Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...New Game Sales Helped, Not Hurt

June 30, 2009 -

A new report by Wedbush-Morgan analyst Michael Pachter should put paid to game industry whining about used game trades. Although, somehow, we doubt that will happen.

According to gamesindustry.biz, Pachter found that up to 100 million (!) used video games are traded each year in the United States. That figures accounts for a remarkable third of all game sales.

But Pachter also reports that the used game trade has a positive impact on new game sales, not the negative impact so often claimed by a variety of game industry types. The outspoken Pachter comments:

The vast majority of used games are not traded in until the original new game purchaser has finished playing - more than two months after a new game is released - typically well beyond the window for a full retail priced new game sale.

If trade-ins occur at GameStop, they should position the trade-in customer to buy more new games than he/she would otherwise normally purchase. Because the average used game value is around 20 per cent of the new game price, we think that used game trade-ins fuel incremental sales of over six per cent of total new game sales, suggesting that the cannibalisation from the used game 'push' is more than offset by the benefit from used game currency.


Comments

Re: Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...

>A new report by Wedbush-Morgan analyst Michael Pachter should put paid to game industry whining about used game trades. Although, somehow, we doubt that will happen.

To be fair, considering nobody's been whining, merely saying that something exists, stopping it would be quite difficult.

/b

 

Re: Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...

EA have said it damages sales, Nintendo has said it damages sales, the ESA have labelled used game sales a 'concern' on more than one occasion. Yeah, no whining whatsoever.

--------------------------------------------------

I LIKE the fence. I get 2 groups to laugh at then.

-------------------------------------------------- I LIKE the fence. I get 2 groups to laugh at then.

Re: Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...

Eh, what?  TWO MONTHS after the games release?  I see used games the DAY AFTER.  In fact, I had a good laugh when a week after Gears of War was released, there was basically an entire row of stacked used copies of the game.  

Most games just don't take very long to play through.  And the more copies bought on day 1, the more used copies there's going to be 5 days later when everyone has beaten it. 

While I do think GameStop hurts new game sales, what hurts them more is the fact that most aren't good enough to keep or don't last long enough to matter.  If you make better games, there will be less used copies of your titles on the shelves. 

Re: Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...

Working in a store that does business in new and used games I agree that there are games that do come in the day after release.  However, there are not many and it makes me wonder if they actually played the game fully or if they just didn't enjoy the beginning of the game/controls/content and so just want to get rid of it.

I think the two month average is correct though.  That is about the time we have the most copies of any particular game, but depending on the game there can still be a brisk business as there are still people who havent' played it.

I do agree that if the game publishers do not wish to contribute a title or game to the used market, make games that people want to keep.  Make the replayability high, with dlc or some other way to keep interest in a game to keep people wanting to play that particular game.

 

Re: Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...

In my view he is totally right...

 

The companies that are whining at game stop, also has the games that get re-sold the fastest, usually because they suck somehow (like all recent Ubi Montreal games, that are plain boring, or Mirror Edge, that you pay fucking 50 USD to play for 6 hours... Only Final Fantasy deserves that price by the amount of content that it has...)

 

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--- Maurício Gomes twitter.com/agfgames

Re: Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...

I liked Mirror's Edge so much I bought it twice. Once for 360, and again for PC to get the added PhysX effects (as well as KB&M controls) when that version came out. One of the best releases of 2008, actually. Plus, it was scored by Solar Fields.

Length of gameplay is not an indicator of quality. If that were true, RPGs would be TEH BEST GAMEZ EVAR, and that could not be further from the truth these days. Is Final Fantasy 300 out yet?

Re: Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...

Length is one indicator, gameplay quality is another, IMO no game is worth 50$+ not in this environment of short and lulzily developed titles, gaming has become a brain dead mass market medium and its price(20-30$ max) needs to reflect that. If the industry wants to spend them selfs out of business via inane upgrades let them, they will just have to learn that graphics and power is not everything and in most cases costs them more in the long run.

PS:Mirrors edge is a DLC game that got confused with retail.....

 


I am a criminal because I purchase media,I am a criminal because I use media, I am a criminal because I chose to own media..We shall remain criminals until Corporate stay's outside our bedrooms..


http://zippydsmlee.wordpress.com


Copyright infringement is nothing more than civil disobedience to a bad set of laws. Let's renegotiate them.

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Re: Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...

"PS:Mirrors edge is a DLC game that got confused with retail"

Not really. Whether or not you think it's worth the asking price is entirely subjective. It's currently selling for $30 console, $20 PC. I paid full price at release for both (roughly double the current price), and I still feel I've gotten my money's worth. I enjoy supporting innovation, it makes it more likely that I'll get more of it in the future... assuming the developer isn't sabotaged by unreasonable consumer demands.

