The proposition that ex-pirates on average pay more and consume more later on is kind of surprising and very doubtable. I would be happy to see sound statistical footing for this claim. I can say for myself that I almost never pirated and still consume and pay for a lot of games and movies.

They could fight the second-hand market by trying to make their games so good and replayable that more and more people want to keep those games for the first few critical weeks/months. Then the ones waiting for the cheaper second-hand copies would have less options to choose from, and possibly end up buying them new anyway (from sales or not). With piracy, there is no such option as the pirates don't have to wait as long as the first pirated version is available.

But as many have said, this is becoming more and more an irrelevant point in PC games. The only PC games I would buy second-hand nowadays are some very old rare games with only CD-checks, last such game was Terra Nova: Strike Force Centauri. In DRM-sites second-hand sales are prevented, and it is easy to understand why it isn't allowed in DRM-free sites either (because there is no DRM to make sure the seller doesn't keep a copy as well, ie. it turns to piracy too easily).

For consoles, this is still a relevant issue, but of course it is against the publishers' interests to allow second-hand sales at all there either, just like the fact too many people play their games for too long (instead of buying more games), which is why they are also saying current games are "too long", and they are trying to make games shorter. They sugar-coat this also as customer service, while their only reason is to push the development costs down, and try to push people into buying new games more frequently.

Much more people are, even without piracy. Take for example the people who grew with console games, be it Atari VCS, NES, SNES, Playstation, whatever... While piracy existed in most of those systems, it was still quite rare in comparison.

I found one source in English

http://www.geek.com/articles/geek-cetera/movie-industry-bins-report-proving-pirates-are-great-consumers-20110720/

don't care to look for more. There were plenty articles about that in Polish press and Internet, btw. Really? I can assure you that 100% of cartridges for NES and ATARI were pirate here. Well, we had pirated console sold in oridinary stores. Local equivalent of NES was Pegasus.

But on the whole, worldwide, much rarer. Naturally, the case might be quite different in places where one original game would cost the same as whole year's salary or no original games are even imported (I don't know if this applied to Poland in the 80s), maybe I was mostly thinking of times and places where most people could actually afford (legitime) gaming.

Same goes even today. I know lots of people who own PS3, XBox360, Nintendo Wiis, from small kids to grown-ups... and while it is apparently possible to somehow pirate at least some games for them, none of these people I know have even a single pirated games for those systems, probably because it is more hassle than it's worth. For PS One in the late 90s, there might have been some piracy here (ie. people bringing pirate copies of PS One games from their trips to Estonia or Thailand for their personal use in their modded console ), but I'd say even that wasn't that common, and that was ultimately blocked when selling console modding services was made illegal here.

While on the PC side (or in the Atari/NES era e.g. the Commodore 64 crowd), piracy was and still seems to be the norm. Maybe even to the point that for many people all their console games were original, while all the PC games for the same person were pirated, just because they easily can.

PC piracy may have lessened somewhat with the fact that you can easily buy legit PC games only for a few euros nowadays (Steam, GOG etc.), making piracy somewhat less attractive, unless you are mostly after the 50-60€ new games.

That logic is seriously flawed. Over the past five years I have more than ten times as many games as I have played (all platforms combined). Yes, a lot of them have been on sale, but I have probably bought 150 or so at full price. What does that tell you? I own four copies of Skyrim (Pc x 2, PS3 x 1 and Xbox x 1). Two of them were bought at full price. Is it so that I didn't support Bethesda?

I think a more important question is, 'is the consumer really harmed by a lack of a second hand market?".

I think piracy and the second hand market impair game developers and publishers from producing higher quality products and being more competitive when it comes to pricing. I also think that PC digital distributors like Steam have taught us you don't need to buy used to get competitive pricing.

I don't even like how Steam controls my access to the games that I buy there, but the pricing during sales is so competetive, that it's worth it to me to 'own' a game for what I could pay to 'rent' it or buy second hand on a console. The price I pay for those games are so little that I don't really care that they have no trade in value. And fundamentally, I'm not buying a printed book that I can resell, I'm buying a software license, which have never had clearly established resell value or redistribution rules.

Future consoles will work like steam. Your disc or download will be registered to your xbox live ID (or whatever). You can play the game on any console you want, as long as you are logged in. You may even be able to rent games that have licenses that time out or proprietary logins to gain temporary access to a game disc. You can play your game on your buddy's machine, but you have to use your login. You may even be able to buy used discs, but you will have to pay to activiate it to your login. But you won't want to buy used anyways, because the games you really care about, you buy at release; the one's you don't, you wait until they are 5 bucks on xbox live.

Doing it this way seems restrictive, but it puts the used game market share in the hands of publishers and developers, which hopefully leads to better products and services, and still gets the consumers the 'used game' price point they demand. The change may not come all in one announcement, but 5 years from now, I bet this is how it works.

The amazing amount of diversity and sophistication we currently see in the gaming market today, compared to what it was 30 years ago, is a direct result of the enormous capitalization made available by consumers to fund that growth. That's how capitalism works, and it works really well most of the time. You incentivize innovation by the opportunity to accumulate wealth. Capitalism tends to break down, or at least become less efficient, when instead of rewarding innovators (publishers and developers) we reward people who simply stand in the way of transactions, based on the innovations of others (used game sales).

