The game industry has a dichotomous relationship with secondhand games. Gamers pick them up as value filling between premium bread slices, and there is no doubt the trade in culture fuels the constant stream of new releases. Publishers are trapped. The second-hand market accounts for a third of all game sales in the US or about $2 billion annually. When these sales do not directly support the publishers, it seems like a lot of revenue is being left on the table. Games have an image problem, as other entertainment media plummets in price, games have managed to hold a price-point that many would have thought untenable. The problem is price is not set in stone and can tumble dependent upon stock levels, trade in volumes and publisher desire to stimulate turnover. Publishers main anxiety is that a second-hand game sale is only beneficial to the retailer and not the source of the funding for the creation of the game itself. The problem is that the connection between trade-in and new copy sales is not entirely transparent.
It could be argued that this view from retail is shortsighted that eventually the cupboard will be bare and there will be no more money left to fund development.
Retail feel the cold winds blowing. Digital is finally starting to encroach into their minds if not directly on their balance sheets right now.
Physical media is dying, how long the extinction takes is the only point for debate.
EA have adopted an aggressive approach with project ‘Ten Dollar’. For those who don’t buy the game mint there will be the opportunity to buy the value added content. Within Mass Effect 2 it’s dressed up as the Cerberus Network. The fact Cerberus is a distrustful and sinister organisation is not an irony lost in the translation.
A punitive approach is fundamentally flawed and devalues digital as a whole. Giving content away as a value-add damages digital as a standalone format. Initiatives like project ‘Ten Dollar’ and Ubisoft‘s recent measures with Assassins Creed 2 feel like the opening of the door that currently hides the spectre of DRM. The games industry needs to look at the devastating mistakes the music industry made, otherwise the support of Gabe Newell will not be enough to quell the digital tsunami of the pirates.
There are rough seas ahead and the consumer is one the industry needs to listen to.