Gamestop Offers Glimpse Into Their Used-Games Facility

from the they're-tired-of-being-labeled-the-villain dept

IGN has a very cool story about what happens to the used games that get traded into Gamestop Stores. The entire article is quite fascinating and a rare glimpse into a notoriously secretive company's business, but it's the why of this article I want to focus on. Or, more specifically, why Gamestop opened their doors for this piece.

Used-game sellers generally, and Game Stop specifically, have been a constant target of game producers. They claim that used game sales keep people from buying games in their awesome new shrinkwrap. As the IGN article notes, this is a case of only looking at one side of the coin (those that are going to Game Stop to buy used games) without acknowledging the other side (those that are going to Game Stop to trade in used games). The article expands on this:
"GameStop’s bosses are obviously tired of hearing about how used games are killing gaming, about how unfair they are on the producers of the games who get nothing from their resale.

One astonishing stat is repeated by three different managers during presentations. 70 percent of income consumers make from trading games goes straight back into buying brand new games. GameStop argues that used games are an essential currency in supporting the games business."
So, if that number is correct, the interest in used games by some consumers is what drives the purchase of new games by other consumers. This is similar to what we've seen in book sales, where used books fuel the new book market. Being able to trade in games doesn't simply result in money collected for the retailer; it results in money collected by game producers as well. This goes beyond simply mentioning first sale rights. If used games are fueling the purchase of new games, what are producers complaining about? If Gamestop is to be believed, it's a significant part of the new games market:
"GameStop says 17 percent of its sales are paid in trade credits. The implication is clear - if the games industry lost 17 percent of its sales tomorrow, that would be a bad day for the publishers and developers."
So maybe game producers should be thanking Game Stop instead of griping.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Keii (profile), Aug 8th, 2012 @ 12:16am

    Oh Gamestop is not entirely faultless with their business practices. Just ask any of their customer-facing employees.

     

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    Grammar, Aug 8th, 2012 @ 12:17am

    I stopped reading at the first line.

    *they're*, not their.

     

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    Anonymous Coward, Aug 8th, 2012 @ 12:23am

    While I believe this is probably true I still will probably never shop at a Gamestop I just hate their practices towards consumers.

     

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    Josh (profile), Aug 8th, 2012 @ 12:24am

    Of course it would be nice if they had trade in prices anywhere near reasonable. I wanted to trade in my Wii, get an Xbox. I had a mint condition Wii, 4 Wii-motes (2 of them those light up afterglow ones) a charger, a balance board, 2 motion plus accessories, all the cables and such, and half a dozen games. They offered $15 for the lot of it. Needless to say, I just kept the damn Wii.

     

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    Anonymous Coward, Aug 8th, 2012 @ 12:26am

    Yep even with fueling new game sales they still rip off the consumer. But yes some videogame companies freaking out over used game sales are pretty crazy.

     

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    Anonymous Coward, Aug 8th, 2012 @ 12:49am

    Re: I stopped reading at the first line.

    arrrrggh a wrong grammer nazi!

    their was correct!

     

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    Anonymous Coward, Aug 8th, 2012 @ 12:50am

    "70 percent of income consumers make from trading games goes straight back into buying brand new games."

    Question: where did that money come from? The other people buying used games. It's a misleading number, because someone has to be buying the used stuff. So 70% of what... how big is the resale business? That would be a good indication of how much used is eating into the new market, because clearly the money isn't just appearing out of the sky, people are buying used.

    Considering that what gamers get for a used game is about 25% of the price of a new game, they have to sell 4 times as many USED games to buy a single new game. It doesn't add up very well, does it?

     

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  8.  
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    IronM@sk, Aug 8th, 2012 @ 12:54am

    Re: I stopped reading at the first line.

    Second line, actually.

    from the --->their dept

     

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  9.  
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    IronM@sk, Aug 8th, 2012 @ 12:55am

    Re: Re: I stopped reading at the first line.

    Second Line: from the "their"-tired-of-being-labeled-the-villain dept

     

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  10.  
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    IronM@sk, Aug 8th, 2012 @ 12:57am

    Re: Re: I stopped reading at the first line.

    Should have previewed befaor I posted, but this is what happens when you don't include an edit function.

    from the their-tired-of-being-labeled-the-villain dept

     

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  11.  
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    Anonymous Coward, Aug 8th, 2012 @ 1:18am

    Re:

    That the caveat isn't it in that someone's buying the used games. I'll believe Gamestop is right on the way they phrase it though in that the guy trading in the games is buying new ones.

     

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  12.  
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    Mike Masnick (profile), Aug 8th, 2012 @ 1:35am

    Re: I stopped reading at the first line.

    If you stop reading everything that has a typo in it, you won't read very much in life.

    Either way, I've fixed it.

     

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    Anonymous Coward, Aug 8th, 2012 @ 1:48am

    "That would be a good indication of how much used is eating into the new market, because clearly the money isn't just appearing out of the sky, people are buying used."

    As much as I hate car analogies... you better not be driving around in a used car with that philosophy, or buying used furniture, or accepting it from family or friends. Think of the new sales!!!

    Personally, I'm a late adapter and I'm the kind of people the game companies will say "good-bye" to if they continue down their current path. The Wii may be my last console purchase. No console sales = no sales period. I'm not interested in any system that requires an internet connection or that only sells part of a game on disc and makes you download the rest. I don't care how awesome the graphics are. I won't buy the damn system new or used!! Eventually something newer and better will come along, the online networks will go down, or the company will just go under, and I'll be left with a pile of trash that I can't sell or even throw in the garbage nowadays. I WILL however continue to enjoy my older systems, of which I have plenty, to keep my busy until I'm so old that I'm physically unable to play anymore.

