Second-hand Markets for Used Games

There’s a bit of discussion over at Penny Arcade on the practice of buying used games rather than new ones – views apparently range from “It’s basically piracy” to “It’s legal, why should I care if the developers don’t get my money?”

Here’s my contribution:

Hey Gabe,

I’m an economist as well as a gamer, so a few thoughts from that direction: while a second-hand game purchase doesn’t directly benefit developers, it’s not a 1:1 decrease in sales – I might purchase more new games if I know that I can sell them later (like buying a new car every 10 years when the old one is still drive-able), and/or use the money used from selling old games to buy new games. Cheapskates who wait for used games probably wouldn’t buy new games, anyway – they’re paying with their time (waiting for games to appear on the second-hand market) rather than money. Second-hand games also increase exposure in younger/poorer audiences that later, when they have the money, can go out and buy new original games.

Basically, second-hand are markets are not at all unique to gaming – practically every physical product has one (ebay, craigslist, etc), and those producers have learnt to cope (e.g. planned obsolescence).

I note that these effects don’t apply to piracy, though.

/Martin

I forgot to mention that there’s obviously a key difference between video games and most physical products in the sense that games don’t degrade in quality nearly as quickly – however, off-setting that, video games have a strong “state of the art” component that reduces over time.

This was all just off the top of my head, but interested parties can check out further reading here.