New Court Ruling Could Affect Used Game Business

If it's not the advent of digital game that could kill bricks-and-mortar game retailers, it might be the law. A recent US federal appeals court ruling could impact how used games are bought and sold.

The Dallas Morning News reports that the 9th US Circuit Court of Appeals decided that a software publisher can stop buyers from reselling software to others. This differs from previous rulings in which software programs could be resold under "first sale" doctrine due to the rationale that licensing agreements that prohibit resell take precedence.

According to the University of California at Irvine's R. Anthony Reese, "The first sale doctrine has been a major bulwark in providing public access by facilitating the existence of used book and record stores, video rental stores, and, perhaps most significantly, public libraries."

Pundits believe that if this recent decision is upheld by by other courts, it could impact second-half retailers like Half Price Books, eBay and, yes, GameStop.

For GameStop, used video games are incredibly profitable and make up over 30 per cent of the chain's profits. According to GameStop, used game sales actually benefit new game sales. 14 per cent of new games are bought with store credit gained from trading in used games.

However, do not expect used game sales to cease tomorrow. Other US retailers like Target and Best Buy also offer used games. One legal expert believes that publishers would instead negotiate some sort of agreement with retail instead of simply banning used games.

Court ruling could hurt GameStop's used-game business [Dallas Business News - Thanks NinjaMarion!]

Pic via Scrape TV


    eBay?? :(

    Oh well, it's only America. Hopefully that will never fly in PAL regions.

    These people (not developers, but distributors) are greedy, aside from the advent of exclusive pre-purchase content incentives for kids and parents to fork over $100.00+ per game for day of release gratification and the addition of paid DLC you cant tell me that at any point the consumer is benefiting from the pricing structure and sale of new software.
    How much freaking money do these people need from the sale of one game.

    I have not purchased a new game since 'little big planet'. Its disheartening to get a game for Xmas at $94.00 only to see it for $39.00 3 months later. Why the hell would Australians not want to buy second hand games? Or anyone else in the world for that matter.
    And in terms of stopping Ebay from selling them, thats just mean spirited. Second hand goods is the reason E-bay exists. Its the whole premise.I will paraphrase from Ed Nortons Character in 'The people vs. Larry Flynt':
    Throw a wall up here and accept it and one day soon we are going to wake up and see walls where they never were before.

    George Orwell YOU WERE RIGHT!

    I'm sorry Big Brother I'll buy everything straight from you from now on!

    No more shady side deals and lending to my criminal friends, no more second-hand illegal conspiricies, I PROMISE!!!

    I never understood why people buy pre-owned instead of new, coming from a PC background. Most of the deals I see for pre-owned you only save $5-$10 and when you're already forking out $80-$120, it doesn't seem worth it. I worked at GAME for a while and found it kind of soul crushing because you give people about $15 for their game and then I go out back and put a $70 price tag on it.

    I tried trading in a game, still in shrink rap as it was a bundled item I didn't want. On the shelf, the game had a $90 pre-owned tag. I asked how much they'd give me and she said $16. I got more pleasure simply giving it to someone else who I think used it as a coaster. The lady wouldn't even haggle or see the raw deal I was obviously getting.

    I dislike pre-owned, but it does seem kinda weird that publishers are ragging on the retail stores that sell their game.

    "According to GameStop, used game sales actually benefit new game sales. 14 per cent of new games are bought with store credit gained from trading in used games."

    So... how is it a benefit when game developers lose sales on 5 games that have been returned for credit only to sell 1 new game in return?

    Sure they sell 14% more new games...
    But what percentage of new sales do they lose because of second hand games...

    return five games in exchange for 1.
    Game dev makes profit on 6 new sales.
    Store makes profit on 6 new + resale of 5.
    That could be 5 games less that might have been sold as new; thats almost halving the profit they could have made. Considering the games could be sold multiple times means they might only see 20% as much profit from the new sales than they could have had.

    Or course there is a large amount of people who only buy new and keep their games, etc which will change that number.

    But 14% increase sounds like a load of bullshit to me! I'd bet a large amount of money it causes more than 14% loss, not increase, on new game sales.

    This is really disheartening.
    The games industry is going the way of current music. I can see a bright side here though.

    This greed could possibly lead to the a$$ end of the games industry falling out and pushing games development into the more than capable hands of the fan/independent developers...once again bringing gaming back to its art and entertainment roots.

    I keep my fingers crossed!

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