     

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    Anonymous Coward, Aug 8th, 2012 @ 1:52am

    Re: Re: I stopped reading at the first line.

    Hey Mike,
    What's going on with the home page? If I refresh or come back later it always loads about a 1/4 way down the page at the same point.

     

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    Anonymous Coward, Aug 8th, 2012 @ 2:42am

    Re: Re:

    yes, but the question is valid here... at a 4 to 1 trade ratio, it means that the resale market on used games is much bigger than the market of new games bought by the sellers.

    Remember: Game stop pays for the used games a low amount (I think it's 25%) and resells it at about 50% (of the original price). So for every "new" game sale they make (and make whatever their margin is, maybe 30%), they make 100% margin on the same cash value of used games sold.

    They have a big vested interest in justifying the used market, it's where they make a huge margin.

     

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    Anonymous Coward, Aug 8th, 2012 @ 2:48am

    Re: Re: Re:

    Further:

    "So, if that number is correct, the interest in used games by some consumers is what drives the purchase of new games by other consumers."

    Actually, it seems the reverse - by creating a market for used games, Gamestop is diverting potential new game buys away from the lower margin product, and towards their 100% margin used game department. Any new sales that come as a result are only a side effect of them maintaining this increidbly lucrative re-sale margin.

     

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    The eejit (profile), Aug 8th, 2012 @ 2:54am

    Re: Re: Re:

    But, with rare exceptions, the used market will always outstrip the trend-stters. This is basic economics on reusable goods. Without the used video market, there would be far fewer videos. The same goes for DVDs and Blu-ray. IF there is no aftermarket, then chances are there's no actual market ion the first place.

    There are, fo course, majhor exceptions to this. For example, Steam and its ilk, where, at the moment, there is no ability to transfer games to another account outside of gifting.

     

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    Anonymous Coward, Aug 8th, 2012 @ 3:10am

    Re: Re: Re: Re:

    Yes, I understand that. However, they are pushing that the used market specifically supports new product sales, but that just doesn't seem the case. Rather, only 70% of the used trade in money goes to new product, the rest goes off the table. In the mean time, the used product buyer ISN'T buying new, but what they are doing is driving Gamestop's bottom line on their 100% gross margin business.

    They are basically attempting to justify their resale market by suggesting SOME of the money goes to new. But they don't address what used product buys MIGHT have done if they used product wasn't available... like save up a little more and buy new.

     

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  19.  
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    Mesonoxian Eve (profile), Aug 8th, 2012 @ 3:38am

    If there's a gaming exec reading this...

    ...be very, very thankful for GameStop. I may pay $19.99 now, but if the franchise is good, you'll get my $60 later.

    Just ask 2K games (Bioshock), Bethesda* (Elder Scrolls), and Ubisoft (Assassin's Creed).

    Give me a little more time to find other franchises. I just got my 360 about a year ago. I'm sure I'll find more good franchises.

    And if you do it right...

    *I bought the full package that included the Alduin statue.

    :D

     

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  20.  
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    Ninja (profile), Aug 8th, 2012 @ 3:39am

    The implication is clear - if the games industry lost 17 percent of its sales tomorrow, that would be a bad day for the publishers and developers.

    What the MAFIAA understands: OMFG used games black market costs 17% of the world GDP! Something must be done about these filthy pirates, let us pass more bad laws!

    No really, they still think Google and its botnet stopped SOPA, I strongly believe this scenario is possible.

     

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  21.  
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    Ninja (profile), Aug 8th, 2012 @ 3:48am

    Re: Re: Re: Re: Re:

    You see, if I really want a game (ie: have played via file sharing and loved it) I will not buy it used. And if a title is good enough it will not be nearly as much available as most of us would want. Meaning that if the game is crap you'll find a lot of it in the used market. If it's not you won't. Even I stay away of a game if there are too many being offered as used.

    So basically, who the used market hurts the most? The very same ppl that file sharing may hurt.

     

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  22.  
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    Ninja (profile), Aug 8th, 2012 @ 3:49am

    Re:

    That. You, good sir, are brilliant.

     

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    Anonymous Coward, Aug 8th, 2012 @ 4:11am

    apart from little plastic discs with various bits of information on them, what else gives money to the maker when resold? governments stitch people up by charging tax on 2nd hand purchases like cars, for example, but i am unaware of Ford or Chevrolet getting another amount. correct me if i am wrong.

     

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    anon, Aug 8th, 2012 @ 5:02am

    Re:

    If i trade in 4 games and get 25% of the new price tag and 70% of that money i spend goes to a new game and i keep buying a few second hand games with the 30% left i am in fact spending 70% of my money from trading on my older games. Also i might just add a few dollars to the trade in value to get the new game i want. Simple math really.

     

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  25.  
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    marak (profile), Aug 8th, 2012 @ 5:20am

    Re: Re: Re: I stopped reading at the first line.

    Huh i thought it was a bug on my end o.0

     

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  26.  
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    marak (profile), Aug 8th, 2012 @ 5:20am

    But... but... THE CHILDREN THINK OF THE CHILDREN!

