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"Vast majority of pre-owned sales support new releases" - HMV

Publisher views are mixed on issue, says Simon Fox - but digital distribution is a "serious threat"

HMV UK & Ireland CEO and MD, Simon Fox, has told he believes the "vast majority" of software traded in stores through the pre-owned system contribute to the sales of new games.

Talking in the final part of an exclusive interview, Fox explained that consumers believe they should be able to re-sell items the purchase, as they can with anything else.

"I understand where the publishers are coming from - on the other hand it's hard to find a market where I think the original owner/publisher/manufacturer benefits from the future trade of products - whether it's the second-hand book market, the second-hand furniture market or the ticket resale markt," he said.

"The fact is, in every case, the manufacturer of whatever it might be makes their profit from the original sale, transfers the IP or ownership to the buyer - and if the buyer then chooses to sell that item, it's up to them. You don't hear book publishers asking for a share of the second-hand book market. I've never heard that.

He likened the process to the Amazon Marketplace or eBay, where people trade among themselves.

"I think it's slightly odd that publishers should somehow think that they have a claim to profit that a customer might make on a second sale.

"As a retailer all we're doing is providing an intermediary service, just as eBay is, or Amazon is. We genuinely think that actually what it does is enable people to buy new product - and it allows them to trade-in previously-played product to get a credit and put that back into the games market. The way we've certainly geared our offer is that it's far more advantageous for the customer not to take cash, but to take a credit that's then used in buying another game.

"The vast majority of our pre-owned sales are to support new releases," he added.

He admitted that publisher's reactions had been mixed on the matter, but denied that relationships had been damaged as a result.

"No, I don't believe it has," he said. "I've met both types - publishers that genuinely think what we're doing is wrong, or if it's not wrong that they should be benefiting from what we're doing. And others feel much more relaxed.

"As a retailer we feel it is something that our customers want - we weren't first into this market, we were a late-comer. It's not a big part of our mix, but it is an important part of our mix - and what we do is, in some degree, part of way of competing with supermarkets on pricing.

"By providing a trade-in offer on a new release you can make that new release affordable, perhaps even cheaper than the supermarket price - but it's part of a deal. They bring something back, and in exchange they can have the latest product at a very competitive price."

The full third part of the interview with Simon Fox is available now. Parts one and two are also live.

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