Something that most people don't even realize is that the complaint about Gamestop's margins on used sales isn't even a complaint about the second-hand market, but a complaint about the market inefficiency that allows Gamestop to command such margins as a mere middle-man (although based on your earlier comment about the failures of others who attempted to enter that market perhaps it's a difficult enough market space to be successful in that Gamestop's margins are perfectly reasonable). Of course, the reasonable response to having a gripe with such a market inefficiency is to try to make the market more efficient- in other words to make more and easier resale options available to buyers and sellers, so that there's much more competition between any middle-men involved and they can't command anywhere near as large a cut. The fact that the people who complain about Gamestop's margins tend to be the same people who want to make re-selling games more difficult just shows how little they understand about the entire situation.

It's only significantly altered when market inefficiencies allow middle-men to siphon off sizable amounts of any second-hand sale. If you have an issue with that then your aim should be to make re-sale easier, not more difficult.

Also, don't forget that digital distributors like GOG and Steam are ultimately middle-men themselves. Depending on how contracts are written the amount the these distributors get from each sale may not scale linearly- say, if there's a flat fee on top of a percentage then they end up taking a larger total percentage on smaller sales. Thus all those sales that are being offered may end up giving the actual devs/pubs less money than if a new copy of the game could command full price for longer due to a healthy second-hand market.

You may like it, personally, but it's literally destroyed some game studios because if they don't sell enough in the first couple weeks either the sequel and DLC get canned or worse the studio gets sacked. And effectively you'd have paid the same price if you'd bought it for 40 new and resold it to the next guy for 30. That 40 bucks earlier in the sales cycle means way more than the people who scramble to snatch up cheap 10 and 5 dollar deals. How many games don't get sold for top dollar on PC that launch after September 1st because people know if they hold out until Christmas they can snatch them up on the cheap?

This does two things:
1) It artificially drives developers to move more content than may be "right" (i.e. ideal) into DLC and/or offer more DLC with less substance.
2) Gets risky projects shut down far more easily, because even if something ends up being a sleeper hit then it will have missed it's incredibly narrow, high profitability window.

You wonder why PC gamers don't get catered to? Maybe you don't, but I hear a lot of PC only gamers bitch that they are not. Well, that's why. Many, many PC gamers only buy on a deep discount and they know it's coming within 2-3 months after game release, even for the good games. So now PC gamers get console ports and wonder why life is so unfair. Of course, the industry has trained this behavior in the consumers, it's not their fault, really. But don't fool yourself into thinking your Christmas purchases of deeply discounted items means that much to the publishers and devs, they don't.

GOG purchases, however, are different, they're long tail sales and anything made on the long tail is pretty much gravy at that point. Of course, if you buy Populous off of GOG it's not going to keep Bullfrog open, they were shut down ages ago. Of course, by the time you buy Deus Ex HR for 10 USD over Christmas, Square Enix has already had to make the decisions about whether it was successful or not and whether they're willing to do anything else with the franchise or if they're going to work on "safe" guaranteed return projects instead (i.e. more Final Fantasy crap).

Except the kind of movement your proposing kills the entire industry - it doesn't leave survivors because your proposing that we adopt a system in which the secondhand market is not possible to have - something that as orcishgamer and Darrkphoenix have explained is actually a net, longterm benefit for the industry. So your driving the whole industry up a hill and off the cliff. The boom-bust cycle inherent in this line of reasoning can be exceptionally dangerous for a consumer society which relies on consumer confidence in the stability of the markets. You assume that the busts are small and that the survivors will quickly take over the markets lost by the bustees, but as we've seen all-too-often (even in the computer games industry - think 1980's E.T.), busts can be large and damage the entire market where it takes a very long time for the entire market and sometimes the whole economy to recover.

Darrkphoenix and orcishgamer covered the most points I would've covered here especially concerning GOG games. I'll just add my voice to their chorus and try to explain it a different way. Yes a used games market can lead to a lowering of the game's price over time. But the current system does as well and the price drop is actually steeper despite the fact that on digital systems like Steam the price drops should not be steeper than the old retail system where they had to clear old inventory. Steam, unlike retail, never has to clear out its inventory so why does the price drop so dramatically so quickly? no secondhand market. Without a secondhand market the digital first-sale markets experiences heavier price drops sooner and becomes as steep, if not far steeper, than the old retail market despite the advantages present in digital media. The used game market actually causes the first-sale tail to be longer than it otherwise would be.

