The advent of used games and used games retailers in recent years is a cause of concern for publishers and developers. Once a $60 retail game reaches the consumer, should they decide to trade-in the game for credit or other games to retailers like GameStop, the publisher receives nothing from this exchange or through secondary sale to consumers at reduced prices.

Are used games good or bad? For consumers, the availability of alternative, lesser-expensive options is certainly good, as is the ability to earn something back from trading what they bought back in. On one side, it can help gamers purchase more new games but on the side of the creators – like Heavy Rain developer Quantic Dream – used game sales are not something to smile about.

Guillaume de Fondaumiere, co-CEO of Quantic Dream, revealed his thoughts on used games, citing the sales figures for Heavy Rain as a prime example that something in the industry needs to change and that it should be one of the industry’s main concerns.

“I would say that the impact that the recession had, that the most important impact especially on AAA games on console, was the rise of second hand gaming. And I think this is one of the number one problems right now in the industry. I can take just one example of Heavy Rain. We basically sold to date approximately two million units, we know from the trophy system that probably more than three million people bought this game and played it. On my small level it’s a million people playing my game without giving me one cent. And my calculation is, as Quantic Dream, I lost between €5 and €10 million worth of royalties because of second hand gaming.

Now I know the arguments, you know, without second hand gaming people will buy probably less games because they buy certain games full price, and then they trade them in etc etc. Well I’m not so sure this is the right approach and I think that developers and certainly publishers and distributors should sit together and try to find a way to address this. Because we’re basically all shooting ourselves in the foot here. Because when developers and publishers alike are going to to see that they can’t make a living out of producing games that are sold through retail channels, because of second hand gaming, they will simply stop making these games. And we’ll all, one say to the other, simply go online and to direct distribution. So I don’t think that in the long run this is a good thing for retail distribution either.

Now are games too expensive? I’ve always said that games are probably too expensive so there’s probably a right level here to find, and we need to discuss this altogether and try to find a way to I would say reconcile consumer expectations, retail expectations but also the expectations of the publisher and the developers to make this business a worthwhile business.”

The point of contention here is the, “I lost between €5 and €10 million worth of royalties because of second hand gaming,” since the only reason there was additional sales beyond the 2 million retail copies sold were only because of used game sales. Had there been no used game sales, how many of those used game purchases would then buy at full retail? Not as many.

Fondaumiere nails the points from the consumer perspective and he’s right that games are too expensive. If the retail price were lower, or if the game was made in such a way that players would desire to have it upon release rather than wait for the used game market to pick up, then some of these issues would dissipate.

As long as hard copies of video games continue to be sold, and they will not be replaced by digital downloads entirely, then used game sales will continue. Publishers like EA can attempt to force used game buyers to purchase an “online pass” to gain full functions of used games they buy, but this strategy has only aggravated consumers and hasn’t earned EA as much money as they had hoped.

If consumers would see greater value in the retail price when a game hits store shelves, then the problem would be alleviated. But with so many games, and so many expenses being incurred by gamers to play said games, it’s not easy to justify a $60 price tag a lot of the time.

It’s up to the developers and publishers to formulate a business model that makes sense and works for both sides. We’re seeing many MMOs move to a free-to-play model and we’re seeing lower priced digital games sell well. Giving retailer purchasers more is the answer and whether that comes through cool physical media with the game case or through special digital content, or something else entirely, something has to be done to bring the value up to the costs.

How much money does Honda make off of car dealerships selling used cars?

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