Alice posted a note about Mark Rein and how he's been on a tear lately about game second hand sales (and rentals too, I think), why they should be outlawed or at least regulated in a way that lets publishers get a share of the take.
I've actually been hearing developers complain about this for 5 or 6 years. For some reason, I heard about it first in Japan, where a publisher was suggesting we join them in approaching the government on it (we opted not to get involved, for other reasons).
Here's a rudimentary breakdown of the value chain which highlights the problem. (Don't laugh at the figures. I rounded to nearest 5 just to make it simple, and yes, it will vary widely from one game to the next)
- developer 10
- publisher 25
- distributor 5
- retailer: 10
- end user total price: $50
- developer $0
- publisher $0
- distributor $0
- retailer $40
- end user total price: $40
Mark also argued that there's even a loss to the publisher, as the second buyer of the game make also make support calls, return product, etc, etc, thus inflating 'fixed' costs.
At the end of the day, thisn't a discussion that's unique to games. Or media for that matter. Simple supply/demand economics have worked out the value chain, and people short-circuiting that chain pay for it elsewhere. In this case, it's a large increase in margin to retailers and a small savings to consumers; which in turn results in higher prices being sustained. If it were feasible to get away with lower ASPs (as such a 'second hand law' would enable), the market would go there. SOMEONE would take advantage of it, firing the pistol for everyone else.
Another way to think about it: The market has evolved to a certain price point to satisfy all levels of teh supply chain. Let's say for example, that people started grouping together in pairs (or 3's, 4's) and buying a single insurance policy and then saying "if I have an auto accident, I'll just call you to come down, say it was you, and we'll all split the costs of your policy!" - BRILLIANT! Only as it catches on like wildfire, the insurance market reduced by 75% in size, the number of claims stays fixed, in the end rates go up.
No one's saying that consumers shouldn't have choice. Of course they should. But that choice shouldn't be provided by other parts of the supply chain short-changing the developers of the content.
Personally, I feel that the supply chain should be squeezed and made more efficient (e.g. digital distribution, smaller packaging, better inventory management, etc, etc), rather than forcing more efficiency in the hands of publishers/developers.
Valve has chose to address the problem by not selling games. They let you subscribe to a service, steam, and that enables the game to run. Whether you got the game digitally or physically is immaterial. They are in effect saying "if you agree to give us $50; we agree to let you play our game, for as long as you want. But when you are done, you are done. You may not sell the game to someone else."
One way or another, people enjoying games - second hand, rented, whatever - and not paying the developer a single cent for them - is bad for the industry.
It's easy to pick on Epic because their uber-wealthy, but would you say the same thing if it was a small developer teetering on the edge of bankruptcy? Where that extra revenue would make the difference between another 100 people losing their jobs?
My 2c worth on Epic getting their $20 worth.
P.S. Right now I have a strong bias against retailers that is clouding my opinion. I can't find a copy of We (heart) Katamari anywhere, and retailers are telling me "you should have pre-ordered". Pre-ordered? F.U. You are a retailer. Your job is to stock product so that I can come in and buy it at my convenience. If I want to pre-order, I'll do so online and save a few bucks. Meanwhile, stop running your inventory so tight, stock your shelves and I'll be happy to pay your margin so that I can get the game when I want it.
Crap. Maybe I'll just wait for it to become available second hand.