Skip to main content

Pachter Destroys Industry Lies About Used Games Killing Gaming

Remember in the top misconceptions about the gaming industry, we pointed out that used games aren't killing the industry the way publishers have been leading you to believe? Well, Pachter reaffirms this and even breaks down the numbers based on publicly accessible facts and it really is true, used games aren't killing the industry.

As you know, it's not like gamers have a lot of love for Michael Pachter, the Wedbush Morgan Securities analyst. Oftentimes he's wrong about predictions than he is right. However, his latest postulations about the industry, the used game market, and the sales dip that the actual used game or secondhand market actually has on the larger retail market are spot on.

Pachter lays out the details real nice and neat in GameTrailers' latest episode of Pach-Attack, where the industry "expert" breaks down his estimation of the actual cannibalism of the used game market on the retail market. According to Pachter, there's actually only a 5% cutaway from the retail market from affected used game sales in North America from the largest used games retailer, GameStop.

Put into better perspective, the retail market is nearly a $20 billion dollar industry in North America alone. GameStop's mammoth used game market only makes up for 46% of all their total sales, and in 2011 the company made a hefty profit of $2.6 billion, which puts their used game profit at approximately $1.1 billion. As Pachter points out, the totality of $1.1 billion out of the total profit of the retail market is peanuts. What's more is that these numbers are pretty petty compared to what EA, Activision, Nexon, and Ubisoft rake in each quarter, much less what each of the top tier publishers make annually. As an example, Activision's first quarter 2012 net-revenue was $1.1, yeah.

All the crying over used games needing to go away from industry leaders is just a further bid to spread misinformation to garner sympathy from gamers to basically spend money (they don't have).

We've heard Silicon Knight's Denis Dyack shoot down used games, we've had Frontier Development's David Braben bewail the pre-owned market, and even Crytek's own Rasmus Hojengaard spoke out against used games.

The crazy part about it is that even if the used market disappeared it's not like developers would make anymore extra money, because this would jump to the presupposition that gamers who couldn't buy $10 used copies of an old game would magically want to buy $60 games for new. This also assumes that publishers would hold true to their contracts and pay out royalties as opposed to just scheming to fire employees.

Will Usher

Staff Writer at CinemaBlend.