In Defense of GameStop

Robsavillo
Monday, January 25, 2010

I've heard the argument a hundred times over: GameStop is destroying the industry! They push used games, which are only five dollars cheaper, onto customers! They're stealing from developers and publishers!

That the retailer sells used games priced closely to new ones rubs many in the industry the wrong way. They feel that those sales are eating into their profit margins. Who wouldn't want to save five dollars (plus 10 percent for customers with Edge cards) on a barely played copy? (Although, GameStop claims that only four percent of used sales are of titles released less than 60 days prior, which is generally accepted as the period when most revenue is earned.)

Going further, some will argue that developers and publishers deserve money from second-hand sales, which completely blows my mind. Presumably -- since we're talking about a second-hand sale -- the first buyer already paid both aforementioned parties for the copy.

Deep down, I can understand the allure of such an argument, which is one that gives the well-being of those involved in the game's production and distribution top priority. The reasoning also feels intuitive -- if developers and publishers aren't paid, they won't be able to keep making games, right?

But I'm not a developer or a publisher. I'm a consumer, and what may be good for those who make games may not also be good for me. Who's looking out for our interests?

 

The "fight" against the second-hand market

Electronic Arts believes that used sales represent a "critical situation." I'm convinced that if publishers (at the very least) had their way, we'd never have the opportunity to own another game. Every purchase would be access to a license -- nothing more. Embedded within the assault on the second-hand market is the issue of ownership.

In a way, GameStop represents that lingering tradition of ownership. We can resell our purchased games because the first-sale doctrine transfers ownership from seller to purchaser. Copyright holders only have the right to profit from the first sale, not any subsequent sales of that particular copy. This is why I groan when someone argues that developers and publishers deserve a piece of the second-hand pie.

Unfortunately, developers have taken numerous steps to devalue a used copy. Several new titles were released last year with one-time-use codes for small, in-game content, such as Dawn of War 2 and Dragon Age: Origins. We don't necessarily own this content, either, since we are unable to transfer said content to a new buyer.

The most recent example of such comes from Bioware, whose Cerberus Network for Mass Effect 2 standardizes the approach. A bundled, one-time-use code provides access to the network's free content. Players who buy used will have the option to spend an additional $15 in order to receive the extra content.

But don't think that developers would stop there. A little more than a year ago, Epic Games president Michael Capps fantasized about charging those who rent or buy used a fee in order to finish the game at all.

Developers seem intent on removing value from used copies by whittling away the amount of content we own, and thus, can sell to a third party. At the extreme, these actions could result in the exclusive licensing of games and the used option going the way of the dodo.

This goes way beyond saving yourself a few bucks here and there. Many people appear blind to the potential industry-wide negative effects.


The effect on sales

Second-hand goods lower the industry's barrier to entry, which is much higher than other entertainment options for kids. The initial cost of a console is high, and said console usually doesn't ship with a game anymore. Add that -- plus a second controller so you can play with your friends -- and newcomers are looking at something between $350 and $450.

That's significant. And I know for a fact that my Dad was only able to afford all the titles my siblings and I played growing up by trading in older ones we'd already finished.

One of the best ways to grow the player base is to keep the barrier to entry as low as possible. The Wii brought gaming to the masses, but don't believe that motion controls accomplished this feat alone. The system's $250 launch price played a role as well.

A lower barrier to entry -- and the ability to play more games than one's available income would normally allow -- brings more people into the pastime. If kids grow up with a large and diverse library at their fingertips, they're much more likely to continue playing as they finish school, get jobs, and buy new games on their own.

Without a used option, I'm willing to bet that the younger players among us will be less likely to play as many games, and therefore, less likely to still be playing into their 20s and 30s.

But these second-hand goods also do one other thing -- they make a retail operation which exclusively deals in video games profitable. According to the Wall Street Journal, 42 percent of GameStop's gross profits come from used games and hardware. Because the profit margin in the second-hand market is so high -- 48 percent -- the business kept profits up despite the weakened economy. GameStop reported sales for this last holiday season nearly the same as the year before, as reduced revenues were offset by an increase in used game purchases.

