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
    Modplan (profile), 25 Aug 2010 @ 12:56pm

    Re: Not the Same as Cars

    I would definitely think such an argument is - to put it bluntly - bullshit. They're argument only works so long as you assume they have bad accountants and generally idiotic employees to price in a way that doesn't already account for this so they can still make their development cost and a little extra back. This is of course assuming the no degradation argument actually stands up, which for many years it hasn't.

    Either it only becomes true if you assume usable backup copies (which is not something that's always easy to do with consoles AFAIK), or the other extreme assuming that this wear and tear happens often and soon enough that you'd buy so early on that first hand copies are still being distributed (let alone cheap enough to compete with second hand as in every other market). This then assumes you're making low quality crap that breaks quickly, which would make people reticent to buy in the first place if it happened often enough.

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