LGJ: First Sale, Re-Sale, Everything's on SALE!
by Mark Methenitis 
{ Oct 17th 2008 at 10:30AM }
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games:
While it seems like the rest of the known universe is busy talking about subprime mortgages and bailouts, the game industry and associated news outlets have been talking about sales. Specifically, they've been talking about resales, and how that's affected by the first sale doctrine. The most recent development has been talk of incentives to buy Gears of War 2 new, but even that's in the wake of the recent comments from Marty O'Donnell, which has been commented on in other columns on Joystiq. Of course, none of this quite gets to the root of the issue: What is this first sale doctrine and why does it exist? More importantly, assuming it applies to all kinds of software, is there another way to accomplish what we're doing now within those legal constraints?
So, let's start at square one. The first sale doctrine is a rule which says, in short, that once an item that is copyrighted is first sold, then the author no longer has the ability to prevent the resale of that item through copyright law. Without the first sale rule, a copyright holder could theoretically continue to control the item because copyright includes the right of distribution. The first sale doctrine, however, does not protect someone who bought an item if they're illegally reproducing it, for example. It only allows for the legitimate resale of the item itself. The courts have even recently held that this idea extends to demo CDs marked not for resale.
The whole idea behind the first sale doctrine was to make copyrighted material more like other goods, where the purchaser is free to resell the item. If I buy a car, there isn't a law that potentially keeps me from re-selling the car because the manufacturer said so. This was all part of the balance intellectual property law was created to achieve, and things worked pretty smoothly for quite some time with the traditional media. The advent of software, however, threw a big wrench into the system. This was also in an effort to simplify things. Could anyone imagine a world where you had to have permission from the copyright holder to re-sell something you bought? It would be a complete nightmare in implementation.
As you likely recall from previous columns, buying a piece of software is actually buying a license to use that software. Therefore, it's been argued that 'first sale' doesn't apply, and the End User License Agreement governs the terms by which the license can be resold or transferred. The courts have been split on this, some applying first sale and others not. Until such a time that the Supreme Court resolves the issue, there's at least some ambiguity on whether or not software is covered by first sale. If it is in fact not covered, then the idea that the EULA can restrict resale isn't that far fetched at all. Of course, the question of where the balance is with games will potentially enter into this decision to apply first sale, assuming courts haven't lost sight of the original intent of the doctrine.
However, there is a significant conundrum for game makers that isn't as much of an issue for other media, and that's the initial cost of new product to the consumer. Most books, DVDs, and CDs have a relatively low cost for the initial copy, and thus even when they're resold, a relatively low resale value. Games, with higher new product prices, have the potential for higher resale values, and these larger margins let companies like GameStop thrive.
To illustrate this more simply, a DVD sells new for $20. A DVD reseller won't be able to re-sell the used for the full new price, so let's say that the maximum resale is 75%, or $15. Let's also assume the buyback rate is 50% of the new price, or $10. So, the reseller has made $5 per resale. Taking those same percentages, a new game that sells for $60 is resold for $45, with a $15 per game profit for the reseller. These items take up the same shelf space, so if you're reselling something, it's more profitable to move more games than it is DVDs.
What Marty O'Donnell is suggesting -- that game makers find a way to make money from resales -- isn't all that far-fetched and isn't nearly as potentially intrusive and dogmatic as it may sound. It surprises me that none of the console manufactuers have entered into game resale as a web-based enterprise with a mechanism to benefit the game makers as well as themselves. It could actually be a fairly simple process.
For example, let's take Microsoft. This model could work that you can buy new Xbox360 games anywhere, but then register with Xbox360Resale.com [Ed. Note: Not a real site]. If you want to resell a game through their system, you send the game and get some sort of credit you can use to get other used games from their library of all games on the Xbox360. There could even be incentives for newer, more popular games. Microsoft can then resell the game and pay a portion of the proceeds back to the developer and keep a portion for themselves. More importantly, as it's being reprocessed, it would be easier for the publishers to agree to provide extra manuals or resurfaced disks so that anything bought 'used' from this system was actually in good condition. The net cost to replace a disk or manual is comparatively low, and this would bolster the revenue stream to the publisher and developer long term.