This means that GameStop can continue opening new locations, hiring new employees, and, ultimately, moving more product. With more than 6,000 retail spaces in the U.S., you can probably find a GameStop in the smallest of towns and the most rural of areas. More stores mean greater access to games for even more people. This can only be a good thing for the industry.

My point is that not everyone lives in a city with a local, independently owned boutique shop that sells games. Much of the country is in the suburbs and the open country, where chain stores are the only option around.

The big box stores -- like Best Buy or Target -- are only going to carry the latest titles. What little they carry is only a small portion of their inventory anyway, and the profit margin on new games is incredibly tiny as well.

So, if you're looking for something quirky or older, GameStop is usually the best place to go since they're more likely to keep those titles in stock. GameStop has a business model to keep more games on shelves.

Intentionally chipping away GameStop's primary source of revenue -- as developers are keen on doing -- could have disastrous side-effects over the long-term.


Second-hand goods don't necessarily equate to lost sales

GameStop sells a lot of used games, and some might argue that those are lost sales of new titles. The assumption here, of course, is that were used games not an option, most (if not all) consumers would purchase new. I'm not convinced -- no one has presented any evidence to suggest as much.

People buy used for the obvious reasons -- it's a hell of a lot cheaper for heavy consumers (since those $5 discounts plus 10 percent off add up quickly) and doing so allows them to buy more games, new included. If these consumers are priced out of the hobby through the loss of the used option, many of them would stop buying games altogether.

Even if we assume that some consumers would buy new all the time, I suspect that they wouldn't take as many risks without the option of buying used, which means that they'd play fewer games and spend less money overall. I have a hard time imagining that this strategy would increase long-term profits for the industry.

For some odd reason, the Epic Games and Electronic Arts of the world believe themselves to be unique of almost any other industry that sells some type of good. Last I checked, libraries (which lend books for free) and used-book stores haven't put print publishers out of work. Used-car dealerships haven't stopped the production of new models or their sale. I never hear Random House or Toyota moaning about the second-hand market.

While developers and publishers will bitch and moan about used games, I hope that their pleas to receive money each time a single copy exchanges hands falls on deaf ears.

