Why buying used games contributes to the industry

[Ivo]

Disclaimer: The following does not mean that middle men like Gamestop that buy low and re-sell higher are not taking a share of the profit "away" from the industry. They are and that fits perfectly within the analysis. But it means that players that buy used ARE contributing to the industry.

Consider and compare these situations. Who do you consider is supporting the industry in each case?

1. My brother asks me to go buy a game for him. I get it from the store. When I hand it to him, he gives me the money.

2. My brother wants to buy a game, but knows that I also want to buy it. We agree to split the cost 50% each.

3. My brother wants to buy a game and knows I also want to buy it. We don't live together. We agree that I buy the game and when I'm finished with it, he gives me less than 50% of the original value (as I got to play it first) and he gets to keep it after.

4. I buy a game. After I finished playing it I realize that I don't want to replay it, deciding to sell it. My brother learns that I'm going to sell the game, and offers to buy it from me for less than 50% of the original value, saving us both the trouble of putting/searching for it on ebay (or craigslist or whatever). I agree and he buys the game from me.

5. I buy a game. After I finish playing I store it. The game becomes popular and due to a limited print run I decide to sell it for 50% MORE than the original value. My brother learns that I'm going to sell the game, and offers to buy it from me, saving us both the trouble of putting/searching for it on ebay (or craigslist or whatever). I agree and he buys the game from me.

6. Gamestop buys a game from someone. They sell it to someone else for 50% MORE than what they paid.

Now think: is it relevant that I am dealing with my brother instead of random stranger? Does it matter if I sell it weeks or months or years after I finish the game? Compare each situation with the previous one. What changes? What should matter in counting support so that it is self-consistent no matter the example?

In 5., if I actually profit from buying and selling the game, do you think I supported the industry or that the industry supported me? How can that be consistent if you don't count the support from the person that buys the game from me?



Finally, if you want to be extremely precise in all of these, the only think you need to add is accounting for opportunity costs (you can do that by using loans and inflation). So I buy at 60 USD today, I sell it for 20 USD years after, adjust the 20 USD that I got for it for inflation and the interest I could have gotten from it (so it is actually 15 USD or something), and I supported THAT game with 60-15 = 45 USD today, whereas the other buyer has supported it with 15 USD today (his support is lowered from the actual value he used, but he gets those extra 5 USD back from the same opportunity costs I lost them from - he adjusts for inflation and can get interest for them during those years).

Ivo.

[AppleQueso]

can we stop having used game threads please

or at least like, consolidate them all into a single thread?

[GSZX1337]

can we stop having used game threads please

or at least like, consolidate them all into a single thread?

I have to agree with AppleQueso, this Used Games shit is getting almost as annoying as the constant piracy threads we had a while ago.

[harper]

can we stop having used game threads please

or at least like, consolidate them all into a single thread?

I have to agree with AppleQueso, this Used Games shit is getting almost as annoying as the constant piracy threads we had a while ago.

I know what would cheer you guys up...

Another top 100 thread!!

[Jmustang1968]

Top 100 reasons to buy used games. I think the OP left us of at #8, go!

[Ivo]

can we stop having used game threads please

or at least like, consolidate them all into a single thread?

As far as I know, we've had:

Publishers complaints about the used games:
http://www.racketboy.com/forum/viewtopi ... 44&t=23962
http://racketboy.com/forum/viewtopic.php?f=44&t=33087

Your feelings about buying used:
http://www.racketboy.com/forum/viewtopi ... 44&t=36744

In my opinion, the post I made only fits tangentially in any of the above (it would fit best in the 3rd one). I'd like to have some dedicated discussion about this part of the topic so I think a new thread is appropriate. I don't all facets of the same topic should be consolidated into a single thread.

Ivo.

[artphotodude]

This has been coming for a long time. Every since the Atari Jaguar and its 'laughable' user agreement that stated that the buyer agreed that the system and accessories would only ever be licensed to them and that they were permitted to destroy the system, but not re-sell it (I remember thinking - ya, you and what space-invader army are going to enforce this??!?!). Then in Japan when several of the large game developers pushed legislation through banning the sales of used games; this led to the closing of several of the countries largest game resellers (only to have black-market and Hong Kong resellers fill in the vacuum).

But now, with networkable systems, this might really come to pass with the next generation. Some have said it may be as small as having to pay a 'reauthorization fee' to use a pre-owned game, like the EA Season pass for $10-$20, or it could mean that every major title will cost $40-$60 from then on. If trade-in ceases to exist, how will this affect your gaming? Not to mention, the complete inability to play any games without being connected to the XBL of PSN motherships - so much for playing with the country cousins during a road trip.

