Personally, I agree with Tycho.

Your point about 'Bob not being able to afford/justify buying the game new' only holds water when the difference in price between new/used is significant. However, I'd wager that developers feel the sting of the used market most is when the game is recently released, where GameStop undercuts and VERY actively pushes to sell used copies at a mere $5 (and sometimes even less) discount. Not being able to justify buying a new copy over used copy can't be a legitamate point when it's $60 new or $55 used. I just don't believe it.

Sure, in two weeks on some titles it'll be $60 new, $40 used, and there I can see people who didn't want to pay $60 picking up a used copy, but by and large that big of a price disparity on a quality title doesn't happen as quickly, and GameStop is pretty damn vigilant about making sure every single person who wants to buy a new copy knows they can get a used one slightly cheaper, and that's a new sale lost.

@Jon Your appeal to the Penny Arcade guy's reasoning holds little water when the Supreme Court has discussed the issue at length. We can continue to argue this forever, but in the end, it's really pointless. There is no argument. The SUPREME COURT decided this matter over 100 years ago. And to be clear, we are not talking about a contentious issue like abortion. The law has pretty much stood as it was decided then with a few minor revisions for computer software in particular.

If you're interested and you'd like something more authoritative than Rob's link to the Wiki entry, here is the case summary of the Supreme Court decision:

http://supreme.justia.com/us/210/339/case.html

@Rob Applause all around. I was slack-jawed when I read this quote:

"I honestly can't figure out how buying a used game was [sic] any better than piracy."

First-sale doctrine clearly indcates what the difference is. The Supreme Court was pretty decisive about this issue waaay back in 1908.

Also, I know it was digitally distributed, but didn't those Penny Arcade guys make a video game that no one bought? Hmmm....

Jon, it's always more than $5 less used. I see this point brought up all the time, and it's from people who likely don't shop at GameStop. If you're a regular (and you probably are if you buy used games there), you get an additional 10 percent off with an Edge card. That equals paying less than $50 for a brand new PS3 or Xbox 360 game. That's significant.

But this misses the point. Bob buys the cheaper game because he doesn't want to pay $60. Even if we assume $55 versus $60, that's still a more significant difference than -- say for DVDs -- $15 versus $20. $20 is already low, but $60 is already much higher than people will accept; therefore, I'd say they're more willing to take any reduction in price, no matter how little.

@Rob, sure, I suppose the publisher stands to have increased customer support on every title in circulation, and they should blow off noisemakers every time they do!

What about paid DLC?  I have a strong feeling most every used copy of GTA, Borderlands, Call of Duty (any recent version) or Fallout brought with it a few DLC purchases, extending the life of the game and building brand equity along the way.  Sales for future titles benefit from this brand growth.

@Jon, I tend to buy most of my titles new nowadays, but years ago I took advantage of even small savings.  Now, buying used only becomes an automatic when I see "Buy 2, Get One Free" offers.  Suddenly spending $100 used in order to get what would have cost $150 new seems more than hard to ignore.

I see your point about the $5, but I suppose those receiving the $5 see it as $5 they otherwise wouldn't have had for lunch that day.  There are always those who will take advantage of saving money, even with such small differences in price.

Even though you only buy new, I want to ask... how would you react if I walked up to you and offered you a free 5 dollars for doing basically nothing?

P.S. I wish you'd named this article "Why Used Games Are Nothing at All Like Piracy, Period. Never. Nope Not Ever. No, Not Even a Little Bit. No! Not Even for Developers: It's Not Piracy."

I guess that's a bit unwieldy, though.

James, a similar thought crossed my mind. Penny Arcade is certainly closer with game developers than in the past, too. And, yeah, that title would be a bit much! But your point is well taken. I'm amazed at the number of players who are ready to hand over hard-fought consumer rights so easily.

Keith, excellent point. Used buyers purchase DLC and expansion packs, too. And I think a used buyer becomes more likely to purchase a sequel brand new if she really liked the first game. But one-time use codes for prepackaged DLC in new copies is where this gets a little murky. At what point is the developer rewarding new buyers and not also punishing used buyers?

Mafia II is at this very moment listed for $59 new and $54 used on GameStop.com, yes I know about their Edge card and its discounts, but my feelings are that no one goes to GameStop planning on buying a game this new, somehow losing sleep/the ability to eat over spending the $59 but thenis instantly OK with $54. These sales only happen because someone has already decided to buy a new copy, and the guy behind the counter says 'hey I've got a used one for $54 instead, and with this card you can get an extra blah blah'.

Again, when we're talking $20 vs $40, or $40 vs $60 it's a whole different discussion.

Let me also clarify that I'm not insinuating that people who buy the used copy for $54 are pirates, far from it. I take just as many tiny discounts as anyone else. I think Tycho's point (and this is what I agree with) is that GameStop leverages this market to maximize their gain, and Joe Consumer doesn't understand what's really going on here, and how it affects people down the line when they pay the $54 vs $59.