 
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Comments (60)
Default_picture
January 24, 2010
Great Article! I whole-heartedly agree here. Any game that is over a year or two old (especially in a small town) is impossible to find a new copy of. The only option is to buy used.
Profile_pic4
January 24, 2010
Great article, Rob! Good points all the way through, and you got me thinking. As I read, I starting thinking about other industries. What would happen to used CD places who were forced to give back again to the label? My local used CD place just closed down... after some 30 years of business. Clearly selling used CD's, movies & records wasn't working in the current model. Wonder how many would close if they were forced to cut profits due to paybacks? What about eBay? They sell a lot of used games, yes. But they also sell used DVD's, books, CD's, Blurays, and anything and everything else secondhand. I'm all for Gamestop and what they do. Don't agree? This is the golden age for gamers. There are MANY great buying options out there!
Default_picture
January 24, 2010
Excellent article. There are a number of people whose discretionary money is never enough to frequently drop $50-$60 on new games. I call us the six-months-out crowd, since we buy and play games that have been out long enough to lower in price, and as Matthew said, these games are sometimes only available used. Publishers have created a market in which the buying window gets smaller and smaller before games are pulled from many retailers' shelves. The higher cost of games (as opposed to other media),a the limited profit window for publishers, and the mass holiday-dump sales tactics all combine to reduce how many games get sold new.
Default_picture
January 24, 2010
I want to start off by saying you make some really good points, and you did get me thinking about the used-game industry in a new light. You make some good points, but I can't help but disagree with a few others, most notably the one that second-hand goods don't necessarily equate to lost sales. But at any rate, good article, and I definitely think that publishers are blowing the used games market out of proportion. Like you said, publishers of other content aren't fussing about their used markets, so why are video games different? I'd agree that GameStop can be nice for finding older games you won't find at Target or Best Buy, but to be honest I don't find my local GameStop carrying the niche titles I want anyway. Amazon is much better for that purposes (and generally cheaper too!). The last time I went to GameStop looking for Tales of Vesperia, the dude behind the counter thought it was for DS. They didn't have it, needless to say. I'm sure this is a YMMV thing depending on your location and your GameStop, but it's still a bit silly. For a company who deals exclusively in games, you'd think they'd have those bases covered. While I'm sure it's not true that every used sale means a lost new one, I have to think that a good portion of these sales (especially with newer titles) that offer as little as three or four dollars off wouldn't otherwise be going to a new title. If somebody is willing to pay $56 for a new game, I don't think the extra four dollars would stop them if the used option wasn't available to them.
Profile_pic
January 24, 2010
Here's what I wrote in Jeff's excellent Bitmob [url=http://bitmob.com/index.php/mobfeed/used-games-am-i-a-hypocrite.html]article[/url] on a similar topic: I have nothing against used markets in general, but there's something underhanded about the primary videogame retailer selling used games right next to their plastic-wrapped counterparts. That's something you don't see in any other industry. That said, I've mellowed on the whole "Down with GameStop" stance. The game industry has brought this situation on itself, and it's not the consumer's responsibility to support a stupid business model. New games are too expensive—both in terms of production costs and MSRP—and the margins for retailers are too small. If that weren't the case, GameStop wouldn't have to resort to villainy in order to turn a profit. And if the publishers don't like it, and don't want to change the way they operate, they can always take their business elsewhere. No one is forcing them to sell to GameStop. Gamers will go where the games are.
Default_picture
January 24, 2010
Okay, my last comment got totally rearranged somehow. Second paragraph should be the last and vice versa.
Imbarkus_picard_avatar
January 24, 2010
You make a really excellent point overall with your post. I must admit that after I while I began to feel "used game shame," thinking I had bought almost my entire library used from Gamestop. This has led me to acquire a much larger library than I might have otherwise, one so large it contain plenty of titles I've never once booted. Perceived scarcity has worked on me, as a tactic to combat this trend, and led me to buy many more collector's editions, as my salary went up for a while. Now I am laid off. And Gamestop is my friend again. In terms of perception, Gamestop would do well to ensure they value pre-owned games that didn't just come out: their abandonment of XBox 1 games was a bit strange, for example. Other stores in my area have capitalized on the gap they leave in the "classic used games" market, selling PS1, N64, Xbox 1 and