The used game controversy has picked up lately as rumors have swirled about what the next generations of consoles will (and won’t) offer. The debate over whether or not publishers should see revenue from the resale of games has been going on, in one form or another, since the cartridge and cassette days, when home consoles finally gave gamers the opportunity to buy, collect, trade and sell their own games.
In April, we covered a story about a new retail website called EKGaming, which was set to adopt a model unique in the gaming retail sector: returning 10% of the profit of used game sales to the publishers. Recently, I had the opportunity to talk to Mike Kennedy, the CEO of EKG, and get his thoughts on this new model. What our conversation became was one that dealt more with the industry as a whole, with the retail of used games serving as little more than a backdrop.
Our talk was heartening, to say the least. Mr. Kennedy is looking to do several things with his new model. While the website’s focus is simple on the surface, (giving back to the publishers), EKG also exists to offer gamers an alternative to the used-game giant, as well as making purchases easier on the wallet.
“Gamestop has become so huge now. It’s damaging the industry. There are so many used games that they sell, and as we all know, publishers aren’t profiting from any of that. So we thought, why not create an online marketplace that would have significantly less overhead than a brick-and-mortar situation, and then use those savings to give back to the gamers on one hand, and give back to the publishers, and potentially the developers, on the other hand.”
That’s not as simple as it may sound, though. There are two sides to this used-game conflict. On the one hand, you have the publishers who hate the used game market because they don’t see any revenue from it. On the other hand, you have a vast majority of gamers who believe that the big publishers make enough money on the sale of new games, and that wanting a piece of the used game market is just greedy. EKG does understand this, and gamers can rest assured that they are top priority.
“We really think that, with the overhead structure we’ve got, we can make it work for everybody. Right now, gamers are at war with the publishers, publishers are sort of at war with the retailers; nobody’s getting along. And they haven’t for a few years. Our model, if it were to become accepted and become the norm amongst other retailers, would ensure that used games wouldn’t be such a sensitive issue. That’s really our goal. Our first priority is the gamers.”
One of the reasons gamers are so high on EKG’s list of concerns is that it is they who stand to lose the most should the used market collapse. If the debate became so all-consuming that it actually hurt the used market, that is the only outcome. Big used retailers like Gamestop would take a hit, but they could still make money from the sale of new games. Publishers wouldn’t hurt: they would still be seeing the money from the sale of new games.
Mike Kennedy stressed a lot of things during our conversation, but one of the things we was most passionate about was how damaging the presence of a giant like Gamestop is. This retailer is so large that it has the power to set the standards that other used retailers need to follow or end up out of business. Because this one business can dictate so much, it no longer makes sense for them to keep all the revenue from used game sales for themselves: the amount of money Gamestop makes off of used game sales in a year is comparable to the earnings of several major publishers during the same period. The number he threw out to me was something like $3 billion. All from used games.
“Gamers should have the right to own, collect, buy, sell, trade—whatever—their games. The used game market, to gamers, has always been a huge plus. Now, there’s this huge debate kind of swirling around whether publishers should have a right to that second-hand money, and it’s getting to the point where, now that there’s one company that’s just so big, it’s controlling everything, that they really do have the right. They really are being hurt, although gamers may not think that they are. There really is some truth to the statement that they’re being hurt by the used game market.”
Mike’s belief is that, in its current state, the used game market is in a grave position. Gamestop has become such a force that the big publishers are, for the first time, considering methods to block out these resales.