@Jon, how does it affect people? The original purchaser was obviously not happy enough to keep the game. He won't use any support anymore. Maybe he already bought DLC and has now abandoned it. The DLC profit is already the developer's.

The used-game buyer can now get in on the action, increase the brand's shelf life, and pay for more DLC.

When I see $59, I think, "hell no, 60 bucks is too much". When I see $54, "well, 50 bucks is not so bad".

I 100% agree with Rob on this.

Let's not forget that the sale of games often leads to the purchase of new ones. People who sell their games are often buying the latest releases by selling their older games back. If we take a lot of these people out of the equation then they won't be buying new games at all, or they'll buy them far later in their shelf life when it's in the bargain bin or something, meaning less money for publishers and developers.

The "used game = piracy" remarks boils down to one thing: greed.

If publishers want to stifle used game sales then they have to price GameSpot out of that market, and we know they won't do that. They want to have their cake and eat it.

There are a number of solutions to this:

1) Make the $60 new price "worth it" to those people buying new by positively rewarding new buyers.
2) Lower the price of games.
3) Continue to facilitate the sale of used games in order to part-fund the purchase of new games.

The kind of people who buy used games feel that $60 is too much, and many people pay $60 for a game because they know it has resale value. If we start making games worthless after first purchase then customers will buy less games all together, and that's unhealthy for the industry in the long term, especially in regards to new franchises.

[quote]Even if we assume $55 versus $60, that's still a more significant difference than -- say for DVDs -- $15 versus $20. $20 is already low, but $60 is already much higher than people will accept; therefore, I'd say they're more willing to take any reduction in price, no matter how little.[/quote]

I can't agree with the math or the principle of this. $5 off of $20 is more statistically significant (25% savings) than $5 off of $60 (8.33% savings). And, no, I'm not willing to take any reduction in price. I'm just going to wait a little while and pick it up new for $40 and bypass this argument entirely.

While I do agree that the law is on your side of the argument, that's never going to convince me to purchase a used game unless I have no other alternative. If saving money is my priority, I'm just going to wait for a sale and still buy it new. If getting the game on day one is a priority, I'm going to take advantage of one of the MANY online retailers that offer either a savings or a gift-card for pre-ordering the game and still save $10 to $20 in the long-run. A savings of $5 is NEVER going to be enough to convince me to buy used at GameStop.

For me, this whole issue is a moot point.

I think the main problem here is 'the unfair business policies of Gamestop'. Once it has been cleared that buying a used game is not against the law (in the US or most anywhere else in the world, I think), it's those unfair Gamestop policies that really bring my piss to boil (to quote a contemporary poet).

Personally, I see no point in saving a mere 5 € on a used videogame. Sure, it may mean something to someone who's trying desperately to save money but... why would someone so desperate then buy a videogame? Wouldn't he better off saving the money altogether? Why not wait for the price to lower, instead of giving away money to that horrible shop? There's many online shops that also allow you to save money and avoid used games too.

Ok that's not the point here. The point here is that Gamestop should just stop those practices or close down, it's really the worst videogame retailer I've ever been to, and in every country it's the same, be it Italy or France or the UK.

Didn't Tim Schafer recomend people to just pirate Psychonauts then buy a Double Fine T-shirt as they make way better margins on merchandise?  Or am i thinking of someone else?

It's absolutely crazy that you would call Tycho's argument dishonest, considering you misquoted him.  When you take what someone says out of context and use the decontextualized argument as a strawman, THAT is dishonesty.

You quoted Tycho as saying "I honestly can't figure out how buying a used game was any better than piracy."  However, that's NOT all he said, your quote should have been this "[...]I honestly can't figure out how buying a used game was any better than piracy."  The [...] is ridiculously important, considering your hack and slash quoting job misrepresented the second clause in a conditional as if it were an unqualified statement.

What Tycho ACTUALLY said was this: "IF I am purchasing games in order to reward their creators, and to ensure that more of these ingenious contraptions are produced, [THEN] I honestly can't figure out how buying a used game was any better than piracy." (emphasis added)

See what happened there?  Tycho was making a point about the goal of purchasing games.  For him, if he is purchasing games in order to support the people making them, he sees no difference between piracy, where no money is transferred to the developers, and buying used games, where money is transferred to the original buyer, or to Gamestop, but not to the developers.  Tycho NEVER said buying used is identical to pirating.  That would be a silly comment to make, and he didn't make it.

Of course, there are laws that govern how copyright transference works in these cases.  But we aren't talking about what's legal or illegal, but about why you would purchase a game in the first place.  Tycho does so to support the industry he loves.  I find it hard to see how there is any dishonesty in that.

I guess I'm just alone on this one.

What are these 'support costs' people keep referencing? I've been assuming people are talking about calls/emails from game owners who have problems with their games, but is there really enough people who need to make use of that to include it in an anecdotal single purchase? I've seen people on both sides reference this and having worked in software support I just can't imagine it really factors in that much.

