More from last night’s Wedbush Morgan super-report. The paper claims Americans sell around 100 million games back to retail each year.
“The number of games traded annually is striking; we estimate the overall used game market to be $2 billion in the U.S., with an average ticket of around $20 per used game,” said the paper.
“This means that an estimated 100 million units of used games are traded in each year, representing around 1/3 of all games sold annually.”
The report went on to say that full-price game sales aren’t impacted anywhere near as much as some would like us to believe.
We think that used game sales benefit new game sales by providing currency to gamers with less disposable income, thereby enabling the purchase of additional games. The vast majority of used games are not traded in until the original new game purchaser has finished playing, typically well beyond the window for a fullretail priced new game sale. Thus, while there may be some limited substitution of used game purchases when GameStop employees “push” used merchandise upon consumers lined up to buy new games, the vast majority of used game purchases occur more than two months after a new game is released. Other than the potential impact at holiday (when new game lives are extended beyond the typical two month sell-through pattern), used game sales just don’t impact new game purchases very much…. To the extent that there is a substitution effect, we estimate that fewer than 5% of new game sales are impacted.