If you think about this economically, it actually benefits the consumer. Let's say for a given game, 100,000 copies will sell no matter what. An additional 25,000 copies will sell if the price is at or below $40, and an aditional 25,000 copies will sell if the price is at or below $20. Let's also assume the developer and publisher need a gross sales income of $6,000,000 to break even and keep making games. The way things work now, they make that $6,000,000 from the initial retail sale, then companies like GameStop make the bulk of their money buying games from that initial 100,000 for $20 a copy and selling them for $40 for some period of time, then buying back for $10 and reselling for $20. Under the model I set out in the previous paragraph, the developer/publisher is getting a cut of the downstream revenue, so they may be able to offer the game new at $50 rather than $60, a net savings to the consumer without losing their breakeven point. Using the numbers above, the additional revenue from the second and third tier sales might gross $400,000, and less expenses, the publisher and developer's share might be $150,000, meaning that they would actually be better off than they were at their initial $60 price point with no resale share.
These are, of course, just examples. But it's a way to mitigate the resale's loss to the publisher while still operating within first sale constraints without moving everything to a 'download' system or something similar. In fact, I know of a number of logistics companies who would be able to handle just such an operation for a Microsoft or a Nintendo or a Sony, if any of those companies wanted to attempt such a model. If such a thing were announced, I can only imagine GameStop would likely try to make a similar move to avoid being pushed out of the market. Ultimately, we all want to be happy as consumers but also have the game developers be happy, profitable, and developing the games we enjoy.
Mark Methenitis is the Editor in Chief of the Law of the Game blog, which discusses legal issues in video games. Mr. Methenitis is also a licensed attorney in the state of Texas with The Vernon Law Group, PLLC and a member of the Texas Bar Assoc., American Bar Assoc., and the International Game Developers Assoc. Opinions expressed in this column are his own. Reach him at: lawofthegame [AAT] gmail [DAWT] com.
The content of this blog article is not legal advice. It only constitutes commentary on legal issues, and is for educational and informational purposes only. Reading this blog, replying to its posts, or any other interaction on this site does not create an attorney-client privilege between you and the author. The opinions expressed on this site are not the opinions of AOL LLC., Weblogs, Inc., Joystiq.com, or The Vernon Law Group, PLLC. As with any legal issue that may confront you in a particular situation, you should always consult a qualified attorney familiar with the laws in your state.
So, let's start at square one. The first sale doctrine is a rule which says, in short, that once an item that is copyrighted is first sold, then the author no longer has the ability to prevent the resale of that item through copyright law. Without the first sale rule, a copyright holder could theoretically continue to control the item because copyright includes the right of distribution. The first sale doctrine, however, does not protect someone who bought an item if they're illegally reproducing it, for example. It only allows for the legitimate resale of the item itself. The courts have even recently held that this idea extends to demo CDs marked not for resale.
"Can you imagine needing permission from the copyright holder to re-sell something you bought? It would be a complete nightmare in implementation." |
The whole idea behind the first sale doctrine was to make copyrighted material more like other goods, where the purchaser is free to resell the item. If I buy a car, there isn't a law that potentially keeps me from re-selling the car because the manufacturer said so. This was all part of the balance intellectual property law was created to achieve, and things worked pretty smoothly for quite some time with the traditional media. The advent of software, however, threw a big wrench into the system. This was also in an effort to simplify things. Could anyone imagine a world where you had to have permission from the copyright holder to re-sell something you bought? It would be a complete nightmare in implementation.
As you likely recall from previous columns, buying a piece of software is actually buying a license to use that software. Therefore, it's been argued that 'first sale' doesn't apply, and the End User License Agreement governs the terms by which the license can be resold or transferred. The courts have been split on this, some applying first sale and others not. Until such a time that the Supreme Court resolves the issue, there's at least some ambiguity on whether or not software is covered by first sale. If it is in fact not covered, then the idea that the EULA can restrict resale isn't that far fetched at all. Of course, the question of where the balance is with games will potentially enter into this decision to apply first sale, assuming courts haven't lost sight of the original intent of the doctrine.
"Games have the potential for higher resale values, and these larger margins let companies like GameStop thrive." |
However, there is a significant conundrum for game makers that isn't as much of an issue for other media, and that's the initial cost of new product to the consumer. Most books, DVDs, and CDs have a relatively low cost for the initial copy, and thus even when they're resold, a relatively low resale value. Games, with higher new product prices, have the potential for higher resale values, and these larger margins let companies like GameStop thrive.
To illustrate this more simply, a DVD sells new for $20. A DVD reseller won't be able to re-sell the used for the full new price, so let's say that the maximum resale is 75%, or $15. Let's also assume the buyback rate is 50% of the new price, or $10. So, the reseller has made $5 per resale. Taking those same percentages, a new game that sells for $60 is resold for $45, with a $15 per game profit for the reseller. These items take up the same shelf space, so if you're reselling something, it's more profitable to move more games than it is DVDs.
