100 Million Used Games Traded Per Year
Anyone who’s gazed upon the shelves and shelves of used games at their local Gamestop knows that the pre-owned game market is huge. How huge, though?
“We estimate the overall used game market to be 2 billion in the U.S., with an average ticket of around 20 per used game. This means that an estimated 100 million units of used games are traded in each year, representing around 1/3 of all games sold annually,” said Wedbush Morgan Securities analyst Michael Pachter in a report on the state of the gaming industry.
Wow, a third of games sold every year are traded back? Publisher don’t get a cent when a game’s resold so you’d think that would really hurt them. Not so, says Pachter. “We think that used game sales benefit new game sales by providing currency to gamers with less disposable income, thereby enabling the purchase of additional games. The vast majority of used games are not traded in until the original new game purchaser has finished playing, typically well beyond the window for a full retail priced new game sale. Thus, while there may be some limited substitution of used game purchases when GameStop employees ‘push’ used merchandise upon consumers lined up to buy new games, the vast majority of used game purchases occur more than two months after a new game is released. Other than the potential impact at holiday (when new game lives are extended beyond the typical two month sell-through pattern), used game sales just don’t impact new game purchases very much. To the extent that there is a substitution effect, we estimate that fewer than 5% of new game sales are impacted.”
You have to wonder what effect, if any, GameStop’s pre-order bonuses – such as exclusive demo access or free DLC – have on a game’s sales as well. No doubt publishers arrange such offers for that very purpose. I doubt any of these companies are going to toast to GameStop’s healthy anytime soon but the situation isn’t as parasitic as some would have you believe.
Tips N4G
Source:cinemablend.com
