A website started earlier this year by the family of a boy stricken with a rare disease takes donated videogames and resells them, using the money to assist in finding cures for rare (or orphan) diseases.

GameZone details the story of DonateGames.org, which was launched by Jim Carol. Carol’s undertaking began two years ago when his then 11-year-old son Taylor was diagnosed with Philadelphia Chromosome, a rare form of Leukemia.  After uprooting his family and moving to Seattle in order to ensure Taylor had the best care possible, Carol became of aware of Penny Arcade’s Child’s Play charity and witnessed first-hand the positive effects videogames had on the afflicted youth, saying that games “played a big part in helping them get better.”

Carol acknowledged that his road to embracing videogames was not a direct one:

I’m a 50-year-old pop and I wasn’t a gamer. But I do believe in video-games, I don’t think they are bad, I think they are wonderful for education. My contemporaries jump to conclusions right away and think they (video-games) caused Columbine, and that’s just not the case. You will see, this year, a big part of what I’m going to be talking about in the media is that we need to change that opinion. Video-games are good and gamers are good, and they are benevolent, and they are kind and they are giving, caring people.

Carol also specifically called out HopeLab’s game Re-mission as scientifically proven in its ability to speed recovery time in sick children. The game, aimed at young people with cancer, was financed by eBay founders Pierre and Pam Omidyar.

NC Soft, Electronic Arts, Valve, Telltale Games and Paradox Interactive are among the partners listed on the charity’s website. The Academy of Interactive Arts and Sciences made a donation to the program as well. Donated games are eligible for a tax credit equal or greater to what would have been received if the game was traded in.

We often hear publishers bemoan the fact that they don’t see any revenue from used game sales. But is that really true?

In a recent interview with IGN, Game Crazy’s Director of Used Games Marc Mondhaschen says that publishers are reaping benefits from game trade-ins, albeit indirectly:

We did a study not too long ago for a very large vendor who we managed to figure out for them 20 percent of their sales inside the first 28 days were paid for with trade dollars. So you got 20 points of their sales that wouldn't happen unless we had a trade business going. And that's specialty retail. Game specialty retail is maybe a third of the channel, 35 percent of the channel. So you got 10 percent of your sales that wouldn't happen unless somebody was out there trading games with your customers.

And if you didn't have specialty retail it would be pretty hard to sell innovation into the channel at all. I mean, Wal-Mart doesn't really buy Katamari Damacy. So, in order to innovate, in order to grow innovation in the business you need a specialty games retailer that actually knows something about videogames. And in order to have them, they need the margins through used games...

Mondhaschen explains that while publishers don’t typically see any money from used game sales, they do benefit in other ways:

When The Lost and Damned came out we started selling a whole lot more Grand Theft Auto 4, both on the new side and on the used side. Which, then, sort of funds people's ability to go play L&D again...

-Reporting from San Diego, GamePolitics Senior Correspondent Andrew Eisen...

Outspoken God of War designer David Jaffe posted a video rant against used game sales on Saturday, but apparently removed it from YouTube the following day.

We caught up to Jaffe's video yesterday morning while scanning our daily RSS intake (left). By late afternoon when we checked back to gather some quotes for this article, it was gone. In its place was a YouTube message reading, "This video has been removed by the user."

A short time later, when we looked again, we couldn't even access his blog. A system message from Blogger read: "This blog is open to invited readers only."

It's unclear why Jaffe's video was taken offline or why he locked his blog. While Jaffe's video argument against used game sales was punctuated by occasional f-bombs, that's not unusual for his freewheeling commentaries. Prior to being locked, readers of Jaffe's blog were engaged in a lively response to his video, both pro and con.

The used game issue is a passionate one indeed, and Jaffe has addressed it previously on his blog. For his part, Jaffe takes the standard industry line that games are bad for developers and publishers. In the deleted video, he said (we're paraphrasing from memory here) that he didn't begrudge consumers the right to buy used games, but that game creators deserved a cut of used game sales. He said that some have defended used game sales by comparing buying a used game to buying a used car. However, Jaffe said that was a bad analogy because while playing a used game is the same experience as playing a new game, driving a used car is a different experience from driving a new one.

