It is no secret that virtual goods are a hard sell for me; I need to get something not easily duplicated for my money. After my first post Fantasy7 made the argument that people buy a Facebook gift for the experience. They buy it for the joy of giving and for the joy of receiving. A similar argument was made for in-game items for games such as Word of Warcraft. Again, I understand this. Which is why I then wrote a second post to address these issues.
Again Fantasy7 was back, pushing for virtual goods. That music and games could be passed on. That an e-book had just as much value as a book on the shelf you don’t read. If you don’t intend to resell it they have the same value. While, for me, this is an argument that is on rather thin ice I at least understand where Fantasy7 is coming from. But I am not convinced and today I will make another case against virtual goods.
I believe some of the views toward virtual goods are shortsighted. In reality, one can never know how long they will want something. This is why craigslist become a hit quickly and why rummage sales will never go out of style. At some point in time you will have stuff that is either no longer of value to you either because it is junk or too worn/old for you. At such a point one could just throw it away. Or one could gift it. Or recycle it.
Lets take one example most people can get on board with, a car. A car is not something that one generally just throws away. Nor is it something that is generally just gifted – though I do recognize that children may get one as a gift. I think everyone can get on board with the idea that trashing or gifting a car is not the most common thing to do with it. Even though the goal is to get rid of the car, people still sell it because it retains some value in some way, even if it is just for parts. The physical item has value and always will, if only as scrap metal. It may have too small of a value for the owner to do anything but trash it, but there is still value, however small.
Now to my point. Digital goods only have value to the original seller. If this is not the case, can someone please show me where I can sell my iTunes songs I don’t want? Or where to unload my XBox Marketplace download of the original Halo? Only iTunes and Xbox make money in these spaces. Not the case with purchased games where I have a physical, non-easily reproducible copy of the game. Yes it is a copy of some original source code, but there is the case, manual, artwork, etc. that are not easily copied. If you buy an iTunes song or movie it does not take much to make a copy, copyright protected or not.
My larger point is that any virtual good that you purchase is a sunk cost. End of story. This is simply not the case with physical goods. Forget the arguments about worth and experience and all that. Even Fantasy7 can’t argue with the statement that a virtual game or song is a sunk cost (it may be different for online game merchandise, though as soon as the multi-player server goes offline, the player is left with nothing, no matter how much real money they spent). It is simply a fact. And this is why I will always prefer a physical good with any purchase I make. I cannot predict the future, nor can any of you, so why not keep my options open. The physical will always retain value.
So what prompted this post? I was going to throw away some old XBox games. But, I checked online to see if they were worth something. Anything I could get for them would be gravy since the plan was to junk them. And believe it or not, Amazon is selling WWE Raw 2 for $89.94. Others list it new at $29.99 and used at $7.76.
It’s not much but it is a free lunch. Assume that you have just the download from Xbox Live Marketplace. Who’s paying for your lunch?
This has been a Thought From The Cake Scraps.