     

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  27.  
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    Dionaea (profile), Aug 8th, 2012 @ 5:37am

    Re:

    Same here. One of the reasons I never buy PC games anymore is that some of them stopped working completely due to severed connections/incompatibility with newer PCs. I don't see this happening to my old N64, Gamecube, PS2 or GameBoy/DS games, as long as you don't break your game or console they'll work for all eternity. These new consoles are no better than the PC stuff I came to hate so much.

     

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  28.  
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    Anonymous Coward, Aug 8th, 2012 @ 5:39am

    Re: Re: Re:

    Remember: Profit margin is Revenue - cost / Revenue * 100

    The only way to make 100% margin it for GameStop to buy a used game at 0% of the game value.

    Leave creative accounting to the pros.

     

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  29.  
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    Anonymous Coward, Aug 8th, 2012 @ 5:43am

    Dear Game Producers

    Just thought that I need to pen this little note, 'cos I think you have forgotten what your real word customers are like.
    When I buy one of your games, please realize I do not have pockets that contain an infinite amount of cash. I cannot just go and buy everything that I might want, just because it is freaking awesome. I have to pick and choose what I can afford.
    One of the factors in my decision is if there is a second hand market. If there is, I can offset the resale value and I might be able to afford it.
    If not, I won't buy it.

     

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  30.  
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    Anonymous Coward, Aug 8th, 2012 @ 5:49am

    Re: I stopped reading at the first line.

    Me too,since there was only one line.

     

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  31.  
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    Lord Binky, Aug 8th, 2012 @ 6:04am

    Re:

    Like making the new games more of a hassle to buy than the used ones? I don't know how many times I've said something along the lines of 'Stop. I don't want a used copy for $4 less, I want a new one, quit asking if I'm sure.' followed by 3 or 4 no thank you's for game guides, reservations, memberships, etc. Not that the sales person doesn't listen each time, they know a lost cause when they see it, but it is annoying I need to have the same conversation almost every time.

     

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  32.  
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    Michael, Aug 8th, 2012 @ 6:05am

    Re:

    "As much as I hate car analogies... you better not be driving around in a used car with that philosophy, or buying used furniture, or accepting it from family or friends. Think of the new sales!!!"

    Buying and selling used products is a large part of what makes the free market engine work.

    "Personally, I'm a late adapter and I'm the kind of people the game companies will say 'good-bye' to if they continue down their current path. The Wii may be my last console purchase. No console sales = no sales period. I'm not interested in any system that requires an internet connection or that only sells part of a game on disc and makes you download the rest. I don't care how awesome the graphics are. I won't buy the damn system new or used!! Eventually something newer and better will come along, the online networks will go down, or the company will just go under, and I'll be left with a pile of trash that I can't sell or even throw in the garbage nowadays. I WILL however continue to enjoy my older systems, of which I have plenty, to keep my busy until I'm so old that I'm physically unable to play anymore."

    That's the message that needs to be sent to the big devs that want to make the transition to digital-only in the near-future, such as EA. Retro consoles can be played anywhere and at any time, without restrictions. That's one of the reasons why the retro market is still thriving; another reason being that the older classics are considered by many, myself included, to be superior.

    The vast majority of contemporary software is cookie-cutter, heavily cinematic and void of compelling gameplay experiences. Their glorified graphic engines and glitch-laden sandbox environments are a huge turn-off. Yeah, 3D was great and all back when it was fresh and new but now it's become so commonplace that it's grown stale. What good is all this high-end technology without great imagination?

    I actually long for the traditional 2D pixel-art of yesteryear. They rarely balance the playing field with great 2D offerings and even those few exceptions are almost always done up in that quasi-Flash animation style to compensate for their lack of artistic integrity. Just slap up some generic Saturday morning cartoon-looking characters with multi-jointed limbs in order to avoid having to manually draw the animation, add a dash of processing + special effects and call it a day.

    Gamers were once considered dorks, nerds and losers with no social life, and yet funny how now practically every household has at least one console in it. It sure was great back when it was a niche hobby controlled primarily by Japanese developers during their bubble economy. But ever since gaming broke into mainstream sucess, corporatism has permeated everything, stomping out creativity for the sake of the almighty dollar. Everything revolves around how developers can maximize profit at minimal risk. They intentionally lock content so that later they can tack on an extra fee. They include online passes with software so that if you purchase a product used, they can charge you extra to connect (which is often required in order to play) and many developers are forcing an online connection, even to play solo. They use the consumers as unsuspecting guinea pig play-testers to weed out bugs and glitches they missed because they 'had to meet a deadline,' then have the nerve to charge consumers extra to patch their *finished* products. I could go on all day.

    So, yeah, that's why gaming sucks right now. We never had to deal with all this crap back in the glory days of gaming, when most developers actually cared about things like quality, creativity, fun-factor, replay value, and giving gamers extra content (all of it free) as an added incentive to purchase their products.

     

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  33.  
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    Anonymous Coward, Aug 8th, 2012 @ 6:27am

    Re: Re:

    I've practically got a video game museum here. I've missed a few systems over the years, but I can play ALMOST anything from Pong to Wii in this house. I'll never run short of video games to play:) Screw the greedy bastards!

