Game developer Lionhead has declared that second-hand sales of video games for the Xbox 360 are a bigger problem for the company than pirated video games on the PC. In other words, the resale or pre-owned games cost the company more in the long run than piracy does.
"Piracy these days on PC is probably less problematic than second-hand sales on the Xbox," Mike West, the lead combat designer for Fable III, which is made by Lionhead, told Eurogamer. "I've been working on PC games for many years and piracy is always a problem. There are a lot of honest people out there as well, and if they like your game they'll buy it. The pirates, whatever you do on whatever system, they will crack it. It might take no time... I think the longest it's taken to happen is two days. Someone will crack it somewhere and there's not much you can do about it."
Game publishers and developers do not like second-hand game sales because they don't get any money for the transaction. The party doing the reselling, be it Amazon, EB Games, or another retailer, reaps all the profits. The store stops being the middle man by cutting out the head honcho. Gamers can also obviously sell games directly between each other and then there really is no profit on the actual sale.
Game companies have tried various methods to fight back against the resale of previously-owned games. The most popular initiative is EA's Online Pass: new games come with a free code that can be redeemed to enable multiplayer or receive downloadable content. The code can only be used once, which means second-hand buyers have to buy their own online for around $10 or they won't get to use all the features of a given game.
Let's revisit piracy. West says the fact that people don't think it's worth spending money on computer games is a depressing situation. He insists that pirates are making sure there are fewer games coming out in the future and more people are out of work. He also believes that the only way to stop a pirate from not paying for a game is to have a face to face conversation with him or her, in order to explain the consequences of their actions.