Retailers vs Publishers: The Battle For The Second Hand Market.

I’ll admit that I haven’t bought many games used since I’m usually in the store on release day hungering to be one of the first to get my hands on them. Still I realize there’s quite a market for second hand games since not everyone has the disposable income that I do to splurge on the latest and greatest titles. They’re also a significant source of revenue for brick and mortar games retailers as the margins on used titles are significantly higher than their brand new counter-parts and provide an additional sales hook for them to attract customers (I.E. trade-ins for newer games). There are one group of people who aren’t so pleased with the second hand games market however, the publishers.

Second hand titles, whilst generating significant revenue for the retailers, generate almost nothing for the publishers that first distributed the games. The advent of downloadable content mitigated this somewhat as it was usually tied to the console it was downloaded on and not the game itself but it is a pittance compared to what they generate from a new sale. More recently however games publishers have taken a more sinister approach to the second hand market, seeking to make a resold product less attractive than the new unless the consumer ponies up the extra cash to make up the difference.

Sadly this kind of chicanery affected one of my most favorite games, Mass Effect 2. New buyers of the game received a special code that gave them access to the Cerberus Network, a daily news service for the Mass Effect universe plus the gateway to all the DLC available for the game. The code was a one time use deal so anyone buying the game second hand would have to do without or pony up the US$15 for access to it.  Whilst you could argue that you still got the vast majority of the game despite the lack of the additional DLC there was quite a bit of free stuff on there, some of it even on day 1. This meant that anyone buying it without the code was essentially getting an incomplete game, even if it was playable.

Whilst it’s still not the norm to cripple the second hand market like this it is becoming alarmingly common, with several recent titles making used purchases far less desirable through new-only-or-pay-up DLC. It’s still a step ahead of something like Steam which doesn’t allow the sale of second hand titles at all, not even for a trade in on other steam titles. But it’s still a dick move by the publishers who are just trying to squeeze money out of the consumers in any way they can. Realistically though its detrimental to both the publisher and consumer since many trade ins drive new games sales, to the tune of 20%. Cutting that market out completely would harm the new games market significantly, but none of the publishers will admit to that.

It’s also arguably a violation of the First Sale Doctrine although no one has yet tried to test out this particular violation of it in court.

All this does is reduce the perceived value of the product that the publishers are putting forward and will only help to encourage people to seek out alternative methods in lieu of forking out the extra dollars. Whilst I am happy to give up my freedom to sell my games for the convenience that Steam provides (I am a hoarder, though) I know many people who aren’t so willing to make that trade and have avoided purchasing games that remove their right to first sale doctrine. Instead of punishing people for buying second hand they should be encouraging people to buy in early with things like betas and in game items. Of course I find it hard to fault a company that tries to maximize its profits but when it comes at a cost of significant good will I have to wonder if the costs outweigh the potential benefits and the only ones that know the answer to that are the publishers.

And they’re not talking about it, unfortunately.

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  1. The local EB games stores here in Australia (gamestop in other places) have started to not re-order psn cards and are just running out of their existing stock, its pretty petty if you ask me as its ok for them to sell a second hand game for $10 less than a new version. Plus their hardware and software prices are upto 40% higher than other shops like JB hifi.

    I just wont shop there anymore and many others are starting to see the truth as well, when I do look in there for whatever reason the people buying stuff there are totally inexperienced with this type of technology and they don’t know any different.

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