     

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  34.  
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    Dreddsnik, Aug 8th, 2012 @ 6:27am

    Re:

    Not being snarky, what practices ? I have been a game stop customer for almost as long as there has been Game Stop ( weren't they called 'Babbages' at one time ? ) and I have never, ever had any reason to complain about them. They seem mostly friendly, the ones I talked to seem to really know their games ( some pretty hardcore gamers work there ). The only issue I would ever have isn't their fault. You can't return a crappy game, whether it's unplayable due to bugs or just a POS. That's not just them, that's every place that sells games. No 'Right of Return' is a universal policy and the primary reason I won't ever purchase a new game. I only buy used after all of the bugs have been found by the paying beta testers ( the customers )and patched. If the 'Right of Return' were reinstated I'm willing to bet that not only would more people buy new, large companies that enjoy pushing out a half finished game might actually have to worry about placing a finished product on the shelf.

     

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  35.  
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    Anonymous Coward, Aug 8th, 2012 @ 6:29am

    Re: Re:

    It is. But you are ignoring where your money came from. Look at the 4 consumers that had to buy your used games in order for you to have enough money to buy new. Those people are the ones of concern - the ones that Gamestop is specifically trying to get you to NOT look at.

    It's magician's flash paper. They are getting you to look OVER HERE at what they want you to look at, and hope you forget about the rest of the process.

     

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  36.  
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    Josh in CharlotteNC (profile), Aug 8th, 2012 @ 6:30am

    Re:

    So 70% of what... how big is the resale business? That would be a good indication of how much used is eating into the new market, because clearly the money isn't just appearing out of the sky, people are buying used.

    70% of trade-in credit goes to new games. Which means the remaining 30% is made up of buying other used games, or just ends up sitting in customer's accounts.

    You make the (time and time again) disproven assumption that everyone who buys used games would have bought a brand new game at full retail price. Please learn some basic economics.

    You also assume that in the absence of a trade-in market, the sale of new games would not drop. Some of those buying a new game are willing to pay the price because they know they'll play it for a few weeks or a month, and then trade it in and be able to recoup some of their money for another game.

    The stat I'd really like to see: how many new games are purchased with any trade-in credit at all. That would be what new sales would drop if used sales were to go away. Those sales are what are going to the most dedicated gamers - the ones who are buying the games near release dates, playing them, trading them in, then getting the next release. They are the most loyal customers. They are the trend setters and the opinion influencers - beware of pissing them off.

     

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  37.  
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    Dreddsnik, Aug 8th, 2012 @ 6:35am

    Re: Re: Re: Re: Re: Re:

    I'm just the opposite.

    I won't buy them new.

    " Meaning that if the game is crap you'll find a lot of it in the used market. "

    I bought 'The Witcher ', X3 Terran Conflict,Dungeon Siege 2, Freelancer etc .. a very long list of games that I think are pretty damn good, and never paid more than 20.00 for them. Most of the bugs were found and patched by the time I bought them so I didn't have to pay for the privilege of beta testing. As long as there is no right of return for games and other similar media I won't buy new .. ever.

     

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  38.  
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    Timothy Campbell (profile), Aug 8th, 2012 @ 6:37am

    Gamestop Cleaning Up, Oh My!

    Yes, GameStop is making a killing on those games, but that might actually work out well for everybody. Consider this: because GameStop is so profitable it can set up shop in even crappy markets. I live in Eastern Kentucky, in a "hillbilly" county that is far from rich. Yet even here we have two GameStops. And we've purchased new games from them.

    Yes, we've purchased used games, too. But if our only choice had been WalMart we probably wouldn't have purchased those because we'd have become discouraged by the entire process.

    Why? Because for every 10 games we buy, only 1 really catches our interest. The other 9 will make us motion sick, or have a hokey game mechanic, or horrid voice acting, or simply isn't what we expected. How many times would we spend $60 before we gave up on the whole exercise?

    Yet when we finally learn of a game we like (Call of Duty and Fallout come to mind) we zip on over the GameStop and buy it NEW or even in a Special Edition. The ability to buy used games has taught us how to recognize what we'll like AND when we're ready the GameStop is conveniently close by. (It also doesn't hurt that their magazine Game Informer has lots of reviews to pique our interest).

    If not for GameSpot, my wife and I would probably buy only one game a year. But because GS exists we buy about 3, two of which are pre-ordered.

     

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    Anonymous Coward, Aug 8th, 2012 @ 6:41am

    Re: Re:

    Hate the policy, not the person brow beaten and threatened of losing a 'good enough job' if they don't follow the script.

     

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    AzureSky (profile), Aug 8th, 2012 @ 6:43am

    last I checked, at least around here, you cant do 100% trade for new titles/items at gamestop, they limit you to a %, you can get a higher % off of used then new, but you dont save much here buying used anyway, so most people I know who do shop there, buy new and trade in stuff they dont want to play again(mostly crap games), once in a while sell games for cash to friends or on ebay then recycle that money into buying more new games.

    another thing to point out that nobody has mentioned is that publishers STILL get full price for the new games, even if people where to be able to trade in 4:1 to get them.

    remember, gamestop buys the games they sell from publishers or their primary distributors, so they are just complaining that they possibly could have sold a few more copies at full price if gamestop didnt make it convenient and easy to trade in used stuff.....

    the converse is that places where there is no gamestop (and even places there is one) you can find groups of people who just trade games or buy/sell/trade games because they cant afford to buy every new title that comes out....I was part of a group like this for PC games years ago, it was good some of the guys would even buy extra copies at full price and trade them for older titles or titles they couldnt buy locally....(managed to get 3 brand new titles for one older hard to find box set that cost me less then 1/2 the price of 1 of the new titles, he really wanted that box set....hehe)

    my point is, unless your a total idiot, used buy/sell/trade programs do not equate to less new sales, they actually drive new sales, and they get people into new franchises much the same way deep cut steam sales have done for some less known games......

    hell, i cant count the number of games I have on steam that I only got because of crazy sales that then lead to me buying the whole franchise AND on top of that, getting friends and acquaintances to buy in as well

     

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  41.  
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    Anonymous Coward, Aug 8th, 2012 @ 6:43am

    Re: Re:

    Well said. My wife would agree with you completely regarding the 2D style gameplay. She still prefers much of the old SNES or Genesis games to even the PS1 games. She loves the Wii too. It just depends on the games. Mostly it's the platform style games.