@Alejandro How does it affect people?

I have no actual industry information about this, I'm just making assumtions based on my personal previous purchaing experiences for the sake of an example.

Let's assume that I run a game company and we just released a retail $60 game. You come in to GameStop and want to buy our game, and the GameStop clerk says 'I have a used copy of this game in stock for only $55, plus if you use this card you can get it for $50. You'd be hard pressed to not take the $10 discount, so you do that. As far as you're concerned it's not a big deal because you went through legal venues and aquired the game you wanted, and you even got a deal, too.

Except I lost out on profit. You have a full copy of my game, and I didn't make any profit because of it. Therefore, as far as my accounting bottomline is concerned, you may as well have pirated it. This isn't your fault, I place the blame on GameStop, though however the means, the end result is the same.

Yes, in order for someone to buy a used game a new one must have been sold initially. However, in the act of you saving $10, I got cut out of the exchange entirely. GameStop however, managed to make triple or even better than they would have their cut, which is why they push the used copies so much.

This doesn't sound like that much, but what if 20% of the copies sold in your first week are used copies? Maybe next week it'll grow to 40%. That is going to add up. This is why we see things like EA's Project Ten Dollar and other pack-in single-use bonuses. These immediate used sales really take a bite out of a developer's bottom line. You can't just tell me to 'make a better game' because I can promise you that I will be able to find a used copy of Halo Reach within the first week of its release. I bet I could get one within 48 hours.

Now, yes maybe $50 is your breaking point and that's why you didn't buy it new. However, that doesn't really change the discussion, because if I had released my game for $50, GameStop would counter with $45. And when you go to buy it, you'll be able to walk away from the deal having only spent $40. As a Developer, GameStop is always going to be undercutting you to increase their profits.

Not to mention, game development studios invest in games. They spend a lot of money making/marketing/etc hoping to make a good chunk (preferably more than 100%) of that back once it's released. Used copies of games selling so early take a large bite out of their returns.

You can't assume that every one who buys a used copy of a game is going to buy DLC either, that's just shallow. Not every game even has DLC for the developer to recoup the lost profit of the used sale, and not everyone who buys your game even has their console hooked up online, and they couldn't buy DLC even if they wanted to.

Jay, you're thinking about this wrong. Instead of looking at prices through a statistical lens (which most consumers do not do), look at the price from the perspective of a cash-strapped consumer. $20 is low enough that $5 cheaper doesn't mean too much, but when the price is already high at $60, any savings look a lot more appealing.

Think about this another way -- what's the used market for DVDs? Is it anything comparable to GameStop's business with video games? I'd wager a bet that it's not.

Egads, I disagree -- Tycho certainly equated used games and piracy, irrespective of that first part of the quote. Developers do see money from used games, just in less direct forms. We've gone over several in the comments already, not to mention that used games build brand loyalty among customers.

Furthermore, the first part of the quote is bit of slight of hand. In the comic, he laments a "typical" gamer for buying used for the reason stated in the editorial -- that used buyers don't give money directly to developers, and are therefore no different than pirates in the eyes of developers.

But in the first part of that quote, he ascribes his own purchasing justifications onto the public at large. Not all of us buy games to reward developers.

Also, we encourage users to sign up with their real names. I hope you'll update your profile and begin contributing to the site!

Jon, it sounds like you think creators should get a cut every time a single copy of one of their works is sold. Think about the far-reaching implications such a position has. For example, let's say I make chairs. I sell a chair to Chad for $X. Sometime later, Chad sells the same chair to Debbie for $Y, even though I'm still selling that model chair from my warehouse. Do I deserve a cut of Chad's sale to Debbie? What about when Debbie then sells the chair to Evan?

To fully understand the 'gaming piracy' situation, it is important to consider the idea of durable goods vs nondurable goods. A durable good is a good that does not easily wear out and provides services or utility over time rather than wearing out. A nondurable good is either used up immediately, or has a lifespan of less than three years. In their current form video games are mostly sold in a medium that allows them to become a durable good. The problem is that once a player plays through a game once or twice (which is almost always within the timespan of three years), the game is consumed. With a few rare exceptions the games become mere mementos, paperweights, or trophies on shelves. In most cases, The games value to the player has been completely reduced but the physical state of the product hasn't changed. This format is what allows the resale of the game.

I believe that consumer rights are not really what's being argued here. The gaming industry as a whole needs to realize that they have created the means for the used game industry's 'piracy' by allowing their innately nondurable product to become durable and available for resale. Instead of taking jabs at players of used games in the press, and whining about lost revenue, companies should work to protect themselves by changing their products. Through innovation like the use of CD keys, Battle.net and downloadable content, companies like Blizzard have been able to almost completely shut down the resale market for their games.

