Quantcast
Using SCIENCE to learn the effects of killing used games - Destructoid




Game database:   #ABCDEFGHIJKLMNOPQRSTUVWXYZ         ALL     Xbox One     PS4     360     PS3     WiiU     Wii     PC     3DS     DS     PS Vita     PSP     iOS     Android



Using SCIENCE to learn the effects of killing used games photo
Using SCIENCE to learn the effects of killing used games

12:30 PM on 05.31.2013

By eliminating the used market AND dropping prices, publishers could profit


With all this hubbub over used games and whether eliminating them would be good or bad for the overall industry, it was only a matter of time before SCIENCE was brought in to drop some truth bombs. Professors Masakazu Ishihara (New York University Leonard N. Stern School of Business) and Andrew Ching (University of Toronto Rotman School of Management) have closely studied the Japanese gaming market, where pre-owned business is much more significant than it is in the US, and shared their findings in a paper published on December 15, 2012.

Their verdict? Not quite what you'd expect.

Ishihara and Ching found that, all else remaining equal, eliminating the used market would result in a 10% drop in publishers' profits per game. However, if average retail prices for software were to drop by a third across the board -- $40 down from $60 -- publishers could actually see a 19% rise in profits. Of course, the profit increase scenario would only work if publishers agree to a reduced MSRP, the likelihood of which is up for debate.

Ishihara and Ching's study demonstrates that there are many factors involved in used game sales and purchases. Consumers assign value to their individual software purchases, and some of that value is derived from their ability to resell it down the road. Reduced retail prices could feasibly counterbalance the loss of resales.

No matter how you look at it, this is a far more complex situation than anyone could have imagined.

Dynamic Demand for New and Used Durable Goods without Physical Depreciation: The Case of Japanese Video Games [Social Science Research Network via Wired] (Thanks, M Gross!)






Comments not appearing? Anti-virus apps like Avast or some browser extensions can cause this.
Easy fix: Add   [*].disqus.com   to your software's white list. Tada! Happy comments time again.

Did you know? You can now get daily or weekly email notifications when humans reply to your comments.






Game Sales

9:00 AM on 10.29.2014
The PlayStation Store is full of sales

Feeling consumeristic today? There are a bunch of dripping hot slimy dealz on the PlayStation Store right now. You can see them on the Internet version of the store here. You can also peep the PlayStation Blog for the we...more



6:34 AM on 10.07.2014
Super Smash Bros. 3DS has sold over 2.8 million copies worldwide

Nintendo has just sent word to Destructoid that Super Smash Bros. 3DS has sold over 2.8 million copies worldwide. This number includes every region, as well as both the physical and digital versions of the game (Nintendo...more



8:00 AM on 09.13.2014
Monaco: What's Yours is Mine sells 1 million

Sales of stealth action game Monaco: What's Yours Is Mine have surpassed the one million mark, developer Pocketwatch games announced this week. Monaco was the big winner at GDC's Independent Games Festival in 2010, ...more



View all Game Sales






Back to Top




All content is yours to recycle through our Creative Commons License permitting non-commercial sharing requiring attribution. Our communities are obsessed with videoGames, movies, anime, and toys.

Living the dream since March 16, 2006

Advertising on destructoid is available: Please contact them to learn more