     

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  42.  
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    teka (profile), Aug 8th, 2012 @ 6:45am

    Re: Re: Re:

    "Had" to buy?
    Flashpaper?

    Some people can choose to buy a game for a slight deduction. they Choose to. They know exactly what is in the box when they are handing the money to the counter attendant.

    So some people who want to pay a little less for a somewhat less valuable product get what they want, someone else gets to unload a product that is no longer very valuable to them in exchange for a small amount of cash or credit which almost always gets turned right around into new games one way or anther.


    Where is the spooky scary magician trick?

     

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  43.  
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    Anonymous Coward, Aug 8th, 2012 @ 6:46am

    Re: Re: Re:

    No, I will hate both, and have never gone back to another gamestop since.

    (im definitely not interested in their chump change they offer as trade credit.)

     

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  44.  
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    Anonymous Coward, Aug 8th, 2012 @ 6:51am

    Re: If there's a gaming exec reading this...

    Mass Effect. Gears of War. Dead Space. :)

     

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  45.  
    identicon
    Lord Binky, Aug 8th, 2012 @ 7:06am

    Re: Re: Re:

    Politeness is merely replaced with directness when the actual person (not the policy fails) to understand I am not target audience. Hopefully I'm not hating on a person when I tell them 'no thank you'. Who knows, there may be a policy that they have to feel butthurt when their script fails.

     

    reply to this | link to this | view in thread ]

  46.  
    identicon
    Michael, Aug 8th, 2012 @ 7:07am

    Re: Re: Re:

    There's been a noticeable lack of traditional 2D art and gameplay. Is it just by sheer coincidence how most of the former creativity vanished when 3D supplanted 2D? I play video games as an escape from reality, something which 2D fosters better than anything else because it leaves so much to the imagination. 3D attempts to 'fill in the blanks,' so to speak, and leans toward realism.

     

    reply to this | link to this | view in thread ]

  47.  
    identicon
    Anonymous Coward, Aug 8th, 2012 @ 7:16am

    Re:

    You're assuming that, in the eyes of consumers, used and new are good substitutes. Studies show they're not. What this means is people buying used games wouldn't be buying new anyway so the fact that for every 4 or so used games purchased a person who does buy new gets enough credit to buy another new game means the used game is increasing sales. It can't not.

     

    reply to this | link to this | view in thread ]

  48.  
    identicon
    Anonymous Coward, Aug 8th, 2012 @ 7:18am

    Re: Re: Re:

    You're acting like buying used is automatically a suspect activity they want to distract from. It isn't. People buying used is not 'of concern.'

     

    reply to this | link to this | view in thread ]

  49.  
    identicon
    Anonymous Coward, Aug 8th, 2012 @ 7:22am

    Re: Re: Re: Re: Re:

    Yes, I understand that. However, they are pushing that the used market specifically supports new product sales, but that just doesn't seem the case. Rather, only 70% of the used trade in money goes to new product, the rest goes off the table. In the mean time, the used product buyer ISN'T buying new,


    I'm going to stop you right here because this is where your logic derails completely. You're assuming they would buy new given no other choice. That's simply not a good assumption. Furthermore you cannot make that assumption when the thing you're trying to prove is that used sales cannibalize new sales because it's begging the question.

     

    reply to this | link to this | view in thread ]

  50.  
    identicon
    Anonymous Coward, Aug 8th, 2012 @ 7:23am

    Re: Re: Re: Re:

    Gamestop doesn't 'create' a market for used games. They service the market for used games that would be there if they were the ones servicing it or not.

    You also have yet to provide any actual evidence, other than your a priori assumption that it does, that used sales 'divert potential new game buys.'

     

    reply to this | link to this | view in thread ]

  51.  
    identicon
    Anonymous Coward, Aug 8th, 2012 @ 7:24am

    Re: Re: Re:

    The fact that they're making money off of the used games market doesn't speak to the used market affecting the new market positively or negatively. That's what's known as ad hom.

     

    reply to this | link to this | view in thread ]

  52.  
    icon
    Mesonoxian Eve (profile), Aug 8th, 2012 @ 7:29am

    Re: Re: If there's a gaming exec reading this...

    I've got GoW, just haven't played it yet. GS had a buy one get one offer on the title.
    :)

     

    reply to this | link to this | view in thread ]

  53.  
    identicon
    andrew, Aug 8th, 2012 @ 7:30am

    Re:

    I don't know where you pulled that 25% number from but it smells like ass.

    My son used to work at gamestop and I've seen the trade in value of a $49.00 (new) game be as low as 3 or 4 dollars. The resell price for the game, used, might be as high was $29.

    It's a huge money making racket for gamestop.

    I watched a guy bring in a stack of games, perhaps 20 games total, and they offered him about $80 cash.

