Pre-Owned Games = Piracy?

As a games student, I get to speak to some interesting people in the industry (ooh, get me! I'm so special.)
Last year I got to speak to Rob Bartholomew, of Bethesda Publishing, and one of the topics of conversation has been on my mind ever since.

In the UK, since the days of cartridges when games were no longer self-distributed and the NES and Sega consoles had made games a commercial industry, new games have had a set price of around £40. The value of the pound has declined and the technology involved has improved, but the price of a Megadrive (Genesis for the U.S.) game was £39.99 and the price of a PS3 game today is £39.99.
Children generally can't afford this. I remember when I was a kid with my Sega Mastersystem, and after that with my Megadrive, I used to get £20 - £25 a month in pocket money. I had to wait 2 months before I could get a new game, and that was my little ritual. It was the only thing I spent my money on, even though it always meant that I had nothing left afterwards.

Now I'm an adult, my stream of incoming games is a lot less regular. There are less games I want to play, for one. I no longer have so much disposable income and I have bills to pay. I can never afford to get a game when it is released, I always have to wait for the price to come down.

The main way I get to play new games is by getting  pre-owned games, and trading in my old games for shop credit. It saves me a lot of money. However, there is a problem.

Rob was explaining to me that game developers and publishers are worried about the pre-owned games market killing the development of new games.

The problem is that when companies like GAME buy your old games, then sell them on for a profit (less than a new game but more than what they paid you for it) the only people making the profit are the ones at GAME. You're not making a profit, because you're getting substantially less than you paid for it originally, and the people that made the game - the game that GAME are now making just as much, if not more profit from reselling pre-owned as they did when they sold it new - are getting nothing.

When a brand new game is sold, the profits from the sale go to the shop you bought it from. To get the game on their shelves, the shop had to buy it from the distributor. (If you've done film studies it's a lot like the Hollywood Model - I think that's what it was called, I covered it almost 10 years ago!) The money from the sale of each game is split between the distributors, the publishers, and the producers. These are the people who developed the game, the people who burned all the discs and made all the packaging, and the people who sold it to the shops through advertising and sales pitches. This is a very simplified version of the model, there are a lot of people involved from start to finish in getting these games on the shelves, and that £40 split between them probably works out to less than a penny each per unit sold.

The really big worry is that the less brand new games are bought, the less the game designers will earn, and they will just stop making games because they can't afford to keep doing it.

I find this to be a bit arsey, as games were originally made as a hobby, and passed around for free. Any profits made were the icing on the cake. I also find these fears to be a bit unfounded because there will always be a demand for brand new games. There would be no 2nd hand games if nobody bought them first hand. There is also the fact that games don't last forever, especially now that they're all on DVD and Blu Ray discs, so people will always need to buy replacements for really good games.

Some companies have been trying to figure out ways to stop this market, saying it's as damaging to them as piracy - probably more so, seeing as it's legal. EA in particular have been giving out single-use codes in new games for exclusive and free DLC. Fair enough. I've heard some disturbing rumblings that companies are trying to "lock" discs to machines, like SIM cards in mobile phones. This is not the answer. This is why:

1. I feel that if I buy a game that looked really good but was actually awful, I should be able to get my money back (This is a massive gripe I have with PSN and XBLA) even if it is only part of the money I paid for it.
2. I live in a one bed flat. I don't have the space to keep every game I ever bought, even if I wanted to. Some games I enjoyed, but I'll never play again. I can either trade them in and make some use of them, or I can put them in the bin.
3. The Pre-owned games market is a way of recycling games and saving the world!
4. So many games would never have been played - and loved - if it weren't for trade ins. I missed Mass Effect when it first came out, I hadn't heard of it, and then I saw it, after Mass Effect 2 was released, pre-owned, for £6.99. I got it, loved it, and bought ME2 soon after.

There is a solution staring everyone in the face. The people who make the games should get a cut of the profits. How best to do this? Set up your own trade in scheme. Offer an incentive to use it.

If it is really that big a problem, there's your fix. and you can always contact me if you need more help.

Considering how much DLC is available for every game released these days, some of it costing as much as a brand new game and with none of the costs incurred making discs and packaging, I think the companies are making more than enough to compensate for the amount lost through the sale of pre-owned games.

Thank you for taking the time to read this, I hope that you've found it interesting, particularly those of you into games. I won't be doing any game reviews until I find a game worth spending my money on(!) but until then I will provide you with some writings about games in general.

TTFN

Hell Thirteen

PS: Comment question. Do you buy pre-owned games? Or do you always buy brand new?