Rob,

There's plenty of room for a healthy second hand market that doesn't discourage new sales, and I'm all for that. The problem is that the way the industry works now, GameStop knowingly and eagerly canabilizes new sales, and that's only going to get worse as stores like Best Buy and Target get in to the action.

I'm not sure how I'd fix it, but I'd be tempted to put a moratorium on all used sales that lasts two weeks after release, or something.

Jon, I think you're oversimplifying the market forces at work with the sale of used games. I don't see a problem that needs fixing at all. If anything, Best Buy and Target offering used titles is only a good thing for consumers, as the extra competition could reduce prices across the board (both new and used).

If I read one more person whine about someone not feeding their entitlements as a handing over of rights....

I do appreciate Rob's take on the rhetoric. That statement was ill-advised, even if I think Tycho's actual point stands on a lot more ground than what was chosen to deconstruct. But I'm finding where some of the rhetoric has gone on boths sides of this debate to do little to push forward solutions independent on my thoughts that boths sides are severely overdramatizing the issue for personal interests.

It's kind of a bizarre setup when the retailer can provide meaningful competition to the distributor of a product by reselling said product.

You could argue that it's killing the golden egg-laying goose, but maybe there's something terminally wrong with the goose.

Maybe huge-budget games that require massive investments and therefore large sales numbers at a $60 price point just don't have the market to support them. It's not like a movie where you have the domestic take, the international take, DVD/video sales, rentals, and broadcasts to recoup your costs over the long term.

Rob - I AM a cash-strapped (albeit smart) consumer, and I still don't agree with your assessment. 

You're never going to convince me that Gamestop selling used titles for $5 less than new has any bearing on truly cash-strapped, smart consumers. People who really have to watch what they spend are going to wait for a larger sale or not buy it in the first place.

Their used game policy purely caters towards people with disposable income who think "Oh, I can get $5 off of this game that I was going to buy anyway" and Gamestop's own coffers. While I'm not going to debate the legality of it (because I agree with this part), nothing anyone will say will ever convince me that Gamestop is contributing to a healthy second-hand market. They're doing it to make money, not to provide a service to the community.

Frankly, I don't think the DVD analogy holds any weight. With DVD sales, you can usually find the movie on sale during the first week of release at most major retailers, and the price usually goes up after this period and then down again about a year or two later. The entire business model is different. Not to mention, a larger percentage of people who purchase movies in the first place tend to hang on to them for a long period of time.

Rob, it is a good thing for consumers, but I fear it's a horrible, horrible thing for development studios. I am really concerned that we're going to see less and less of the smaller studios (like Double Fine that Andrew mentioned) because used sales combined with everything else going against them are going to eat them alive. And that's a bad thing for consumers.

Either that, or we're going to see an increase of studios that release digitally (which again, it looks like Double Fine is doing), since those can't be re-sold.

I'm gonna kick it to 88 mph and moot this debate in the digital release future! P:  I will also not need any roads.

It's funny, several comments in this thread suggest that used buyers were previously going to buy new until seeing the cheaper option, but in my experience, they were never going to buy new because $60 is just too much money for them.

I think the DVD comparison is something game companies should look toward -- DVDs generally retail at $20 brand new, and DVDs don't have nearly the same size secondhand market that video games do. Best Buy and Target [url=http://www.gamasutra.com/view/news/30129/Interview_Best_Buy_Target_Unfazed_By_GameStop_Used_Game_Dominance.php]are testing[/url] the used-game waters -- not the used-DVD waters, for instance. I think that speaks volumes about the $60 price point.

Hey Rob, I'm gonna have to go all English teacher on you and say that I fail to see how misunderstanding a situation equates with dishonesty. I get the point you're trying to make, but it certainly looks like you're taking the quote out of context. Just my two cents on rhetoric...

Penny Arcade should know better, and I feel this is beyond misunderstanding the situation. Suggesting that used games are no different than piracy from a developer's perspective is just plain false. Developers were already paid from the initial sale, the used game builds brand loyalty and product awareness, and the used game opens a portal for secondhand buyers to spend additional money on the product.

Hey Ben, I'll go all English teacher on you and say that all quotes by definition are taken out of context.  What you (and everyone else) means to say is that the quote misrepresents the context.

Anyway, silly English quibbles aside, I'm a little disappointed in how many gamers seem to have been recruited by developers into fighting for their money.  The issue of used games cutting into game sales is something for developers and retailers to fight out.  If you want to make a stance based on whatever principle you ascribe to, then by all means, have at it.  Claiming that other gamers are somehow hurting the industry and should change their habits is rather ridiculous. 

If publishers feel like used games sales are somehow affecting their profits, then they should do something about it.  Complaining to the games press and trying to recruit players to their cause just muddies the waters, and seeing Penny Arcade now taking up their side is even more disappointing.

Rob I really don't see how you can still be so adament that they are so fundamentally wrong.

We're dipping into symantecs and consumer personalities, but when you say people think $60 is too expensive for a game, then what are they doing in a video game store looking at new 360/PS3 releases?

