Is The Used Game Market Doomed?
It seems incredibly unlikely, as the removal of the used game market could absolutely cripple the retail industry.
But publishers have clearly expressed their disapproval of the way the pre-owned market works; retailers like GameStop can sell a title countless times over and keep raking in the profit, while the game makers never see another dime beyond the initial sale. Hence, the emergence of online passes from major manufacturers like EA, THQ, and Sony.
But that's mere child's play to what may happen in the next generation. The hot rumor involves Microsoft's next-generation console and according to Kotaku, the machine may actually block the playing of used games. How exactly, we're not sure. But if Microsoft and Sony incorporate such a feature in their next-gen hardware, used games may be forced to go the way of the dodo. There's not much game makers can do about it, either, if they're cut off at the source (i.e., the systems themselves).
Let's not forget that a huge portion of GameStop's profits come from pre-owned sales and with the increasing popularity of digital gaming, consoles that won't play used games could put GameStop in a critical position. After all, they're mastered the art of taking in a game for a certain price and selling it for three times the trade-in value. The profit margin is about 300% and of course, they don't enjoy any such margin with new products. Not even close, really. But what about consumers? They've become familiar with used games being available and fans seem to love the option, even if the pre-owned copy is only $5 cheaper than a new copy.
We're not sure how the next generation will pan out, but we should probably expect some significant changes. The death of used games is probably unlikely, but at this rate...who knows?
1/25/2012 8:37:43 PM Ben Dutka