Supreme Court upholds "Right of First Sale".. what does it mean for video games?

I've been having a discussion via email with Bill Harris, who runs the most excellent Blog "Dubious Quality" on the recent Supreme Court decision that upheld the "Right of First Sale" in a case where a foreign student bought textbooks overseas (where prices were cheaper), and then imported them back into the US for resale (at lower than list price.). The court case found that the book publisher could not block the sale on copyright grounds.

Now, at first look, you may not think that this has a lot to do with the video game markets. More often than not, games are region locked for consoles, so you can't play a Japanese Playstation game on an American console, but there are signs that this discussion opens the door to looking at this deeper.

The video game industry has been paranoid about used game sales and their claimed effect on companies bottom line ever since the days Nintendo tried to bar renting of NES cartridges. And the right of first sale, established back in the day of the historic Betamax case says that once we buy something, we control what we do with it. We can sell it on to someone else (as long as we do not infringe the copyright by making an illegal copy of the product) without any consequences.

And the content industries have been wrong about this from the Betamax case. In hearings before Congress, the then-head of the MPAA, Jack Valenti said "The VCR is to the American film producer and the American Public as the Boston Strangler is to the woman home alone.". Wow, hyperbole much? Considering  the industries that sprang up from the VCR/DVD markets, and how much more money it made the content companies, you'd think they had learned their lessons.

But you see import issues even today. And sometimes, it's not even the US doing the importing! On Steam, it's not unusual to see someone from another country send money to someone to purchase and gift a game to someone else, just because it would cost more, sometimes significantly more to buy a game in countries like Australia (where sometimes a game will not even be allowed to be sold at all, due to not being issued a rating due to violence or something similar). This problem is so widespread in Australia that the Adobe, Microsoft and Apple recently got called on the carpet for price gouging in front of the Australian Senate.

If you want to see why publishers want digital downloads so much, it's because they can get away with calling this a license instead of a purchase. You can't sell a game you've finished on Steam. Should you? I'd say yes, but that's just me.

This will get looked at deeper, and I have a feeling sometime in the next two years or so, we'll start to see court cases trying to determine where the line is between licensing a video game and selling a video game, and if it determines that games are sold, not licensed, whether it's an illegal restraint of trade to region lock your DVD player or console system.

You can read a New York Times article (Minimal Paywall) on the court decision here