Dreamcast games, as well as older stuff, quite successfully. Finally, I don't know about your local Gamestop, but over the last few years mine has seemed to clog their shelves with far too many games with no books and no box art. If they keep this up, they will find themselves getting less of my dollars, and we all will find publishers taking us back to the C-64 days of "find the fourth word on page 17 of the manual to continue." You mentioned the way that used book outlets do not destroy the sales of new book stores. Honestly, it will be digital distribution (with the new eBook readers) that will accomplish that, as it has with the Music Store scene. This will be true of gaming as well. My "used game shame" also began to diminish once I began to realize that Sony and Microsoft and Nintendo themselves are more than willing to siphon dollars away from purchases of new games at retail, as long as they receive those dollars themselves over a service selling XBox Originals, Virtual Console games, or PS1 (and PS2--you can bet it's coming) Classics. Publishers will find that the convenience of buying digital downloads will compete with and eclipse the used game sales at Gamestop for me if, AND ONLY IF, they can ensure my ability to access and play those games in the future. If your Wii dies 20 years from now, will the download service still be there for me to replace the gems in my VClibrary? Unless this option is guaranteed, they can look forward to a future of used game sales ALWAYS providing stiff competition to whatever option they provide. A Bird in the Hand is worth Two in the Cloud, after all.
Default_picture
January 24, 2010
I think one of the points missing in the article is the tactic EA (and other publishers) take in regards to older titles. They basically make the game unplayable after a certain amount of time so that they can persuade you into buying the new updated version. My biggest concern with the new digital model, isn't the publishers' methods into convincing people to buy new instead of used, it is the lake of support most publishers have toward their products after a year or two has passed. We may be purchasing a license to play it, but that license's lifetime is hidden to the consumer. It is made available by a little blurb in small print on the back of the box. It would be nice that if we purchased a license, that it would be a lifetime license. Think about if this model would have take place back in the NES days and we could now download a copy to play our oldies on the 360, ps3, or even our portables? But I doubt very much that publishers would allow us such transferablity, which basically leaves us "renting" games for an undisclosed period of time.
Default_picture
January 24, 2010
Great Article! I do not take issue with the used game sales from EB/Gamestop. I do not shop there any longer but that is more of a reflection of the stores customer service [or lack thereof] and finding better prices elsewhere. Things I do take issue with: -hard sell on pre-orders -charging full price for a "gutted" copy of a new release [their return policy states no returns on opened software and only give you trade value so by that logic they cant charge me full price for a opened "new" game] -from a price standpoint they are the worst deal in town. [Often Amazon beats any price offered on a new release, and will ship it to my house the day its out]
Redeye
January 24, 2010
I still try to buy new when close to the release window of the game, just because I prefer putting my dollar vote on the game itself rather then on gamestop's used game strategies. I will, however, agree with you that publishers are largely just shooting themselves in the foot. I mostly buy used when I don't want to play a game when it first comes out but would like to play it when it is cheaper. For all intents and purposes the used purchases I make are for stuff I would most likely never pay full price for. If game publishers want to put a dent in the used market they should give their games a longer tail by making the prices for them competitive to the used market as the game grows older. More emphasis on 'greatest hits' reprints and discounts would help them greatly. The games on demand downloadable service helps. As not having to leave the house to pick up a game for 20 dollars is nice, but some games on that service are inexplicably 30 dollars (which is usually 3 times their used price). I don't know about you but I consider 30 dollars for oblivian or call of duty 2, two LAUNCH titles, to be pretty freaking steep. Publishers need to focus on getting their product into more people's hands rather then just trying to charge the people they do sell it to more. If they aren't providing a competitive value then of course the used market is going to eat into their sales.
Robsavillo
January 24, 2010
Garret -- Fixed that for you. [quote]I have nothing against used markets in general, but there's something underhanded about the primary videogame retailer selling used games right next to their plastic-wrapped counterparts. That's something you don't see in any other industry.[/quote] But Craig, you do. Borders sells second-hand books right next to new ones and FYE does the same with DVDs. Tower Records (when they were around) did the same for CDs.
Imbarkus_picard_avatar
January 24, 2010
