I'll try to answer..I hope i can help you.. Maybe that is the concept of Reported Speech/Indirect Speech. Which one that said I think it depends. For the first sentence : Indirect Speech :"My friend said that he had never seen this movie before" The direct speech form is : My Friend said, "I have never seen this movie before." For the second sentence : Indirect Speech :"My friend said that he didn't see this movie." The direct speech form is : My Friend said, "I don't see this movie." I more understand if "see" replaced by "watch". So : Indirect Speech :"My friend said that he didn't watch this movie." The direct speech form is : My Friend said, "I don't watch this movie." But..if refers to your question without there is word replaced, I think I would prefer to choose the first sentence. I hope you can accept my explanation..or you more confused instead?he..I'm sorry, I'm learning english too..please someone else can correct me if i give wrong explanation.

My friend said that he had never seen this movie before. My friend said that he didn't see this movie. In practice, these two mean the same. One is an indirect quote (hadn't seen), the other is a direct quote (didn't see).

Please look carefully! 1.My friend said ''I have never seen this movie before". (Direct speech) my friend said that he had never seen that movie before. (Indirect speech) 2.My friend said ''I saw this movie yesterday". (Direct speech) my friend said that he had seen that movie the day before. (Indirect speech) But you can't use "didn't" and "this" in your sentance "My friend said that he didn't see this movie.", it is wrong.

In my opinion The former is that he is just seeing the movie. The later is that he has never seen the movie.