Legal Niches

Pachter: 100,000,000 Used Games Traded Yearly in U.S. ...New Game Sales Helped, Not Hurt

By gamepolitics

A new report by Wedbush-Morgan analyst Michael Pachter should put paid to game industry whining about used game trades. Although, somehow, we doubt that will happen.

According to gamesindustry.biz, Pachter found that up to 100 million (!) used video games are traded each year in the United States. That figures accounts for a remarkable third of all game sales.

But Pachter also reports that the used game trade has a positive impact on new game sales, not the negative impact so often claimed by a variety of game industry types. The outspoken Pachter comments:

The vast majority of used games are not traded in until the original new game purchaser has finished playing - more than two months after a new game is released - typically well beyond the window for a full retail priced new game sale.

If trade-ins occur at GameStop, they should position the trade-in customer to buy more new games than he/she would otherwise normally purchase. Because the average used game value is around 20 per cent of the new game price, we think that used game trade-ins fuel incremental sales of over six per cent of total new game sales, suggesting that the cannibalisation from the used game 'push' is more than offset by the benefit from used game currency.

Full post as published by GamePolitics.com on June 30, 2009 (boomark / email).