PS3 interactive drama Heavy Rain exceeded expectations and sold three million copies worldwide. However, developer Quantic Dream's co-CEO Guillaume de Fondaumiere says that about one-third of those sales were second-hand.
"We know from the PS3’s trophy system that probably more than three million people bought this game and played it. On my small level it's a million people playing my game without giving me one cent," de Fondaumiere told GamesIndustry.biz.
"And my calculation is, as Quantic Dream, I lost between €5 and €10 million worth of royalties because of second hand gaming."
Many retailers, such as GameStop, let players trade in their games for cash or in-store credit. For example, you can trade in Deus Ex: Human Revolution and probably get $30. GameStop then turns around and re-sells the game for, say, $55. It's a cash cow for them but none of the profits from this resale go back toward publishers or developers. de Fondaumiere says that the gaming industry - developers, publishers, and distributors - are hurting themselves with this approach.
"Because when developers and publishers alike are going to see that they can't make a living out of producing games that are sold through retail channels, because of second hand gaming, they will simply stop making these games. And we'll all, one say to the other, simply go online and to direct distribution. So I don't think that in the long run this is a good thing for retail distribution either."
de Fondaumiere acknowledges that consumers are part of the equation, too. After all, they're the ones choosing to buy cheaper, used games in the first place.
"Now are games too expensive? I've always said that games are probably too expensive so there's probably a right level here to find, and we need to discuss this altogether and try to find a way to I would say reconcile consumer expectations, retail expectations but also the expectations of the publisher and the developers to make this business a worthwhile business."