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Ronin4life avatar 12:16 PM on 05.24.2013  (server time)
XBONE-D: Used Games? Lets Follow the Cash Flow!

So used games. XBOne. The situation isn't looking too pretty, with publishers and MS each getting a cut of the sales of resold products. For many, the blatant reach into the used market is the last straw, keeping them from purchasing the Xbox One. For others it is merely aa brick in the wall of a myraid of problems. In any case, it is bad... but HOW bad?

Our own Chris Carter broke the report for us on d-toid: in the write up, he explained how the Pie Cut would drive up used costs and damage the feasibility of the used market as a whole. That seems pretty bad... but that is only the begining.

So, Who wants to play "Pass the Buck"?
Let's set up 2 different scenarios: A free used market and a publisher -cut in used market. We will attempt to follow cash flow through each and see where we end up. Now obviously the games industry doesn't exsist in a bubble: people won't always spend money they have on Games. But we are exploring the potential of how that money could affect the game industry ONLY, so let's disregard other markets for a little bit. Everyone cool? Ok, Here we go!!

In a free Used market, Billy has a game he no longer wants. So he procedes to sell it. He gets an amount obviosly less than he paid and the store gets a potential investment(Or loss: thus why some store have hideous used prices). In this scenario, we will say the store does sell that game. Now, Let's Follow the Money!!

Bill now has more money. He can spend it on anything he wants, and he buys another game. That is more sales for the industry.
The store has made a tidy profit. They can now spend it on resupply, including more used and new games, which will mean more sales and more profit, which means more sales... ok, you get it. But that resupply comes from... where? Game companies, who now have more money. That is sales for the industry.
And Geoff walks in. He is the purchasor of Bills game. He has a new game in his stable, and the store has his money. Further, he has managed to save money on the sale, and could be a potential customer who would spend more on games. That is sales for the industry.

Scenario 1 just went off without a hitch. Now, before we begin, can anyone guess how Scenario 2 will play out? I think we can all guess...

The market is now cut-in by MS and pubs. Bill wants to sell his game, so he heads to the store. He gets an amount less than he paid for(How the store may charge differently from a free used market is currently unknown, so for fairness let's assume it is the same) and the store sells his game. Now let's follow the money!

The store sells the game to Geoff. He now has a game(the price of which in fairness we will assume the same) same as before. Bill has more money same as before. But what of the store... and Pubs?
The store has less money to resupply. That means less money for the industry. Fewer used or new games. "But Wait!! The amount is the same!" Yes... but remember, the name of the game isn't "Change the amount". It is "Pass the Buck". And where does that buck end up?

The Pub/MS have more money. In fact, they get money everytime someone resells their game. Money that would have been spread to everyone is now Pooled collectively to a select few. They are now bloated, while the rest of the industry suffers. Alone, this may not be a bad thing: A company growing larger must be a strong company doing a great deal for the industry. But not in this case. The only "Product" They are giving us for this EXTRA revenue is a mandatory restriction. They are, in effect providing a product FOR THEMSELVES. Now if this sounds familliar to you, it should; have you ever been accousted by a highway man in Oblivion? That is what a Cut-in used market effectivly is. A set up designed to squeeze money from the industry for themselves, no matter if it is deserved or not.

Further, this is the BEST case scenario: Remeber, out of "Fairness" Those who resold and bought used were not directly affected at all in these examples. And this also completely disregarded the possibility of Bill wanting to give/sell his game to Geoff directly... which we all know is not truly possible under MS set-up.

So in the end, MS and the Pubs have more money. Money that naturally flowed freely and healthily throughout the industry stagnates. Companies and retailers suffocate. And the industry itself is stunted and stifled.

No Good can come of this. Even MS and the select few pubs will crumble under their own weight. Better to let *Them* crumble now than bring everyone else down with them.

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