Mr. Dyack states that “used games actually increase the cost of games” if more consumers end up buying games used. He explains this further by describing what’s called the “revenue tail” that greatly helps with bringing revenue in to the developers after a game has had its opening run.
“There used to be something in games for 20 years called a ‘tail’ where say you have a game called Warcraft that would sell for 10 years. Because there are no used games, you could actually sell a game for a long time and get recurring revenue for quite a while. Recurring revenue is very key.”
“Now there is no tail. Literally, you will get most of your sales within three months of launch which has created this really unhealthy extreme where you have to sell it really fast and then you have to do anything else to get money.”
This last statement is in regards to the expansion of multiplayer and downloadable content (DLC) that has become a common business practice today. To put it simply, games have such a limited life window and these trends are simply to get back that lost money developers don’t see anymore. This could shine some light on past stories regarding recent business practices from BioWare and Capcom.
“I would argue, and I’ve said this before, that used games are cannibalizing the industry. If developers and publishers don’t see revenue from that, it’s not a matter of ‘We’re trying to increase the price of games to consumers and we want more.’ We’re just trying to survive as an industry. If used games continue the way that they are, it’s going to cannibalize. There’s not going to be an industry.”
Now that’s a scary thought. What do you think? Could used games really destroy the gaming industry if these trends continue? Make your voice heard through the poll and comments section below.