Why Used And Rental Games Were Such A Sticking Point

Steve Anderson : End Game
Steve Anderson
The Video Store Guy
| The video game industry has gone from a mole hill to a mountain in no time flat, Chris DiMarco is your Sherpa as you endeavor to scale Mount “Everquest”

Why Used And Rental Games Were Such A Sticking Point

Easily one of the--potentially, we can even strip the qualifier away and just call it the--biggest controversies in gaming for the last couple years was the issue of used and rental gaming. More specifically, would the next generation consoles permit such activities--that gamers had grown fond of over the years--to continue? Yes, no, maybe, with fees, without fees...the suppositions flew like no tomorrow. But for the most part, the answer turned out to be yes, eventually, and that's good new for gamers and for the industry alike.

A recent report that came out today broke down the retail gaming market--new, used, and rental alike--into its various components including cost of goods sold, licensing fees and similar matter. Now, this report by itself contained a wealth of information about the game industry as a whole, but there was one number that especially caught my attention: the gross market figures.

The total market for gaming in the United States in 2012 figured out to be around $8.9 billion. That's a lot of money no matter who you are, and the new market was of course the lion's share of the proceeds at around $7 billion. The rental market, however, pulled in $268 million in 2012, and the used game market accounted for nearly five times that number--$1.52 billion--making up the rest of the market.

These four numbers by themselves make up an excellent point. Indeed, that was a lot of money that the new game market was never going to see. Whether the used game sales constituted direct losses--people deliberately avoided buying new to buy used--or indirect losses--people were never going to buy new in the first place--is debatable. But it was clear that gamers enjoyed rental games--$208 million at even $5 a pop is a whole lot of opened wallets--and they certainly wanted to buy games used. We're talking about millions of transactions, which guarantees at least thousands of gamers, so the idea that suddenly a third of the market--using it here as a planning number; surely the distribution of rentals between Sony, Microsoft and Nintendo isn't perfectly even, and Xbox 360 games would have still rented even after the Xbox One arrived--would vanish from access would be a pretty big hit.

Though this generation seems to have ensured at least one more go-round for the game rental and used game concept in its standard form, it behooves every rental operation out there to think twice about its own future. How can a game rental operation work when there are no games to rent? How can a used game operation survive when there are no used games? Looking into new markets--into new means of survival--will become paramount in the coming days as we all start to adapt to a new way of life, and a new way of gaming.
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