Analyst: Industry Will Disintegrate Without Used Games
In the latest episode of Pach Attack, Pachter explains why used game sales barely take any money away from console manufacturers and that eliminating them from the market can have disastrous consequences.
“I think the industry will disintegrate; I think there will be no more video games if next-gen consoles don’t support used games. You hear that, Sony and Microsoft? You have to support used games.
“Why would the next-gen consoles not support used games? Sony doesn’t sell that much software; maybe 10% of sales are Sony products. Everything else, the other 90%, is third-party. Sony isn’t going to help its overall sales that much – let’s go with 1%, 2%.”
Pachter continued to crunch his estimated numbers to clarify how little money is lost to used game sales:
“What does it actually cost [publishers] if people trade in used games and some people buy used games instead of new games? My guess is 5% of software sales, probably.
“Because most people don’t finish new games in a week. Most people take thrtee weeks to a month to finish games. Not everybody buys a game the first day. You probably don’t get that many games traded in; in reality about 40% of games get traded back in.
“So what’s the cannibalisation? I’d say probably 5%. I’d say about 5% of the time somebody buys a used game instead of a new game, that costs the publisher a new sale.”
I wonder where PC gaming fit into this picture, given that with the advent of digital downloads and DRM, there are undoubtedly far fewer used game sales. Is Pachter implying that if consoles don’t support used games, PC gaming will suffer as well?