     

    reply to this | link to this | view in thread ]

  54.  
    identicon
    Mason Wheeler, Aug 8th, 2012 @ 7:30am

    Re: Re: Re: I stopped reading at the first line.

    I'm seeing it too. I've seen it since yesterday. It seems to be related to the graphics on the UCF article.

     

    reply to this | link to this | view in thread ]

  55.  
    identicon
    Anonymous Coward, Aug 8th, 2012 @ 7:32am

    Re: If there's a gaming exec reading this...

    Even getting away from sequels this can work similarly simply for developer name recognition.

     

    reply to this | link to this | view in thread ]

  56.  
    identicon
    Anonymous Coward, Aug 8th, 2012 @ 7:33am

    Re: Re:

    That speaks to there not being enough competition in the used games market really.

     

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  57.  
    identicon
    Travis, Aug 8th, 2012 @ 7:41am

    I'm sure the publishers realize this. They just want it both ways. They want money for new game purchases and they want a cut of used game sales.

     

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  58.  
    identicon
    grayputer, Aug 8th, 2012 @ 7:46am

    Re:used vs. New

    Many Many Many years ago when my children were younger, I had video games all over the house. As a general rule, my son (less so my daughter) would get some game for a birthday or xmas or other event. Otherwise he bought his own. Given a typical tween to teen income it was not unusual for him to trade in a pile of old games and some cash for a new one or wait until he could find a used game in his price range. I'd guess that all the new games he bought entailed some sort of trade in. I'd also speculate that he bought about 50% of the games he got. Given his income, a ban on used sales would have killed his purchasing of games. Lack of games to play would have likely reduced his need for 'console' video gaming, further reducing purchases.

    Now like all parents, I like to think my kids are special. However, in this particular case, I doubt it. I'm sure some percentage of used games bought are due to pricing/finances. I'm reasonably sure that once you have a stack of games you rarely play and you REALLY REALLY want new game X but can not afford it, that a 'sale of old games' (private or commercial sale, trade, etc.) to fund the new one comes to mind (regardless of your age).

    So yeah, I can believe that the used game market funds the new game market to some extent.

     

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  59.  
    identicon
    Dreddsnik, Aug 8th, 2012 @ 7:57am

    Re: Re: Re: Re: Re: Re:

    " You're assuming they would buy new given no other choice. That's simply not a good assumption. "

    Exactly. It's the same as the assertion that every download equals a lost sale. Neither assumption is true.

     

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  60.  
    identicon
    Anonymous Coward, Aug 8th, 2012 @ 8:05am

    Re: Re: Re: Re:

    You missed it. Not part of the transaction is a magician's trick. The point is that Gamestop specifically doesn't address the other half of the equation what percentage of new game buyer will buy used instead - the lost sales. Instead, they focus on a narrow factoid to try to justify the process.

    Yes, 70% of the money earned selling used games goes towards new games. It's not shocking, because people who are selling used games are already game buyers. They have done it before, they will do it again. It's such a narrow part of the question, it's almost misleading.

    The real question they will not answer is how many people purchases a used copy of a game rather than a new one, because both were available?

    They are trying not to get you to look at that half of the business model, because that is where the new game sales are lost.

     

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  61.  
    identicon
    Anonymous Coward, Aug 8th, 2012 @ 8:09am

    Re:

    No offense, but I'm calling shenanigans on this. I just traded in 3 games a few weeks ago and got $20. There's no way they'd offer $15 for a current console, nevermind with all of that other stuff included with it.

     

    reply to this | link to this | view in thread ]

  62.  
    icon
    The eejit (profile), Aug 8th, 2012 @ 8:15am

    Re: Re: Re: Re: Re:

    So hang on - what you're arguing is that used games mean that the dev companies are losing out because they aren't getting paid. Am I right?

     

    reply to this | link to this | view in thread ]

  63.  
    icon
    Keroberos (profile), Aug 8th, 2012 @ 8:21am

    Re: Re: Re: I stopped reading at the first line.

    Same here. Thought it was on my end too.

     

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  64.  
    icon
    DanZee (profile), Aug 8th, 2012 @ 8:24am

    Retail Model

    Some people have commented about the low price GameStop will pay for used games and then mark them up 100% and sell them. But 100% mark up is the standard mark up for retail organizations. You have to think of the costs involved in running a store. Rent alone can cost between 5%-20% of gross sales. (Mall rent is towards the higher end.) Likewise employees can cost between 5%-20%. There's also utilities, taxes, accounting costs, technology costs. Additionally, for the company, there's the cost of opening new stores and the cost of closing down non-performing stores or subsidizing unprofitable stores. So 100% markup is fairly reasonable especially for a store where the average purchase is probably around $60.

     

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  65.  
    identicon
    Anonymous Coward, Aug 8th, 2012 @ 8:25am

    Re: I stopped reading at the first line.

    Seriously dude?

     

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  66.  
    identicon
    BigKeithO, Aug 8th, 2012 @ 8:27am

    Re: Re: Re:

    Agreed. If publishers don't like it offer up their own trade in program and sell the traded in games used for a discount.

    This is the same argument the **AA's have against bittorrent sites. These other companies are making too much money with our IP!! The horrors! If these other companies and/or sites are making so much money doing this why don't you just do it as well?

     

    reply to this | link to this | view in thread ]

  67.  
    identicon
    BigKeithO, Aug 8th, 2012 @ 8:31am

    Re: Re: Re: Re:

    Check out "The Banner Saga". It was a Kickstarter project, hand drawn 2D art in the style of classic Disney. Might be something you're in to.

