Opinion Piece - The future of used videogames sales

Tue, 5 Oct 2010 13:40:04 -0700

Blockbuster is dead! Long live Netflix. In late September, while Blockbuster was filing for bankruptcy protection (1) , Netflix was entering the Canadian market (2). Although the timing of both these events might be purely coincidental, it is clearly a sign of our times and of our digital virtual good future. Netflix Canada, unlike the service it offers in the U.S. is only streaming technology to deliver the movies, bypassing the “inefficient” Canadian postal system.
What does this mean to videogames? Buying videogames online and streaming content directly to PC or consoles is not new; Steam and Xbox Live have delivered these services for years. OnLive is the newcomer and only time will tell if they are able to overcome their initial pricing formula challenges (3). Although the death of the retail industry has been predicted many times before, it has not happened yet. The sales of these virtual goods have not deterred people from buying videogames at retail stores. I would contend that one of the reason people purchase videogames at retail stores is to have the opportunity to lend them to friends or resell them once they are finished playing them. In fact, GameStop earns a significant portion of its revenue from used game sales (4), and companies such as BestBuy and Amazon are now offering these services.
Some videogame publishers are now trying to make a dent in this secondary market, by requiring people who purchase a used game to purchase an unlock code to play online. This strategy, in my opinion, is simply inappropriate, as it ignores the root cause for the existence of the secondary market. In addition, this strategy only allows publishers to recoup money from the consumers willing to play the game online. What needs is to happen is to allow consumer-to-consumer online transaction of used videogames.
The smart publisher will realize it is in their best interest to guarantee revenue from the sale of used videogames and build the infrastructure to support it. Consumers need to have the right to transfer ownership of any goods they purchase, whether virtual or not. I foresee a future where people will be able to sale their virtual videogame on Steam, transferring ownership rights, all the while allowing the game developers to earn a portion of revenue from that transaction, bypassing used videogames retailers like GameStop.
The day this happens, don’t be surprised to read about GameStop filing for bankruptcy protection.

written by Stephane Morichere-Matte

(1) Blockbuster seeks U.S. bankruptcy protection, September 23rd 2010, http://www.cbc.ca/money/story/2010/09/23/blockbuster-bankruptcy-protection.html
(2) Netflix launches Canadian movie service, September 22nd 2010, http://www.cbc.ca/money/story/2010/09/22/netflix-canada.html
(3) OnLive nixes monthly fee for streaming games, October 5th 2010, http://news.yahoo.com/s/ytech_gadg/20101005/tc_ytech_gadg/ytech_gadg_tc3816
(4) Game retailer GameStop misses earnings target despite huge used-game sales, August 19th 2010, http://venturebeat.com/2010/08/19/game-retailer-gamestop-misses-earnings-target-despite-huge-used-game-sales/

CVA are back on May 18th 2011!

Thu, 5 Aug 2010 17:02:22 -0700

Catchy Consulting is proud to once again be associated to the hugely popular Canadian Videogame Awards to be held on May 18th 2011 at The Center for Performing Arts in Vancouver, BC.

CVA G4 TV Special is Live!

Mon, 31 May 2010 21:50:34 -0700

Catchy Consulting was contracted by Reboot Communications to be responsible for the Event Management of the 1st Annual Canadian Videogames Awards, you can watch the special here.