You can tell me that it's right, legal, and good for consumers until you're blue in the face, but equating to piracy or not, there's no way it's good for the industry as a whole.

These arguments always come down to two sides that generally can't see things from the other's perspective. Gamers love to trot out the whole "publishers want to think that every used copy sold equals a lost sale on a new copy, but it doesn't" line. And they're right.

But those same people never seem to realize that it can work the other way. No, not every used sale equates a new sale lost. But some of them do. And anyone who's shopped at GameStop and taken a new game up to the counter has most likely been hit with the "I have a used copy of this for $5 less" line more than once. If you went in totally ready to buy a game new, and then went for the used game at the cheaper price (which is your right), you are absolutely a new sale that was just lost to a used sale.

The problem is that there is no way to measure any of this. So yes, all used sales to not equate lost new sales. But some do. And it's those used sales for very slight discounts at the very beginning of a game's shelf life that are the ones I think most publishers are trying to curb.

Is it the same as piracy? Absolutely not. That was a really poor choice of words on Tycho's part. But the end result in both situations is a $0 return on a potential sale. I think that was the point he was trying to make.

Why aren't people suing yet??? This is what I want to know. We have a right to sell, lend, borrow or even throw out any product we buy. Once we buy a movie, it is ours to do with what we will. The same goes for video games, dishwashers, cars, computers, etc.etc.etc. What companies like THQ are doing is purposely attacking the resale value of OUR products that WE purchased. By doing this, they are attempting to take away our right to choice and our right to sell OUR goods.

I have already filed a complaint with the BBB against THQ, but have not heard back in months. They have ignored my complaint. We honestly need to take this to the next level and get some sort of Class Action Lawsuit going on. This needs to stop before it gets any worse. I do not know a single gamer who can buy every game New. Buying used and renting is a Must along with buying New. If I buy 15 games  year, half of them are used. Then I trade in those used games to buy more NEW ones.

We have a right as consumers to choice and competition. We are being screwed out of both. We NEED to get some sort of Class Action Suit going on and stop this now. We shouldn't look for money, we just need to fight their greed and fight to have them stop this practice and apologize to the people who they manipulated.

@Rob

Changed my name from Egads to my real name.  It's a habit of mine to stay anonymous on sites such as these, sorry about that.

Regardless of the merits of Tycho's argument, I still think you misquoted him.  And, I don't really care about Tycho's point of view (I'm not a fanboy of any sorts), I'm merely interested in the argument.  I think you misconstrued what was at stake, so I said so. 

I think what is at issue is that Tycho is making a fairly modest argument.  He says, if you want to support developers monetarily, then don't by used games.  Of course, he never provides an argument for the first premise.  It's perfectly legitimate, as you said, to assume that people buy used games for many different reasons (money constraints etc.).  Perhaps Tycho should beef up his editorials.

You're also right to point out that it is possible that developers may see money from used game buyers.  DLC, online gateway fees etc. will most likely generate a profit at some point.  But, then again, developers don't see any money from the purchase of the used game EVEN IF the purchaser decides to invest in DLC or whatever.  Does anyone know if it's possible to purchase DLC for pirated games?

And, if your argument about brand loyalty is simply that in playing the first of a series then people will go on to buy the second, doesn't that also apply to pirated games?  So, if I pirate Hitman and like it a lot, aren't I more likely to both buy a legitimate copy of it and perhaps purchase the sequel?  Surely, brand loyalty doesn't just arise from having a used or new copy of a game.  This is the same argument people use to promote music piracy.  Unfortunately, without any concrete statistics all of this is really just speculation.  Maybe people who by used games don't give a shit about the brand and never will.  Conceptually, I see your point, but without any evidence, I can make the exact same claim about pirates.

I agree that there isn't an exact equivalency between pirates and used game purchasers.  That is obvious.  I'm just saying that, there are issues concerning buying used games that are the same as the issues that concern piracy.  The large difference, one that you pointed out, though perhaps not in this way, is that the used game market (most likely) won't bankrupt a developer.  As you said, the games have to be purchased new at some point, so they are already "in the system" so to speak.  I'm sure that if World of Goo was subjected to used game sales and not piracy, 2D Boy would have stayed afloat (at worst, 50% of the purchases of its game would have been used purchases, as opposed to the 80% or 90% that were pirated).

Here is another point, one that hasn't been addressed, I don't think.  Who makes money from the purchase of new games?  We know retailers make $10.  And, we also know that publishers make most of the rest, because they are the ones taking on the monetary risk of releasing the games.  So how much do the developers ACTUALLY make?  But not only that, how much do the grunts in those companies actually make?  Does the Lead Artist make any more money if the game sells 1.2 million or 5 million copies?  Maybe at some companies (for instance, we know Infinity Ward gives out large bonuses), but perhaps not at others.