But it's good for consumers too. The 'market' recognizes that there are a substantial amount of people who will not pay $60 per game, but will pay $5 or $10 per game. For consoles, that market is currently being served by used game vendors. It's not that the publishers want to destroy that market, they just want to reap the rewards of it. So the people currently buying used games will just be served by a different vendor while receiving a similar deal. This puts more of the money from that market into the hands of the innovators, rather than middlemen, which then helps fund the growth and advancement of the games industry (which necessarily includes the accumulation of wealth for innovators in the industry). Low budget gaming will not be harmed by this change.

Now, people who borrow games, pirate games, steal games, etc....those people will be harmed by this change. But those people aren't consumers; and you're right, the corporations don't care about non-consumers.

Fundamentally, though, this change will be market driven. If the primary market truly cannot serve the current second-hand market, then the industry will adapt or suffer. We already have evidence from the PC games market that adaptation is realizable.

And somehow came about with used game sales in full force, which shouldn't have happened according to you.

Which ignores the fact that a thriving second market drives a larger first-sale market. After all there can only be a huge number of copies sold on the second hand market if there were a lot of copies sold in the first-sale market and the ability to recoup some expenses for the person selling their copy allows them to buy more brand new games. Strong sales in the time frame are the most crucial for a game publisher and both previous second hand sales and the knowledge that a game can be sold second hand can help drive those important sales.

Not everything is market driven and not everything market driven is good for the overall health of the market itself - i.e. one can maximize short term profits at the expensive of long term growth. Over the short term the market drives itself in a particular direction up hill ... and then off a cliff.

Now obviously with purely digital media one should probably draw a distinction between DRM and DRM-free merchandise. By the nature of how a purely digital transaction works, wherein one copies the product then deletes it, with a DRM-free the seller has no guarantee that ownership was transferred rather than copied. But if a seller has DRM control, especially account base DRM control, then one has by virtue of that system ensured that ownership has been transferred - at least as much as would be the case for transference of a physical item. At that point, just like with physical merchandise (which much of the console AND PC markets still are), consumers have a right guaranteed by law to resell the products they have bought. And the game publishers emphatically do not have the right to change that regardless of the effect on short term profitability. They do have the right to offer their own services to compete against eBay, Amazon, Gamestop, etc ... They do not have the right to kill the used game market as much as they might argue otherwise.

Yes, how can it not? The harm is to the first hand buyers that do resell their titles (after all they cannot be that rare, or there wouldn't be a big second hand market, now would there? Obviously it's not the same copy of BF3 that's being resold 1 million times serially).

Just because it got to where it is to day on yesterday's practices, doesn't mean we can get to tomorrow that way. Sure, we could survive with a second hand market, but it contributes to stagnation. A secondhand market that drives a first primary market by recapitalizing consumers is fake growth...like a snake slowly eating itself. Some companies will try to maximize short-term profits at the expense of practices that make them not survive long term. That's why they die and give up their market share to survivors.

Don't get me wrong, I'm not for DRM or anything that interferes with access to content I purchase. I'm a GOG customer because I find the DRM free products to be superior products. At the same time, I think industry should be concerned about growth. Strategies that put money into producers and primary distributors are better for healthy growth. Rather than have you trade in an old game for a five dollar credit towards a ten dollar game, why not just buy that same game for five dollars outright. The monetization works out the same and the growth is healthier for the industry.

If you let everyone sell any license key for all the software they've ever purchased, I think that would adversely affect first sales in the extreme. A lot of people would just wait for the price to come down in second hand sales, which profit the developers nothing and contribute to slower growth of future projects.

The right of first sale is tricky when it comes to software. Do you guys think you should be able to sell your gog purchases to others? How many people would come buy anything from GOG if people were selling thier used licenses for like a dollar a piece? The right first sale works for a lot things, and is an important consideration. I'm just not sure it can work exactly the same way for software. Software doesn't wear out and need to be replaced. There's no 'final' owner, because it can be infinitely transferred. It just really screws up the supply side of basic economics.

What the fuck are you talking about? Seriously. Growth has nothing to do with the second-hand market (or lack thereof). Eliminating the second-hand market isn't going to magically provide people with more money to spend on games. They'll still have the same (limited) amount of money to spend on games, there will just be fewer games played overall. If anything, removing the second-hand market removes wealth from the overall population, as it amounts to the forcible removal of property from the market (or put another way, the forced destruction of wealth). Removing the second-hand market doesn't provide game-makers with more money, it just results in game buyers having fewer games.

I'd say precipitate8 probably doesn't recognize a broken window fallacy when he/she sees it.
They already do, why do you think Steam sells 3 month old, AAA titles for 10 USD during Christmas? That's what removing second hand did to the PC market. As that happened a lot of folks fled to consoles. Do it to all markets and just see how bad it gets.

EDIT: And on a final note, I'm sick of this "second hand sales are dominated by one big company now and are not person to person", first of all I fail to see why this matters as it's the same net result as person to person and second of all I think people stating this are literally lying, game swapping among friends is incredibly common with console games.

No, game companies need to focus less on used games, piracy, and competition and more on the consumer.

Used games aren't hurting the industry, terrible publishers are.

I'm looking at you EA/Activision.

Obviously, you guys feel strongly about this, so all I'm going to say is that yes, there is a limited amount of money in the market...where that money goes during sales is somewhat altered by the second hand market. I would personally rather pay lower prices for older games that had no resale value so that money was distributed to the developers and publishers rather than vendors that purchase used games. That's what Steam and GOG essentially do. I like buying 3 month old AAA titles for $10, and that the money is split between Steam and the publisher.

It's an interesting phenomena, though.