Why Game Publishers (and the Auto Industry) Need to Revisit Econ 101

As the world slips further into an economic abyss, several industries have sought financial help from their respective governments, especially the auto industry.  There were several excellent pieces written by Thomas Friedman about why the auto industry should be left to its own fate and how it can reinvent itself for the future.  The crux of his argument, with which I mostly agree, is that the American auto industry should suffer the consequences because they refused to innovate where other companies did. 

The capitalist principle of innovating on a product to keep the market in your favor is necessary for a variety of reasons that we all learned about in either Econ 101 or by visiting any Apple store in late January.  Similarly, video game developers and publishers must use this principle to address their problems with the used game market.  Their current strategy is to cry.  The used game industry provides a tremendous service and value to the consumer.  I'm not referring solely to gamestop , but the myriad of services that allow the you and I access a game without having to buy it in shrink wrap.  There are tons of games that we want to play, but don't want to pay full retail price or wait for a sale/price drop.  Hell, there are several games I want to play but don't want to spend any money on, ever! And the used game industry provides a means for us to address this issue.  And what the market wants, the market traditionally gets and whinning about it isn't going to do any good.  

However, innovation can help everyone! For example, I recently traded away several PC games via goozex only to rebuy them through Steam.  Why? Steam allows me to easily install the games on multiple machines or put them right back where they were after I format my hard drive.  That is a service I'm willing to pay (twice) for and prevents me from reselling.  Console publishers need to develop similar improvements to their approach that will encourage you and I to consistently buy new.  Unfortunately, I don't have any good suggestions at this time, but I think that the inclusion of bonus content with the initial purchase (and not as rip off DLC) is a good start as per Gears 2 or NBA live.  However, strides should be made to avoid punishing the users for not buying new a la Nintendo's Wii Speak model or Epic's suggestions.  That method is akin to pushing Hummers when gas is $4 a gallon.  Using that tactic is sure to lead to a bad response from the market and the US government will never bailout the games industry.