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This is how a second hand digital copy market works




In recent weeks, players have offered the tried Red Dead Redemption 2 a long-awaited title of Rockstar games, for around $ 60. Despite its popularity, the secondary market is already available for around $ 50.

However, only individuals purchasing physical media can benefit from this price erosion, as a secondary market for digital game copies simply does not exist.

But what if we had a secondary market for digital copies of video games? How would it work, what would it look like and who would benefit most?

This month my family bought a record player and we had the privilege to visit a local vinyl market in Vilnius with my wife. Lithuania. We've just bought a few additions to our small collection: a few "best of" records for a few euros, and some of the more expensive and well-maintained original releases by Queen and The Rolling Stones.

The earlier record was a few euros more expensive than the Rolling Stones ̵

1; probably due to the recent Bohemian Rhapsody film.

Still, it was an amusing and confusing experience: a remarkable finding, such as some 30-40 years old items, stores some, if not most, of their value in the secondary market [niche].

This reminded me of an industry I am currently working in: the gaming ecosystem. It also has the factors of storage and price fluctuations, but only for the smaller part of the ecosystem: the physical disks.

How Prices Affect

For many titles, it can take only a few weeks after they start to see a price erosion on the primary and secondary markets. For others, however, a price erosion may take years: Rockstar Games offered its GTA V only mid [201] [201] [201] for $ 30, after spending more than four years sold for $ 50-60.

Witcher 3: Wild Hunt a massive, award-winning, single-player blockbuster, was launched in May 2015 for $ 50, but its standard price dropped to $ 40 and the price of used versions to $ 30 four months after the start.

The price of Witcher dropped to $ 25 (50% over the release price) almost two years after its release. At that time, the copies used were in circulation for around $ 17.50.

What about a multiplayer title? Overwatch a world-renowned blizzard first-hand multiplayer shooter, was priced at $ 40 at its launch in May 2016 and $ 60 in consoles.

About consoles Overwatch has fallen to $ 50 Just a few months, and the used copies were sold until September 2016 for a few euros less than the new CDs. This fall, the game finally reached its 50 percent mark of the original starting price ($ 25). own copies are currently in circulation for around $ 20.

Of course, all games will be cheaper over time, but the used copies always follow the prices of the "unused" versions: the resold copies are at first glance 5-10 percent cheaper and then dropped to 10-25 percent in comparison.

There is no reason why the secondary market should not be activated.

In the past, many manufacturers, including game development companies, have feared the second-hand market, as their primary market sales – especially second-hand goods – can lead to cannibalism "perfect substitutes" for their newer versions.

However, it all comes down to two main factors: where the original owner of the game (or other product) uses the money gained from reselling the game, and whether there is an ecosystem that benefits the manufacturer ,

The automotive industry would be an excellent example of a stable and thriving ecosystem of new and used goods. It is safe to say that if the first buyer of a car sells or sells their vehicle, the revenue often buys another new car, while the buyer of the used car still claims the automaker's parts and maintenance services.

Over the past decade, the business model for game development has changed from direct selling to free-to-play, to selling in-game items. Although both business models are still on the table, blockbusters such as Fortnite are driven solely by the purchase of in-game cosmetics products.

From the developers' point of view, the pricing of games has become less important. So, if the business model is based, at least in part, on the in-game economies there is little reason to block growth from the number of users who only want to save a dozen dollars on the game copy itself.

The direct financial impact is a more sensitive issue. The majority of players spend most, if not all, money on sold CDs to buy new titles, both new and used ones. Gamestop, a leading game retailer, said [1965] 035] that 70 percent of the money players get from selling used games will be spent on new releases. Used digital copy markets would not endanger game developers.

On the contrary, it would expand the pool of players and trigger billions of dollars of transactions currently stored in the players' libraries. There are also great opportunities to appeal to players who can not afford new releases, giving them the ability to legitimate digital copies and avoid piracy.

Besides the advantage side, the used digital copy market would reduce the risk of the buyers: I'm pretty sure other players, like me, would be more willing to try something new if they knew the game would easily be resold could.

Also, the physical copies of the game are only 5-20 percent cheaper in the second-hand market over their lifecycle, but the game developers have not received any commission – their only benefit is the "ecosystem".

I believe The technology that opens the doors to the digital resale of games is already on the horizon. Of course, there are many business opportunities and issues that need to be tested against market forces, but I can not wait to launch a product that will allow the secondary market to see how it works and how it affects the industry , [19659043]
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