What Marty O'Donnell is suggesting -- that game makers find a way to make money from resales -- isn't all that far-fetched and isn't nearly as potentially intrusive and dogmatic as it may sound. It surprises me that none of the console manufactuers have entered into game resale as a web-based enterprise with a mechanism to benefit the game makers as well as themselves. It could actually be a fairly simple process.
"It surprises me that none of the console manufacturers have entered into game resale as a web-based enterprise." |
For example, let's take Microsoft. This model could work that you can buy new Xbox360 games anywhere, but then register with Xbox360Resale.com [Ed. Note: Not a real site]. If you want to resell a game through their system, you send the game and get some sort of credit you can use to get other used games from their library of all games on the Xbox360. There could even be incentives for newer, more popular games. Microsoft can then resell the game and pay a portion of the proceeds back to the developer and keep a portion for themselves. More importantly, as it's being reprocessed, it would be easier for the publishers to agree to provide extra manuals or resurfaced disks so that anything bought 'used' from this system was actually in good condition. The net cost to replace a disk or manual is comparatively low, and this would bolster the revenue stream to the publisher and developer long term.
If you think about this economically, it actually benefits the consumer. Let's say for a given game, 100,000 copies will sell no matter what. An additional 25,000 copies will sell if the price is at or below $40, and an aditional 25,000 copies will sell if the price is at or below $20. Let's also assume the developer and publisher need a gross sales income of $6,000,000 to break even and keep making games. The way things work now, they make that $6,000,000 from the initial retail sale, then companies like GameStop make the bulk of their money buying games from that initial 100,000 for $20 a copy and selling them for $40 for some period of time, then buying back for $10 and reselling for $20. Under the model I set out in the previous paragraph, the developer/publisher is getting a cut of the downstream revenue, so they may be able to offer the game new at $50 rather than $60, a net savings to the consumer without losing their breakeven point. Using the numbers above, the additional revenue from the second and third tier sales might gross $400,000, and less expenses, the publisher and developer's share might be $150,000, meaning that they would actually be better off than they were at their initial $60 price point with no resale share.
These are, of course, just examples. But it's a way to mitigate the resale's loss to the publisher while still operating within first sale constraints without moving everything to a 'download' system or something similar. In fact, I know of a number of logistics companies who would be able to handle just such an operation for a Microsoft or a Nintendo or a Sony, if any of those companies wanted to attempt such a model. If such a thing were announced, I can only imagine GameStop would likely try to make a similar move to avoid being pushed out of the market. Ultimately, we all want to be happy as consumers but also have the game developers be happy, profitable, and developing the games we enjoy.
Mark Methenitis is the Editor in Chief of the Law of the Game blog, which discusses legal issues in video games. Mr. Methenitis is also a licensed attorney in the state of Texas with The Vernon Law Group, PLLC and a member of the Texas Bar Assoc., American Bar Assoc., and the International Game Developers Assoc. Opinions expressed in this column are his own. Reach him at: lawofthegame [AAT] gmail [DAWT] com.
The content of this blog article is not legal advice. It only constitutes commentary on legal issues, and is for educational and informational purposes only. Reading this blog, replying to its posts, or any other interaction on this site does not create an attorney-client privilege between you and the author. The opinions expressed on this site are not the opinions of AOL LLC., Weblogs, Inc., Joystiq.com, or The Vernon Law Group, PLLC. As with any legal issue that may confront you in a particular situation, you should always consult a qualified attorney familiar with the laws in your state.
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Reader Comments (Page 1 of 1)
CNash @ Oct 17th 2008 10:40AM
Such a system would have my support. However, what's to stop people buying used games from GameStop, then sending them to Microsoft for credit? Games would need unique markers on them, or else part of the intent of this system - drive up new games sales - would be lost. People could even play the system by tracking down used games at low prices, then potentially sending them to MS for more credit. Essentially, MS would become an online second-hand game retailer - albeit, as you say, one with access to things like manuals etc.
EdwardA @ Oct 17th 2008 11:42AM
In the post I think the author mentioned that Microsoft would issue credit, not cash. Trying to game the system by buying games at a discount from Gamestop and turning around and reselling them to Microsoft would only net you value of the Microsoft resale library. The least this system would do is make Gamestop more competitive with thier buyback values and used prices.
