Used games do the following:
- They allow people at a very low investment risk to branch away from their select few titles and try new games. This means that used games allow the consumer to become part of a market that was once too exclusive for them thus growing said market into a more stable brand for later titles.
- DLC still can be purchased on current gen used games. This means that instead of limiting a single physical copy of a game to just one person in potential DLC sales each title can be resold to the consumer market innumerable amounts of time to get more DLC sales per physical unit. In other words DLC lets publishers penetrate used games for sales more than new games. Used games account for 1/3rd of the business in the industry currently.
- A used market creates a resale market allowing consumers to sell back their old titles. The majority of games resold have been documented to go toward the purchase of NEW games and consoles. In other words the used market is helping the consumers to be able to afford to buy new games and hardware. Remove the resale market and many wont be able to afford new titles or systems.
By eliminating the used market through the methods Microsoft is trying to do they will likely cut down on some piracy and they will guarantee all profits go to them and the developer, but they will be MASSIVELY shrinking the size of their markets as most cannot afford to reside exclusively in the new game market's price point level.
What they have done is effectively ignore the law of large numbers in business. "More coming in than what is lost" is how insurance companies and bank's thrive. Microsoft has bottle necked their market so tightly that they have vastly reduced their market in favor of a near 100% revenue model. 100% of a much smaller market still isn't as good as allowing the HIGHLY profitable used market to continue on their console. 1/3rd of the profits in the industry are from the used market and its completely incalculable how much this will hurt them with consumers let alone developers in the long run.
Who ever came up with this business model was not only blind to resale business markets, but they were absolutely wreckless in ignoring the consumer's reaction to this topic this past year.
Plus if this was a way to attack piracy I'd say it will backfire. The more unattainable you make it for the consumer to receive something they want the more you popularize piracy and the more you empower pirates to find ways to steal and distribute your goods.
Gabe Newell gets that...apparently Microsoft doesn't.
Dark times ahead for both gamers and developers at this rate as the industry is about to lose some money.
