Video Game Execs Freak Out Over Used Game Sales

from the try-learning-some-economics dept

You would think that after years and years of evidence that a second-hand, "used" market for products increases the value of the original products that executives who create the original products would know better than to complain about resales or demand a cut of the profits -- but apparently you'd be wrong. Reader Lucretious writes in to let us know that the audio director of Bungie Studios, a Microsoft subsidiary and the makers of Halo among other things, is out complaining about how the second-hand market for video games has a huge detrimental effect on the industry, claiming that the game makers deserve a cut of all of those sales.

Except that's not just wrong, from a common sense standpoint, it's wrong from an economic stand point and a legal standpoint. It's almost impossible to come up with a rationale where it actually does make sense. First, on the legal front, the first sale doctrine is well established. When it comes to copyright products, once you've sold something, you really have sold it, and the buyer has every right to resell it -- just as they do with things like a chair or a house -- without owing the original creator another dime. Second, from an economic standpoint, plenty of studies have shown the importance of an active second-hand market. First, for buyers of the initial product, the fact that they can resell it is part of the value they put in the price. Wipe out (or heavily tax) the second-hand market, and you decrease the amount people are willing to pay for the initial product. Thus, you actually shrink the market for your product. There's also a lot more research in terms of signalling and market adoption that show that a second-hand market is important. Finally, from a common sense standpoint: you sold the game, you no longer have control over what people do with it. That's how transactions work. Would the folks at Bungie like it if we suddenly started telling them how they could spend the money we gave them for games? No? Then they shouldn't complain about what people do with their games.

Filed Under: economics, secondary markets, video games
Companies: bungie studios, microsoft


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  1. identicon
    Twinrova, 1 Oct 2008 @ 4:25am

    Why am I not shocked?

    Oh, yeah, because I have no sympathy for gaming publishers and creators who allow a new console every 4 years, charge $49+ for poorly developed games, and continuing this notion of a "console war" in which every damn consumer loses.

    I don't say this often, but fuck them all. Every. Last. One. Of. Them. Let these executives cry when legitimate consumers get shafted for those copying games.

    Let them cry because consumers are pissed they can't get the titles they would like to play because they "chose" the wrong console.

    I feel sorry for none of them. This whole crap about "creative licensing" is tiring and consumers shouldn't have to feel guilty by selling the game. Many, many gamers will keep games when they're exceptional. The primary reason a gamer will sell a good game is to offset the cost of the other new game they want to play.

    These publishers should take a listen to the consumer and adjust their business model accordingly. DRM? No. The majority of gamers are legitimate buyers.

    Continue raising the price because it costs more to develop a game? No. Gamers often state graphics don't matter. We didn't ask these developers to rush out and create HD games (especially when 70% of the current market still doesn't own an HDTV).

    I've quit buying games at full price long, long ago because I've tired of losing my money on bad games. I've long learned most games drop to $29.99 within a year (except Nintendo, whose greed is so ingrained, it's hard to imagine ever seeing a Nintendo title less than $49, unless a new, worthless console is developed).

    The only exception to this is Retro Studio's "Metroid Prime" series. I've yet to feel disappointed on paying full retail for these games. And yes, to me, better than Halo because I don't have to run around shooting everything that moves.

    When there's only one console, less expensive games, and better quality games that I'll begin to care.

    Until then, fuck them all.

    (sorry for the language to those offended)

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