Used Games Market in UK Takes A Dent With Argos Withdrawal

United Kingdom, December 17th, 2011.  Following Argos’ withdrawal from the pre-owned games market last week, other large retailers such as Asda and Tesco are still insisting their own catalogues of used games remain popular with customers.  Asda’s Head of Games, Andrew Thompson, does not “read anything” into Argos’ withdrawal and likewise, Tesco’s Mark Burgess has stated that Argos’ departure “will have no effect on our current plans.”

It is an interesting legal question, according computer games expert and lawyer, Brian Miller, to consider what ability publishers have to control the resale of their games.  “Unlike pirated games, the pre-owned market involves the sale of genuine products that have already been sold to punters. The concern for publishers is that such copies do not feed back any further royalties into the industry and that the size of the pre-owned market threatens to stifle future development and income.”
 
Under EU competition law, Miller says, once goods have been put on the market in one jurisdiction, a publisher is deemed under European law to have “exhausted” its right to control the resale of those goods in all those markets.  “In terms of competition law, the courts and related enforcement bodies will look at the underlying purpose (and the effects) of the agreement between the publisher and distributor.  Any manufacturer or supplier which sought to impose terms during the sale of goods to distributors could find itself in hot water.”
 
In conclusion, it would seem that a publisher cannot attempt to prevent a resale once the game is used.  One way in which a publisher can lawfully restrict or avoid the resale of pre-owned product is to employ the digital distribution model only, where the game is licensed via a console or other online gaming system to a single user (or machine) only.  This can be very lucrative for a publisher, although it does undermine physical retail. 
 
The success of the major online gaming networks demonstrate that consumers are prepared to accept such a means of distribution, and the features included in the games help prolong the use and consequently the ownership of the product. 

It will be interesting to see what impact online has had on the used games market in five years’ time.  “I am not sure it will be around then”, concludes Miller.  Or as one industry veteran, Chris Avellone, Chief Creative Officer of Obsidian Entertainment commented this week, “I hope digital distribution stabs the used game market in the heart”.

© Brian Miller 2011. This article may not be reproduced without the prior written permission of the author, Brian Miller, solicitor. 

Brian can be contacted at Stone King LLP.  For further news and information on legal topics of interest, please visit Brian’s other blogs:

Brian Miller Solicitor’s IP Blog
Brian Miller Solicitor’s Computer Games Blog
Brian Miller Solicitor’s Privacy & Data Protection Blog

This article reflects the current law and practice. It is general in nature, and does not purport in any way to be comprehensive or a substitute for specialist legal advice in individual circumstances.

LINKS/SOURCES

1. www.mcvuk.com/news/read/there-s-still-a-place-for-us-in-pre-owned
2. The Office of Fair Trading provides guidance on the Competition Act 1998
3. www.industrygamers.com/news/chris-avellone-obsidians-chief-rpg-designer/#comments

Contact Information

Brian Miller

Solicitor

Stone King LLP

Contact via E-mail