The reason behind this is simple - to buy secondhand you can't just wait for the game to go on Steam sale, you have to wait for someone else to finish the game and decide they are never going to want to play it ever again. If the number of people for that is low relative to the number of people trying to buy on discount, the secondhand market is in high demand which means the price for used copies stays at higher price - people who paid full price for the brand new game want to recoup as much of their cost as possible and no doubt have to pay a further percentage of the resale to some vendor for facilitating the process - and the wait time to buy the secondhand copy increases. This in turn keeps the price of the first-sale market higher for longer which means the company makes more from each sale for longer and doesn't have to rely on huge sales bursts in the first few weeks of release. If the game is terrible and the early adopters are all trying to get rid of their copies, then it is no different than the current system which already experiences large price drops quickly after introduction especially for bad games. Further as already mentioned, secondhand markets encourage early adoption and those important early sales since a customer know that if they don't like the game or simply will never play a game more than a couple of times they can recoup at least some of their costs.

This line of reasoning is not more popular amongst the industry because these are all second-order effects which are harder to gauge and measure than first-order effects. So people tend to assume that they aren't there or aren't important. That's the broken-window fallacy to which orcishgamer referred and is considered to be rampant in business and economics. In that parable the second-order effects were hidden costs in the system, while we're referring to hidden benefits, but the parable holds for either. It is true that the parable can be and has been often misapplied. After all second-order effects are, as aforementioned, extremely difficult to judge and tricky to navigate, especially when there are both second-order costs and second-order benefits and one has to adjudicate which are larger. However, historical evidence and the above logic support that a used market far from being harmful is actually beneficial to the first-sale market and should remain so even in the digital realm. Obviously should the used market prove damaging, one could lose the secondhand market. However as it never has been previously and logically shouldn't be now, it does indeed have to be proven that the used market is a parasite rather than proven it is at least a commensal if not an outright benefactor. The default shouldn't be how to get rid of the secondhand market, but how best to adapt it to the digital age.

I would also say that the second hand market is not good for the consumer. It is only a thought, but it is notable that PC games are a lot cheaper to get than console games. And it can't be only the gain by no shipping and physical media (As they still sell many games at redicoulus prices new.

But the fact that Steam, etc is selling some AAA titles with 50% off within two month is astonishing and great. I've bought Batman during Chrismas for a third of it's release price, same for L.A. Noire and even Skyrim got a recent 50% deal. And the publisher is making tons of money of this, because it turns sales up to eleven. I don't see that on consoles.

The only explanation for me is, that it has somethin to do with those games being "unsellable". Therefore I don't really thing that the console market going digital might be bad for the cosumer.

But as my last consoles was a Genesis/Mega Drive, I'm just making an educated assumption.

Actually I address this point in my post above. You are completely right that the deep discounts occur because of the lack of a secondhand market. And Orcish would agree with that too. He pretty much stated so himself. So yes the current system benefits those who wait for sales and would don't resell their games, but it obviously it does hurt those who play right away, pay full price, and then resell. I'm the former rather than the latter, so in many ways I'm arguing my own best interests as I have neither bought used nor resold a game, but if I'm patient enough I can still wait the little extra longer for the 50% off sale and retain my rights as a consumer to resell should I choose to. :)

It's only great for consumers, and then only a certain kind (those without multiple gamers in their homes, etc., then it starts to suck really quickly). These quick sales actually hurt gaming in general and you could pay the same net price in addition to playing sooner by simply divesting yourself of new purchases that weren't outstanding after playing them.

crazy_dave is right, I completely agree that the PC market and lack of second hand is the very reason prices drop like a rock on PC, I just don't think this is overall a good thing for either the industry or gamers in general.

I think there are several things that feed into the quick price drops on PC games, of which the lack of used sales is only one factor. The lack of used sales factors into things by altering the total cost of games, and the effect that has on people's buying habits. This has already been covered in this thread so I won't go into it much further. Other factors that I think play into it even more, though, is the openness of the platform and the incredibly low marginal costs associated with selling digitally. The low marginal costs mean that prices can be lowered pretty significantly while still making a profit, thus reducing the optimal pricing point. The openness of the platform means two things. First, not having the pay a console maker a cut again means that prices can be reduced further while still keeping a profit, again lowering the optimal pricing point. And second, the openness of the platform means there's significantly more competition (e.g. from indie studios), which naturally drives down prices.

Additionally, while I think that the lack of used sales does factor into the costs of new games, I don't think there would be much of a change in the total costs of PC games if, say, one could suddenly easily resell Steam games and the like. The sticker price on new games might end up being a bit higher, but between lower-priced used copies being available and being able to recoup money spent on games (both new and used) there probably wouldn't be much of a change in the amount of money one would need to spend for a given amount of PC games.

A couple of points, yes there are lower costs associated with digital selling, but mosts of the costs even in retail are still game development and a very small fraction are the actual physical packaging and distribution. So the difference between retail and digital isn't as great as most people would imagine and should be far outweighed by the fact that retail has to clear out old inventory to make room for new inventory - the bargain bin.

