Development costs and manufacture costs are 2 different things. Development happens once, manufacture costs are per unit sold. A new car costs millions to design too, but then also costs thousands to make. Digital merch costs zero to reproduce.
Well, not 0 - bandwidth and servers aren't free. Definitely comparatively small, though.
But I don't see how manufacture costs really matter? In the end, it costs X to make the game. Y people buy the game and the publisher gets Z dollars out of it. If Y*Z < X, the company loses money, which isn't going to keep happening for long.
Allowing used game sales is going to MASSIVELY reduce Y. Heaven only knows how much but, given that you can hand your key around different time zones and that you can be very certain of cheaper prices showing up not just in six months but probably just a few weeks later, I wouldn't be surprised if they only got one tenth the sales. If a game company wants to keep spending like they are now, they would need to up the price to $600 per game! The first gamers that buy should be able to sell the game back for $560 (assuming they don't dawdle) but jeez.
They could put a lot less money into development but that leaves them to either charge more for a rather inferior game or charging the same amount for a clearly inferior game.
I think getting out of it means getting out of the law. Start charging a subscription and take games away from anyone who can't keep paying. Steam would need to make some big changes for that. GOG… sheesh, there's just no way it could stay GOG. The games-as-a-service places, though, are already set up for it.
(Of course, another way out would be for the law to change, but that's boring.
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