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[jvm]

My weekly column this week at Next-Gen was about GameStop sales numbers. The editor wrote a column a couple of weeks ago which was pretty down on used game sales and big retailers like GameStop in particular. So I went poking through GameStop's public documents (10-Q, 10-K) and came up with a few items I thought were interesting and worth sharing here.

Here's one of them:

From the text:

Let me offer some perspective. GameStop is currently selling a new copy of Halo 3 for $60 and a used copy for $55. Let's assume – and it is a fairly big assumption – that the numbers above apply to this specific software title.

If they sell you the new copy, then they get to take home $13 out of the $60, roughly speaking.

If they sell you the used copy, then they get to take home $27 out of the $55, again roughly speaking.

There's a speculative calculation at the end about how many software unit sales are used vs. new in GameStop's last full year (ended Jan 2007). Used wins.

Perhaps these things have been discussed here before, so sorry if this is old hat. Otherwise, I thought it might be of interest to you guys.

Full article here.

 

[Tickets]

Why do they have to put like 8 stickers on the used boxes? Competely turns me off.

 

[mr_bishiuk]

Why do they have to put like 8 stickers on the used boxes? Competely turns me off.

Its to let you know you're cheap!

I'd pay the $5 and leave the white spirit in the shed myself...

 

[Mamesj]

Why do they have to put like 8 stickers on the used boxes? Competely turns me off.

these days they only use two stickers, which usually come off with no residue.

 

[Dave Long]

You have a good analysis there based on some reasonable conjecture, however...

There is a huge river of money flowing through those stores that isn't going toward new games, and publishers should be asking themselves how to get a cut.

...is a huge buzzkill. The law is written so that they do not get a cut, period. They shouldn't get a cut. They get to sell their product once, just like everyone else in the business world.

What publishers should be doing is look at your graphs and note just how much NEW game sales have grown next to used game sales. That's the real story for them. Without those trade-ins, people have less whole dollars to convert into games. Hence less new games would be sold and the industry would be growing at a slower rate.

I wish you would have that in the article, because that's the most important point and one the industry refuses to realize.

Either way, the publishers deserve nothing for those used game sales and without them, there would be far less Gamestop stores to promote their product because many of those locations can only survive thanks to used games and the margins they provide.

 

[Doc Evils]

Adds more to fuel to the fire that used games hose developers.

 

[Dave Long]

Adds more to fuel to the fire that used games hose developers.

BULLSHIT!

Did you not notice the amount of new game sales has risen as well? Why do you think that is? Would there be a triple digit percentage increase in new game sales if there weren't used games being traded-in for credit toward the new? No. Way.

Gamestop makes less per unit on a new game than a used game. That's because developers got their cut already in the initial sale. They're not entitled to shiti beyond that initial sale. Ford doesn't get anything if I buy a used Focus. Hoover doesn't get a cent if I buy a used vacuum cleaner. Fender doesn't see a dime if I buy a used guitar. The law protects consumers from unreasonable fees associated with sold goods in exactly this way.

Game companies are not above the law.

 

[AstroLad]

Adds more to fuel to the fire that used games hose developers.

Pretty much justifies everything that was said by the more rational posters in the eariler thread about this issue (not that we ever doubted it). This is why the move toward digital distribution will be much faster than the Luddite diehard physical mediaists would like.

 

[urk]

Looks like Gamestop is gutting more than just copies of "new" games.

 

[Felix Lighter]

The proper way for publishers and developers to prevent their games from being sold used is to give their customers a reason to keep their game. Quality and preferably free DLC can help.

Also a good multi-player component can really help when appropriate.

 

[DarthWaiter]

Those Used Game sales would be much higher if they didn't have stickers all over them.

That said...video game software seriously needs to come down in price.

FOR THE LOVE OF GOD DONT MENTION HOW YOU PAID 100 DOLLARS FOR STREET FIGHTER 2 AND THAT WE SHOULD BE THANKFUL FOR PAYING 60 DOLLARS FOR GAMES.

 

[Superblatt]

Let me offer some perspective. GameStop is currently selling a new copy of Halo 3 for $60 and a used copy for $55. Let's assume – and it is a fairly big assumption – that the numbers above apply to this specific software title.