@Brian Yep. Calling All Cars says "hello" (although there is at least local multiplayer there). Starcraft II with no LAN support says "how ya doin'?". Virtual Console games associated to your Wii's MAC address, rather than to an account (from what I have heard) says "take off your coat and stay a while... a short while". The world of digital fairness I imagine would allow having the serial number of Pokemon Snap from my original N64 cartridge to get me a free copy (or at least a deep discount) on the Virtual Console title. But instead we live in a world where Sony releases a PSP that wants you to re-buy the disk-based content you may have bought THIS FRIGGIN' YEAR! Ugh...
Default_picture
January 24, 2010
Let's not single out Epic and EA. Did we forget about Microsoft and the whole digital download thing? They will have full control over pricing and distribution of games if digital licensing becomes the new standard format. Imagine the day I cannot goto Gamestop or ebay to buy a copy of Stubbs the Zombie because it's no longer available for download on the Xbox Marketplace. If the demand is high enough to make it available for download again I am sure it would be pretty pricey license that I would not be willing to pay. Gamestop gives me the ability to shop around for a good deal on games. Just one of the reasons why I will never buy something I can't touch with my hands but the is beside the point. Screw the gaming industry! I am a hardcore gamer and if you want my money then it's going to on my terms: The games I want for the price I want, however I want it.
Default_picture
January 24, 2010
Part of why I no longer shop at Gamestop is because they pushed used, yes. But more importantly I don't go there anymore because all three store locations near me seem to be incapable of hiring employees that know a damn thing about the products they are selling. Example: little kid: Excuse me? Do you have Drawn to Life for the DS? gamestop employee: Uh... I think so. Let me look it up... (looks it up for five minutes) Uh... sorry we don't have any games called "John to Life" for the PSP. I know this could have just been a mistake, but for the most part, the employees just seem clueless about anything that they aren't currently taking pre-orders for.
Default_picture
January 24, 2010
The real problem with Gamestop isn't so much the resale aspect of their business. The true problem is game reservations. When Gamestop asks it's customers if they want to reserve a game it's not because they want to do you a favor. The truth is they are betting on you having a bad memory. Game reserves are posted as early as a year before release. This gives them ample time to gather reserves. At any given time an average Gamestop sits on at least $2500 of unclamed reserves. With 5000 store locations that means the company sits on 1.2 million dollars of money that you forgot about. Given that they are under no obligation to remind you that you reserved a game, that is money they can deposit and gain interest for themselves until you finally remember it. And they do nothing to jog your memory. If you pick up a reserve and happen to have an older reserve still sitting under your name they won't remind you. Store managers actually instruct their employees not to mention the old reserves to customers in fear of having their reserve numbers drop for the day. You can get upset all you want about how pre owned sales are ruining the market but at least they're upfront about that. They are flat out scamming people with game reserves.
Imbarkus_picard_avatar
January 24, 2010
[quote]Imagine the day I cannot goto Gamestop or ebay to buy a copy of Stubbs the Zombie because it's no longer available for download on the Xbox Marketplace.[/quote] Or imagine buying it, being happy you have it in your library. Then, a year later your XBox red-rings, you get a replacement, and come to find out the title's no longer available for download. Removed from the marketplace. Removed from your library, as you never received even an install file that you yourself could be responsible for burning to disk. This is what keeps me buying games on gog.com instead of entirely trusting Steam. It may be a download service, but it give you an installer. It's DRM-free. I can burn it to a disk, buy a case, and print out a label to add it to a bookshelf if I want to, dammit! Great game, by the way, truly an under-appreciated classic...
Profile_pic
January 24, 2010
@Rob [quote]But Craig, you do. Borders sells second-hand books right next to new ones, and FYE does the same with DVDs. Tower Records (when they were around) sold new and used together as well.[/quote] But do Borders and FYE employees offer you the used version first when you ask them for a product? GameStop actively tries to sway you away from new copies. Anyway, as I said above, I've stopped thinking of it as the consumer's problem. The game industry brought it on themselves, and if the situation is so bad, it's up to the publishers to do something about it. Though thank you for the correction.
Default_picture
January 24, 2010
@Dana I've had my Wii purchases tied to my Nintendo Club account. Much like purchasing a hard copy of the game and putting in that registration code, the VC games are automatically registered to the account. My hope is that Nintendo is having the forward thinking to one day have that be associated with digital licenses. Wishful thinking, but if it turns out to be the case Nintendo will certainly have a leg up on the marketplace.