GP: Hmmm... We tried to reach Jaffe via Twitter to ask him about the missing video, but it appears that his Twitter account is no longer active. We hope that Jaffe has not decided to stop interacting with gamers. While we don't always agree with his rants, they are provocative and entertaining.

Eidos president Ian Livingstone (left) is the latest game industry exec to complain about used game sales.

The BBC spoke to Livingstone about the issue. Here are the Eidos exec's comments:

The pre-owned market is a serious problem, because there is no benefit to developers or publishers...

A shop makes a bigger margin on a pre-owned title, and can sell them six or seven times, so there is no incentive for them to reorder and the content creator gets no slice of the action.

GP: "No slice of the action," of course, is the operative phrase in Livingstone's mini-rant.

Frankly, I have no sympathy for the industry's used game whiners and even less when I remember that digital distribution is inching ever closer. When that happens, the publishers will be in the driver's seat.

Enjoy your used game savings while you can.

Via: gi.biz

Part 2 of Video Games are Dead, Scott Steinberg's short documentary look into the future of the game biz, has dropped.

While it's unclear why this needed to be a two-parter, there were a couple of good lines:

We have too many people who have a love of money in our industry. We need more people who have a love of art, who have a love for the act of creating games.  -Chris Taylor, Gas-Powered Games

 

Game publishers and the retailers, they should come to some kind of agreement about how to make [used game sales] happen so it doesn't really hurt the developers. But at the same time consumers have their own rights and to pull games out of the reach of many consumers is actually not a good idea. -Dean Takahashi, VentureBeat

Catch Part 1 here...

Brand-new games at used game prices?

A pilot program that does just that is being tested at a Best Buy location in Utah. While it sounds like a good deal for consumers, Wedbush-Morgan analyst Michael Pachter doesn't expect to see the Best Buy experiment gain traction on a large scale.

Of the program, under which Best Buy will match used game prices in effect at either GameStop or Game Crazy, Pachter said:

I don’t think it will do well.  The price match means that Best Buy either cuts their profit per game in half, or wipes it out altogether.  I don’t think that they can afford to sell $60 games for $50, and don’t think that it will be effective in the long run.  If it does well, then GameStop will cut used game prices to the point where Best Buy can’t match without losing money.

The used game debate rages on...

Joystiq reports that big box retailer Best Buy is testing a used price matching program for new releases at its store in West Jordan, Utah (see pic).

In the pilot deal Best Buy will sell customers new games at used prices offered by GameStop and Game Crazy. This should save game buyers at least five bucks, and maybe more for certain games - and saving money is always a win for consumers.

There's more discussion of the Best Buy test program at CheapAssGamer.

A pair of video game websites weighed in on the controversy over used game trades this week.

Crispy Gamer serves up a well-reasoned two-parter by David Thomas:

The price of a game is, at the end of the day, exactly the balance point between what someone is willing to pay and what someone is willing to sell... The trouble is, the publisher wants back in on the deal, and goes out of its way to convince you that it still owns a piece of that junk you bought from it...

 

The used market, it turns out, isn't screwing [game] publishers... Instead, the used market helps keeps people in the game by letting them play games that they wouldn't otherwise bother buying... Used games help make game fans out of game tourists...

Meanwhile, Destructoid's Jim Sterling has a bit of a rant on the topic:

Have you considered what happens to a publisher when you buy a secondhand game? They lose money! Oh, you might argue that publishers already make money off the original sale of the game, but they don't! In fact, whenever a secondhand game is bought, the original $60.00 transaction disappears from our corporeal plane of existence, erased from history as if it never happened...

The main issue with secondhand games is that no other industry ever has to deal with a similar problem. Think about it -- have you ever bought a used car, or even heard of a store selling used clothes or music? Of course you haven't! The very idea is preposterous...