If they sell you the new copy, then they get to take home $13 out of the $60, roughly speaking.

If they sell you the used copy, then they get to take home $27 out of the $55, again roughly speaking.

As an x-District Manager for EB/GS, I can tell you your numbers there aren't very accurate at all. Margins on new games (that are $50-$60 titles) are more in the line of $6-$8. I'd imagine your $13 estimate is correct if operating costs are not taken into account.

Additionally, GameStop's profit on any one individual game sold is actually based around the cummulative average of what they've paid for a title over it's entire lifetime. So, $27 isn't entirely wrong. Rather, it just isn't possible to determine an average overall profit margin in terms of dollars. There are too many transactions that occur on a daily basis, and too much variance to create a hard line number.

Rather, I would normally take in percentages as it's more accurate and takes into account trade-in variance. On average, GS expects about 40% margin on used games and %15 on new games. Hardware of all varieties actually goes to a larger extreme...with used consoles pushing 45% margin and new consoles cutting below 9% margin. Accessories are the biggest margin producers for new merchandise by a long shot, making over 25%.

If you really want to know more, I'll be happy to spill the beans.

 

[plagiarize]

Pretty much justifies everything that was said by the more rational posters in the eariler thread about this issue (not that we ever doubted it). This is why the move toward digital distribution will be much faster than the Luddite diehard physical mediaists would like.

i think digital distribution only really appeals to people that like new stuff and don't sell it on (either trade in or ebay, whatever). in that regard it won't really hurt EB games much unless DD prices start matching used game prices rather than often being as expensive (sometimes more expensive) as shelf product.

people that buy new and trade / sell on or buy used and trade sell on aren't going to find digital distribution appealing because you can't sell it when you're finished with it.

 

[G4life98]

why is the videogame industry such big babies about the used market compared to almost every other industry.

they bitch and moan about it almost every few months now and frankly its annoying. if you want a piece of used game sales, set up your own infrastructure or shut the hell up.

 

[AstroLad]

i think digital distribution only really appeals to people that like new stuff and don't sell it on (either trade in or ebay, whatever). in that regard it won't really hurt EB games much unless DD prices start matching used game prices rather than often being as expensive (sometimes more expensive) as shelf product.

people that buy new and trade / sell on or buy used and trade sell on aren't going to find digital distribution appealing because you can't sell it when you're finished with it.

Well currently retailers are pressuring publishers to keep DD at rip-off retail prices (see: Warhawk, Steam incidents). Publishers--especially console publishers--still rely heavily on b&m, so they can't quite give the "fuck you" that these retailers deserve when they try to fix upstream pricing. When their stranglehold is less, you'll see publishers start to push back more, and then you'll see retailers try to glom on to the DD model to continue to get their middleman take. Some people say two years, some say ten years, some pray never. I'm not going to get into that discussion of course.

But it is precisely because DD allows for an end run around the FSD that publishers are moving in that direction. Not to mention fully accurate and constantly updated sales figures, demographics, etc. It makes perfect sense for publishers. The only people it really nails are the middlemen, who are basically now just helping keep prices inflated so that they can "compete" with DD.

Loss of FSD has a negative impact on consumers, but the question is can that loss be negated (or even turned into a net gain) by eliminating all of the ridiculous costs that go along with physical distribution and then passing on some of those savings. The delicious ironing here is that we won't know how plausible this is until retailers finally give up the ghost and let publishers price their own digital content.

 

[TelemachusD]

Did you not notice the amount of new game sales has risen as well? Why do you think that is? Would there be a triple digit percentage increase in new game sales if there weren't used games being traded-in for credit toward the new? No. Way.

A lot of the increase in those last two years is probably from the buyout of EB in 2005.

 

[plagiarize]

Well currently retailers are pressuring publishers to keep DD at rip-off retail prices (see: Warhawk, Steam incidents). Publishers--especially console publishers--still rely heavily on b&m, so they can't quite give the "fuck you" that these retailers deserve when they try to fix upstream pricing. When their stranglehold is less, you'll see publishers start to push back more, and then you'll see retailers try to glom on to the DD model to continue to get their middleman take. Some people say two years, some say ten years, some pray never. I'm not going to get into that discussion of course.

But it is precisely because DD allows for an end run around the FSD that publishers are moving in that direction. Not to mention fully accurate and constantly updated sales figures, demographics, etc. It makes perfect sense for publishers. The only people it really nails are the middlemen, who are basically now just helping keep prices inflated so that they can "compete" with DD.

Loss of FSD has a negative impact on consumers, but the question is can that loss be negated (or even turned into a net gain) by eliminating all of the ridiculous costs that go along with physical distribution and then passing on some of those savings. The delicious ironing here is that we won't know how plausible this is until retailers finally give up the ghost and let publishers price their own digital content.

until digital distribution becomes feasable for your average console game, which isn't going to happen anytime in the next three or four years minimum, publishers will still have to kowtow to brick and mortar stores.

only really pc games can do DD right now, and they're a fraction of the market. Activision and EA aren't going to piss off the brick and mortar stores so that Valve or ID can undercut their prices.

 

[AstroLad]

until digital distribution becomes feasable for your average console game, which isn't going to happen anytime in the next three or four years minimum, publishers will still have to kowtow to brick and mortar stores.

only really pc games can do DD right now, and they're a fraction of the market. Activision and EA aren't going to piss off the brick and mortar stores so that Valve or ID can undercut their prices.

right, although let's not completely forget the success of XBLA, VC, PSN, etc.

 

[dark10x]

right, although let's not completely forget the success of XBLA, VC, PSN, etc.

Those have been successful, but file size is very small. You would need a huge HDD and great bandwidth to handle 6-7gb (or greater) sized games. I mean, that would really fill up your HDD pretty fast.

I don't mind paying $5-10 for a downloadable game, but I would never pay $50-60 for something I can't have a hard copy of.

These services are not going to last forever. Hard copies don't rely on services that could eventually shut down.

 

[eznark]

right, although let's not completely forget the success of XBLA, VC, PSN, etc.

Has Sony ever released sales figures for the DD version of Warhawk?

 

[AstroLad]

Those have been successful, but file size is very small. You would need a huge HDD and great bandwidth to handle 6-7gb (or greater) sized games. I mean, that would really fill up your HDD pretty fast.

I don't mind paying $5-10 for a downloadable game, but I would never pay $50-60 for something I can't have a hard copy of.

These services are not going to last forever. Hard copies don't rely on services that could eventually shut down.

I fully agree that rental services or services that otherwise require constant authentication are not ideal. Steam has some issues, but in my experience its offline mode works quite well, not to mention the fact that you can mod files, etc. I think and hope that as we move forward these issues will be ironed out and more care will be taken to allow people to keep their content across multiple generations. Now sure "lol they'd rather you just re-buy ten times!" but I do think that the consumer pushback is there and publishers are starting to get the idea of how this is important to consumers and how it affects their purchasing decisions.

 

[IzumiK]

Why do they have to put like 8 stickers on the used boxes? Competely turns me off.

Hell, they put stickers on NEW boxes for crying out loud. **** Gamestop/EBGames.

Someone in the world has to step up and make a new video game retailing chain for Canada that gets all the rare games because I hate going to EBgames. But I couldn't find Fire Pro Wrestling Returns anywhere else. -_-

 

[MrTroubleMaker]

wow, that used game figure is a lot larger than I thought.

 

[dammitmattt]

As an x-District Manager for EB/GS, I can tell you your numbers there aren't very accurate at all. Margins on new games (that are $50-$60 titles) are more in the line of $6-$8. I'd imagine your $13 estimate is correct if operating costs are not taken into account.

Additionally, GameStop's profit on any one individual game sold is actually based around the cummulative average of what they've paid for a title over it's entire lifetime. So, $27 isn't entirely wrong. Rather, it just isn't possible to determine an average overall profit margin in terms of dollars. There are too many transactions that occur on a daily basis, and too much variance to create a hard line number.

Rather, I would normally take in percentages as it's more accurate and takes into account trade-in variance. On average, GS expects about 40% margin on used games and %15 on new games. Hardware of all varieties actually goes to a larger extreme...with used consoles pushing 45% margin and new consoles cutting below 9% margin. Accessories are the biggest margin producers for new merchandise by a long shot, making over 25%.

If you really want to know more, I'll be happy to spill the beans.

