Sunday, 5 April 2009

Contention: Used

Long absence, I know. Same reasons as usual, so screw giving you the usual excuses; my handful of regular readers will have seen them all already, and any new readers won't have suffered the downtime. Maybe "suffered" is too strong a word anyway.

Instead I'll get straight into what I want to talk about today: the controversial hot-button issue of pre-owned videogame retail.

It's an interesting debate, what with there being three distinct camps of conflicting interests. There's the publishers, that would quite reasonably like the consumers buying their products to actually contribute to their finances. Then we have the high-street retailers, themselves concerned with earning enough money to stay afloat. And finally there are the consumers, understandably in favour of lower price points for videogames - an extremely expensive hobby. Obviously there are overlap groups - consumers and publishers satisfied with the existing system, and even consumers backing the publisher perspective - but they can still be split into these three positions, so for argument's sake I'll stick to the publisher/retailer/consumer distinction.

To start with, let's look at the publishers' perspective. If retailers sell games - games still fresh on the market - at lower prices pre-owned than new, naturally their customers are disincentivised (if that's even a word) from buying the brand new copies. Some of their arguments have gone as far as likening pre-owned sales to digital piracy, and not without justification. If consumers are playing videogames without funding their development in any way, what - from a publisher's perspective - is the difference between resale and theft? Publishers therefore often take a stance directly opposed to any and all pre-owned sales.

Consumers, meanwhile, are opposed to the current system for precisely the opposite reason. Retailers make huge margins of profit on pre-owned games - several times more per disc than new stock. Customers in all areas of the second-hand system often feel shortchanged, believing that they could easily save more on games (which are far and away the most expensive popular media), or at least be given greater sums of money for trading in their used products. This in turn conflicts with publisher interests - if pre-owned games were even cheaper the incentive to buy new would be yet further diminished, while if customers were reimbursed more generously for used games there would likely be a sharp increase in the volume of games being resold, stealing important shelf-space from new games.

In the middle of this debate, voices barely audible under the clamour of the other parties' advocacy groups, and struggling to remain relevant with the ubiquity of Internet shopping (can you even remember the world before Amazon?) and the rise of digital distribution systems like Steam, sit the high-street retailers. From their perspective, pre-owned sales are a must, as are the margins they make.

I find myself compelled to side with the retailers on this issue. The compromise they have reached and continue to operate is as satisfactory to either opposing camp as it could ever be. I am sure I don't need to patronise my readers with any further explanation of the existing workings of used videogame retail, so instead let's qualify that statement by examining the alternatives.

Publishers would argue that without pre-owned sales taking their rightful cash games could be priced lower, benefiting consumers and publishers alike. This argument seems to forget that retailers exist at all, or at least unfairly take them for granted. If retailers are not making their used game profits, they have to find some other means to make that money - the shelf price of new games. At best this would have new games around the prices at which they are currently sold, which would hardly be beneficial to either the consumers unable to spend so freely or the publishers trying to attract these consumers. The consumer argument against retailer margins themselves can be discounted for the same reason.

The only alternative is to completely eliminate high-street retail from the system, leaving digital distribution and online stores in its place. Aside from people such as me who would decry the loss of hard copies (though online retail would mitigate this if it remained sustainable), there are - to put it lightly - a lot of jobs dependant on high-street videogame retail. The direct-to-consumer digital distribution future is a wonderful ideal to aspire to, but the economic reality is that we cannot simply switch to it overnight, to say nothing of the logistic reality.

The system we have now doesn't over-incentivise the sale of pre-owned titles, gives lesser-known products longer shelf-life (would Beyond Good & Evil 2 be in production without used game sales I wonder), keeps the sales of new games flowing through trade-in deals and giving hard-up consumers more spending money, and gives sentimental fools like me our precious boxes and manuals.

It isn't perfect for any one of the parties, but such is the nature of compromise.

0 comments: