I don't quite follow your argument about AAA titles going away -- how does the sale of used games help the game developer? how does it encourage them to make them?
It reduces the risk for the buyer. A buyer bears less risk than the $60 cost of a game because of the resale value of the game.
In 2007, there was at least $1 billion in new game sales funded through the proceeds of used game sales (between GameStop data and paid industry research).
There's a multiplier effect - game publishers can receive more than $100 in revenue for a given $100 in purchasing power.
That would probably be the "risk mitigation". In simpler terms, I think he means "people are more likely to buy a (AAA, thus probably $50+) game if they know they could sell it used and recoup some cost if they end up not liking it, grow tired of it, etc.".
The AAA gaming market is already pretty fragile, as the games cost so much, the production values are ridiculous, and so on. It's a very hit-or-miss industry, where a partial success is a financial failure and blockbusters are what keep companies afloat.