I'm shocked that the margin for accessories/other is only 25%. I know it was always higher for 3rd party accessories, crap like Game Doctors, and strategy guides. Do you have those rough breakdowns?

 

[Version 3.0]

Even if used game sales do cost publishers money--and that's questionable--it your right, my right, and Gamestop's right do buy or sell used if we want to.

Why some of you think that anything that makes a company "lose money" (which is a BS term also) is automatically bad is beyond me. It really scares me that some of you might vote.

 

[ToxicAdam]

Can we start the "Console gaming is dying" threads now?

 

[dammitmattt]

Even if used game sales do cost publishers money--and that's questionable--it your right, my right, and Gamestop's right do buy or sell used if we want to.

Why some of you think that anything that makes a company "lose money" (which is a BS term also) is automatically bad is beyond me. It really scares me that some of you might vote.

It's weird because I don't see this argument for the music, DVD, book, car, house, etc. industries...

 

[f3niks]

Even if used game sales do cost publishers money--and that's questionable--it your right, my right, and Gamestop's right do buy or sell used if we want to.

Why some of you think that anything that makes a company "lose money" (which is a BS term also) is automatically bad is beyond me. It really scares me that some of you might vote.

.

 

[AstroLad]

take that straw man

 

[davepoobond]

what publishers in the video game industry should do is similar to what the textbook industry does --

buy back old games from retailers

 

[radioheadrule83]

I only buy used games when the game is no longer being printed or I know its a game that isn't worth full price. A lot of people do the same. I research my games before I buy them, a lot of people do.

If I buy it used, the chances are I wasn't ever going to buy it new.

I actually don't buy Nintendo games used because I want the points cards that come inside them. And I like building up loyalty points on my GAME card too, so I tend to pre-order, then buy new as well (you get points for doing each).

What I would actually like, is if game shops started rental sections. Blockbuster and the like are dying a death, but I'd rent a game from a game shop if the price and loan-length was right. They *could* give the publishers a cut of rentals. In fact, some of the crapper games would make more money as rentals than they would in sales.

Better yet, price small, non-deep games properly in the first place. The near-flat pricing system is stupid.

 

[dammitmattt]

A lot of the increase in those last two years is probably from the buyout of EB in 2005.

The EB buyout has absolutely nothing to do with the overall industry growth, which is what the poster was referring to. The video game industry has seen absolutely massive growth over the last few years.

 

[Davedough]

BULLSHIT!

Did you not notice the amount of new game sales has risen as well? Why do you think that is? Would there be a triple digit percentage increase in new game sales if there weren't used games being traded-in for credit toward the new? No. Way.

Gamestop makes less per unit on a new game than a used game. That's because developers got their cut already in the initial sale. They're not entitled to shiti beyond that initial sale. Ford doesn't get anything if I buy a used Focus. Hoover doesn't get a cent if I buy a used vacuum cleaner. Fender doesn't see a dime if I buy a used guitar. The law protects consumers from unreasonable fees associated with sold goods in exactly this way.

Game companies are not above the law.

I understand your logic and support your motives, but calling out Ford, Fender and Hoover isn't exactly a fair comparison. Take video games as an entertainment venue and not as a product and you dive into the realm that the television and movie studios are facing with the writer's strike. With your model, the publishers, actors, directors, producers shouldn't get royalties when their movie/television show comes to DVD or becomes syndicated. They do, so does that mean they're above the law? Their original product paid everyone as it should have, but the regurgitation of said product now is paying everyone again. I think thats more of a realistic model to compare to.

 

[Desi]

what publishers in the video game industry should do is similar to what the textbook industry does --

buy back old games from retailers

I took it as publishers already do that somewhat.

 

[Reilly]

I'm more shocked that people are buying used games from Gamestop rather than other places.


STOP BUYING SHIT THERE ASSHOLES!

 

[Superblatt]

I'm shocked that the margin for accessories/other is only 25%. I know it was always higher for 3rd party accessories, crap like Game Doctors, and strategy guides. Do you have those rough breakdowns?

3rd party accessories, like MadCatz stuff and Gamedoctors, is more in 30-35% margin area. When I said 25%, I was referring to some first party accessories.

