GameStop's executive vice president Michael Mauler recently told Edge Magazine that the sale of second hand video games benefits the entire industry - not just retailers. The benefit, he claims, is that these second-hand sales keep customers engaged with yearly franchises. Mauler said that without the opportunity to cash in on older titles, many gamers wouldn't be buying as many new ones.
"I can understand the feelings [but] we've sat down with developers and publishers and really gone through the data," Mauler told the magazine's website. "I personally think there's a lot of benefit to the publisher. "A great example is sequels, where there's a large percentage of people who are just not going to spend $60 every single year without being able to do something. They'll look at their shelf and see ten FIFAs, Pro Evos or Maddens. “
"Being able to take the older one and do something with it in order to buy the next version is really important to consumers. That drives new sales quite a bit."
Mauler believes that getting new customers involved with a series which they may not have invested in at full price also pushes DLC sales and that services such as EA's Online Pass aren't particularly effective.
"Our data says that used customers play a lot less online than new customers. The number's very low - like 15, 20 per cent."
"We the industry have done it to ourselves," Mauler says of the second hand market. "We take all the great releases and put them all in a two-month period. "If you're an FPS fan, you look at all the games that are coming out this fall, and you'd have to be pretty wealthy to buy all of them. There are going to be people who buy Battlefield 3, and they're not going to have €60 for at least another month or two...they're all coming out so close together."
Of course, developers responding to the story on GameIndustry.biz sounded like they wanted to ride Mauler out of town on a rail. Below is a sample of the responses from individuals working in the industry.
Jason Lee Ried- Producer, Walt Disney Company:
"Freeing up money for new games sales is one thing. Releasing a second hand version almost to the day of launch is another - all this does is give 97% of the profit to the retailer while the Publisher/Developer receives nothing.
I would listen to his opinion on data more closely if there was a window where second hand games couldn't be sold. That then gives new games enough time to make money before being pushed to the back. But that will never happen... "
James Steele - Software Engineer, Nintendo of Europe:
"It's not the older titles being sold second hand that are the real issue here.
It's the price gouging that that the retailers are doing by selling a second hand copy of a new title in its first few months of release. If Mr Mauler were serious about helping to drive sales new games sales which lead to increased profits for the industry as a whole, he would first commit to stopping the price gouging activities which take money away from the publisher , developers and platform holders."
Chris Taylor - Gas Powered Games:
"Well, it's all going to be moot in the coming years, so we can analyze this all day long, but it doesn't matter. I agree with the comments about being offered used, when you walked into the store to buy new... that's where Gamestop's arguments fall down. Take that sales pitch out of the equation, and they'll gain some ground with me."
Brynley Gibson - Executive Producer, Headstrong Games:
"I believe (this may now have changed) the film industry model provides far greater protection and improved sales.
It is to not allowed for you to sell second hand films in a place that retails full price films. Second hand films can be bought from a rental establishments only. Rental is another beast to handle. Rental copies of movies are a special version, a license that cost the rental companies a great deal. Rental games on the other hand are just normal retail copies.
If anyone a bit more legally minded can let me know if this is correct I would appreciate it."
Tom Pickard - Art Lead, The Creative Assembly:
"Gamestop's argument is only relevant for casual gamers who buy series of games, and even then it's a stretch.
How is selling used copies of week old games at £3 discounts right next to new games beneficial to the developers or publishers? maybe a year into their lifecycle selling very cheap second hand games raises awareness of sequels to new players. Oh well money talks. "
Dave Knudson - Sr. Technology Manager, Electronic Arts:
"I sort of wonder how much Gamestop's used success might be overstated. I'm not an analyst, but I believe the accounting they are allowed to use for used sales might make things appear a little more rosy than they actually are. From a used games inventory perspective they could sell the last unit in (presumably always the cheapest for them to buy), which would make their margins look very good. At some point they would have to write down the older more expensive inventory, but I presume they have some control over when they choose to do that. I don't think this method can be used in a lot of countries, and even in the US it can't be used for tax purposes.
Again I am not an expert in this field, but it seems like accounting and inventory management would create some opportunities for Gamestop to overstate the success of their used business a bit. "