Everything in iTunes played even after I disconnected my desktop from the net:

•new purchased ones that I own and
•old protected ones with DRM.

Follow the trajectory of CD prices if you want a closer example to gaming. That market was impacted both by an active secondary market and by piracy. Now it’s competing with digital distribution. In music, at least, they give you a break on price if you buy digital.

Until the early 1990s, college textbooks averaged about $75 each new, but could be had for about 60% of that cost if students bought used. University bookstores ran their own buyback programs and received 100% of the profits from those resales, having already put a retail markup on the original purchase price. Textbook prices crept upwards during the 1980s and 1990s, as publishers realized that most textbooks had to be paid for in their first production run.

In the mid 1990s, Barnes and Noble essentially bought out the college textbook secondary market by buying up all the bookstores. Using a centralized database, they were able to make the market for secondhand books and control prices, as well as reduce demand for new textbooks. In a few years, average textbook prices more than doubled, with new texts selling for $150 to $300 as publishers suffered even greater economic pressure. Once the practice became centralized, a single competitor was able to have a far greater influence on the market than were hundreds of individual competitors.

This same dynamic played out in the music industry. Physical CDs now cost $20 or more, while equivalent downloads from iTunes can be had for around $10.50, assuming 8 tracks at around $1.29 each. By shutting out second-hand competition, iTunes crippled the major-player secondary market and allowed content creators to retain some control over pricing.

The best model for mass-market retailers is cost amortization across the largest customer base possible. When this is achieved, as happened with CDs from the 1980s into the early 1990s and is currently happening with Blu-Ray, per-unit costs for end consumers go down and consumers are able to purchase more individual units of a product. This benefits everyone involved in the supply chain.

When a single business (or a handful) is allowed to control the secondary market, costs are amortized among a smaller group of primary buyers who pay full retail. This pushes per-unit costs up and limits the number of individual units the average consumer will buy.

Ideally, game companies should be moving to 100% digital distribution to lock out the secondary market and properly amortize development costs, which would deliver a lower purchase price to consumers. Instead, most of them are offering digital distribution at the same price as physical media, which is a blatant cash grab, as there are inherently higher profit margins for digital distribution.

Here are some stats to chew on: In 2007, console penetration in the United States was 41%, or approximately 46 million homes. In 2012, 56% of U.S. households had a current-generation gaming console, which equals approximately 60 million homes. Usually that level of market growth would be accompanied by a drop in per-unit media prices, because the available install base has grown by a third. During that period, however, average game prices stayed the same or increased. Why? Gamestop, primarily, and the ongoing loss of revenues to a parasitic second market.

Those rising new game prices are also a boon to Gamestop, because it prices its used titles at a percentage of new-game average prices. They’ve also slashed what they pay out for used games, so they’re making more profit per used sale than ever before while simultaneously screwing the market they claim to serve.

Digital distribution should come at a discount, and it can’t come fast enough. The “bargain” you think you’re getting with a used game is pure illusion. Time-limited rentals should also be part of the equation, and that might be where this industry ends up anyway, as the number of games truly worth owning for replay value gets smaller with each passing year.

“Since you already own the songs, albums, movies, or TV shows in your purchase history, you can tap to download them to any of your devices.”

NB Any of your devices.

I’M LIKELY TO STOP GAMING!!!

Oh man, just saying that makes my future feel bleak! LOL!

Sorry, Deuce, but you’ve got real thieves stealing your sales and don’t enforce your copyrights, so how can you bewail that developers can’t get paid again each time somebody new plays a second-hand game?

I do agree though that the threat to stop buying second-hand games and start pirating is ridiculous, only because the more likely occurrence is I’d give up gaming or [gasp] get an Xbox before I give in to grasping crooks. It’s not like we’ll ever be getting money back as a game becomes less challenging or exciting. So what’s to lose?

I just thank dog that Vermeer’s dead, or I’d owe him a fortune for looking at those paintings of his that Mr Mellon picked up second hand. [Plus I’m pretty sure that Vermeer only got paid once, although his pix have been sold many times and for millions more than their original price.]

Never bought a game second-hand but nevertheless I find very disturbing this greedy new notion that if legal use of my purchase could profit some corporation further, I should bend over and let them pick my pocket whenever they decide. Who says?

As a legal precedent it’s got to be stopped now. If you buy into the crock that anyone suffers when corporations aren’t granted eternal control over transactions then you’ll never stop paying.

I proudly buy some titles new. And I also bought and rented(much less now that I’m on home all the time) a bunch of used game. There is so much crappy button smashing games out there theres no way I’m risking a full retail price on a game I know nothing about. Many times in the past I bought a game after trying it.
I bought Destroy all humans 2 only because I rented the first one (ps2). When Mafia II was offered at discount as a DLC I bought it because I rented it too.
the used game market and the new release are two different animal. It’s not true that all the money, or even a significant part of it, spent on used game will transfer on new games. Someone who have a limited budget, who can spend $20 once or twice a month for entertainment wont wait several months to pay the $65 to $80 asked for AAA games here in Canada. They will spend the money elswhere.
If Sony and other console and content producer really beleive the second hand market is truly stealing their money. The only way I can see a justification for that is if prices are at least cut in half. Wich won’t happen.

A quick word about customers/after sales services…. It’s not something console base game producer are reknowned for… Maybe Pc games require some, but that’s not bothering me much. Unless Sony stop investing money on how to alienate customers and more on customers services…

The same thing happened to audio CD’s in the 90’s. The price jumped up so high people went to Napster and I feel it never would of happened if the prices didn’t skyrocket.

The larger question here is: Who owns these things? You can’t “gift” a iTunes song to somebody else, so do you really own it? Do we rent these things or do we own them?

It seems to me if you buy something it’s yours and will always be yours. If Sony wants to do this (I don’t think they will) then they are saying we still retain ownership of this, and we decide what you can do with it. This will further erode an already shrinking fan base.

If developers wanna put out shoddy work then fine, let the masses who know no better pay for half-baked games and fund a bad work ethos, but don’t expect me to pay them a penny for it. I’ll happily support a developer with my wallet if what I’m getting is good quality. I won’t however pay my hard earned cash for something that’s not even finished because some suit in an office wants his money before the game’s even ready.

I’m not blaming the developers here, I’m blaming the “executives”.

The threat that you will stop buying second hand games and start pirating them is honestly no threat to Sony or the developers since they get no revenue from your buying the game.

What is interesting is that people who buy second hand games want support for it because they paid money for it. The problem is how does a company support people who paid someone for a game, just not them? I actually have been contacted by people who bought one of my games from a company that just copied my CDs and started selling them for full retail. The people say they paid full price, but my company received no money from them. How can we pay people to answer all their questions?

This is complex from both ends.

As for the ridiculous idea of stopping machines from playing second-hand discs, well, it’s just laughable isn’t it? Dutch’s comment was bang-on, that’s exactly what it’s like and there’s really no need for it.

What if I want to take a game around to a friend’s house, oh wait, I can’t!

What if my PlayStation dies and I have to get a new one, I gotta buy ALL my games again too!?

What if… Actually never mind, there’s so much wrong with this idea I don’t know where to begin, but I’ll end by saying this; If I’m stopped from buying second hand games, I’d start pirating stuff like a bloody swashbuckler from a damn ghost ship!!!