 

[Dave Long]

I understand your logic and support your motives, but calling out Ford, Fender and Hoover isn't exactly a fair comparison. Take video games as an entertainment venue and not as a product and you dive into the realm that the television and movie studios are facing with the writer's strike. With your model, the publishers, actors, directors, producers shouldn't get royalties when their movie/television show comes to DVD or becomes syndicated. They do, so does that mean they're above the law? Their original product paid everyone as it should have, but the regurgitation of said product now is paying everyone again. I think thats more of a realistic model to compare to.

No it's not. What the hell? You're comparing new products to used products to create a strawman argument.

Writers and studios don't get shit for used DVD sales. They only get it when the product is purchased new.

I said in a similar thread recently that the game industry only have themselves to blame. Number one, they killed off the arcade business which once served as their "first-run" game sales arena, thus giving a similar business angle to the movie theatre/DVD model used by studios now. Now they're trying to tell us that used games are somehow still theirs? That's just garbage.

Used sales of anything is covered by law, period. You have the right to sell it once new and after that, it's no longer owned by you. What publishers should be doing is finding ways to get more revenue out of other streams. License titles to Gametap and charge Gametap a fee every time someone plays your game. Create your own rental service where people can pay each time they play your game. Allow people to sell back directly to the publisher for credit toward a new game instead of through Gamestop. There are a million options out there for them to dream up.

Instead you get this repeated bullshit that when used games are sold the publisher/developer should get a cut. The law prevents that, and with good reason.

If you don't agree with that, you're anti-consumer. No ifs, ands or buts about it.

 

[SonOfABeep]

Buying new at gamestop? Whatever, fine. They get a marginal profit and you're supporting the developer/publisher more than anything.

But to any of you buying used or trading at gamestop, seriously, why? You're just feeding that awful company money, and probably choking any local competition to death. I have the most AMAZING local game/hobby shop here and I would never do anything to stunt their growth. They give on average $10-20 more for used titles than gamestop does, and charge $10-15 less for used games. Any of you gamestop shoppers probably could have places like this too if you weren't so damned lazy and stupid to just go to the big name store because it's there.

Shit pisses me off. Especially when so many of the gamestop employees/managers are just complete piles of human infectious waste. These people should be flipping burgers, not interacting with customers. Not to mention the way their stores smell. Shit makes me sick.

And to Dave: I think publishers should get a cut of used sales, but that cut should come directly from gamestop's coffers, not from the customer. Of course, they're greedy shifty types, so that would never happen, and instead of giving $20 for $55 used games, they'd give $13 for $57 used games. Which might discourage used sales, and help hasten their disappearance, so I'm all for that.

 

[dammitmattt]

I understand your logic and support your motives, but calling out Ford, Fender and Hoover isn't exactly a fair comparison. Take video games as an entertainment venue and not as a product and you dive into the realm that the television and movie studios are facing with the writer's strike. With your model, the publishers, actors, directors, producers shouldn't get royalties when their movie/television show comes to DVD or becomes syndicated. They do, so does that mean they're above the law? Their original product paid everyone as it should have, but the regurgitation of said product now is paying everyone again. I think thats more of a realistic model to compare to.

No, it's not. A better comparison to Hollywood is that the game makers should benefit not only from the end product sales, but also from DLC, being placed in hotels/planes, etc. And from what I understand, they do see the benefit.

A better comparison is to look at the DVD market. You've got new sales and used sales, and it works fine.

Buying new at gamestop? Whatever, fine. They get a marginal profit and you're supporting the developer/publisher more than anything.

But to any of you buying used or trading at gamestop, seriously, why? You're just feeding that awful company money, and probably choking any local competition to death. I have the most AMAZING local game/hobby shop here and I would never do anything to stunt their growth. They give on average $10-20 more for used titles than gamestop does, and charge $10-15 less for used games. Any of you gamestop shoppers probably could have places like this too if you weren't so damned lazy and stupid to just go to the big name store because it's there.

Shit pisses me off. Especially when so many of the gamestop employees/managers are just complete piles of human infectious waste. These people should be flipping burgers, not interacting with customers.

Not all of us have anything like that. I live in Birmingham, AL (metro population > 1 million) and the closest thing we have is a podunk local outfit selling mostly crappy used 16-bit games, DVDs, and music.

