Selling back games will make prices RISE - BEWARE!
by Eric Lamendola · in General Discussion · 10/31/2004 (5:26 pm) · 22 replies
A lot of game retailers offer a couple of bucks to get a hold of your used games, but this is a DANGEROUS practice that slowly but surely will RAISE prices of games over time.
Like any idustry with a large turn-over of product with a short life span, companies guage how much they should charge for new products based on how many copies of the last product sold.
So lets say XYZ Corp puts out Donkey Punk Delta and sells it for 40 bucks. They produce 100,000 units.
So lets say that 50,000 units are sold and people return 10,000 for credit from their local store and those 10,000 units are sold as "used". The Game store makes a considerable killing in gross margin - but XYZ only thinks they sold 50,000 units and not the 60,000 that were acutally sold.
So XYZ Corp. now believes their title wasnt a better success AND they don't see ANY of the profits from the sales of the used titles.
This means there is LESS money for development and they may consider charging more to make up the difference in the future.
This applies to ANY industry that resells used goods (College Books, Cars, etc.) The better the USED industry does - the more the NEW industry has to compensate.
Buyer Beware - pay the 5 bucks now or pay 15 more later.
Like any idustry with a large turn-over of product with a short life span, companies guage how much they should charge for new products based on how many copies of the last product sold.
So lets say XYZ Corp puts out Donkey Punk Delta and sells it for 40 bucks. They produce 100,000 units.
So lets say that 50,000 units are sold and people return 10,000 for credit from their local store and those 10,000 units are sold as "used". The Game store makes a considerable killing in gross margin - but XYZ only thinks they sold 50,000 units and not the 60,000 that were acutally sold.
So XYZ Corp. now believes their title wasnt a better success AND they don't see ANY of the profits from the sales of the used titles.
This means there is LESS money for development and they may consider charging more to make up the difference in the future.
This applies to ANY industry that resells used goods (College Books, Cars, etc.) The better the USED industry does - the more the NEW industry has to compensate.
Buyer Beware - pay the 5 bucks now or pay 15 more later.
About the author
#22
Also, it would be a rather silly concept to try to ban the sale of used software. Copyright law pretty much forces intellectual property to be a transferable medium between people. What would pawn shops be without the sale of used stuff? inexistent.
01/13/2005 (3:57 am)
In general, there has to be a balance between the amount of new units sold to consumers and the amount of used units in circulation. I can see no real cause for alarm on this issue. Used game sales increased a lot with the coming of Sony Playstation because of a huge variety of titles, but since then, the slope of increase has built itself back to a balance with new game sales. While the actual ratios are still increasing, the rate of growth is slowing and will eventually reach a business equilibrium.Also, it would be a rather silly concept to try to ban the sale of used software. Copyright law pretty much forces intellectual property to be a transferable medium between people. What would pawn shops be without the sale of used stuff? inexistent.
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