New Court Ruling Could Affect Used Game BusinessS

If it's not the advent of digital game that could kill bricks-and-mortar game retailers, it might be the law. A recent Federal appeals court ruling could impact how used games are bought and sold.

The Dallas Morning News reports that the 9th U.S. Circuit Court of Appeals decided that a software publisher can stop buyers from reselling software to others. This differs from previous rulings in which software programs could be resold under "first sale" doctrine due to the rationale that licensing agreements that prohibit resell take precedence.

According to the University of California at Irvine's R. Anthony Reese, "The first sale doctrine has been a major bulwark in providing public access by facilitating the existence of used book and record stores, video rental stores, and, perhaps most significantly, public libraries."

Pundits believe that if this recent decision is upheld by by other courts, it could impact second-half retailers like Half Price Books, eBay and, yes, GameStop.

For GameStop, used video games are incredibly profitable and make up over 30 percent of the chain's profits. According to GameStop, used game sales actually benefit new game sales. Fourteen percent of new games are bought with store credit gained from trading in used games.

However, do not expect used game sales to cease tomorrow. Other retailers like Target and BestBuy also offer used games. One legal expert believes that publishers would instead negotiate some sort of agreement with retail instead of simply banning used games.

Court ruling could hurt GameStop's used-game business [Dallas Business News Thanks, NinjaMarion!] [Pic]