Hmmm, yes us publishers must be absolutely thrilled that retailers like GAME take 100% profits on preowned and the fact product lifecycles for full price are shorter than ever due to the rise in pre owned selling, using the recession as an excuse to reinforce his argument seems a little misjudged.

CHACK, do you really think many people could afford to fork out £40 cash every time a new game comes out, especially considiring how thick and fast they come out. Likewise, can GAME afford to run expensive shopping centre leases giving new games a window to thousands of customers, while ASDA happily sells below cost.

I have no problem with Game/Gamestation selling some pre-owned titles. However, the Gamestation in my home town is like a flea market. There's so much pre-owned it seems to be at the expense of stocking a wider range of new titles. Worringly, the pre-owned games are not always marked clearly as such either.

Game/Gamestation are supposed to be specialist retailers, yet the choice of games in this branch was abysmal, especially if you wanted new. I wanted a new copy of the new Naruto Broken Bond game, no such luck! They were also selling Dead Space on the 360 for £40, where everywhere else had it for £20 or less. Or I could have got it cheaper by going for a pre-owned copy. It's as if they don't want me to buy new, I wonder why that is?

In fact the only thing non flea-market is their prices, which are stupidly high considering you can get many of the titles they sell pre-owned for a similar price new by shopping online.

If GAME want to keep pre owned sales I think they should give at least 10% of the money from pre owned sales to the publisher.

Most of the time a pre owned game is five pound less than the retail version.

First question: is this a LEGAL business/doesn't it infringe the developer's and publisher's rights ?
Second question: If legal, what should be the revenues splitt between Retailer/Publisher/Developer ? My attitude: Retail: 30%, Publisher: 70% and developer getting its royalties form said 70%.
Otherwize, this is a business we should legally BAN!

Both the publishers and gamers needs to get over it. Used games, like used cars business is reality and it remain a strong as long as consumers demand cotinues for older classic titles and value price items. Publishers can add value to by diversifying their clients beside large chain of retailers. In addition, they need to identify which titles needs to be discontinued and others which can be republished at value price point. I have been in retail and distribution industry for 20 years where I observed numerous opportunties where the publishers missed an opportunity to maximize its library of catalog items to be reproduced causing used games demand and price surge well beyond the fair value. Here is an idea, re-release the high demand classic games at competitive prices, eliminating the market for used items hence benefiting both the cosumers and themself.

There is no VAT attracted to small (or private) second hand sales. This is so that you can sell me your lawn mower without having to file it on your tax return. This loop hole is exploited in a number of markets including games. The government should reform this when applied to retailers to generate much needed revenue.

Many second hand titles generate more profit than the full priced equivalent. I wonder how "proud" retailers would be of their second hand offering if they had to give up 15% of the cash?

If the goverment did bring changes in the rules on on second hand games, us the consumer would pay for it, in the end.

I'm sorry but games are not some holy grail with unique ownership rights. People need to get off this high horse of thinking that games deserve special treatment.

CD's get traded, does this damage the music industry? DVD's get traded, does this damage the film industry? Cars get traded and yet the motor industry is still doing pretty well (considering the state of the economy). In fact, if people couldn't trade in cars, new car sales would probably be zero. And we're not talking about a piffling £20 or £30 here, we are talking thousands of pounds in trade value.

But more importantly, do we have to listen to those industries complaining about it every week?... No!

It IS a legal business practice, it's in accordance with the CONSUMER'S rights to trade in goods THEY own. Once sold, the publisher/developer relinquishes any rights to further income from that item, unless it is sold under restrictive licenses, like 3DS Max or Spectrasonics software.

Plus, if you consider that for a non-sequel title that has taken say 4 years to develop, the game pays £40. Then, for the sequel, that has taken 8 - 12 months to develop, the gamer still pays £40. So before you talk about how unfair it is on the publishers/developers, just remember the level of exploitation that goes on the other way round.

Think about how people buying from the PSN, got ripped off with GT5P costing £8 more online than it did in the shops, from a business model that was supposed to give the gamer "cheaper games". Publishers will rip of the customer, with each and every chance they get... and have a clear conscience doing so. £3 for a Sackboy outfit anyone?

