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In the long run, the end of used games and brick-and-mortal retailers will be good for gamers and the video game industry.


Total Biscuit is one of my favorite video game YouTube commentators and he has a really excellent commentary up on used games and why retailers like GameStop are bad for publishers, consumers, and the industry as a whole. (You can watch the video below.)

I find his arguments compelling, and I agree with most of them. Indeed, Total Biscuit's argument that removing GameStop and third-party retailers from the equation will ultimately reduce costs is one I myself made recently.

I know I'm going back and forth a bit on this subject. It's a tough subject to work through, and it's easy to draw contradictory conclusions.

I think there's pros and cons to the end of used games, and these largely come down to timing: what may be a con in the near-term will almost certainly be a pro in the long-term. In the short term we may see consumers on the short end of the stick, but in the long term we'll see both gamers and game developers reap the benefits.

Update: In my latest post I talk about a study that basically supports my conclusions and states that game publishers will need to slash prices by 33% if used games go extinct.

So how does GameStop impact the prices we pay for video games?

Good question.

First off, the retailer puts pressure on publishers to keep prices on digital platforms as high (or nearly as high) as they are at retail.

If publishers don't, they face the risk of losing much needed shelf-space that they currently rely on for the majority of their sales. And they're forced to do this even as GameStop places used versions of the same games for $5 less just a couple feet away. But this is already changing.

Right now people save money on used games, and there's no denying that. But there are unintended consequences---namely, that a great deal of money doesn't end up going to the publishers and developers of these titles and goes instead to support GameStop and an antiquated distribution model. The money is going to a manufacturing and distribution infrastructure that is becoming less and less necessary.

Moreover, GameStop simply has too much influence over the video game industry.

That influence keeps prices higher across all platforms including PC where customers at Steam and other distribution platforms suffer higher costs due to the continued pressure from retail. They also make it extremely difficult for actual price wars to occur since publishers are forced to price their games according to a single retail price point. Competition from online retailers like Amazon is also kept to a minimum.

No competition is bad for consumers. The perceived secondary benefit of used games is as short-sighted as many of the weird decisions the industry makes.

But aren't used games a huge benefit to consumers, just like used items in other industries are beneficial to consumers?

Total Biscuit brings up several counter-arguments to this.

People arguing in favor of used games bring up used cars as one counter-argument.

But cars are physical objects that suffer wear and tear and can't be properly compared to a digital items that don't wear out with use. They're also essential rather than luxury/entertainment goods (at least for most people).

Nor do car companies bear the costs of maintaining those cars once they're sold (or resold). They don't have to maintain servers or issue patches. Video game publishers, on the other hand, shoulder those costs on an ongoing basis.

Books, like cars, suffer wear and tear in a way that a digital product (outside of its corporeal disc) cannot. (And if the disc is damaged, you get to return it and get one that works...as good as new.)

Total Biscuit also points out that whereas music, movies, and other entertainment have business models which provide long-term, sustainable revenue streams (via royalties for online streaming, radio, etc. as well as box-office sales for film and live shows for musicians and so forth) many video games, outside of subscription and F2P based games, do not.

This is especially true of single-player games, and is perhaps the biggest reason we've seen single-player on the decline.

Without the ability to maintain revenue streams like their counterparts in film and music, the video game industry will continue to migrate toward games that can provide that. The prominence of used games and the business practices of GameStop are a huge part of the problem.

This is not just a matter of "greed" on the part of publishers (though for-profit corporations do operate on that principle, even the ones who wisely use good customer service to their benefit).

And it's why we see ridiculous multiplayer elements pop up in traditionally single-player franchises; it's why micro-transactions are becoming so popular. Long-term revenue that goes beyond the first week at retail is crucial to a sustainable industry.

The transition will be painful.

I understand why gamers distrust the industry and why they think that the end of used games could lead to higher prices, but I think they're wrong---not because they should necessarily trust the industry, but because ultimately markets will adjust and only sustainable business practices and pricing models will survive.

The end of music retailers and used CD sales didn't lead to a spike in prices. Now we can buy albums often much cheaper, or buy songs a la carte, or simply subscribe to music services like Rhapsody or Spotify. We have more choices than ever before, and many musicians are actually finding that the age of the internet has empowered them and given them more creative freedom. I think we live in a golden age of music, and I think the end of the old distribution model is a big part of this. Indeed, many musicians have become more independent and less reliant on big music labels.

Digital distribution will help free developers from publishers as well.

This is why we have games like Torchlight 2 selling for $20. It was self-published and digitally distributed by the developer rather than sold on the shelf at GameStop or published by a mega-publisher. You could buy three copies of TL2 for the same price you paid for Diablo III. And yet the developer makes every bit as much on each copy as they would have off of a $60 sale at retail.


(Blizzard sold its digital version for the same price as its boxed version, but you can guarantee this had more to do with deals hammered out with retail rather than because Blizzard was "greedy." I'd bet good money the company would have made even more money and sold quite a few more copies if they'd offered a cheaper digital version.)

Movies (and television) are available to stream or rent online. A digital copy of a film is often far cheaper than a new Blu-Ray despite the relative lack of used discs out there. (Yes, you can find used DVDs and BDs but it's no longer a prominent way to purchase this type of media.) And of course, none of these types of media have anything like GameStop impacting their sales of new products.

So why would video games stay expensive once they entered the digital age in full force when other types of media have seen decreasing prices? Some people point to digital prices now and use them as evidence that a pricing shift won't occur, but they fail to realize that the reason this shaft hasn't already taken place is because the distribution model is still firmly rooted in brick and mortar.

This is why I'm not bothered by the end of used games any more than I'm bothered by the end of used music or DVDs. It comes part and parcel with the digital distribution era which will ultimately empower developers and save consumers money.

Yes, there will be bumps along the way and probably some big ones and yes, consumers may bear the brunt of these for a while. Microsoft may keep prices high for Xbox One games for now, but once retail is out of the equation we'll see much more room for competition. Sony will be able to challenge Microsoft's pricing, appealing to gamers who want a system with cheaper games. Publishers won't be pressured to keep prices high on services like PSN, XBLA, and Steam.

These platforms will be able to lower prices without fear of publishers scattering to the four winds under the threat of retail. Gamers will save more money than they do on used games and more of that money will go right into the pockets of the people who made those games to begin with.

True, there will be problems with gamers accustomed to selling their games on eBay, and certainly I think that the next-gen systems should allow for games to be gifted or loaned out. I think Steam should have better lending policies, for that matter. Even Amazon allows its Kindle users to borrow books from one another (and check them out from digital libraries, including the Kindle Library).

The end of used games won't be a peaceful or happy transition and for a while at least, I suspect consumers very well might suffer the most. But the end-game is a world without powerful third-parties like GameStop strong-arming the rest of the industry into brick-and-mortar prices when we should be paying much less and game companies should be earning much more on the dollar.

Savings will be passed on to consumers, and even PC gamers will feel the positive effects as prices drop even further on digitally distributed PC titles.

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I write about video games, TV and movies.