Profile_pic4
January 24, 2010
I have no problem with Gamestop asking me for a reservation 6-12 months out. If I forget I put money on a game, that's my problem and I should buy a memory improvement game. There are plenty on the shelves. ;)
Default_picture
January 24, 2010
I know it's not really the point of the article but just something I picked up on [quote]My point is that not everyone lives in a city with a local, independently owned boutique shop that sells games. Much of the country is in the suburbs and the open country, where chain stores are the only option around.[/quote] Aren't the suburbs and open country exactly where you wouldn't expect a chain? Or wouldn't have if the chain across the road hadn't knocked your Mom n' Pops out of business? Sorry, it seems my epidermis (read: socialist agenda) is showing.
100media_imag0065
January 24, 2010
This is a very good article, although I do not agree with all of it. I do agree that developers are at fault here. There was a very small window early in the Xbox 360's life cycle that the games were $50, not $60. The Developers decided they wanted to be greedy, and they were going to raise the games to $60 while they still could. They got their way, and now all current gen games are $60 (Wii is not current gen, it is last gen). This screwed the consumer, and forced us into the arms of EB Games. Games do not need to be so expensive, and they know it. They do not need to spend 200 million on making a game and ask us to pay the bill. Now we are forced to listen to developers threatening out wallets. Telling us that they are intent on finding ways to force us to buy new. All this does is make me want to buy used to show them that I will not be bullied. I have even read some anonymous developers dreaming about a world where all there is is Digital Distributed games. And to my shock, most gamers are FOR this idea. Just look at Microsoft's Games on Demand service. I am constantly shocked when I look at how many people are actually buying these games. Not only are you spending $10 or more to buy a digital game that you could get much cheaper if you went to a store like EB Games, but you are severely limiting your options. You can never trade it in to help pay for a new game, you can not lend it to friends, or bring it with you anywhere. All you are paying for is the right to play it, not ownership. If the developers get their way, and this industry turn into nothing but Digitally Distributed games, then you can also say goodbye to bargain bins. Do you think they are going to let you buy one of their games for cheap?? Nope. EB Games can do that, since they are not under the leadership of any developer. Sure, we will get sales, but not to the great extent that EB Games gives us. The Industry needs to stop crying and grow up. They made their bed and now they need to sleep in it. We are forced to pay over $60 when we buy your games, and that is simply outrageous. You FORCED us into buying used, you FORCED us into renting games, and you FORCED us into trading our games in to afford new ones. Maybe you should have thought twice about being so greedy when you upped the price of 360 games $10.
Default_picture
January 24, 2010
[quote]If the developers get their way, and this industry turn into nothing but Digitally Distributed games, then you can also say goodbye to bargain bins. Do you think they are going to let you buy one of their games for cheap?? Nope. EB Games can do that, since they are not under the leadership of any developer. Sure, we will get sales, but not to the great extent that EB Games gives us. [/quote] You don't use Steam a whole lot, do you? I get more deals on Steam than I could possibly dream of getting elsewhere, and it's the biggest video game digital distribution system out there. For example: I'm getting a Bioshock 2 preorder and Bioshock 1 for 35 bucks. You'd be hard pressed to get that elsewhere.
100media_imag0065
January 24, 2010
@ Garret, you are not understanding my point. Steam is successful because the Developers are using it as a middle man. They have no choice at the moment. Yes, I do use steam quite often, as a matter of fact, I just bought Aliens vs. Predator for $5. What do you think is going to happen when they cut out the middle man? Why would they need someone like steam when they can do it all by themselves. Currently, on Steam, they have to compete with everyone else on that network. They ARE going to cut out the middle man and begin selling their games directly. That equals 100% pure profit for themselves, and now they are not competing with anybody. If someone wants their game, they are going to have to get it DIRECTLY from the Developer, and if you do not like their prices, too bad. This is where we are headed.
Default_picture
January 24, 2010
Great article. I support Gamestop as a way to "lower the cost of entry" for kids and families. But I buy my games to keep them. I rarely rent or trade up - only if I own several entries in the series with little incentive to play the older copies (Gears 1 and Gears 2) do I really bother to sell the older games, and then it's for the money to buy new games. I'm tired of scratched, dirty disks!
Imbarkus_picard_avatar
January 24, 2010
