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Study: Killing Used Games Could Be Profitable, or Suicide

If the marketplace of used videogames were to disappear, game publishers would see their profits decline — unless they massively lowered game prices.

Those are the results of a recent study conducted by marketing professors Masakazu Ishihara of the New York University Stern School of Business and Andrew Ching of the University of Toronto’s Rotman School of Management.

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icecoldfire1543d ago

Suicide for both customers and the publishers.

dedicatedtogamers1543d ago (Edited 1543d ago )

Having given two years of my life to working at the wonderful place known as Gamestop a few years ago, I can tell you the used game fee won't work. Heck, even if there is no fee and Microsoft simply cuts into the profit of used-game stores like Gamestop, it won't work. The reason is incredibly simple.

A lot of my customers would buy a new game, play it as fast as they could, and then return it for maximum trade-in. They would only get about $30-35, but to them, it was worth it. I know this may come as a SHOCK, but used games come from customers who bought a new game. Surprising, right? Well, what happens when Gamestop cuts the trade-in value down to $15 (or dare I say even less?) for a brand-new game because Microsoft is taking a sizable cut of the profits? The result is no one will trade in their games, and on top of that, a lot of people will simply wait until a new game goes down in price.

That's the thing people don't understand. A large number of people cannot afford to buy a brand-new $60 game and then stash it on the shelf. They trade it in so that their next $60 game is actually $30-40 due to trade ins.

dcbronco1543d ago

But you admit they only get 30-35 dollars. If they started out with a credit it's not bad. But if you buy a $60 game and trade it in for $35 in two weeks, you lose $25. Gamefly is cheaper than that. If you got two games, Gamefly is far cheaper. You spend $23 and get both.

I know Gamefly isn't the most dependable company in the world, but they would have more copies if more would deal with them rather than dealing with Gamestop. Actually the publishers could workout a deal with Gamefly to allow the trade-ins to go to them for rentals and take a piece of that and it would kill Gamestop and the publisher would make more.

The plan as it is only hurts Gamestop. I don't care about Gamestop. The customer still gets to trade in their game. Gamestop may offer less. That would make customers less willing to trade-in, which means less would buy unless they know, which means the prices would drop faster. Again, only Gamestop and others are hurt by this. Not the consumer.

NameRemoved00171543d ago (Edited 1543d ago )

The only reason they get away with it on PC is because games are usually a lot cheaper than the used versions anyways and it can be downloaded infinite times and it doesn't break.

brish1543d ago

When they started doing intrusive DRM on the PC the market turned into the tiny market it is today. I wouldn't call that getting away with it!

If they push intrusive DRM on all consoles I expect the console market to crash like the PC market did when they did it. If only one console does intrusive DRM then then they are giving the market to the other console(s).

Roccetarius1543d ago (Edited 1543d ago )

Killing used games will end up biting the industry in the ass. It may seem like a brilliant decision, but it'll mean that less people will buy your games before significant price drops.

A video about used games - http://www.escapistmagazine...

GhettoBlasStarr1543d ago

Every gamer should see this VIDEO!! Bubble well deserved.

Mikelarry1543d ago

i don't think this issue will ever be resolved until we go all digital. knowing publishers and console makers they will keep trying stupid DRM's steps but it will always fall flat, and if they do go ahead it will only make consumers less eager to buy any game unless it is a proven franchise meaning they lose again. not everyone can afford games new the sooner the publishers accept this the sooner they can start concentrating on the all digital age.

MoreRPG1543d ago

Yep it will make selling new IPs harder

mmj1543d ago (Edited 1543d ago )

People will buy less games without the ability to recoup their loss on junk games, they will simply buy the AAA titles and not risk getting something they know nothing about.

Infact thinking about it, it will probably hurt indie developers the most which is probably the big publishers intentions when they block second hand market, they don't want publisher-less indie developers threatening their monopoly.

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