Attempting to Solve the Videogame Resale Conundrum

It's the same tired, whiny story from game publishers and developers that we've heard time and time again: the used game market is killing profit margins and destroying otherwise well-received games and development houses.

The videogame industry is not new.  Entertainment media as a whole is not new (see: books, music, movies, etc). So why is it that the videogame industry seems to be the one persistently pounding on the Dining Room Table of Greed saying that they're not making as much money as they should because of resales?

So how about we stop banging on the table and actually start doing something about it? 

The Irony of the Situation
Why are we even having this discussion?  

The irony of this whole situation is that people purchase resold games to save a few bucks.  Publishers complain that they see $0 from the resale, while shops like GameStop regularly clock in with a 50% profit margin on these resales, while gamers can save anywhere from $10-20USD off the price of a new, sealed game.

Yet, somehow, folks like Bobby Kotick announce that if they had their way, they would up their prices for games (and, as witnessed by Modern Warfare 2's price increase, the PC is the first to get hit - ironic, but an easy target, considering the profit margin's for PC's is huge to begin with).  It wasn't too long ago that $50USD was the norm, but with the PS3 and XB360 we saw a $10 premium for most titles.  But does Kotick secretly work for GameStop's used games division?  Increasing prices even more would in effect drive more folks to purchase used games - at a higher price, thus more profit for used game resellers, so the fact that he even muttered those words is pretty staggering.  Not to mention that his timing of the matter, with a global recession and all, is questionable at best.

Activision has learned how to suck at the teet of online content distribution (see World at War's map packs sold for $10 each times 3), but not everyone has the development prowess, distribution leverage, or fan base to pump out as much additional content that people are will to buy.  But what about the other guys - those publishers and development shops that don't have the moneypower (similar to firepower, just with dollar bills instead of ammo) to profit from such a system?  

Time for Piecemeal Gaming?
Many games contain an immersive single-player campaign that is complimented by an addictive multiplayer experience that keeps the good times rolling.  It would seem that the gamers most likely to trade in their games are those who make a purchase mostly for the single player experience - so how about selling a cheaper, "gutted" version of the game, containing ONLY the single-player campaign?

Before you start kicking and screaming - just think about it. You can buy the single player campaign piece at retail for $30USD, and should you want to give the multiplayer campaign in a few quick clicks you can download it for an additional $20 (all prices subject to change) - and the DLC, of course, requires the disc, so if you enjoy the online experience you would be less likely to trade the disc in.

Obviously, the resale value for an MSRP $30USD game is much less than that of a $60USD game, which may curb some folks from trading in at all ... is a $10 trade in credit really worth it - especially if you spent $20 on the online piece?  Not only that, but the publisher gets the higher profit margin on the $20 spent by the gamer for the multiplayer DLC - which on average is ~70%, and higher for some publishers (whereas pure retail is much less). 

Publishers could then buffer potential resales by jacking up the cost of a disc that has both components (let's say, $65USD), to push gamers toward the more profitable piecemeal solution, while also giving them the option to avoid DLC and purchase the whole package at a premium.

No Multiplayer? No Problem!
But what if the game ONLY has a single player component, and thus no multiplayer DLC? 

Well, the market penetration that would come with a lower price point would most likely increase sales of the title, since it would be within more people's price ranges.  The lower initial price will also take a huge chunk out of a gamers' resale return... as mentioned previously, getting $10 back on your $30 game (which would then be resold for $20-$25) doesn't seem nearly as lucrative as receiving $30 for your $60 game.  In theory, the reduced interest in reselling games would put a squeeze on the resale market as a whole, making the new games more attractive due to their relatively low price and availability.  

In addition, as a developer/publisher, if you really want to make your fan base happy, offer up some DLC that will extend the storyline for those that bought into the game.  An increase in market penetration, assuming your game is well received, means more folks that would be likely to purchase DLC to extend the experience (see: Fallout 3).

In the end, a lower price point for single player games will most likely put a significant dent in the resale market.  

Of course, all of this goes out the window if your game (or, by extension, your single player DLC) sucks.

No Two Gamers are the Same
What it comes down to is that gamers are not a one-size-fits-all, easily satiated user base.  We're a finicky bunch.

In general, however, what drives our purchasing decisions is bang-for-the-buck. As a consumer, is a 10 hour single player only game worth the same $60USD as a game that offers 72+ hours of online gaming bliss?  For most of us, the answer is "of course not".

But not everyone will care about online.  Many of these folks will be the first to throw their game back into the resale market, where it very well may be purchased by someone who will play online for 72+ hours - and pay less for the experience. 

So why not offer up some flexibility that could be beneficial for all involved?