John @ Oct 17th 2008 1:11PM
Market conditions would force a no arbitrage rule and either the credit would go down or the sale price would go up.
In life there is no free money and even if there were there would be too many hands for you to get some
Vidikron @ Oct 17th 2008 1:33PM
"However, what's to stop people buying used games from GameStop, then sending them to Microsoft for credit?"
Because they would lose money. Have you seen the prices at which GS sells their used games? You actually think MS or any other publisher is going to give you that much for a used game? That mark-ups that occur when buying a used game would almost entirely prevent this scenario you are talking about.
Sir_Drace @ Oct 17th 2008 10:43AM
Good post!
jason W @ Oct 17th 2008 10:52AM
Such a system would make me buy bootlegs. If I buy something I own it. If I sell it to you then its yours. All these added (taxes) will only cost us more. It will make the consumer's price go up just as the economic condition of the world has gone to hell. Yea great idea!
Hunting_phoenix @ Oct 17th 2008 10:55AM
This idea is a moot point. Gaming will go to digital distribution in the future. There is no resale for games purchased through DD.
Therefore, Gamestop's days are numbered.
Monkey Thing?!!? @ Oct 17th 2008 11:15AM
If you call 10+ years numbered
Not so long as the big Telecom companies keep screwing with Broadband, and until a way around their legalized monopolies is found. In fact, DD might decrease from where it is today if they start tightening those download caps
Hunting_phoenix @ Oct 17th 2008 11:30AM
10 years is generous, IMHO. This post has a good point, used game retailers are making money off the publishers. Period.
So, which is easier: switch to DD, or have a resource intesive enterprise for buying back used games? I think DD.
While I lament the immenent loss of the used game marked (and the cost savings I get from it), I am excited by the idea of having my game library available on a device without the need for media. On a message board months ago, I said that I want a portible system with internal storage and DD, so I can have a complete selection of games w/o bringing cartriges. The DSi might do that, and the PSP can.
I also am excited for the end of hard to find games. DD will make it such that anyone who wants a copy pretty much whenever will be able to get it.
The3rdNuisance @ Oct 17th 2008 5:48PM
Sorry for the late response, but Monkey Thing brought up a really good point. The issue with DD isn't that theres no demand or supply, which I can easily imagine ramping up greatly in 3 years time, its the ISP's. You'd only be able to get such and such amount of games for a month before they cut your internet and you can't even log into the program needed to play them.
Its like your car getting fed up with you buying 6 games, breaking your game system and saying "To hell with driving him places anymore."
Arnie @ Oct 17th 2008 10:55AM
Good article although of course the numbers seem too simplistic. I would imagine that a company like Microsoft would like to do this since it results in a better branding of the console itself.
Anyway I really hope that developers start getting better shares of their end product. I would hate to see a model of the Music industry with all its inefficiency and crazy profits to undeserving people be replicated in the gaming industry. I hope gaming companies realize that making games is becoming too expensive and that the sooner a newer and more efficient model of distribution comes out the better it will be for everyone in this business.
Erwos @ Oct 17th 2008 10:56AM
The key point the author seems to miss is that his scheme would essentially hand control over all resales to the publisher of that game. This would kill market competition completely, and simply lead to higher prices for used games. The publishers don't care about dropping prices over time, really, that's a fact of life for them - they simply don't want competition for those new games at a lower price point.
I have very little sympathy for game developers on this particular issue. There is _nothing_ special about games that should entitle them to a forever stream of income compared to any other intellectual property. The "OMG WE MIGHT ONLY SELL 1 COPY WHICH GETS RESOLD 10 MILLION TIMES" scenario is so implausible that it's ludicrous.
Besides, it's pretty clear that games are moving to digital downloads, anyways, and you can bet that "resale" is going to be lost in that particular transition.
Vidikron @ Oct 17th 2008 1:37PM
"The key point the author seems to miss is that his scheme would essentially hand control over all resales to the publisher of that game. This would kill market competition completely, and simply lead to higher prices for used games. "
I don't see how that would happen. They would simply be competing with GameStop and the other countless local used game dealers. There's no way they could literally force everyone to use their system.
