GameCyte

GameCyte attended a presentation at today's MI6 Conference, where the results of a study were revealed about the business of used game sales. The study, commissioned by MI6, involved an in-depth survey of 2,000 gamers in March 2008 by research firm OTX.

Eric Villain (pronounced "Vill-ayne," the man does not tie maidens to railroad tracks), Executive Vice President of Media and Entertainment Insights for OTX, spoke to attendees about the comparative markets for used and new game sales. In 2007, the total market for all video game related sales totaled a whopping $17.9 billion. Of that total, $8.6 billion came from the sale of new software, while used games only accounted for $1.3 billion. The study also indicated that, contrary to the notion that used game sales are hurting the market for new games, gamers who sell their software have a growing tendency to re-invest that money back into games--often times, spending the money on brand-new software or pre-orders. Villain described a subset of game sellers termed "New Game Gluttons"--gamers who will devour new software as quickly as possible, in order to resell the title early in its lifecycle for maximum return, and put the money right back into another new game. The study estimate that these insatiable players account for as much as 5% of the total market revenue. Similarly, game sellers tend to place more pre-orders than any other type of customer--no doubt, in order to be able to finish and sell the game while demand is still high.

OTX's study examined a number of patterns within used game sales in order to help publishers and merchants understand what drives the market. While sellers of used games are predominantly young males--very often, teenagers or children for whom money is a greater concern--the flip side is true for buyers of used games, which shows an increase of female customers--mothers, Villain estimated, who are looking for bargains when buying games for their kids. Action titles and shooters have the highest frequency of being sold and re-bought, although a game with high replay value and extensive multiplayer and social features will tend to stay in a gamer's collection indefinitely. For all three console platforms, the title that most gamers said they'd keep forever was, across the board, Guitar Hero III. Games that get sold, naturally, are the titles that players have completed, or which just plain suck.

The future of the game resale market, said Villain, is a greater presence in online selling and trading. Currently, only 35% of gamers are making sales or purchases online, through eBay, craigslist, Goozex, or otherwise, but OTX predicts a sharp increase for 2008. In addition, the overall marketplace for used games will see an increase this year--during an economic downturn, Villain predicts, more gamers are going to start turning to used games in order to keep their hobby affordable.

The presentation was very enlightening, but we have a number of further questions for Mr. Villain. What about the advent of digital distribution? How can the disparity be explained between the low percentage of used game sales and the high percentage of its profits? Does the increase in online sales spell trouble for the brick-and-mortar merchant? GameCyte will be speaking to Eric Villain tomorrow morning--stay tuned for more details.