 

[Gwanatu T]

Looks like Gamestop is gutting more than just copies of "new" games.

They are new, quit bitching about nothing. New means not used (no I'm not representing Gamestop).

 

[Dave Long]

Buying new at gamestop? Whatever, fine. They get a marginal profit and you're supporting the developer/publisher more than anything.

But to any of you buying used or trading at gamestop, seriously, why? You're just feeding that awful company money, and probably choking any local competition to death. I have the most AMAZING local game/hobby shop here and I would never do anything to stunt their growth. They give on average $10-20 more for used titles than gamestop does, and charge $10-15 less for used games. Any of you gamestop shoppers probably could have places like this too if you weren't so damned lazy and stupid to just go to the big name store because it's there.

Shit pisses me off. Especially when so many of the gamestop employees/managers are just complete piles of human infectious waste. These people should be flipping burgers, not interacting with customers.

I've got no issue with this. If I still had a local retailer to go to that was worth visiting, I'd be going there. The one place that's not a Gamestop/Game Crazy in my town is the dirtiest hole of a store on the face of the earth. They have a lot of stuff, some of it rare, but I feel like I'm going to catch a fatal disease just by walking through the door (and their used prices are awful).

Also, if it wasn't for used games and rentals, there would be no independent game stores left in the US. Margins are terrible on new games when you don't have the buying power of Gamestop. You make $5 per new game sold... at most.

 

[jvm]

You have a good analysis there based on some reasonable conjecture, however...

There is a huge river of money flowing through those stores that isn't going toward new games, and publishers should be asking themselves how to get a cut.

...is a huge buzzkill. The law is written so that they do not get a cut, period. They shouldn't get a cut. They get to sell their product once, just like everyone else in the business world.

I see now that my wording there could have been better. Let me clarify.

My intention, when I wrote it, was to say "there is a huge river of money involving games [used and new], publishers should ask how they can get a bigger cut". That certainly didn't come across in what I wrote.

Personally, I support the FSD and I encourage publishers to come up with ways to get my money directly ...without using rental models like Steam.

 

[Dave Long]

And to Dave: I think publishers should get a cut of used sales, but that cut should come directly from gamestop's coffers, not from the customer. Of course, they're greedy shifty types, so that would never happen, and instead of giving $20 for $55 used games, they'd give $13 for $57 used games. Which might discourage used sales, and help hasten their disappearance, so I'm all for that.

Why? They're not entitled to any of it!

Gamestop aren't greedy. They're in business to make money, just like the publishers who ask those retailers to sell consoles at cost and promote their products while at the same time selling them new product for $52 that they can sell for $59.99.

You cannot run a store on that kind of margin. Without used games, there would be far less game stores, far less variety in the available games, far less publishers and far less developers. There would be far less money in the business of games and it would affect everyone right down to the smallest developer.

 

[dsmoke1986]

As an x-District Manager for EB/GS, I can tell you your numbers there aren't very accurate at all. Margins on new games (that are $50-$60 titles) are more in the line of $6-$8. I'd imagine your $13 estimate is correct if operating costs are not taken into account.

Additionally, GameStop's profit on any one individual game sold is actually based around the cummulative average of what they've paid for a title over it's entire lifetime. So, $27 isn't entirely wrong. Rather, it just isn't possible to determine an average overall profit margin in terms of dollars. There are too many transactions that occur on a daily basis, and too much variance to create a hard line number.

Rather, I would normally take in percentages as it's more accurate and takes into account trade-in variance. On average, GS expects about 40% margin on used games and %15 on new games. Hardware of all varieties actually goes to a larger extreme...with used consoles pushing 45% margin and new consoles cutting below 9% margin. Accessories are the biggest margin producers for new merchandise by a long shot, making over 25%.

If you really want to know more, I'll be happy to spill the beans.

I thought that profit margin on new games seemed too high...

 

[jvm]

Not all of us have anything like that. I live in Birmingham, AL (metro population > 1 million) and the closest thing we have is a podunk local outfit selling mostly crappy used 16-bit games, DVDs, and music.

When I moved to my current location, we had several independent shops that sold games. As far as I know, they have all gone out of business except this one just over the border in the next state. While I had some time off during the holidays, I drove down their briefly and the shop was in sad shape -- terrible selection, only a handful of new games, and even the staff seemed listless and moribund.