A new report by Wedbush-Morgan analyst Michael Pachter should put paid to game industry whining about used game trades. Although, somehow, we doubt that will happen.

According to gamesindustry.biz, Pachter found that up to 100 million (!) used video games are traded each year in the United States. That figures accounts for a remarkable third of all game sales.

But Pachter also reports that the used game trade has a positive impact on new game sales, not the negative impact so often claimed by a variety of game industry types. The outspoken Pachter comments:

The vast majority of used games are not traded in until the original new game purchaser has finished playing - more than two months after a new game is released - typically well beyond the window for a full retail priced new game sale.

If trade-ins occur at GameStop, they should position the trade-in customer to buy more new games than he/she would otherwise normally purchase. Because the average used game value is around 20 per cent of the new game price, we think that used game trade-ins fuel incremental sales of over six per cent of total new game sales, suggesting that the cannibalisation from the used game 'push' is more than offset by the benefit from used game currency.

Earlier this week, GamePolitics reported on “benefit denial,” a loss-prevention technology proposed by game retail trade group the Entertainment Merchants Association. The EMA plan would disable movies and video games until unlocked at the point of sale.
 
Not everyone thinks it’s a good idea.
 
Writing for CNET, technology columnist Don Reisinger dubs the plan "a loser."

Piracy and theft is indeed a problem in the video game industry. But it's not so bad that it requires games to be shipped in an unactivated state. Moreover, game piracy is really a bigger problem on the PC than on consoles... And since most of the issues affect the PC side of the business, not even benefit denial will be able to stop piracy...

However, EMA Public Affairs VP Sean Bersell told us that benefit denial is “all about retail theft,”  not piracy. He points to a comment to Reisinger’s article posted by Capgemini, the firm commissioned by the EMA to evaluate the feasibility of benefit denial.

[The benefit denial study], announced by the EMA, doesn't even mention piracy.  And that's because the whole project is about elimination of physical theft of discs, whether DVDs, or CDs, or games on optical discs. It has nothing to do with piracy. Zero.

Reisinger also raises concerns about how well this technology will work with second-hand games, whether Internet connectivity will be a factor, and if the Big 3 console makers' participation will be required.  Bersell commented:

We are not talking about DRM or other software-based technology. The technology to which we are referring would be a physical lock that is opened via radio frequency in the store at the point of sale...
 
The purpose is to make it easier for the consumer to purchase the product... And since EMA is pursuing this and we have been protecting the First Sale rights of retailers and their customers for 28 years, I can assure you that nothing in this will interfere with the rights of consumers to sell, lend, or give away their used games.

DOCUMENT DUMP: Grab a copy of the benefit denial study here.
 
-Reporting from San Diego, GamePolitics Correspondent Andrew Eisen...

In a move that has been anticipated for some time, big box retailer Best Buy has jumped into the used game business, reports gamesindustry.biz. Best Buy will apparently be using a kiosk system similar to that now employed by Wal-Mart.

Used game trade leader GameStop is not bothered by the new competition, however. A spokesperson for the retailer told the Fort Worth Star-Telegram:

GameStop understands that trading in used games and consoles is a highly-assisted activity. We are very confident in our business model that allows our expert associates to help consumers trade in product, a fact not addressed with a self-serve process.

Meanwhile, gi.biz reports that analyst Colin Sebastion of Lazard Capital Markets sees no threat to GameStop with Best Buy's move into used:

While we believe that Best Buy’s entry into the used video game market will create a new overhang on shares of GameStop, we expect Best Buy’s initiative to expand the used videogame market rather than take significant share from the speciality channel.

GP: With the Best Buy announcement we can expect the obligatory round of hand wringing from certain game publishers and developers.

If you want to trade in your used games in Broward County, Florida, prepare to give up your thumbprint.