Crono (NDF - Knight of the Old School) @ Oct 17th 2008 10:58AM
The fact that its unclear if first sale applies to software or not is scary in itself. If it doesn't apply to software who's to say then that it no longer applies to movies? Does it then become illegal to sell used movies? Or books. Or old newspapers and magazines. Software is governed by the same copyright law as everything else so why should it be treated any different? And if you believe that companies will start offering software for less, you are dreaming. Prices in the market are determined by percieved value, not just cost of creating the product. Same reason your gas is still 3 dollars a gallon even though oil is at its lowest in almost a year or longer. No publishers will use that extra cash to pad their wallets.
Barbara @ Oct 17th 2008 11:53AM
I think the best way for Publishers to do this is reduce the price of the game to say $45. Then license multiplayer for $20. I think this would bring more single player first time sales since some people don't want to play MP. Also those that do and resell the game to someone who want to play MP they get that money too.
I, for one will never buy another Halo game. The single player was fun, but the multiplayer was designed for people who play all the time. I hated it. I also don't have time to play with the map editor. I was glad when I was able to resell it. my feeling was that te money I got on the resale was what I overpaid to get multiplayer and a map editor I would never use.
Jakka @ Oct 17th 2008 11:21AM
I love how people are against DRM while at the same time hating on Gamestop and Used Market.
When I buy a game I have the right to do anything I want to do with it including selling it to Gamestop.It is my property.By telling me I shouldn't buy or sell second-hand games, you're restricting my customer rights as much as DRM does.
Then again who am I fucking kidding, we all know DRM exists to stop used sales rather stop piracy anyway.
AwesomeTown @ Oct 17th 2008 11:23AM
I understand that we are licensing a copyright based on the purchace of the work instead of actually owning it. But why doesn't this apply (or should I say how does it apply) to other goods like say a Dyson vacuum or a Ford vehicle which hold their own set of copyrights in one way or another?
Crono (NDF - Knight of the Old School) @ Oct 17th 2008 11:43AM
Because devices and designs for inventions are covered by patents, not by copyright. Patents are a whole different animal when it comes to legalities.
AwesomeTown @ Oct 17th 2008 12:11PM
Ah, that makes sense, thanks.
Y2M @ Oct 17th 2008 11:39AM
Digital Distribution isn't nearly as close to mainstream reality as many hope. The first issue - we still don't have an overwhelming majority of consumers with access to high speed internet. There are lots of rural areas where dial up is still the only method of online connection, and that would just take too long to download the contents of what fits on a 9gig DVD. Let's not even talk about a Blu-Ray disc. On top of that, not all gamers want to pay for high speed internet, even if they have access to it. Until well over 90% of game consumers are actively using high speed internet, digital distribution will never replace physical media; it will only exist along with it.
Even now, there are problems with Digital Distribution. When the last Call of Duty map pack came out, people had issues redeeming point codes because the servers were simply just too busy to handle the atypical traffic. Throw out a major, full game release like Gears of War 2 and that day one web traffic will grind downloads to a halt. It's a lot easier to just go buy a disc and start playing, and enjoy the hype that 100 people lined up at a store can generate
The last issue is the nature of the consumer. Many people still want the experience of going into a game store and seeing and handling all of their potential options. They like being surrounded by fellow consumers and staff members, and talking about games. That experience cannot be replicated online, which is why brick and mortar stores will not be replaced.
itGOESWOAR @ Oct 17th 2008 11:58AM
I like the idea of publishers and developers including extras for people who buy the game new. I'm not opposed to reselling games from an ethical perspective, I just don't agree with Gamestop's pricing structure.
To me, 5 extra maps FAR outweighs the lousy $5 dollars I would save from buying the game used. If more developers hop on this train, and I suspect they will, then maybe Gamestop will give a little bit more realistic discount for used product. As it stands now, it seems like it would be pretty easy for developers to include content that exceeds a $5 value, thus making the new game the better buy.
Eric @ Oct 17th 2008 12:00PM
I am the only person who doesn't sell games back to Gamestop because it feels like a serious rip off?
They give me what, a $15 trade in on a game that (if it is still relatively new) they sell for $40-$55? To me, it's worth 15 bucks just to have the damn game on my shelf taking up space. Never mind that I may want to play it again/loan it to a friend/ buy downloadable content for it in the future.
If i do sell a game, I sell it to another human, not a store.
Once a friend of mine and I were at gamestop, he was considering buying a sports game used that I had recently bought and wasn't too fond of. They were selling it for $45. I asked what the trade in value was and the dude told me twenty bucks or something. I turned to my friend right there and told him I'd sell it to him for thirty. We both got better deals sans gamespot.
Of course, this isn't anything new. (*^#$(*& middleman.
