As Recession Deepens, Used Games Get More Painful

Braben insists that the industry needs to find new ways of incentivising the sale of new versions. "For instance, if we lower retail prices, gamers won't feel as much of a need to wait a few weeks in order to pay used prices," he says.

Developers should also come up with clever methods of increasing the value of new games, in addition to add-ons and expansion packs, he adds.

"As an example, Gears of War 2 offers downloadable multiplayer maps that you wouldn't get if you owned a pre-owned version," he says. "And many new games come with scratch-off codes for a weekend's free Xbox Live Gold."   

Most everyone agrees that when the video games industry shifts to predominantly digital distribution, that, too, will bolster new game sales.

But that's a good 10 years off as only about 53% of homes in the U.S. currently have access to broadband, says Braben.

"It's forecast to rise to about 70% by 2012," he says, "but even then there are gamers who will still want to buy retail. For instance, there are some who like the portability of having a boxed game so you can bring it over to your friend's house."

In the meantime, the noise from the industry about used games is becoming louder, Braben reports. "Pre-owns have been around for years, but that sector has become acute this year. I've seen some chain shops in the UK where the new game section is less than 10% of the store; the rest is all pre-owned. That can't be good for our industry."

In recent months, industry execs such as Acclaim Games COO David Perry, Epic Games president Mike Capps, and Xbox Live Marketplace group program manager Alvin Gendrano have taken similar stands.

But industry analysts who see real growth in the resale market for 2009 say that isn't necessarily bad for the industry.

"A good analogy is used cars," explains Pachter. "If you were told by the auto makers that you could only buy a new car and you'd have to drive it until it was totally rusted and useless... and then throw it away because there's no resale market for your car... you'd be less likely to buy a new car as frequently as you do."

"GameStop's argument is that if you lose the currency from trade-ins, new sales will suffer -- and I'm certain that's true. So the publishers want their cake and eat it too. They want the used games business."

"They just don't want used game sales that cannibalize their new game sales. They are fine with the $20 used game. They're just not fine with the $50 game one week after it's released for $60."

And so, what do publishers intend to do about it?

"The only real meaningful threat," says Pachter, "is for publishers to stop supplying GameStop with packaged products. And, so far, nobody has made that threat. But, frankly, if it's not [Electronic Arts CEO] John Riccitiello or [Activision CEO] Bobby Kotick, it doesn't really matter. The other guys don't matter. I mean no disrespect to anyone else, but who cares what anyone else thinks?"

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Photos by Stephan Mosel, used under Creative Commons license.