Video Game Exec Claims Used Games 'Cheat' Developers
from the lets-learn-you-some-economics dept
For whatever reason, every few months or so, yet another clueless video game company exec spouts off about how the used video game market is somehow unfair or hurting video game developers. We’ve seen it again and again and again. However, since a whole bunch of you keep submitting the story that Cory Ledesma from THQ has made the downright laughable claim that the used video game market “cheats” developers, it seemed worth discussing.
This shows a fundamental misunderstanding of the law, basic economics and the customers THQ is failing to serve. On the law, Ledesma and others should familiarize themselves with the First Sale doctrine before making silly statements. On economics, repeated studies have shown that a healthy secondary market for products actually significantly helps the primary market. If you take more than a second and a half to think about it, it’s easy to understand why. If there’s a healthy secondary market for products, it reduces the risk for the buyers in the primary market. That is, if they buy the product and don’t like it, they know they’ll be able to resell it and recoup some of their losses. That makes it effectively cheaper for them to buy the primary product, increasing the number of sales. On top of that, the secondary market also helps in markets like video games in acting as a good way to segment the market, and get new buyers into a game or series of games. I’m sure many of the folks who are now buyers in the primary market, at one time purchased an earlier game in a series used. How is it that so many video gaming execs have so much trouble recognizing these basic concepts?