Could someone explain why piracy and used games do no hurt devs? When people can continuously get games without paying devs, how does that not hurt devs?
As someone who rarely if ever buys a used game, the second hand market in a lot of ways increases the demand for new games, and only in cases where there is an abundance of that particular used game, does the second-hand market negatively impact a new game. Even when the second hand sale does negatively impact new game copies, it isnt on a dollar-for-dollar basis, the extent of its effects is largely based on the value of the original product, before reaching second hand. This reminds me a lot of when people were freaking out over used book sales through amazon. You know what happened as a result? The market adjusted and start selling e-books at a cheaper rate then physical books because the transaction costs were reduced.
What the game industry is currently trying to do is have its cake and eat the whole thing, too. It wants to push out the second hand market, focus on the perks of not needing the physical package, and rely on the internet to help alleviate the costs, while not adjusting their prices accordingly. They essentially want to be e-books, but without any adjustment to cost. This has a chance of completely biting them in the ass in the long run, and because of this we actually may see a very real decline in new game purchases because of this aggressive idea.
As someone who is not a huge fan of the second hand market, because I like knowing who I am essentially giving my "demand" to, I'm not blind enough not to see the intrinsic value in allowing for a second hand market to exist. This is the equivalent of Latin America putting ridicules tariffs on used cars to force people to buy new. It will backfire, and the economic health of the game industry will be the response. The second-hand market grows if transaction costs decrease or if product lifetime increases. The growth of the secondhand market reduces demand for new goods if there are used goods that can be brought into the market(essentially the product has low value of owning or high sell value). But if there is not a ready supply of used goods, growth of the second-hand market can increase demand for new goods, thereby increasing material consumption. Moreover, even when second-hand sales reduce demand for new goods, it is typically not on a one-for-one basis. The extent to which the purchase of used goods replaces the purchase of new goods is shown to be an explicit function of the relative value provided by used versus new goods.
There is a very good reason that we dont have a lot of detailed numbers, that compare the value of a second hand market for new goods; the obfuscation this brings is a desire from companies so they can adjust a consumers expectation and their personal wealth, while also attempting to keep them in the dark.
I'm not sure why you think there is a need to show an indirect benefit of a second hand market to this particular industry. Seriously, do you think a second hand market, specifically, is detrimental to the overall economy/demand?
The game industry is trying to eliminate a market, without properly adjusting their business model or adjusting the costs on the consumer. This will not work the way they think it will if this is truly what they are doing. Steam has the right idea of how to handle this, but they are more of a distributor. Developers and publishers(most anyways) dont have the ability to do what steam does to increase the viability of a lack of a second hand market. If developers and publishers don't adjust accordingly, THQ will be a footnote in what is to come.
The simple realization is, if they get rid of the second hand market, then they better do something major to help adjust the demand for a specific title(2nd hand market is a billion+ dollar industry). You cant be ignorant to a average persons disposable income, in relation to the second hand market; and then try and eliminate that market without realizing you might be alienating a lot of people who essentially lived in that market, without some serious adjustment to they way you do business. Your opinion or POV is a non sequitur. This POV is the assumption that by getting rid of the second hand market, that they are helping their bottom line... I'm not sure what example they are using where trying to bypass the second hand market helped an industry make more money.
There is a finite amount of used games, and the ability to purchase those used games comes from people purchasing new games. The only way for the used game sales to grow, is by the new game itself growing. The onluy real way it is a negative(proof positive) is if the majority of the product has been put in the "used" category, that would mean there is a viewed lack of value with a particular game, which has no basis in believing that the used games is actual forgone growth.
Essentially, you cant ignore the intricacies of supply and demand, and at the same time complain you are not seeing the profits that you want. The idea that getting rid of that market share will result in more disposable income for new games is nonsense.
The only way the second hand markets can depress a good is if the value of the item goes into the negative in terms of the availability of a new good vs used and only then does it become a depression of demand when the value of the product is considered lower then the original value. In every other case that I have ever seen there is an increase in demand from second hand markets, for new product.
When the second-hand price is zero, equations show that increasing the product lifetime always increases the second-hand demand and decreases the demand for new goods. When the second-hand price is positive, however, increasing product lifetime results in increased sales in the primary market. In other words, as long as the market value for a used good is in the positive, and product is still in circulation, demand is increased due to second hand sales.
With digital goods there is no excuse why MS/Sony don't routinely, already, have deep discounts similar to Steam, even with the 2nd hand market. We have been shown nothing that indicates that the big 3 are anything close to being able to handle a market where there is no 2nd hand market.
There is absolutely nothing that shows that the 2nd hand market of video games acts in anyway different then the other industry. There is definitely nothing that even hints that the 2nd hand market is forgone growth of new games. The idea is for the ignorant or purposely manipulative(publicly traded companies).
So if someone believes that the 2nd hand market in this industry is actually forgone growth, then they need to show the numbers to prove why the game industry is a special snowflake. As for piracy, if you look at the introduction of napster, you can see about a 10% decline in music, because of P2P, movies pare probably a bit lower then this, and then PC games are a bit lower then this. As far as console games, I'm not sure there is any data that shows what the average is at, because the console industry doesnt really have economic norms, yet.