If you want to buy games here, you have to buy from GameStop, Best Buy, Circuit City, Wal-mart, or Target. All big chains...

And don't even get me started on how there aren't any pre-PS2 games being sold used anymore...how am I supposed to build my library and avoid getting crap (or counterfeits) over eBay or Amazon?

 

[Dave Long]

I see now that my wording there could have been better. Let me clarify.

My intention, when I wrote it, was to say "there is a huge river of money involving games [used and new], publishers should ask how they can get a bigger cut". That certainly didn't come across in what I wrote.

Personally, I support the FSD and I encourage publishers to come up with ways to get my money directly ...without using rental models like Steam.

Dude, the publisher gets a huge cut. They're not hurting for cash. Have you looked at Electronic Arts', Nintendo's and Activision's financials?

Stop acting like these massive corporations are poor. They're not. They don't deserve anything beyond the initial sale of a new game. If they want something more from that title, then sell add-ons whether that's online or through expansion packs. Make your games pay to play like World of Warcraft.

Game companies are not above the law. No company in the US gets money from the sale of a used product other than the person selling it used. End of story.

 

[Dave Long]

When I moved to my current location, we had several independent shops that sold games. As far as I know, they have all gone out of business except this one just over the border in the next state. While I had some time off during the holidays, I drove down their briefly and the shop was in sad shape -- terrible selection, only a handful of new games, and even the staff seemed listless and moribund.

If you want to buy games here, you have to buy from GameStop, Best Buy, Circuit City, Wal-mart, or Target. All big chains...

And don't even get me started on how there aren't any pre-PS2 games being sold used anymore...how am I supposed to build my library and avoid getting crap (or counterfeits) over eBay or Amazon?

...and this is not Gamestop's fault. It's the fault of terrible margins on new games and systems. You cannot run an independent game store today and expect to make ends meet without selling used games and/or renting. There is no money to be made in videogame retail without used product.

The likes of Best Buy, Target, Wal-Mart... they have games because they draw customers into their stores to buy TVs and Home Theatres. They don't make a pile of money on the games and systems themselves.

Also, if you aren't one of those major chains, you must buy your new games through a distributor, adding another cost to that game over and above what the publisher charged to the distributor first. New game retail is a shitty business, but if you can manage to build a customer base via trade-ins and pre-orders as Gamestop/EB has, then you can survive and grow.

 

[tanod]

So I'm calculating that Gamestop's 2006 revenue on new hardware, software and accessories is about $4 billion. Total NPD sales for 2006 was $12.5 billion.


So gamestop was responsible for almost a third of all new video game and hardware sales in 2006?

:O

Did I miss something?! Is this right?

 

[dLMN8R]

I stopped buying games at EB/Gamespot years ago. If I buy a console game, it'll be from Best Buy or from an online retailer. if I buy a PC game, same deal if it's not also on Steam for a decent price.

Yeah, Best Buy may be just another large corporation, but at least they're not ripping off developers (and customers) with their used game bullshit.


If I do buy a used game, however, it'll be from eBay where I can get a much lower price than the shitty used game prices that Gamestop charges.

 

[jvm]

Dude, the publisher gets a huge cut. They're not hurting for cash. Have you looked at Electronic Arts', Nintendo's and Activision's financials?

Stop acting like these massive corporations are poor. They're not. They don't deserve anything beyond the initial sale of a new game. If they want something more from that title, then sell add-ons whether that's online or through expansion packs. Make your games pay to play like World of Warcraft.

Game companies are not above the law. No company in the US gets money from the sale of a used product other than the person selling it used. End of story.

Slow down, hoss. Where did I say that they didn't get a cut? Even a huge cut? I didn't.

The fact is that there is a lot of money being spent on games which isn't being tapped by publishers. Looking at the market the publishers should ask themselves why there is so much money consumers are willing to spend but not spend on new product?

There's no siding with one group or another here, it's a simple observation. There's money out there the publishers might be able to get in on, if they come up with the right model.

I get the feeling you want to make me out to be something I'm not. I said I support the FSD *and* the publishers doing a better job getting my money? Isn't that about as free market as I can get?