"gaming has become a brain dead mass market medium"

Sounds like you need to start playing better games. They're always out there if you take the time to look for them. A little discerning taste goes a long way.

Re: Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...

Meh its like Doom 3 trying to be inovative in all the wrong things....

If it was more a compelte game I would not harp on it as much....


I am a criminal because I purchase media,I am a criminal because I use media, I am a criminal because I chose to own media..We shall remain criminals until Corporate stay's outside our bedrooms..


http://zippydsmlee.wordpress.com


Copyright infringement is nothing more than civil disobedience to a bad set of laws. Let's renegotiate them.

---

http://zippydsm.deviantart.com/

Re: Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...

DOOM 3 is a challenging survival-horror game. Problem is, everyone was expecting more of DOOM 2, which they didn't get. The lack of robust multiplayer is my only major gripe; I had a similar problem with Quake 4, which leads me to believe that someone with decision-making power at id Software led everyone astray with the last generation of its two major franchises... Which is interesting, considering Quake 3 was essentially ONLY robust multiplayer.

"If it was more a compelte game I would not harp on it as much...."

This is a red herring, and part of the reason that no-one is taking the Left 4 Dead 2 "protest" seriously, either. Mirror's Edge has plenty of problems (predictable story and iffy weapon implementation are both near the top of the list), but being "incomplete" is not one of them.

Re: Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...

The problem is they took DOOM a maze based shooter and trued it into a shallow in the dark corridor shooter, it was not even difficult...the trem hollywoodization coems to mind where so much shallow thought leads to a epiphany quagmire of ill conserved thought. 

Quake 3 setup the coffin and Doom 3 put the nails in it after those 2 titles main titles they pretty much shown they do not have the drive or imagination to be respected anymore, Both ID and raven(who developed quake 4) have had all most all their creativity sucked out, Rage dose look interesting, wolfenstine looks like more normalized gun and run fodder. Seriously  Daikatana had better level layouts,weapons and AI(kinda) than D3 and Q4 had put together now they might have better script/dialog but that a game dose not make.....

And no a red herring would be asking for a solid single player experance from halo or LFD...oh wait!...Seriously the game(Mirrors edge) can be beaten in one afternoon, the gameplay can be spotty its a pure DLC game posing as a full retail product and I feel that to my very core, hell Fallout 3 is damn near close with as much crap as they left unfinished in it..

MG and D34 have alot in common  in terms of visual and or story themes it comes down to it being more of a film experiment than a game, tho in MG's defense its more a rushed hybrid that is trying to do something innovative rather than a cash in rushing to get money from teething noobs..

The LFD2 stuff is somewhat annoying, it dose feel they had alot of content left over from the game that was released and looking to cash in on it and the games current momentum its not all bad though I see worse things done for the sake of absolute profit like launch a game in near final beta then refuses to finish it while moving on to the next title*cough*bioshock*cough*FO3*cough*. 

I really wish more was done to standardize bug testing and patching for all systems take at least 1 year to actually finish the product you have released before starting on another or wait 6/12 months before plopping the steaming pile of bug ridden wank onto the unsuspecting populace.... anything to get a bit more polish on gaming..I am sitting here can't play my 30$ used copy of Prototype because the bastards did not fully bug test it and since I have a reltek HD sound chipset and win XP I have no bloody sound.....  at least dead space worked....well...I could not reconfigure the control the way I wanted because it seems when game devs go to to setup option menus they lose 99% of their IQ points and become drooling imbeciles .. is it so hard to have it so no matter the control method used you can remap it anyway you possibly can? I swear its like FF12 with the you can't wear this item without a fcking degree!

Oh wait...its not...since you don;t need a degree to setup button mapping or options apparently....

 


I am a criminal because I purchase media,I am a criminal because I use media, I am a criminal because I chose to own media..We shall remain criminals until Corporate stay's outside our bedrooms..


http://zippydsmlee.wordpress.com


Copyright infringement is nothing more than civil disobedience to a bad set of laws. Let's renegotiate them.

---

http://zippydsm.deviantart.com/

Re: Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...

Wow Zippy, I had no idea you had the qualifications to void others opinions on games, I guess you word is the final word on weather a game is good or not. [/sarcasm]

 

Re: Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...

Hey the only thing I haz qualificationsfor is for the dozer I use to move my fat ass..er...bull sht around in. :P

But anyway I merely trying to make my opinoin comperhenandable...and thats diffcult as all hell. :P....

 


I am a criminal because I purchase media,I am a criminal because I use media, I am a criminal because I chose to own media..We shall remain criminals until Corporate stay's outside our bedrooms..


http://zippydsmlee.wordpress.com


Copyright infringement is nothing more than civil disobedience to a bad set of laws. Let's renegotiate them.