[quote]@Dana I've had my Wii purchases tied to my Nintendo Club account. Much like purchasing a hard copy of the game and putting in that registration code, the VC games are automatically registered to the account.[/quote] Hey @Brian I did this too. Will it work? That would be a relief to know...
5211_100857553261324_100000112393199_12455_5449490_n
January 24, 2010
Great article. I had to chuckle at the "Last I checked, libraries... haven't put print publishers out of work" comment because, ironically, you're standing on the shores of that enemy force as you read this. While the entry bar can be described as being high for system sales, remember, most (if not all) consoles end up selling systems at a loss not even a year after launch, Sony excluded, counting on licencing sales to produce profit. It's unfair to blame high console prices (Sony excluded. That was ridiculous for far too long) for keeping people from playing games. That said, used games are important, as is the market, and publishers have no right to dip their hands into it. Stick to your jobs, make good products. Make people want the games on day one. That will ultimately give you those sales you seem to be lacking.
Default_picture
January 24, 2010
[i]"But I'm not a developer or a publisher. I'm a consumer, and what may be good for those who make games may not also be good for me. Who's looking out for our interests?"[/i] You my friend gets a standing O. Great write up. :)
Default_picture
January 24, 2010
I find something missing on this conversation, why we MUST buy if the price is not right? why we MUST support this broken bussiness model? you people talk like the 'Do not buy' option wasn't in the menu, maybe is that the reason behind publishers getting closer to our throats? isn't all this industry supposed to please us? when things changed so much that we must accept whatever policies they impose us?
Imbarkus_picard_avatar
January 24, 2010
[quote]Stick to your jobs, make good products. Make people want the games on day one. That will ultimately give you those sales you seem to be lacking.[/quote] @Bryan I love how you put this. Digital distribution can work if you can end up with a product you can back up, and later install and use, yourself, without requiring the presence of the service. So far, the only one on PC that supports this model is gog.com. Everything else that I know of requires authentication against the service to reinstall. Who says direct2drive is even still going to be around in 10 years? iTunes lets you burn downloaded songs to CD. If you don't back up your library somehow, it's your fault (iTunes, not coincidentally, doesn't support re-downloading previously purchased content, but happily let's you pay again to get the song again). I'll take this burden as a consumer, if I have the option to make my download stand-alone. But gog.com is the exception, and is only permitted by license-holders as the final grab at a fair buck before software becomes abandonware. The lack of trust exhibited by digital distributers may, however, be justified. I don't seem to be as fond of trying to steal games as many people I know, so, in that regard we, as consumers, are the cause of our own woes as well.
Default_picture
January 24, 2010
I do not trust Gamestop. It pains me to see them have the most games available, but they are such low quality they aren't even worth buying new.
Default_picture
January 24, 2010
The first-sale doctrine preserves the right of the publisher to receive no more compensation for a single disc. But that doesn't mean they [i]shouldn't[/i] receive money each time it's sold. The difference between the prices of new and used games for a consumer may be 12%, but for the developers, it's 100%. There is nothing wrong with selling stuff you own, including used games. There is something wrong with encouraging saving $5 and thereby supporting a mom-and-pop-store-devouring franchise instead of the people who worked to create the game. The only reason that, as you said, consumers in small towns have to rely on GameStop stores is because that business drove out the independent sellers. They consumed several game retailers in my hometown alone. And what has changed? Now when I enter a games store I am positive I will find no retro titles and that I'll be pressured to pre-order games I don't want -- two burdens not usually found in indie shops. Saying more GameStop locations equals more game sales assumes that other retailers are incapable of selling games. Since you say you require more evidence to know if used games sales on a massive scale (i.e. GameStop's business model) leads to lost sales, it's quite a leap to conjecture that "many [consumers] would stop buying games altogether." On what evidence is that opinion based? I strongly support the sale of used games that are no longer manufactured. But to stock a new copy of a new game next to a used copy of a new game, while it may not be as crippling as publishers argue, does have an effect on revenue getting back into developers' hands. Plus a $5 markdown for a huge profit increase is awful. In this way your argument amounts to one of pro-piracy. Sure, piracy helps the consumer. Sure, musicians and directors and programmers aren't starving because of it. It's the cheapest option so just do it! As you can see, I'm not a fan of severe capitalist competition.
