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?

Filed Under: cheating, cory ledesma, secondary markets, used games, video games
Companies: thq

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  1. icon
    BigKeithO (profile), 25 Aug 2010 @ 12:39pm

    Not the Same as Cars

    I've got a question I was hoping some of you who have a better grasp on this stuff than I do can help me with.

    Whenever this question comes up, and it comes up a lot these days, you always get some developer or gamer who doesn't like the idea of used games jumping into the discussion. A common argument I hear from people who are for used game sales is that a game is just like a car, should Ford or GM get a cut of each used car sale? The standard response from a developer is that a car isn't the same as a digital good, a car suffers from wear and tear while a video game will not. A digital file suffers from no degradation and therefore should be treated differently than a physical good.

    Now when I hear this my first thoughts are doesn't a disc suffer from degradation much in the same way any other physical object would? The next thought tends to be, you decided to create digital goods, tough titties if it doesn't degrade. Code in some self-degradation and see how many people buy your game.

    Just wondering what you guys make of that argument?

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