The Broward-Palm Beach New Times reports that the local sheriff's office began requiring game traders to submit to thumbprinting in October, 2008:

Broward County Sheriff's Office spokeswoman Kayla Concepcion said the new requirement comes straight from the Florida Legislature, which enacted a law... that treated video games like second-hand goods sold at pawn shops. Now any store buying used video games has to collect the thumb prints, along with a bunch of other personal info about the seller.

Used game sales are an understandably sore point with publishers but to claim that the purchase of second hand titles are not in the best interest of the consumer is absurd and borderline insulting.

That’s why it’s refreshing to see such a measured response from Nintendo CEO Satoru Iwata during a recent financial briefing Q&A:

If [used game sales] were illegal acts like piracies, we could criticize them. But, however hard we may express our concern about the secondhand market, as long as they are not illegal, it does not do us any good. With video games, because people do not see much deterioration in the quality when they purchase as secondhand, it may give publishers a hard time if the used product market grows.

On the other hand, this is one of the changes in the social circumstance, and it is our job as publishers to think of how to cope with the changes. When you ask me how we will cope with this issue specifically, our answer is that Nintendo must continuously craft ideas so that our consumers will feel like owning the purchased products or think about how to motivate the customers to purchase new products instead of used ones.

On a related note, according to Gamasutra, Gamestop reports that while console and new software sales are down 2.8%, sales of used software are up a whopping 31.9%.

-Reporting from San Diego, GamePolitics Correspondent and gaming snob Andrew Eisen only purchases factory sealed titles...

On Monday the gaming press, including GamePolitics, was abuzz with news that Wal-Mart had apparently entered the used game business in direct competition with category leader GameStop.

However, Ars Technica's Ben Kuchera dug deeper into the story and reports that the game trade machines currently located at dozens of Wal-Marts in the Northeast actually belong to Ohio-based e-Play. Although it's not stated, one would assume there is some type of financial arrangement between the companies. e-Play CEO Alan Rudy told Ars Techica:

Walmart is providing vestibule space to e-Play at 77 of its Northeast region stores. Some stores have Video Game Buy Back only kiosks and some kiosks are full-functioning, but e-Play manages all aspects of kiosk operations for both types. While we have over 200 other retail locations, this is currently a pilot program with Walmart, but we are optimistic of its success and future expansion.

Rudy believes e-Play is well-positioned against newcomer to the used game trade, Amazon.com:

The e-Play trade method does not involve printing shipping labels or waiting on snail mail to deliver your games or to return your Amazon gift card. Soon, e-Play will also post their buy-back pricing online so customers can preview this information before going to a kiosk.

Check out the Ars piece for some fascinating details on how e-Play machines keep traders honest.

Prepare for a renewed round of video game industry whining now that Wal-mart has apparently entered the used game business.

Neocrisis reports that the editor's local Wal-mart has installed automated game trade-in machines which exchange credit for used titles. Or should, anyway. Neocrisis reports that the machines at his store were glitchy and couldn't complete his trades. When functional, the machines should accept PS2, PS3, Xbox, Xbox 360 and Wii games:

The machine looks extremely similiar to the Redbox DVD rental machines. When I went to use the machine, however, it still had more than a few bugs that need fixing... But still, if there is one business out there to give Gamespot some competition, it's the giant Wal-Mart.

Kotaku has more, including word that the project is being tested at 77 Wal-marts in New York, Massachusetts, Connecticut and Rhode Island. Payment for used games is not in Wal-mart store credit, but rather is handled by a third party, e-play. Money for trades is charged back to the trader's credit card up to three days after the transaction.

Via: CheapyD on Twitter

In a refreshing break from the standard video game industry propaganda, a pair of maverick PC developers offer some straight talk on DRM to Gamasutra's Paul Hyman.

Ron Carmel of 2D Boy (World of Goo) believes that the major publishers are beginning to back off on the use of DRM following consumer outrage over its use in games like Spore:

I definitely believe this is all the result of a change in the public perception of DRM, a sort of grass roots uprising. Gamers are much more vocal about it than they used to be, perhaps because they are so accustomed to downloading music without too many restrictions.

