This past March, MCV announced that the average price of video games rose 5.4 percent over the past year. There has been speculation that the next generation of consoles won’t work with used titles. This year EA was named the winner of Consumerist’sannual Worst Company in America in part for its games’ high prices. So yeah, you could say video-game pricing is a point of contention.
While reselling can ease some of this tension, it’s not exactly a system that works in consumers favor. GameStop, for instance, sells a new game for an average of $60, and the average gamer trades it in after 3-4 weeks and gets $17. Then the original game gets resold for $55 – and the cycle continues. And that’s how the used-video-game market is a $2 billion dollar a year industry.
But Lynx2Games has a stupid-simple solution to this problem. Just out of beta, the site allows customers to shop for video games – either to buy or borrow. Here’s how it works: Someone buys a game and invites someone to help pay for it and share it. The person invited to split the cost gets three weeks with the game before sending it back to the original buyer. There’s no cloud storage, sending, or syncing involved; you both front some of the cash, the first buyer gets it for keeps. A new game that would typically sell for $60 might go for around $45 on Lynx2Games, while a borrower pays only $15.
LynxSquare, the umbrella platform under which Lynx2Games falls, soft-launched in late 2011, and decided it would divide itself into separate verticals instead of one giant hub for sharing – Lynx2Games shares the platform with Lynx2Books, Lynx2Movies, and Lynx2Music. The site has also undergone a UI redesign and improved social integration.
Cofounder Zul Momin says the idea for Lynx2Games was in reaction to the economic meltdown that caused buyers to start boarding up their pockets. “The resell market is controlled by big retailers. Because video game stores like GameStop and bookstores, especially college textbook stores, monopolize the market, the customer receives only a fraction of the original cost – typically 75 percent less of the purchase price,” he explains. “These video game stores and bookstores then resell the item to another customer, receiving over 125 percent profit.”
Users don’t need to have a pre-arranged person to go in on the scheme with them either. The platform has a patent-pending algorithm that will set you up with another customer with similar gaming interests, so borrower and buyer are on the same page. Lynx2Games gets a cut of the sale, and is free for users.
The concept behind Lynx2Games puts it in the same bucket as startups like Airbnb, Zipcar, Taskrabbit, and Zaarly – they’re all part of the sharing economy, also called the collaborative consumption movement. These businesses are attempting to get rid of the middleman that stands between buyers and sellers, making the entire process simpler, less expensive, and more resource efficient.
“We are a hyper consuming nation,” Momin says, also noting we’re one that is more connected to other consumers than ever before. “As more and more disruptive companies in collaborative consumption are making headlines, consumer adoption rates will increase and confidence will go up.”
But economic change doesn’t come easy, and there have been legislative barriers standing between these companies and mass adoption. “Policy makers need to come up with innovative ideas like providing tax incentives to customers who buy or share [within] the sharing economy, just like they provide incentives to buy energy efficient cars to promote the green economy. It will not only save consumers tremendous amounts of money but also save the earth valuable resources.”
Fortunately, Momin says Lynx2Games hasn’t faced any legal challenges. “So far we have not found any legal or policy barriers in our model,” he says, noting that revolving around the sale and resale of physical games has made things less complicated than if the team were cornering the digital game-sharing approach.
Digital sharing is in the works, however. At the moment the entire LynxSquare platform functions like Lynx2Games does – sharing the costs of physical products – but Momin says moving into the digital sphere is in the pipeline. “Our approach would be to learn fast, iterate, and then enter into other verticals and the digital space based on user feedback and learning.”
Given this, I asked for Momin’s take on ReDigi, a digital music resell application that has faced legal troubles. “I think in the end consumers will shape the future market of the digital space,” he says. “For years the consumer market was used to buying and selling the product without any restrictions. Publishers and content providers will need to work with online retailers, because the P2P model is good for consumers as well beneficial to the digital content providers because of repeat sales and boosted brand awareness.”