---

http://zippydsm.deviantart.com/

Re: Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...

Opinion != Fact.

Personally I've loved all of Ubisoft Montreal's games - in fact, I reckon they're the single best developer in the world and can't wait to play Splinter Cell 2, Assassin's Creed 2 and whatever the follow-up to that new Prince of Persia might be.

-- teh moominz --

Re: Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...

To be fair, he did say opinion - and his opinion is no less valid than yours.

For example, in my opinion there hasn't been a Final Fantasy since 6 worth paying more than $10 for. :D

Re: Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...

But...that opinoin is correct..... :P


I am a criminal because I purchase media,I am a criminal because I use media, I am a criminal because I chose to own media..We shall remain criminals until Corporate stay's outside our bedrooms..


http://zippydsmlee.wordpress.com


Copyright infringement is nothing more than civil disobedience to a bad set of laws. Let's renegotiate them.

---

http://zippydsm.deviantart.com/

Re: Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...

Hold up!! Wait a minute!! Patcher's math assumes that the ratio of trade-ins to new purchases is 1 to 1 (i.e., the consumer trades in one game, gets their 20% value of the new game, and then applies it to the new purchase while having to come up with the remaining 80% of the purchase price out of their own pocket). Or, at the very least, he assumes a ratio less than 5 to 1. Because if the ratio is at least 5 to 1, then Patcher's theory makes no sense. Because if the consumer traded in five games and then applied that value to the new purchase, that's 100% of the price of the new game whch has been covered by value received from trade-ins. The consumer hasn't been forced to come up with any money out of their own pockect. And, given total trade-ins of 100 million, a 5 to 1 ratio isn't far-fetched. And, if so, there isn't any "push" of new game sales. It'd actually be a zero-sum game.

Re: Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...

Your math assumes that a gamer starts with a large inventory of games and then steadily downsizes with each new purchase, and stops purchasing games when they only have one, or one and a remainder >= 3.

Of course, some of the used games traded in could be other games that the gamer already bought used.

The bottom line is that as long as game publishers invest advertising bucks into retail stores and those stores turn around and cheat them by offering a used copy to the gamer at no profit to the publisher at every opportunity, there's going to be sour grapes. I don't think most publishers have a problem with used sales, in theory, but in practice, the game stores are outrageously opportunistic, and I think a lot of publishers are having a hard time swallowing the massive profits that these stores make in comparison to theirs.

I'd be frustrated too, if I invested a few million dollars and a year or two of a team's time to make a game and the retailer makes a profit off of my work equal to something that's two, three, four, or five times my profit. All they're doing is putting it on the shelf - the developers did all the work!

Re: Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...

So? There is nothing wrong with used sale and there should never be, as long as its a physical good there should be no limit on its resale(and once the digital land scape catches up with permanent forms of file encryption to limit duplication, it should have the right of resale as well).

 

If you don't like the retail market try a smaller pond like digital distro, the reality of the market is what it is you simply can not trump up sales from nothing and that is what you will be doing if you remove used sale from the equation.


I am a criminal because I purchase media,I am a criminal because I use media, I am a criminal because I chose to own media..We shall remain criminals until Corporate stay's outside our bedrooms..


http://zippydsmlee.wordpress.com


Copyright infringement is nothing more than civil disobedience to a bad set of laws. Let's renegotiate them.

---

http://zippydsm.deviantart.com/

Re: Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...

I'm not sure I present a theory as much as I point out the risk in Patcher's theory's assumption that the ratio of trade-ins applied to new purchases is low (certainly he assumes a ratio less than 5 to 1), particulary in light of the fact that the total trade-ins number 100 million. Does it matter to the math what an individual gamer's inventory of used games is and and at what point in the depleting of that inventory they would or wouldn't be inclined to continue using trade-in value to offset new purchase price? Or can we just confidently spread the 100 million in trade-ins across and in relation to all purchases of new games?

And I assume that Patcher's "average" value of 20% of the price of a new game takes trade-ins of third-hand games and four-hand games and all other -hands games into consideration. If it hasn't, then that's another flaw in his math. But perhaps not a fatal flaw if the market for third-hand-plus games is small - as I imagine it is - because the failure to account for third-hand-plus games would have a negligible effect on the actual average value. Besides - and while I'll admit ignorance on the point, having never dealt in the market for used games - is there any way to tell the difference between a second-hand and a third-hand game?      

Re: Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...

Usually the only way I know of to determine if a game was bought used is if the customer bringing it back in to sell left the stickers from it's previous sale on the package.

 
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