     

    reply to this | link to this | view in thread ]

  68.  
    icon
    sheenyglass (profile), Aug 8th, 2012 @ 8:44am

    Re: Re: Re: Re: Re:

    As eejit pointed out, a secondary market (used games) assists sales of goods on the primary market (new games). Assuming GameStop offers 25% for trade ins, if people are willing to pay $60 for a new game with the assumption they can sell it for $15, then they are really only willing to pay $45 for it. So without the used market, those new games would be less valuable.

    Notice how after the initial release demand drops and sales gradually decline to the point it becomes cost effective to sell "new" (in the sense of not used) games for $30? Well without the cushion of a potential used sale, demand for the game on its initial release and afterword would be lower, meaning initial prices would be lower and/or price drops would be required.

    If you look at downloadable PC games, which are non-transferable, their prices tend to be lower than console games. Interestingly, I just went over to amazon to double-check; of the six games proffered for pre-order (All AAA), you can pre-order 5 of them for lower than the console version, 4 of them for $45 or less. The only one at full price was Call of Duty: Black Ops 2.

    So basically, even without trade-in money being used to purchase more new games, I think its reasonable to argue that without the used game market, prices for games would drop significantly. If every new game sold for $45, then the videogame industry would see revenue decrease 25% I doubt it would drop that low all the time, but a much more modest 10% revenue drop would still be disastrous.

     

    reply to this | link to this | view in thread ]

  69.  
    icon
    sheenyglass (profile), Aug 8th, 2012 @ 8:51am

    Re: Re: Re: Re:

    Although Steam provides other advantages which may compensate. For example, ease of use across multiple devices.

     

    reply to this | link to this | view in thread ]

  70.  
    identicon
    Anonymous Coward, Aug 8th, 2012 @ 9:02am

    Re: I stopped reading at the first line.

    Then you need to repeat english 101

     

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  71.  
    identicon
    ld, Aug 8th, 2012 @ 9:23am

    Re: Re: Re:

    There's a 4 to 1 ratio because not everyone can shell out $50 to $80 bucks for a game all the time.
    It's like sports cars, there's a much bigger market for used Porsche 911s than there is for new ones because more people can afford the used one, even though they might like to have a new one.

     

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  72.  
    icon
    Jeffrey Nonken (profile), Aug 8th, 2012 @ 9:55am

    Warning: Car Analogy Ahead

    Take the whole article (and pretty much every article written on the subject), replace "game" with "car" and any specific business references with used car dealerships or car manufacturers, as appropriate, and I think the result is the same: the car manufacturers whine that they can't sell new cars because the used car market completely destroys the new car market.

    It's not the same (for one thing, games don't generally need regular maintenance and don't usually break down halfway through an weekend trip to see the folks) but it's a strong parallel. Starting with the fact that people expect to be able to sell the car when they're ready to move on, which helps finance the purchase of the next car.

    Me, I'm a filthy selfish pirate who has never, ever bought a new car.

     

    reply to this | link to this | view in thread ]

  73.  
    icon
    Keroberos (profile), Aug 8th, 2012 @ 10:08am

    Re: Re: Re: Re: Re:

    Your arguments might be a little more reasonable sounding if you'd quit throwing around that "100% gross margin" line. It shows that you didn't actually read the linked article, nor have a clue what you're talking about. All that shipping, storing, processing, and re-shiping of the used games they buy is paid for out of Gamestop's "100% gross margin", but with new games all those costs are paid for by the distributer and are included in the wholesale price of the product, this usually includes the return shipping for unsold/damaged product. And you have to subtract all the used games they sell at a loss--or can't sell at all--plus any defective merchandise, so I wonder how much difference in profit there is for Gamestop between a new game and the same game used (it's probably not near as much as all the haters want to believe it is).

     

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  74.  
    icon
    That One Guy (profile), Aug 8th, 2012 @ 10:09am

    Re: Re:

    >The stat I'd really like to see: how many new games are purchased with any trade-in credit at all. That would be what new sales would drop if used sales were to go away. Those sales are what are going to the most dedicated gamers - the ones who are buying the games near release dates, playing them, trading them in, then getting the next release.

    At least with gamestop I'd assume that would be a fairly decent number, due to their practice of giving 'special deals' when you trade in a game and use the credit for a new one.

    If I'm remembering correctly, they usually give a fairly high percentage bonus(the one listed on their site now is an extra 30%) to the trade in value if it's put towards a new game, and you also get a pretty decent amount if you trade in a game close to when it's released.

    Combine these two and you've got good incentive for those kinds of people who will buy a new game, play it, and trade it in towards another new game in a short period of time, which helps everyone involved.

    -It gives Gamestop a steady stream of used games to sell for full profit.
    -It gives game publishers a steady stream of sales, actually benefiting from used games entering the market, because the credit from them goes to more new game purchases.
    -And finally it allows gamers to buy more new games than they otherwise would have been able, or willing to, as it basically lowers the price of the later ones.

