The best way for console makers to deal with the used games market is to ensure their games are so good that people don't want to trade them in, Nintendo of America president Reggie Fils-Aime told Polygon. But supporting used games is also important, he added.
"We have been very clear, we understand that used games are a way for some consumers to monetize their games," Fils-Aime said. "They will buy a game, play it, bring it back to their retailer to get credit for their next purchase. Certainly, that impacts games that are annualized and candidly also impacts games that are maybe undifferentiated much more than [it] impacts Nintendo content. Why is that? Because the replayability of our content is super strong. The consumer wants to keep playing Mario Kart. The consumer want to keep playing New Super Mario Bros. They want to keep playing Pikmin. So we see that the trade-in frequency on Nintendo content is much less than the industry average – much, much less. So for us, we have been able to step back and say that we are not taking any technological means to impact trade-in and we are confident that if we build great content, then the consumer will not want to trade in our games."
Used games have become a hot-button topic this year as both Microsoft and Sony continue to detail how their new consoles will operate.
While Microsoft won't charge any fees as a platform holder for the sale or purchase of used Xbox One games, they are leaving it up to individual publishers to decide whether their games can be sold or traded — a policy that hasn't been very popular.
"The trade-in frequency on Nintendo content is much less than the industry average – much, much less."
When Sony announced during their E3 press conference, held half a day after Microsoft's, that they wouldn't have such restrictions, the news was met with thundering applause.
That spontaneous reaction, Fils-Aime said, was likely not just a message to Sony, but "probably a bigger one to the [publisher] who went earlier in the day."
Sony is still allowing publishers to decide whether the online portion of their games will require some extra fee to be re-activated when resold.
The end result is three next-gen consoles with three sets of used game policies. Ultimately, it will be up to the publishers to decide how they want their games to be bought and re-sold. I asked Fils-Aime if Nintendo is prepared to stick to their open used games policy in the face of publishers who may want Nintendo's policy to become more restrictive, like Microsoft's or Sony's.
"The fact of the matter is, we will see what happens with publishers," he said, "but it seems to me that every major publisher has come and said we don't mind used games."
Nintendo's approach to used games may be in part driven by the fact that the publisher is having increasing success with the sale of downloadable versions of its games.
In April, Nintendo announced that about a quarter of the 3.86 million copies of Animal Crossing: New Leaf sold in Japan were purchased through its online store.
Nintendo found that once a person made a purchase through the online store, they were much more likely to purchase other games or content. In their current form, those disc-less games can't be traded in, lent to friends or sold, essentially removing any question of a used game market.
"But it seems to me that every major publisher has come and said we don't mind used games."
Despite the increasing popularity of purchasing games online and downloading them, Fils-Aime said he doesn't think "digital games" will supplant physical copies and the retailers who sell them anytime soon.
"I don't see [Nintendo stopping the sale of game discs] in the future, certainly not the near-term future," he said. "For us, retail is a key part of our overall business. Retailers play a huge role in driving awareness. Their stores play a large role in consumers having an experience with their interactives. We couldn't do a program like what we are doing with Best Buy without the power of retail and letting consumers play four games that haven't been released yet. The only place you can see these games is either here at E3 or at a 100 best buy locations in the U.S. and in Canada. So we see a very strong role for physical product in the near-term."
Ultimately, Fils-Aime said, he doesn't know how much the used game policies of a console will weigh on a gamer's decision to purchase a console, but with the least restrictive policies, it's not something Nintendo has to worry about.
"I think we'll have to wait and see," he said. "I am not sure what the next steps will be, how the different competitors will respond to each other. Again, for us, it is about the games. We want to give the consumers a great gameplay experience."
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