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meteorscrap avatar 10:17 PM on 05.17.2011  (server time)
Ending the Blight of "Used": 3 steps for publishers to reduce the used market

After the recent post on the main page about used games (LINK!), I got to thinking: How exactly could publishers turn GameStop's used game empire into a margin of their profits instead of the focus? Because let's face it... Publishers are indeed chomping at the bit to get a piece of the action there, but I don't think they're going about it in entirely the right way.

Step 1: Unless your game's budget requires it and you know you're going to sell millions regardless, lower the god-damned MSRP to a maximum of $40.

I know this has made a lot of publishers clench their assholes shut in terror at the smell of lost profits, but listen guys: People don't necessarily care about New versus Used. People care about price. And publishers, you should care about price too, because a lower price means three things:

It means you've lowered the trade-in value of the game as well. GameStop or any other used retailer cannot price their used games higher than a new copy, and they have to maintain at least a $10 disparity between trade-in value and MSRP to make the handling and resale of the games worth their time. This disparity also covers games which are not sold, or which hang around long enough that their eventual sale price is actually lower than the credit the customer got for trading it in.

Psychologically, that $10 difference in returned credit looks like a bigger loss for the customer because 25% of their investment has puffed away into smoke instead of 16.5%.

It means you've sold more units. Now, setting aside the fact that because you had to produce more units, you've probably lost about 1% on the top margin of your profits. This is not important relevant to the short term goal, which is marginalizing the used games market so that it's not the bread and butter of major chains of stores and is, instead, a sideline.

More copies means that the stores are also going to be getting more copies returned for the reduced store credit mentioned above. Now, we already know that the lowered price point means you've sold more units (and thus, sold more units in the area), so there's going to be a smaller market for used copies of that game. A smaller market means GameStop (or whoever) will be able to charge less for the used copy, because the demand isn't there. Which in turn means the trade-in value of a copy will be worth even less than just the price difference, because the store can't be sure the units will all sell and must price things accordingly.

It means customers feel like they're getting more value for their money. When combined with the lower trade-in value, the customer may just decide that getting rid of the game is simply not worth the cost. God knows that if I was looking at losing a third of my cash (as opposed to the current one sixth) on a new copy of a game when trading it in for another, I'd be looking at things a little differently.

Step 2: Cut content and hide it behind a code, and allow used purchasers to buy the content with a $5-$10 pass online. Then offer GameStop the ability to buy codes to pack in with used purchases.

To be perfectly honest, I love the concept of online passes. I buy a lot of my games new, and knowing I get the complete package feels great. Getting Zaeed and the Firewalker missions in Mass Effect 2 and similar schemes is a great marketing ploy. It's good for current releases which are now at their $60 price point. Imagine how much more effective they'd be at a lower price point.

Now, some games with the online pass are worth ten dollars less in trade-in value. Which works fine for the current model, but let's apply that using the above-mentioned lowered price point and see how it works for the used market.

New Game sells for $40, so the trade-in value is $25. You've used your online code, so the trade-in value is now $15. Suddenly trading in your game towards a new game doesn't look quite so attractive anymore.

Better yet, generating online-access or content-access codes has GOT to be cheap. Why not cut a deal with GameStop, stating that after, say, three to six months you'll start selling them the content codes at a slightly reduced rate to pack in with their used games? That'd work great for everybody concerned, actually:

- The customer who bought the used game is happy because they get all the content in the game.

- GameStop is happy because they were able to buy the ten dollar code off of you, the publisher, for six bucks, and so they made an extra few bucks off the sale of the used copy and have a selling point for their used lineup other stores can't offer.

- You're happy because instead of wondering if every used sale is maybe going to result in a ten dollar profit coming back to you, the majority of used sales still come back to you for a six dollar profit for the effort of churning out some extra content-unlocking codes when you were doing them anyway.

It's a wonderful compromise because everybody wins, and you actually make GameStop happy to help you out with anti-used game measures like content-cutting and online passes instead of angry and resentful.

Step 3: Understand that it will never go away completely.

There is nothing you can do to stop the used game market. There is nothing you can do to completely eliminate first-sale doctrine and no matter how aggressively you attack the "problem" of used game sales, you can only ever marginalize it and you can never, ever actually get rid of it entirely.

For literally thousands of years, the creators of works of art and literature have tried to prevent people from recirculating the work. Books got traded, stories got told, and in the end, there is nothing you can do to stamp it out entirely. Don't assume you're going to be the first to succeed at it in all that time.

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