More Evidence: Used Sales Benefit The Primary Market

from the basic-economics dept

We've pointed to research in the past that shows how a robust used goods market boosts the primary market, because the buyers know they'll be able to resell the goods at a later date, if they choose to do so. In other words, it makes the purchase less risky and lowers the bar for making that purchase. Yet, for some reason, many content execs -- especially those in the video game space -- continue to insist that not only are used markets bad for the content creators, but that they're bad for consumers as well. Yet, now there's yet another study showing how a robust used market can be quite helpful to a primary market -- specifically in the video game space. In this case, the research done by Game Crazy found that nearly 20% of sales on primary goods were purchased with dollars from trade-ins:

We did a study not too long ago for a very large vendor who we managed to figure out for them 20 percent of their sales inside the first 28 days were paid for with trade dollars. So you got 20 points of their sales that wouldn't happen unless we had a trade business going. And that's specialty retail. Game specialty retail is maybe a third of the channel, 35 percent of the channel. So you got 10 percent of your sales that wouldn't happen unless somebody was out there trading games with your customers.

Now, you could argue that the source is biased, but at least this is one more suggestion of how a used market can help improve the primary market.

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Nintendo Making Peripherals Impossible To Buy Used

from the sneaky,-sneaky,-sneaky dept

An anonymous reader points us to some news concerning the latest skirmish in the battle over used goods in the video game industry. As we've noted, various execs have been freaking out over secondhand sales, despite tons of economic evidence that a robust secondhand market increases the value of the original offerings. In this case, it appears that Nintendo is selling a "Wii Speak" microphone that can be used with certain games, but in order to use it, you need to download the "Wii Speak Channel" which can only be downloaded with a code supplied with the Wii Speak (Update: as noted in the comments, this description isn't quite accurate. You can still use the Wii Speak in the game, but the Wii Channel is needed to use it outside of the game). And here's the sneaky part: that code can only be used once. Effectively, it's impossible to resell the Wii Speak, because you can't use it unless it's been purchased new. This is pretty dumb, as it certainly decreases the value of the device, and will make plenty of folks think twice before committing to it, knowing that it can't be resold.

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