Are Used Games Good or Bad for Developers? A More Complete Perspective

We've all heard the arguments. We've all heard developers and publishers talk about how used games are destroying their business, and occasionally, I even see used game sales lumped in with piracy.

I'm not going to address the ethical or legal issues here. This post is primarily to bring up business aspects of used game sales that I rarely see elsewhere.

 The Cons:

The cons of used game sales are pretty obvious. Developers and publishers get no money when a used game is sold. Thus we have the crusades against used sales and various attempts to curtail them.

The Pros:

What doesn't get properly discussed is how used game sales can benefit developers. Sure, they don't get any direct money from a sale, but there are a lot of indirect benefits that could even possibly outweigh the one major drawback.

1. People risk less money to buy your game: Knowing that I could sell a game on ebay for 90% of what I paid for it (or gamestop for 40-50% if I'm lazy) has often made the decision for me on whether to buy a game.  While a used sale doesn't give any money directly to the developers, the existence of the used market provides sales that would not have otherwise happened by lowering the risk factor.

2. It helps game retailers thrive: While there have been plenty of conflicts between retailers and developers, the fact is that there would be a lot fewer games sold without gamestop, game crazy, and other stores like them. The more these retailers succeed, the more they'll spread, and the more easily customers will be able to buy their games. 

3. More people will be exposed to your game: The lower cost of a used game will get a good number of people to purchase it who otherwise wouldn't, which can have two positive effects on the game's sales.

First is viral marketing: Somebody who buys and enjoys your game is likely to recommend it to friends who may or may not buy used. This is especially valuable with multiplayer games, as people try to get their friends into the same games that they're playing.

Second is that it can raise the person's opinion of your franchise or company. Somebody who bought Halo 1 off of ebay for $20 and loved it is likely to buy later games in the series immediately after they come out.  In fact, the reason I bought a wii was because I wanted the sequel to the $15 dollar Super Smash Brothers Melee game I had bought earlier (I was disappointed in it, but that's beside the point. Nintendo still made their money).

 Net Effect:

So the obvious question now is whether the pros outweigh the cons. While it's certainly debatable, my theory is that it depends on the game.

A really good, long term game will get extra sales because of #1, and most of the people won't want to sell it off, keeping used games scarce and their price high. Few people will bother buying used because they save so little money (when there is even a used game available to them), and the extra sales from the reduced risk are likely to outweigh the lost sales due to people buying used.

In addition, once the game has aged a bit and the used price finally goes down, new people will get into it, enjoy it, and buy more from your company and franchise.

On the other hand, if your game is bad, people will trade it in in droves. Supply of used games will shoot up and game retailers will be sticking them in the bargain bin to get rid of them. Item #3 will actually work against a bad game because people who buy it cheap used will warn their friends away and become less likely to buy other stuff from your company.

Conclusion:

So in short, make good games and the used game industry is your friend. Make bad games, and it will help drag you into oblivion.