Retailers such as GameStop make a significant profit off of pre-owned sales.
Image credited to http://www.zombiegamer.co.za

As the world continues to progress into a more digitally-oriented age, it appears that the age of pre-owned media sales may slowly be coming to an end.

Since the beginning of media itself, sharing and reselling has been a common, if not promoted, form of product recycling. Take garage sales for example, which include not only media devices, but also anything from furniture to clothing to toys and anything in-between. When a product is no longer being used, it only makes sense to put it to good use once more in the hands of another while still regaining some of the money spent on it.

Recent glimpses into the future of technology may threaten this “product recycling,” however. Reports have been appearing among the gaming community that the future of Xbox may come with a built-in system that registers games to the console, rendering them unusable on another console. Think of retailers that make a majority of their profit off of the sale of pre-owned games; a development like this would cripple them, seemingly beyond repair. Even the days of simply lending a game to a friend could become a thing of the past.

While the protest over such a concept may be loud and outspoken, the reality is that it has already crept into our lives through other media forms. Take iTunes for an example, which ties purchases to individual Apple IDs and cannot be opened under another user’s name. The same concept applies to their App Store, which has been confirmed to take on a more prominent role in their upcoming OS Mountain Lion. Even gaming networks such as Steam, Xbox Live Arcade, and Playstation Network have downloadable games which are tied to accounts.

Why are companies taking such drastic moves to limit the usage of their products? Parallels can be drawn to the recently over-thrown SOPA legislation, which took a stab at eliminating piracy and the sharing of copyrighted materials, effectively restoring maximum profits to the producers. When a pre-owned product is resold, virtually all of the profits go to the retailer. Compared to the sale of a new product, in which the producer makes a profit, the reasoning behind such a decision becomes obvious.

Pre-owned sales have a special place in the hearts (and wallets) of many, however, especially gamers. A console game in today’s market can cost anywhere between $50-60, on average. On the other hand, a used game only costs a fraction of the price, reaching as low as $10, if not even less. While factors such as the popularity and release date play a huge role in the discount, more savings ultimately lead to more customers in a typical market.

The ultimate problem seems to occur when consumers are being forced to pay full price for a product which has traditionally had resale value and long-lasting appeal. By changing this delicate balance, the nature of the market has been upset. Other companies have appealed to the masses by offering full products at drastically reduced prices. For example, Steam is able to sell games at incredibly low sale prices, sometimes as low as $2.50. Apple is able to sell full albums at a fraction of the price, and individual songs for $1.29 or $0.99. While a large part of this discount is likely due to the fact that there is no physical transaction, only digital, chances are good that such a booming business would not be possible if products were offered at full retail value.

If rumors evolve into facts and the new Xbox system will prohibit used games, many will compare it to Microsoft being greedy shooting themselves in the foot. They are by no means the only gaming platform out there, and at this point in the game, crippling yourself can be a fatal mistake when there are plenty of companies out there to turn to instead. Only by lowering prices to a rate which is affordable to the masses will the media industry truly keep their competitive edge while still retaining maximum profits and full control over their products.

What are your thoughts? Is the media industry headed toward an age when pre-owned products exist? Would you buy in to such a system, or prefer the age of resale? Leave your thoughts in the comments!

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