     

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  75.  
    identicon
    Anonymous Coward, Aug 8th, 2012 @ 11:52am

    Re: Re: Re: Re: Re:

    How about this: I don't buy games. New or used. Why? Ridiculously over-priced hardware and games for a limited experience over what you could have on a PC. I play free-2-play PC games, and if you think those are castrated examples of games, you don't know the market these days. (Example: Mechwarrior Online)

     

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  76.  
    identicon
    Jim B., Aug 8th, 2012 @ 11:56am

    Used shovel

    I loaned my shovel to the neighbor the other day. I guess it kept him from buying a new one. Oh, that was the purpose, to save him money. What if I'd sold him one of my spare used shovels? Would that mean that somehow the shovel manufacturer should have the right to complain and seek protectionism from the government?

     

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  77.  
    identicon
    Jim B., Aug 8th, 2012 @ 11:57am

    Used shovel

    I loaned my shovel to the neighbor the other day. I guess it kept him from buying a new one. Oh, that was the purpose, to save him money. What if I'd sold him one of my spare used shovels? Would that mean that somehow the shovel manufacturer should have the right to complain and seek protectionism from the government?

     

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  78.  
    icon
    weneedhelp (profile), Aug 8th, 2012 @ 12:51pm

    Re: I stopped reading at the first line. Engrish

    They're is a conjunction of they are.
    as in:
    from the(they're)they are-tired-of-being-labeled-the-villain dept

    Their is a possessive pronoun - in the plural form:
    These aren't Mike & Brandon's books. Theirs are digital.

    Please tell me you are not in the US and Engrish is not your primary language.

     

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  79.  
    identicon
    Xangria, Aug 8th, 2012 @ 12:58pm

    Re: Re: Re: Re:

    While true, they also try to increase preorders of new releases when buying a used copy is not an option. The inclusion of soundtracks and other perks has certainly increased the amount of games I choose to preorder rather than buy used.

     

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  80.  
    icon
    weneedhelp (profile), Aug 8th, 2012 @ 1:12pm

    Re: Re:

    "placing a finished product on the shelf."

    Try and find a PC game in their stores. That's what drove me away.

    DRM.
    If I have to buy DRM laden crap, i don't want to spend more than 20 bucks on it.

    Just bought new in packaging but from ebay:

    Max Payne 3 (PC, 2012) - $31.99
    Deus Ex Invisible War - $10.99
    Deus Ex: Human Revolution - 16.98

    Take the always on DRM out of the mix and I will gladly pay 40-50 again.

    If there is a chance I wont be able to play my games 5 years down the road you are not worth more than 20 bucks a pop.

    I AM A PAYING CUSTOMER.

     

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  81.  
    icon
    weneedhelp (profile), Aug 8th, 2012 @ 1:19pm

    Re:

    Someone was trying to rip you off:
    http://trendygamers.com/2012/05/25/gamestop-posts-trade-values-systems-ps-vita-worth-125/

    I f your wii is older you should have been offered 40.

     

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  82.  
    icon
    weneedhelp (profile), Aug 8th, 2012 @ 1:28pm

    Re: Re:

    "some of them stopped working"

    Thats why I get my buddy to download the cracked versions.

    I still pay, never full price, and if I have to wait a year to get what I want then so be it. If I have to buy them from ebay, then oh well.

    Console graphics dont come close to the PC versions. IMHO.

     

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  83.  
    icon
    weneedhelp (profile), Aug 8th, 2012 @ 1:32pm

    Re: Re: Re:

    My wife still plays her gameboy:
    https://en.wikipedia.org/wiki/Game_Boy

     

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  84.  
    identicon
    Anonymous Coward, Aug 9th, 2012 @ 6:20am

    I'm really get sick of seeing all these video game publishers complaining about used game stores "stealing" all their revenue when the only reason the used game business is so massive in the first place is because of their "all new games will be 50-60 dollars regardless of quality or projected sales" price fixing scheme.

    People buy their games used because most games are not worth anywhere near that much money, if the publishers priced their games more realistically then used games sales would drop dramatically. I know I would buy a lot more new games if they only cost 5 or 10 dollars more then the used version, because the guarantee that the disc won't be scratched up and the manual and dlc codes won't be missing is worth that much to me.

     

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  85.  
    identicon
    Michael, Aug 9th, 2012 @ 6:50am

    Re: Re: Re: Re: Re:

    "Check out "The Banner Saga". It was a Kickstarter project, hand drawn 2D art in the style of classic Disney. Might be something you're in to."

    As I just finished explaining, I don't like that Flash- animation-style; Flash animation smacks of laziness and looks forced. I prefer traditional 2D artwork (or pixel-art, if you prefer). Think Street Fighter III. However, I'd gladly take the 8- and 16-bit styles as well. Unlike The Banner Saga, Disney animation is hand-drawn frame-by-frame, though I don't like how they incorporate CG into their more contemporary offerings. Animation always looks best when it's authentic. Heck, Winsor McCay animated 'The Sinking of the Lusitania' all by himself.

     

    reply to this | link to this | view in thread ]

  86.  
    identicon
    josephsmith908, Aug 19th, 2012 @ 9:30pm

    fun online game for free

    This could be very decent one and gives detailed information, thank you for telling your thoughts and time in to the stuff you share info about addicting games for you.

    Know more about fun online game for free | Know more about addicting games for you

     

    reply to this | link to this | view in thread ]

  87.  
    identicon
    Anonymous Coward, Jan 18th, 2013 @ 2:35pm

    Re: I stopped reading at the first line.

    Are you retarded? You wish for the sentence to read: "Gamestop offers glimpse into they are Used-Games Facility"? lol. Please, for the love of god, don't ever try to correct someone's grammar again.

     

    reply to this | link to this | view in thread ]


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