GameStop fights back on used-game sales
Buying and selling used games might not seem controversial to the average gamer, but it's becoming a huge issue in the game industry.
Essentially, a small but growing number of game makers are complaining that they don't get a cut of the profits from the sale of used games.
Instead, middlemen such as GameStop are making a killing off the blood, sweat and tears of game developers and publishers.
But GameStop is getting ready to fire back and make its case that, on the contrary, used games generate a huge profit for game makers.
Here are some internal numbers that GameStop chief executive officer Dan DeMatteo shared with me during an interview last week:
Just 3 to 4 percent of used games purchased are ones that have been released in the last 90 days.
So while Epic and other publishers fume about cheapskate gamers buying used copies of Gears of War 2 on the day of release, that's not what's happening, by and large. The used games that are sold are mostly older titles that have already gone through 98 percent of their lifetime sales before hitting the used bin.
Eighty percent of people who trade in a game turn around and use the money or credit to buy a new game. So the used-game market is directly fueling the new-game market.
When gamers buy a new game, on average, they expect their game to retain about $20 in trade-in value when they get tired of it and decide to sell.
So they're willing to put up with the $60 price because they know that they'll recoup about one-third of that when they sell the game in a few months.
Now, GameStop knows that those internally generated numbers are going to be seen with some skepticism in the gaming industry, which is why the company plans to commission an outside research firm to examine the topic independently.
When that's done, GameStop will begin a push after the holidays to explain to game makers why used-game sales are beneficial to the entire industry and not just GameStop.
Beyond the statistics, DeMatteo says, game makers should be reluctant to take away something gamers like.
To illustrate: Some games now come with one-time-use codes to download extra maps or player rosters.
If the game is re-sold, the second owner must pay a fee to the publisher to get the extra features.
In other words, purchasers of those secondhand games ultimately pay full price to get the full game.
And they pay the extra price to the game maker, rather than a retailer like GameStop.
But obliterating the market for used games, which is what these pay-to-play proposals would do, would likely generate a huge backlash, DeMatteo says.
"At the end of the day, the consumer is going to fight this more than me," he says.
"I know I have an army of millions of people behind me with swords in hand ready to attack that."