Have the bean-counters finally gone too far, or is this simply a logical progression of the industry? What do you all think?

P.S. If one of the next Gen (like say Nintendo's upcoming Wii-U) breaks ranks with this and allows the playing of used games, and/or back-wards compatibility, how much would this influence your decision to buy that machine?

[Ivo]

Have the bean-counters finally gone too far, or is this simply a logical progression of the industry? What do you all think?

I don't mind the industry giving incentives to buy new, and I don't think it is "evil" to try to get a bit of the share (both from normal sellers but particularly other companies like Gamestop that have buying used low and selling used high as one of their major profit drivers).
That is in fact part of their job - trying to emulate the relative success Blizzard has achieved with games selling even though they are several years old and such. Or making games cheaper like Steam effectively does, people that buy on Steam generally don't complain about not being able to re-sell those games and I presume part of the reason is that they feel the price is worth it, either because of the added services Steam provide or because of the frequent sales knocking off some % of the price.

It is however bullshit to claim that those that buy used are not contributing to the industry, and anyone trying to guilt-trip people that buy used - that is simply not justified. What is happening is that the person that bought new is transferring a chunk of his contribution to someone else, which is quite different.

Ivo.

[Ivo]

I hope this clarifies the point.

A company (you can use Facebook as an example) gets listed on the stock market. They have an IPO (initial public offer). Companies typically get listed - effectively selling parts of themselves - in order to get money to invest. In this example the initial value of each stock is $10.

I decide to support the company with $50. I buy 5 stocks at $10 each at the IPO. You can think of this as buying the stocks "new" as no one else in the public owned the stocks before.
The company (which used to "own" its own stocks, so to speak) now has $50 bucks of my money to use as they please, and I have 5 pieces of paper that prove I "own" a (tiny) part of the company.

Later, the stocks have de-valued. The value of the stocks is now $6 each.
I decide to sell them. I lose 20, get 30 back. The company has sunk those $20 (maybe trying to expand their business) and this is indirectly reflected in the lower stock value. I supported them for that amount that I am never getting back. Someone bought the stocks from me - not from the company as I did in the IPO. In fact, I would say they were now bought pre-owned, or even "used". He gets the 5 pieces of paper, but it is registered that he got them for 6 each.

My point is that after I sold my participation in the company, I have divested $30, someone has invested those $30. Now the other investor has $30 that are part of the company's funds (that the company can invest).

It also doesn't matter if I then go and buy stocks of another company (say, Microsoft), or even if I buy stocks of a company that is partially contributing to the value of the initial stock I got (say, Xynga in the case of Facebook). Whoever got the stocks of the initial company is supporting THAT company, not whatever company I support afterwards (if any).

Now instead imagine the stocks went up, to $14 and I sell them. The company has apparently managed to use the funds they had to grow and that is reflected in the value of the stocks. I divest and get 70 - more than the 50 I put in at the IPO! Whoever invested replaced my $50 and I got $20 extra. Note that the company never got to see the full 70, they only got the amount given to them at the IPO. I "soaked" up the extra. It is registered that I sold them for 14 (in fact in the legal systems I know of, I would need to declare the extra 20 I made to be taxed by the government).

My point is basically that it would be pretty ridiculous to say that I am still supporting the company after I divested, just because I got my stocks at the IPO. And in fact any dividends will be paid to the other investor, it doesn't matter if the stocks went up or down. However, if they did go down it was registered that I supported the company with those 20 that I never recovered (in fact in the legal systems I know of, I can declare the loss of 20 to reduce my taxation liability).

Now I know that games are not stocks (they can be considered commodities though). But if you apply my type of logic with transfer of support, it is consistent, and it just works no matter the scenario. If you apply the type of "non-transferable support" logic you get into inconsistencies, and all it takes is one single example to prove it is wrong (it is typically easier to show something is wrong: you just need 1 counter-example. Showing something is right is typically harder). If anyone finds 1 counter-example showing that transferring support is wrong, I would like to see it.

Ivo.

[Jmustang1968]

Stocks are shares of company value, games are a product a company makes. By owning a game, your aren't supporting that developer or publisher, nor do you have a stake in their company. You are using a stretch in logic by comparing the 2. The game companies value and revenue are directly affected by volume of new games they sell. Gamestops value is reflected by # of used games they sell. A developer gets no value or revenue from you purchasing a title they made used. It may be indirectly supportive in the future with brand recognition and marketing, but that's all circumspect.