But Carmel also relates DRM to the battle over used game sales currently being waged between video game publishers and retailers:

Publishers aren't stupid. They know that DRM doesn't work against piracy. What they're trying to do is stop people from going to GameStop to buy $50 games for $35, none of which goes into the publishers' pockets. If DRM permits only a few installs, that minimizes the number of times a game can be resold.

Although, to be fair, there doesn't appear to be much of a secondary market for PC games among retailers. Consumer-to-consumer channels like Ebay may be a different story. Brad Wardell of Stardock added:

Spore was the final straw that broke the camel's back. Someone who buys software does not want to be made to feel like a chump for buying it.

Not surprisingly, the Entertainment Software Association, which lobbies on behalf of publishers, argued in support of DRM. VP Ric Hirsch told Gamasutra:

DRM is a reasonable response to high piracy rates... There is little doubt that piracy would be far more widespread without game publishers' use of DRM.

Old school electronics retailer Radio Shack has jumped into the used game market.

Employing a web-based trade-in model similar to that announced recently by Amazon.com, Radio Shack will accept games, consoles and handhelds sent in by consumers.

Radio Shack foots the bill for shipping and customers will receive a store gift card in return for their items.

Via: Joystiq

Kotaku reports that a GameStop corporate policy of selling games played by store employees as brand-new may be a violation of federal law:

GameStop's "check-out" policy, confirmed to Kotaku by a number of the chain's managers and employees, could fall under scrutiny of the Federal Trade Commission.

Kotaku cites GameStop's policy, which it reports that it obtained from several employees of the leading video game retailer:

Associates are allowed to check out one item of store merchandise for personal use for up to four days. Merchandise checkout is a privilege, not a right, and may be revoked at any time...

If the product is returned in unsellable condition, or if anything is missing from the package, or if the product is not returned, the Associate must purchase the product...

When asked by Kotaku, the Federal Trade Commission declined to say whether GameStop's practice of selling employee-played games as new might be considered deceptive. The FTC also declined to say whether it was looking into the practice.

A British man who purchased a pair of used Grand Theft Auto games discovered what appeared to be ecstasy tablets wrapped in plastic and hidden in one of the game manuals.

The Telegraph reports that Richard Thornhill, 34, bought the second-hand games at a GameStation in Gloucestershire:

When I opened the box up, the cling film wrap fell out. I could not believe it. I have two children and my son plays Xbox all the time. He could easily have opened the box and found them.

I dread to think what the consequences would have been if he had. He is only 12. He could have died. It was a pre-used game, but that should not make a difference. My wife is beside herself over this because she keeps thinking about what could have happened and so do I.

The retailer and local police are investigating.

Spending extra money is good for consumers. Especially if they spend it on Nintendo products...

That seems to be the message from Nintendo of America president Reggie Fils-Aime, who offered these rather amazing comments to Venture Beat's Dean Takahashi:

VB: Used games are coming up as a big issue again. Why?

RFA: ... We don’t believe used games are in the best interest of the consumer. We have products that consumers want to hold onto... We believe used games aren’t in the consumer’s best interest. [GP: What kind of answer is that? Commendably, Dean calls him on it...]

VB: Because?

RFA: Describe another form of entertainment that has a vibrant used goods market. Used books have never taken off. You don’t see businesses selling used music CDs or used DVDs. Why? The consumer likes having a brand-new experience and reliving it over and over again. If you create the right type of experience, that also happens in video games. [GP: Does Reggie get out of the rarified air of the executive suite much? Used books, movies and CDs are widely available.]

VB: Could this be rectified if the retailers share some of that used game revenue with the publishers?

RFA: That could make it more palatable. But we just think it’s a bad idea... [GP: Here's the big reveal as to where Reggie is coming from. Used games are a bad idea, but not AS bad if Nintendo gets a slice of the action. Please...]