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Are Used Games Killing the Gaming Industry?

In a recent interview with Gamasutra, well known Frontier Developments founder David Braben discusses his thoughts on the future of gaming and its industry, In the interview he states some interesting things about video game prices, psvita possibility of success and the problem with used games.

This article I will focus on second hand games, as most people who buy video games locally, buy it second hand.

David Braben  

“Of course, none of that revenue or chart position gets recorded, or VAT [value-added tax]... it's borderline whether that's legitimate. But it's killing single player games in particular, because they will get preowned, and it means your day one sales are it, making them super high risk. I mean, the idea of a game selling out used to be a good thing, but nowadays, those people who buy it on day one may well finish it and return it.”

“People will say "Oh well, I paid all this money and it's mine to do with as I will", but the problem is that's what's keeping the retail price up -- prices would have come down long ago if the industry was getting a share of the resells.”

This makes a certain amount of sense as developers need money to develop games, sales equals games being published.For example, what if Call of Duty 4 only sold 10,000 new, and then resold used , even though the game would be a hit among fans, if a developer says he wants to make a sequel he may not be able to as a  publisher will look at sales and will have to decide how much risk they are willing to take in developing a sequel. The Idea may be thrown out or the developers would have to make concessions to the game for it to be published.

To my knowledge and experience , it is mainly down to the numbers, which is unfortunate usually as some developers have great ideas but may never happen as it's too much of a risk to take, thus more focus is done on the mainstream.

In a follow up with the gamasutra interview, Denis Dyack, Founder of Silicon Knights. Agrees to this notion.

Denis Dyac  
"From a consumer side, [in the last few years] we started seeing used games really come into fruition, and I believe that has caused quite a problem. I would argue that used games actually increase the cost of games."

Most retailers would probably not think much about this. As a game comes in and resold, it is generally 100% profit for the store, thus a push for second hand games from retailers would not be a surprising notion, which may be unbeknownst to them, affect new game sales, which could create a sort of loop, where games become more expensive, more people will try to get games second hand.

Piracy also affects this greatly, by effectively stealing from developers and publishers, thus not seeing the revenue, possibly stopping any further production of future games or worst yet, the developer closing its doors. Sad, but it does happen, least more often these few years.

"There used to be something in games for 20 years called a tail, where say you have a game called Warcraft that would sell for 10 years. Because there are no used games, you could actually sell a game for a long time, and get recurring revenue for quite a while. Recurring revenue is very key,"

"Now there is no tail. Literally, you will get most of your sales within three months of launch, which has created this really unhealthy extreme where you have to sell it really fast and then you have to do anything else to get money,"

In an interview with the Giantbomb Patrick Klepek, Double Fine’s Tim Shafer states videogame development is getting more and more expensive, and with the 3 million in funds, it will not be a AAA looking title, you are looking at something equivalent to Grim Fandango or The Next Best Thing.

With most indie game developers reaching for donation funds (Kickstarter) from their fans, it’s clear something has to change. If games get cheaper, more people will buy them new. However some people has the mindset of “well if the game is so cheap, it must be shit”, it's a common thought pattern, old but common. These days, you cannot really put a price on the quality of a game, nor how many hours it is, an example would be journey, a recent release, the “game” is about 1 hour and 30 minutes long, costs R125.00, a lot to some, for something so short, however you’re not buying a game for the length, but for the experience. If you wanted to pay by the hours spent, by all means, get Resident Evil Raccoon City, terrible game, lots of hours.

Videogames is an expensive hobby, so I get why people go for second hand purchases, Just easier on the wallet, you love games, but unfortunately it's not currently that afforable, so I ask..

What are your thoughts on the matter?

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