This is in part a reply to xking596x blog on used games where they essentially summarized that the online code was in fact hurting the video game game industry, because they hurt Gamestop which in turn helps the industry. While I will comment briefly on the fact that the online pass is an interesting evil, I would like to also comment on another thought that occurred while reading this blog, and also one of which I had overlooked when I last thought on the used games conundrum.

Gamestop and other retailers make a small portion of what gamers pay for a game when purchased new, almost to the extent where they would hardly be able to be as large as they are if they only sold new product. This is because several factors economically, and business web wise have to be considered. First is the publisher, they get a cut of the game sales, second Gamestop has to have some one ship and distribute the games to their locations, and third and perhaps even more deviously is the console developer.

What many don't understand in the video game market, is that when you create a console, you provide the rights for games to be developed on that console. Essentially what it boils down to, is that the console is its own mini distribution center. Without a console gamers would have no way to play the games that these companies make. Similarly the owners of  operating systems on PC also need money, as many games today require an Operating System to function properly.

What is strange though is that we hear on a fairly regular basis these days of studios and publishers closing their doors, and companies being folded into others. But what we hardly ever hear about is how console manufacturers are close to closing the door on their end of the business. Save for some severe flops from 3DO, Jaguar, and Sega it's rare to hear any news of Sony, Microsoft, or Nintendo being in any danger of abandoning the console wars. This is because as the manufacturers of their consoles and game development companies being reliant on them to sell a product for their own profit, the big three essentially have all the control.

Despite lack luster sales, Sony still moved forward with the Vita, and Microsoft continues to dominate in the realm of third party exclusives. Nintendo also has their own market down with family friendly, easy, and intuitive games to play. However despite this I'm constantly reading about some doomsday scenario for gaming. How oversaturation is crowding out better games, because developers and publishers are more concerned about profit than innovation, and esentially the list could go on for awhile on customer complaints about the industry.

I don't think the doomsday scenario will quite be as bad as the crash and burn of the Atari, however I do think that we will see far too many studios shut down and become assimilated under another company. However, Sony, Microsoft, and Nintendo are from being in major financial trouble. They are all eating into the same profits that developers and Gamestop get for new game purchases. They are entitled to these things, because in order to receive a software development kit you have to pay the license fee, and agree to specific contracts.

The industry may be on the verge of collapse from a game stand point, and we may even see more companies close their doors, but the big three will probably remain around for a while longer. While this is far from the death of the industry in its entirety, it can spell the end of interesting 3rd party titles, and potentially push the race into one of who can provide the best exclusive titles. Seeing as how our economy in this world is far from stable, and also given that sales on video games and consoles are strongest a couple years after a new console releases, the next generation will be the saving grace for an industry trying to remain economically viable.