You need to talk to some insiders in retail before you go off thinking 50% is a typical margin on games (and consoles). I own a video game store and the margin on NEW games maxes out at 20% but usually hits around 12-15%. That's GROSS margin. I still have to account for shipping and for the cut for the credit card/debit transaction providers.
Now new CONSOLES is even worse. The margin is 5% or less. We usually lose a little money selling new consoles.
Talk about taking risks. Try operating a video game store that trades in used goods. It slays me that the publishers can even THINK that the used market is damaging their profits. They obviously never took an economics course. Secondary markets drive demand (as most people here know and have indicated) for products and give people the opportunity to lower the risk (cost) to try some games they would otherwise never buy.
Oh and we DO promote games too. I spend OUR money advertising games to try to get people interested in coming in and trying them out and (hopefully) buying them. We let people try any game (and encourage it) before they buy so they know they're getting something they'll like (Halo Wars being a good example of something that didn't meet expectations). The relationship between [new and used] video game retailer and video game publisher is not parasitic as some of them would like to portray, but symbiotic. I for one hope that relationship continues well into the future.
-- Taz
Life would be so much easier if we could just look at the source code. -- Dave Olson