you are neglecting the absolute most important piece of information: you are assuming all customers are aware that no profit from used game sales goes to the developers. Most people are simply casual players, and won’t give a second thought about their purchase. To them, a used game is simply a cheaper version of what they were going to buy. It doesn’t change the fact that the developer is cut out of the sale, I just want to clarify some important gaps in your initial complaint.

GameStop logo

GameStop is probably the largest and most known used games reseller. Also significantly hated by many gamers for shady business practices.

I won’t really bother to counter the arguments against piracy as I’ve done so already in multiple articles here, but it’s interesting on how a perfectly legal practice in the world, suddenly becomes anathema when in the context of digital goods. Kinda like how the practice of sharing, become the “evil” piracy when it is done with digital goods.

It is very perplexing how these people do not see any issue with second-hand markets on physical goods, which are not only established but also very useful in market economies. The same arguments one does here against used games, can be used against used TVs just as well. As much as a used game sale deprives its creator of potential revenue, so does a used TV sale deprive its creator of potential revenue. And the argument that items change hands doesn’t even apply here, since the entitlement of the creator to receive profit from each transfer of their product is not based on the concept of material transfer, but on the idea that they deserve reward for creative effort and to protect their business model. A concept that, needless to say, is very very wrong.

The fact of the matter is, as Techdirt has explained, is that second-hand markets in fact boost original sales at launch periods, by allowing people to take more risks with their purchases, knowing that they can recoup some of that cost if the game does not live up to its potential. It also allows people to buy originals at full price during launch periods, even if their value of the product falls below that price, since they can reduce the price via selling the game used. Finally it allows people who do not have the money to buy full price, to enjoy the game via used game sales which in turn helps the game to sustain the most-important community size and possibly spread more word of mouth, as a the lost of someone disgruntled can end up in the hands of someone enthusiastic.

The point is that there’s a lot of positive effects coming from second-hand markets, which are summarily ignored through the short slightness of game publishers who feel ripped off by used game sales. Unfortunately for them, second-hand markets for software have been deemed legal. Unfortunately for us, software companies have the capacity to implement ways to extract money from either resellers or second-hand customers via the use of Online Codes.

But while the gaming industry might think that Online Codes give them a cut from each used game sale, the reality is that this cost is usually passed over to the customer in some way. Because the value of a second-hand game without a usable Online Code is diminished, either the original customer will be able to resell it for less than they’d like and thus the original price for the game (and thus the risk) will be higher, which will discourage people from doing it, or the second-hand buyer will end up with a gimped game, and thus discover that the price they paid was not for a full product, leading to resentment. Another option is that the used games salesman like GameStop is going to take the hit by subsidizing the Online Code cost to its customers (and thus providing a voluntary “tax” of 10-30% or so to the creator on each sale they make), but this again has unforeseen consequences, as GameStop is so big and has such a margin that it can afford to do this, while smaller resellers cannot. If anything then, this practice plays into the hands of GameStop by allowing them an advantage which can improve their market share, perhaps to the points of monopoly, which would be great for GameStop and publishers (who only have to deal with GameStop after that), but disastrous for the customer.

In any case, the absolutely most frustrating thing when discussing such matters with gamers online is how often you see a stunning display of privilege from people who either don’t have to think about what to buy, or simply have masochistic tendencies. This comment exemplifies this attitude:

A sketch of a male face, sporting a neckbeardThe gaming world is full of cheap ways to get games – Steam sales, app gaming, web-based gaming portals, FTP MMOs, ‘Greatest Hits’ discount re-releases, etc. The gamer that cannot afford to but full-price top-tier games on launch day should not buy them; just as a person living hand-to-mouth shouldn’t be going out to eat on a credit card or buying a fancy car when the bus is available.

I.e. let them eat cake.

This is the kind of argument that really gets me annoyed. It’s not even enough to condemn pirates who, at least are doing something illegal, but now they condemn people who do something absolutely legal, just because they’re not rich enough to afford full priced games at launch day? It’s this frustrating attitude which implies that there’s either the very poor and the well-off in the world, and nothing in between. And if you belong to the former, then you don’t deserve to enjoy culture. This projection of privilege from smug neckbeards online is really starting to become a pet peeve of mine.

In closing, I’ll reiterate that used game sales are as much of a threat to the gaming industry as piracy. I.e. not at all. If anything, according to “executive logic” used game sales are worse than piracy since they are far closer to actual lost sales, since the people buying them are already ready to spend money and that money simply didn’t go to the developer. The actual reality however is that used game sales and piracy have various positive effects that are difficult to see and quantify and the more the industry reacts to things humans find natural, such as sharing or selling their stuff, the more resentment and reaction it will bring, which will ultimately be to their own detriment.