My point is that, if we agree with Tycho that supporting developers is what we want to do, purchasing a game new may not be as effective as we think it is.  This is obviously a larger issue and has to do with the role of publishers etc., but it is important to think about when figuring out where to put our money.  

Peter, but they did see money from the initial purchase, which is why buying used isn't at all like piracy. And because of all the market forces involved, which I've already enumerated, I feel that buying used also supports game developers, just less directly.

P.S. 2D Boy is still afloat.

I'm going to bring yet another comparison to this massively explosive debate… Bluray disks.  I only buy Blurays when they are on sale.  I suppose I COULD buy the title at $30, but why do that when I know Target will have it for $20-25 in the first week of release?  If I miss that window?  Well, I guess I’ll have to wait until the next sale they offer.  Before Bluray, DVD used a similar pricing model.

Where the comparison between our games and Bluray and DVD's falls flat is when we look at trended prices over time.  When I first bought my DVD player back in 1998, DVD’s were $30-35  Now many retailers offer new DVD’s for $10.  Similarly, Blurays started out at $35, and have sorta hovered down to $25, where DVD price points lived for some time.  I expect Christmas will find Blurays to be $20, and that price point may stick.

Why haven’t game publishers slid their prices down the DVD and BR path?  Greed.  I don’t fault them.  But it’s greed that keeps prices ARTIFICIALLY high, and it’s greed that makes publishers whine about this whole subject.  And as an aside, there’s truth in humor, regardless the syntax.

The DVD/BR analogy is not perfect by any stretch of the imagination, but fundamentally I feel it is important to compare the two.  The economic history of how the price points for DVD, BR (and CD’s, for that matter) have fallen over time is important to note.

We are gamers, but we are consumers first.  Society trains consumers to get the best deal.  We watch for sales, we take advantage of pre-order bargains, we buy on eBay and Craigslist, and we borrow things from friends.  We take advantage of Black Friday.  We get $5000 off our new car purchases and expect that LCD prices will continue to fall and fall and fall.  I even brought up the Gamestop "Buy Two, Get One Free" promo that has worked on me a few times.  It is a score to be able to take advantage of any such deal.

Why are video games exempt from this consumption model?  Answer is: they are not.  So Gamestop, eBay, Craigslist and now Best Buy and Target fill this NEED and create a secondary economy because the first one is BROKEN.  An aftermarket, "secondary economy" model is made more important when the original sellers create artificial parameters and do not play by the rules of "free market" capitalism.

Also, I don't know where people are going to be finding all these used copies of Reach w/in 48 hours of launch, because I'm willing to bet that's a fool's errand all around 13 towns in 5 surrounding counties.  Count me out of that brand of madness.

Lastly, people need to point me to these deeply discounted ($10-20) new releases, because I'm not seeing them.  Only promos I see are for major releases such as Reach, and those involve hope, ironically.  Me hoping Walmart.com (blech) or Amazon.com (blah) gets me my copy on time.  I'd rather not risk that and I'm willing to pay a premium to get it on time and not TWO DAYS LATE.  (that actually happened to me when I ordered Halo 3 from Best Buy and had to pick it up from Blockbuster on launch).

@Rob But you have no statistics that back up your speculation about "market forces".  I agree, as I said, that it would seem as though brand loyalty and DLC purchases would, in the long run, support developers, but neither you nor I proved that.  I don't disagree, because I don't know.  But you don't know either, so...

Let's be clear, I buy used games all the time, unless there is a steam sale, I "need" the game 0-day to feed my addiction, or it is from an indie developer that I really want to support (VVVVVV, World of Goo and Everyday Shooter are good examples of brilliant indie games that I would pay much more for than I did).

I guess my motivation in all of this is to make clear that the BEST way to support games you love is to buy them new.  Perhaps using the similarities between piracy and the used game market is a poor way of doing this, just like equating slaughterhouses and concentration camps is a poor way to talk about animal rights, regardless of the similarities.

I don't understand why people are labeling Gamestop and publishers like THQ "evil" or "bad" for the industry. These are companies whose sole purpose is to make money. Thats how they hire people, expand, and develop R&D. Everything they do is to entice consumers into spending money on what they want you to spend it on. Gamestop supplies games for cheaper which benefits consumers. Publishers are trying to counter this buy offering new content or exclusive content for people who buy the game new or preorder it. Both these models are solely to benefit the consumer. This is capitalism at work. The company who supplies the best product for the lowest price will come out on top. Either way the consumers win. If you feel you are unjustly denied something that should be yours if you bought it used, e.g. THQ only suppling multiplayer support for new copies, I believe you are under false entitlement. You don't get to decide how a company sells something (unless you are a shareholder). They aren't cheating your resell value. They're telling you beforehand that this is how they are trying to maximize profits. I support publishers doing things like this as well as trying to add exclusive dlc and content for people who buy the game new. This will definitely drive down used games prices as well. Either way, the consumer wins.