More competition from indies who no longer have to compete for space in retail stores and only in "mindshare" of the market does lead to more competition. But even then with a few exceptions the types and scale of games developed by indies are very different from AAA games and thus indie, AA (mid-tier), and AAA probably target different sectors and demographics of the market. As such there may be less competition than the simple the additive factor of all the new games released might suggest. However, I agree that the rise of indie and AA does increase competition in the market in general. The payment to console makers may also contribute to the generally higher retention in prices on consoles, but not being a console gamer I haven't given that much thought. :)

So are you saying your main motivation for buying several copies of Skyrim was to support Bethesda, not so much to own and/or play them (or let someone else to play them)? Good for you, then.

Do you do that (ie. buy several copies of the same new game) for most new games you buy, or was that a rare occurence? I'm not talking about re-buying e.g. a GOG game that you may own already on CD, that's a different issue and I have done that too many times.

Do you think most people buying games are like you, ie. they normally buy several copies of the same game?

It will just show the publishers that unlike they think, gamers have only certain amount of money to spend on games. So if they can't recoup part of the money from their older games in order to buy newer games, they'll have to buy cheaper (older), and/or fewer, games. Many people's acceptance for 50-80€ games came partly from knowing that you could get part of that back later on, if you wish.

Some developers and publishers have the right idea, e.g. the article presented earlier here in GOG where some developer was pondering whether games should be cheaper to begin with so that people didn't feel the need to try get cheaper second-hand games. With digital deliveries doing this is easier as the fixed costs are much lower than with retail games.

Anyway, I am not sure whether the price drops faster in digital sites or retail, because in retail there are also clearance sales to get more shelf room for new items etc. Just as one example, I bought an unopened Hitman collection box from local GameStop maybe less than a year ago, including all four Hitman games. The original price was 9.90€ I think, and I actually got it for even less because they had a promotion that if you buy two of their 9.90€ PC games or collections, you get a third one free. So in essence Hitman 1-4 retail collection cost me around 6.60€ in that bundle. These were unused, wrapped games.

Right now, I see Steam offering Hitman collection with less games (apparently missing Hitman 3: Contracts, that my retail collection includes?) for 19.90€. So at least in this case the retail version won hands down, and rest of the Gamestop's 9.90€ PC games and collections seemed quite luring as well, hence it was easy for me to find the other two items for that bundle.

What I normally don't see on retail though are sub-5€ (or $5) games unless it really is some dusty bin of obscure and very old Win3.x edutainment games that the store is ready to throw to trashbin. Maybe retail fixed costs don't allow selling games for only few bucks.

I disagree that it is a bad thing for the industry. Gabe himself has stated that the daily deals were one of the best ideas they had. It actually might be good for publishers or their financial backers to not just look at release sales, but long term sales. I've read somewhere (it was linked here on the forums) that the PC market is becoming more and more attractive again, due to the huge amount of new sales thanks to the "discount system" and DLCs (which are another facet of "single use games").

It certainly changes the perception of "success", as first month sales no longer indicate a good game. But this might actually be a positive development, as it might lead to a longer support.

I think DLCs is a similar attempt as episodic games, ie. making (and faking) the initial costs lower, but making sure you can get the full experience (whatever that means) only if you pay lots of extra (micro) payments. So in the end you may end up paying up much more compared to if they had just sold the full game (including maybe one expansion pack) to begin with.

But margins aren't that much of a factor if your sales increase massively. A 50% price drop can cause more tha three times the sales of a full price game. Which easily eats up the margins, especially if you are selling them through your own distribution service.

And while you are right on "free DLC" as a consumer "binding measure", those paid DLCs are real cash cows. Most development was already done and your profit margin is even bigger than with the base game. And these DLCs are mostly (?) bound to a single account.

True but if you are on Steam, unless your Valve you aren't selling on your own service :) All I can look at is the trends over the last few years: the explosion of pre-order DLC and bonuses and the increased, not decreased emphasis on initial sales period for computer games in general and the PC in particular. The trend has been towards increasing emphasis on generating short term sales quickly and then price slashing to get to the rest of the customer base. As the discount system has evolved this has become increasingly prevalent not less as would expected for a digital distribution system that no longer has to clear out inventory.

Paid DLC's, like expacs before them, can be worth the money depending on the price to content ratio. Besides if DLC and expacs are tied to an account like the game and DRM'ed I see now reason why a user couldn't resell the DLC and expacs just as they would resell an expac disc with the main game in the old physical media days. Resell would again provide a remedy to predatory publishing practices.