Tuesday, May 18, 2010

A Better Explanation

It took a while for me to clarify my thoughts on this.

I've been thinking about this $10 EA Online Pass, trying to figure out why it bothers me so much.I knew that it did bother me, but I hadn't been able to precisely understand why.

Now, I think I do.

For years, the videogame industry has been screaming about used game sales. Digital media are different, they've said, because they can be sold and resold again without any physical degradation. A single game could be resold ten times or more, they've said, and the consumer experience would be the same.

This is true.

It's also true that this is a problem, because Gamestop might resell the same physical copy of a game six times in a twelve month period, and they keep all the profit, with the publishers getting zero. That's why Gamestop's profit margins are obscene, and why their profit margin on used games is more than twice their profit margin on new ones.

What about the first used sale, though?

That first sale isn't reselling a copy over and over again. If I bought the game new, why shouldn't I should be able to resell it without some kind of specific, punitive action by the publisher to reduce its resale value?

If I buy a $60 game new, my investment basically loses half its value as soon as it's unwrapped.


By way of comparison, an automobile, after a full year of driving, will still be worth more than half its original purchase. And that's with 12,000 miles (or more) of actual wear, instead of an optical disc that is still perfect.

Can you think of ANY product that loses half its value as soon as its opened? And I don't mean food--I mean some kind of consumer good that wears but doesn't spoil.

Why does this kind of crap market exist? No real competition. Gamestop has an absolute stranglehold on the used games market, so they don't have to offer competitive prices for trade-ins, because there is no real competition. If there was, their profit margin for used game sales wouldn't be almost 50%.

So we're already losing half our purchase value in a split second. Now EA wants to take a third of what little value we have left. So we spend $60 on a game, open it, and it's worth $20.

Seriously, does anyone think that Gamestop is going to reduce our trade-in value by ten dollars and also reduce the price of a used copy by ten dollars? Horseshit. They'll reduce the trade-in value by ten dollars, all right, but we'll be lucky if they reduce the resale price by five dollars.

I have no problem if EA wants to limit reselling the same copy of a game over and over again. There's a way to do it, though, without screwing the guy who was willing to go out and buy the game new in the first place.

How? A two-use code.

That's right. The original owner could use the code, and when he sold the game, the first used purchaser could use the code as well (or put two different codes in the manual). This would impact Gamestop, but it wouldn't impact people who buy new games.

Wait, isn't that the point? Publishers want people to buy more new games instead of used ones, right? Why do publishers want to punish the people who are doing exactly what they want?

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