I know this isn't directly relevant, but I thought some of you might be interested:

I've seen the $60 price tag mentioned quite a bit. It got me thinking about what I pay for new games in the UK.

When we have big releases here, there are usually some really great deals in supermarkets as they treat the games as loss leaders. MW2, for example, could be picked up on release day for around £26 (or $40).

Or at GAME - a chain of game stores, perhaps a little like GameStop - it was £22.50 ($35) if you traded in MW1. For info, they now sell it for £20 preowned.

This discount is even greater if you factor in the standard price hike we're subjected to anyway -- new games at full price can be up to £45 or $70.

I find some of these comments funny on the mere fact they think Tycho was completely misquoted. 

I honestly have little trust on anything Penny-Arcade says in the matter, mostly because of how they have closer ties to the gaming industry more than they ever did in the past. They probably get free games anyways. Penny-Arcade launched a discussion that has no real end until something drastic is done. 

The gaming industry is spouting crocodile tears to me on this matter. If they really, really wanted to something about it, they'd pull support away from Gamestop, but they won't, because Gamestop essentially has every game company by the crotch. 

This could also bring up several reasons why we hear all these companies crying, 1) Publishers are just getting plain greedy, 2) Game developers are crappy businessman/women, and want a larger cut from the sales of a game but can't because of not signing a good contract with their publisher. 3) Consumers don't believe the game is worth it's $60 price tag. 

Those latter two really strike me as some of the bigger reasons. I personally don't believe a lot of games are even worth $50, because there's an issue with content. I'm tired of hearing, "Oh it's an experience." If I want a 5 hour experience, I'll rent a few movies, or go on a trip, but I'm getting off topic and into a rant. This industry is set on "gotta make Blockbuster or bust", and with as many freaking games that come out, while in a recession, do they think everyone can keep buying a game every month? Not all of us are on a disposable income.

By calling out used games buyers as pirates is an insult, and yeah, I read the whole post Tycho put out. That's the first thing that ran through my mind when I read that statement. I'm sure it got even more hits for their site, but probably gets a swath of mixed feelings from the gaming community. While I think it's good for them to try to get the conversation going, I honestly don't think that it'll bring any fruitful discussion whatsoever. Companies have begun to make up their mind on the matter especially by charging a fee, and gamers have made up their minds as well, they'll either submit to whatever the industry does so they can keep on with their obsession, or others will give them the finger.

Again, this all crocodile tears to me from this industry.

There is one major oversight I see in this debate time and again. Comparing a used game sale to a used car sale is just plain ignorant. When you drive a new car off the lot the company that made that car and the dealership that sold that car both have recouped there cost in full (and with a healthy profit usually). The car is now yours and if you sell it the profit is yours to make.

Why this is not a corollary with games is that a game - much like a film - costs 10's to 100's of millions of dollars to produce. When you pay $60 for it you have in no way paid for that product in full. Entertainment releases rely on selling hundreds of thousands of copies to recoup their investments.

The most obvious similar event is the release of movies. Sure you can buy the film when it is released and if you want to sell it for a profit you are free to do so - however films have an exclusive period of time when they are in theaters where if you want to see the film you will pay their prices and see it in their theater.  During this time the producers of the content can recoup their investment. Video games have no such period. This is when the new sale turned used sale via GameStop ramming a used copy down consumer’s throats becomes a problem. I am sure this debate wouldn't be happening if GameStop couldn't buy / trade or sell a used copy of a game within 6 months of launch - similar in most regards to how the film industry releases their products – and if that’s the case then this is very much about people buying used and the developers losing a new game sale.

It seems like the whole problem could be solved if Gamestop waited a month to start selling used games. Publishers normally don't advertise games that long and most places aren't stocking new copies of a one month old game anyway (unless it's a huge game).

This would create a used market that publishers wouldn't have any real reason to complain about (they're not losing sales during the peak sales period) and anyone who wanted to buy a used game could probably get a better deal (than Gamestop offers) from Amazon's marketplace, Ebay, or they could just wait a month.

Is there something I'm missing here?

In my understanding of how a traditional retail store works, the business buys goods from a supplier in order to put them on its shelves (in some way or another). In which case, the supplier has already recouped the cost of the goods because the business had to pay to acquire those goods in the first place.

So why does everyone argue as though a sale at a GameStop counter to Joe Consumer is what ferries the money over to the good ol' folks who made the games? Haven't the developer AND publisher already received money by supplying the retail outlets with copies?

If the game industry doesn't work like a traditional retail business, then why not?

I understand that either way, used sales can affect the number of new copies sold (in turn, affecting developers), but WHEN the developers and publishers receive payment along the chain of supply is important. It affects what we should do as consumers, and it affects what the developers and publishers can do to stop the middleman from cannibalizing the whole system.