I tell you, you can spot the people who have never developed a game in their life on these pages.

i love pre-owned games... sadly my experience is that 90% of new games are simply 'money makers' for the publishers..with little content and no re-playability:( i consciously seek out older games that are better made so i dont complete them in a day or so

One of the big things affecting the sale price of a car, is that car model's depreciation rate, car manufacturers even work to keep the depreciation rate low, so as to sell more new cars, since the customer doesnt want his new car to be worthless in a couple of years. Same is true for games, can publishers really keep game RRP's at £35 - £40 and tell the customer that it has no value whatsoever, also, like I mentioned earlier, can many people afford to pay £35 - £40 CASH every time a game comes out. Therefore, without pre-owned, new game sales would most definatly drop, unless publishers cut RRP's to below £20 per release, so will the publisher really be better off? Likewise, while the supermarkets plug about 20 new release titles (note, not back catalogue games) for pennies above cost (and sometimes below cost) to push grocery sales, and high street retail cannot make profit to fund their store and staff costs from either new (supermarket competition) or pre-owned (because Mr Publisher doesn't like it), the games market could well collapse. So pre-owned is vital if this industry is to survive, or a drop in RRP's and stop allowing supermarkets to destroy margins, but that will not make the Publishers better off. Finally, note, the reason pre-owned has not taken off as much for DVD's, CD's and Books, is that the new price for these tend to be below £10, the price new games will need to be for pre-owned to die out.

LeeC, sorry I didn't realise developing titles was a prerequisite to commenting on a commercial issue. I have sold millions of units of consumer goods into global retailers over the years, can't I have a say too (please)?

Good point about second hand cars but remember they attract VAT so at least the UK tax pot benefits from their re-sale. There is no situation in that market where a national retailer can make more on a second hand model than it's new equivalent from day two of its life cycle.

I don't think the publishers have to get a slice of the trade in market but it would be good to know the industry was paying its dues on all transactions.

PML, remember though, with cars you do not have supermarkets running these off at low margins, car manufacturers protect the car sellers so they can make a resonable profit on new sales, the same is not true though for games, so if publishers want a high street presence, and still allow supermarkets to use them as loss leaders, pre-owmed HAS to exsist, either that or publishers will either lose high street, and hence only promote the top 20 cherry picked by a grocery store, or start contributing to GAME and others high street rent, rates and staff bills.

PML, you have commented twice on this thread saying that used games are not subject to VAT. Both times you were wrong. Rather than spouting rubbish I suggest you read HMRC's VAT Notice 718, which details the regulations regarding VAT on second-hand goods. Googling 'HMRC Notice 718' will help you. All VAT registered retailers pay VAT on the margin between the purchase and the selling price of any second-hand game. My company developed the Game Guide Epos system which is used by most of the leading independent specialist retailers and mini chains and it accounts for the VAT on second-hand goods using the Global Accounting Scheme.

As to second-hand sales, without them I doubt that few specialist games retailers would still be in business today, leaving the consumers the choice of online retailers or grocers for their games.

When sitting on a branch it is often best not to deploy the saw until you clearly understand where you will fall.

Thanks for helping out Chris. Strangely I am trained by the Forestry Commission in the use of a chainsaw whilst climbing so I should really know better :-)

The small but very significant difference in the clause you point out is that the retailer pays VAT on the margin not the full sales price of second hand titles. My point that they don't do it as a handy Credit Crunch beating service still stands.

Allow me to illustrate:

Full Price AAA Game (£49.99 SRP)
£39.99 sales price - VAT @ 15% = £34.03
£34.03 - Cost @ £23.40 = £10.63
£10.63 = 31% margin

Second Hand version AAA Game
£29.99 sales price - cost at £18.00 = £11.99
£11.99 Margin / VAT at 15% = £10.43
£10.43 cash margin or 37% margin

Sorry I missed the HMRC Notice and thank you for pointing it out, I am off to give myself a good birch whipping.

Lol.

But I wasn't really arguing the moral standpoint, especially not an expectation that retailers offer a "Credit Crunch beating service".

Retailers are in business to provide a living for employers, employees and of course shareholders, if they have them. They run shops constantly juggling income with rates, rent, wages, insurance, inventory and taxes to keep their heads above water and when they get it wrong they become a brief headline on their way to the liquidators. The first casualties of the 'credit crunch' were the retailers who didn't trade in used games, but even now, specialist retailers are feeling the squeeze.

When it comes to survival, the moral argument goes out the window and unless the The Copyright, Designs and Patents Act is changed there is little that can be done except for developers to come on here and claim that rich retailers are 'stealing' the food from the very mouths of their bairns.

Let's face it, if used game trading was outlawed, there would be fewer developers on here as most grocers only sell the top 10 or 20.

What none of you have commented on is the fact that pre owned games are keeping the prices of new releases artificially high. If the same amount of profit from the sale of a pre owned game also went to the publisher the price of new games would plummet down below that of pre owned games. The price of new releases is only high because the publisher is only getting a small percentage of the profit they are actually due. The publishers could put an end to it immediately if they all clubed together and forced a not for resale agreement on the retails in return for lowering the price whilst at the same time increasing the retailers profits.

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