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This is called the doctrine of first sale, and it's been fine for physical products since forever. (The maker of the chair only makes money on the first sale of

by habitue 11y ago

This is called the doctrine of first sale, and it's been fine for physical products since forever. (The maker of the chair only makes money on the first sale of the chair, everyone else plays for "free") If you're going to say " But information products don't degrade", I'll note that a product degrading is not a condition of the first sale doctrine. You can sell your mint condition Mickey Mantle card, without giving a cut to Tops

Houshalter 11y ago
Well chairs really are different than software. Most of the value of a chair comes from the labor and resources put into producing it. Software takes 0 effort and 0 resources to produce more copies. All of the cost comes from the initial development. The actual disks or bandwidth for downloads costs pennies. So when you sell a chair, you aren't decreasing the quality of future chairs in any way. Fewer chairs bought, just means there will be fewer chairs made the next year. Maybe a single chair maker will lose his job. Which sucks for him. But he really isn't needed because the world doesn't need more chairs. With software, less demand means less quality. When you get less sales, then the budget for the next video game will be less and less. Fewer niche games will be made because the budget gets too small to support them. Even though the demand is theoretically there - there are enough gamers willing to spend money on such a game to support it. The problem is it creates a free rider problem where no one wants to be the one to pay for it, when they can just free ride off of used games and not spend a dime. Second, the very important difference is time sensitivity. Games get the majority of their sales in the first month, and it slowly declines after that. If everyone sells used, then all of the sales after the first month don't matter. So the vast majority of their income is lost.

by habitue 11y ago

Houshalter 11y ago

Well chairs really are different than software. Most of the value of a chair comes from the labor and resources put into producing it. Software takes 0 effort and 0 resources to produce more copies. All of the cost comes from the initial development. The actual disks or bandwidth for downloads costs pennies. So when you sell a chair, you aren't decreasing the quality of future chairs in any way. Fewer chairs bought, just means there will be fewer chairs made the next year. Maybe a single chair maker will lose his job. Which sucks for him. But he really isn't needed because the world doesn't need more chairs. With software, less demand means less quality. When you get less sales, then the budget for the next video game will be less and less. Fewer niche games will be made because the budget gets too small to support them. Even though the demand is theoretically there - there are enough gamers willing to spend money on such a game to support it. The problem is it creates a free rider problem where no one wants to be the one to pay for it, when they can just free ride off of used games and not spend a dime. Second, the very important difference is time sensitivity. Games get the majority of their sales in the first month, and it slowly declines after that. If everyone sells used, then all of the sales after the first month don't matter. So the vast majority of their income is lost.