For example, (again, bear with my limited understanding of the industries involved, I might be mistaken), in the book industry, publishers will absorb overstock at no cost to retailers, in order to encourage retailers to purchase more copies in hopes of selling more all around. Does the games industry do something like this? Because right now, there seems to be a lot of incentive for the Gamestops of the world to buy a small amount of new stock (lowering how much stock the publisher sells overall) and keep churning profit out of it through used game sales. Is there anything the publishers can do to increase the amount of stock that retailers take in without hurting the retailers themselves? And would it affect new game sales?

I think that we need to look at the economic side of things and cool down a bit, instead of making this a linear, your-wallet-to-developers'-paychecks, tug-at-your-heartstrings debate. Because our actions as consumers affect developers, certainly. But not DIRECTLY. What does the rest of the picture look like? Can anyone explain the whole process? Because I have no clear idea of how it works, and I'm sure I'm not alone.

@Alex - I'd like to respectfully point out why I don't believe the used car analogy is 'plain ignorant'. You say:

"When you drive a new car off the lot the company that made that car and the dealership that sold that car both have recouped there cost in full"

The company that made the car have certanly not recouped their cost in full. To create, build and sell a car requires substantial investment in R&D, in the machines and people who mass-produce the vehicle, in the marketing, and so on. The sale of one car wouldn't scratch the surface of those costs. The company requires many sales to break even, and more to make profit.

Just as games cost a fortune to mass-produce and many need to be sold to make profit.

The point is, when you've sold it, you've lost ownership rights over that particular product. As it is with cars, so it is with games.

As a cash-strapped consumer, I heavily rely on the secondary market. I buy used typically, but i also buy new. I also trade in my old to buy new games as well. How do i choose whether to buy new or used on any game purchase decisions?

It depends how great my anticipation is and also how many other games I am currently playing. I have certainly bought way more brand new copies of DS games rather than PS3 titles. Why? Because $60 is a steep price, especially for a questionable title instread of the typical $30 or so for a typical DS title. The cost isn't as much of a gamble.

Game publishers: if you want more sales than lower your prices to make used prices less attractive. Put it out for a lower price than your competition and then create some awesome "gotta-have" DLC that most consumers see as worth it. The secondary market has been around for easily over a decade and is here to stay. And I'm very happy for that. If it wasn't for them, I wouldn't be able to afford half the titles out there and even get a chance to get hooked on some of your franchises.

Also, slow down the amount of titles you put out yearly and polish up the ones you do put out so that consumers feel they are "must haves". We are bombarded with crappy and subpar titles and are voting with our dollars when we choose either new or used at the local Gamestop and very soon, at Best Buy and Target as well.

I've been seeing a lot of publishers crying about "lost profits" from used games sales, but it's really a vain attempt to blame someone else (incidentally the customer) for their lack of foresight. Major publishers do not see beyond first day or first week sales. So the money goes into those first day/week sales, which tends to result in games which are stunning but ultimately shallow, then tack stuff on to give it a little more play time before people get bored with it. That results in the customer trading in the game for the newest cash grab of the week, which then gets sold at a lower price.

Now consider a game like Xenogears, which was borderline impossible to get from the start and odds are if you see someone with it, despite the system for it is two generations old, if you ask for it, the term "from my cold, dead hands" would likely spring up. So in the rare event you do find it in a used store, it will be for an insane price. Why? because it's still in very high demand but no one wants to get rid of their copy.

That is what publishers need to do. Not tack on stuff that requires extra money to go straight to them, or DRM which requires buying new, but instead making a game that is still in demand after they stop making it. Otherwise they might as well make a few days worth of copies then go to their next project.

This is a great post, I really enjoyed it. I can't argue with any of your points, very logical. So sorry to be chiming in so late on this but this is a hot topic and I have been reading a lot about it.

I have been contemplating a point that you "touched on" in you article and would like to expand on the idea. The fact that used games get the developers and publishers' product into the hands of a consumer whom wasn't able or willing to have access at full price. Obviously this gamer will buy some new games at some point or, at very least, continue to create demand for the cheaper used version thus supporting the distributor and the trading consumer who continues to buy new. Imagine, there is no means to legally trade in your "finished games" and put the store credit towards something new? Alice would certainly become a much more cautious consumer at this point and only purchase games she has no intention of ever trading in, which equates into less new game sales for the publisher, developer and retailer. Has anyone been able to quantify this? Probably not, but we cannot ignore it as a factor. Secondly, used games are better than any demo the studio or publisher could ever put out (which actually costs them money). For example, Bob wasn't sure about Arkum Asylum or the new Batman franchise, but he picked up a used copy at his local gamestop for $20, now he is hooked, it's a great game and he can't wait for the sequel, he is going to buy the 2nd one as soon as it hits store shelves. Guess who else is going to buy the new one when it comes out? Alice! Just like that, and because of a used copy getting into Bob's hands, the sales turned from 1 to 2 on the second game. The argument could be made that the 3rd installment could realize another expodential increase. Now, can some market analyst please quanitfy those numbers for me?