Vidikron @ Oct 17th 2008 1:42PM
I'm the same way. I generally keep most of my game, but when I do wish to part with one I generally try to trade straight up for another game or sell it to another individual.
SKI @ Oct 17th 2008 4:24PM
There is no guarantee that that used game will sell (that's why direct-sales will net you more money) and some of the used games won't be sold for years and then it will be at $5. If you want to sell, finding someone to buy your game directly will always net you more money.
timby @ Oct 17th 2008 12:29PM
Items are copyrighted, not copywritten.
Mikey @ Oct 17th 2008 1:08PM
One big flaw in your article. "[B]uying a piece of software is actually buying a license to use that software. Therefore, it's been argued that 'first sale' doesn't apply."
This statement is not necessarily true any more. Many districts have found that a "license" such as the licenses for software use really are a sale, no matter what the copyright holder wants to call it. (which you noted in your article). But, a recent Supreme Court case on the first-sale doctrine for patent licenses (not technically the same as the copyright first sale doctrine, but more than likely equally applicable) greatly expanded the reach of the first sale doctrine to licensing situations. I think if the Supremes ever take up this issue, they will find that software "licenses" are in fact sales with no doubt that the first sale doctrine applies.
No matter how you try to twist the numbers, there is no rational reason for treating video games or other software different from other forms of copyrightable material.
Mark @ Oct 17th 2008 2:16PM
I don't resell games anymore. I learned long ago it's a very bad deal for a very different reason. I buy a game for $50 (or $60 these days). I play it, I beat it, and maybe I play it again. Then it sits on the shelf. Then I want to buy something else at some point, so I trade it and some other things in and discount my new game purchase. A few years later, after talking with a friend about some of the awesome games we've played over the years, I realize I really like that game, and I want to play it again. I just didn't want to back then, because I just played it twice. So I go shop around for a used copy somewhere, and find out that the game is out of print, and that it's a high-demand game (or maybe just rare now because it never sold well in the first place), and now used copies run as much as I paid for it new years ago. So to get it again, I basically get burned. Sure, it doesn't happen with all games, but I got burned enough on that with Castlevania SOTN (long before any of the re-releases came out).
Lesson learned. It's more sensible for me to keep the game, even if I stick in a box and put it in the basement, then to sell it, lest I ever decide I want it again. I would pay more money to replace it later than what I get trading it in. I can wait an extra pay period to get that new game...
Daringone @ Oct 17th 2008 3:09PM
I don't buy this crap that GameStop is somehow stealing publishers'/developer's money. They aren't stealing their money any more than Joe's Used Cars is stealing GM/Honda/Pick a manufacturer's money. The only difference is that software can be copied. If they're selling pirate copies, then sue them for that, otherwise it's that thing here in the U.S. We like to call the free market at work.
That said, Gamestop *absolutely* is fleecing it's customers, but that same free market would let anyone that wants to open a store undercut their prices.
CrazySquirrel @ Oct 17th 2008 3:35PM
Here's the thing... The margin on first-sale games is extremely low. I run a smaller game store and we pay usually $53 for a game we sell for $60... that's $7 profit... That's horrible considering how many games you actually buy that DON'T sell.
Basically the only way we or Gamestop (who prob pays less per game I'm thinking around $48 bucks cause they buy so many) can stay open is to make a larger profit in selling USED games.
If a law was passed to stop the selling of used games it would destroy the entire video game market. It would be a disaster. The only reason Best Buy carries games is to get people in the door so they will buy other products while they are there so they can profit.
If Gamestop wasn't able to sell used products it would be terrible for the entire industry and I think this is the main reason why Game Companies don't try to pursue making selling used games illegal.
Also moving to entirely digitally downloading games is defiantly over 10 years away. How many farms and rural areas still can't even get high speed internet. Just because you have it where you live don't assume the whole country has it yet. I do think that physical discs will be cut to about 60% of the sales of games in the next ten years due to downloads though.
The3rdNuisance @ Oct 17th 2008 5:56PM
Haven't read all the comments, so I'll probably be retreading something once said.
What needs to happen is this: Publisher's need to sell the games to retailers for $30-$40 max, the retailers then can make $20-$30 per new game sold. In exchange for this, the retailers can agree to give the publisher a cut of the used games sales. So, the retailer makes 35% of the first sale, and 65% of the second sale, and the publisher gets the opposite. Of course it seems bad to the publishers on paper, but if you get realistic about it, 35% of Gamestop's used profits is a big deal.