Will Used Games Sales Drive Video Gaming To Downloads?

Recently Rockstar Games introduced a new update to the popular Grand Theft Auto Franchise, The Lost And Damned. This was a download only extension to the Grand Theft Auto IV video game and is available on XBox 360. The user pays for the software and they download it to their Xbox via XBox Live. 

Unlike commercial software or some consumer market software which require registration to run, continue to operate or access content as in the case of antivirus software, video games do not require registration to run. The user is able to and expects to buy it or rent it like a movie. They expect to be able to use it on multiple consoles and to sell it when they are done.

This is in contrast to commercial and registered SW where a license to use is granted and resale is not permitted. Any disk supplied is purely the media used to load the SW which the license is then applied to.  This has a couple of key advantages. Firstly you generally avoid resale of the SW. Secondly with good customer registration you can drive customer retention selling such as upgrades, support agreements, patches and continued content if needed.

With video games on the other hand some of these basics of the software industry start to break down. The ability to rent and resell undermines the total volume of initial sales. What better way to ensure less renting or reselling than to launch an initial game and then offer a series of extra content online. The content has to be purchased and downloaded to the target machine, meaning renting and buying it used are not options. In addition the requirement to have the original game for the content to work drives up the chances of a purchase of the original game. Indeed if one can issue three updates at $20 each before a new major revision of the franchise, then there is a chance to potentially double sales if a game had an initial purchase price of $60.

Full game downloads may be a harder sell as the only way to distribute right now. It’s probably not possible for a franchise to go to full download yet, partly due to the customer’s perception of being able to get a game by purchasing it either new or used, or by renting it. I suspect however we’ll see a lot more installment based content between major franchise releases from more and more studios.