Dcswirlonly_bigger
January 24, 2010
I think one company that may have done the best job of "combating" the second-hand market is Nintendo with their "evergreen" titles. They've tapped into a market that's just as likely to buy a game years after release as they are on release day and are more likely to buy from places like Wal Mart and Best Buy. Games like Mario Kart DS and the DS New Super Mario Bros. are still either full price or near full price. As for GameStop itself, a GameStop store is its employees. I happen to live near one operated by people who know what they're talking about when it comes to games. Sure they suggest pre-orders as a job requirement, but I've never encountered anything like the stories I hear of idiotic game sellers.
Default_picture
January 24, 2010
I disagree with you.
Default_picture
January 25, 2010
You know what would get Microsoft, or EA, or whoever into the second hand market? Open their own stores. Beat Gamestop at their own game. They buy and sell used copies and keep the profits. I might be more inclined to buy from Xboxstop because they might have better copies. For that matter, make it a place to ship broken consoles to the repair shop. God knows Microsoft still needs it.
Robsavillo
January 25, 2010
Chris, what independent sellers are you talking about? I grew up in the suburbs, and all we ever had were chain stores -- Funcoland, Babbage's, and Electronics Boutique. Sure, all were gobbled up by GameStop, but they were all chains just the same. If I remember correctly, EB folded mostly because the used-market for PC games dried up once developers started attaching unique CD keys to games. The chain was no longer profitable, and GameStop bought them out. I also state that some people would stop buying games altogether without a used option because there obviously exists a segment of consumers who don't want to pay $60 for games. Without used games, they are priced out. But did you really just conflate the second-hand market with piracy? Really? Come on!
Default_picture
January 25, 2010
When I read this article, it makes me feel like I'm in the past somehow. Since when is Gamestop the only option for second-hand sales of games? Between eBay, Half.com, and a flurry of other trading sites, there are more than enough online sources to deliver these used goods that don't do so in such a maladroit fashion. Not only that, but online retailers are becoming more and more savvy in offering new games in compelling ways - just look at the competition between brands like Wal-Mart, Best Buy, and Amazon to capture every last sale in such a competitive space. The problem with Gamestop is that they're fighting the tides. Publishers are doing things that make sense; these other companies are doing things that make sense; Gamestop is clinging to the old way of doing things, bracing the falling walls around them with the last penny-pinching used sales they can muster. I'm not totally convinced that we should be petting them and whispering "le pauvre" in their ears as they gradually become irrelevant, but I suppose I can meet you halfway and say that the general vitriol is a bit over the top.
Default_picture
January 25, 2010
I apologize if anybody has already mentioned this and I overlooked it, but I always thought the biggest problem with used game sales is the fact that Gamestop buys a game for about, let's say, $20 only to re-sell it for $50, $55. The mark-up is ridiculous and that directly affects the consumer much more so than publishers or developers.
Default_picture
January 25, 2010
Game developers and publishers do not DESERVE compensation for used game sales, and equating used game purchases to piracy is asinine. R.A. Salvatore didn't get any money when I purchased my first Drizzt books, but I guess that was just as bad as stealing them, right? I can't take people who use that lame argument seriously. As far as the actual article, I thought you raised many valid points, Rob. However, I disagree that what Bioware has done with Dragon Age and Mass Effect 2 is a step in the wrong direction. I am of the mindset that if they're offering a superfluous incentive to buy new, and it is available as an optional purchase for used buyers, then there's no harm done. I share your concern with what Capps said (In fact, I misquoted Mark Rein as saying that the other day), but I don't think Bioware is just there yet. I think their method is a great compromise, and I welcome it over digital distribution and licenses.
Purple_night_lightning_storm
January 25, 2010
I agree with everything said about used game sales, but all of this can be accomplished without going to Gamestop. Zero Originality summed the whole situation up nicely. http://www.break.com/WBZero The only people who I hear complaining about the used game market are developers/publishers who don't know how to properly budget and forum posters who seem to be under the delusion that these companies care about consumers. I generally avoid Gamestop because they hire the clueless, take new games out of the plastic, and treat their customers like we just wandered in from a Romero film. Online is the only way to go for my money. The used games I've bought from Amazon show that they actually check them and then accurately described them when posted. GoGamer.com is constantly having sales on new games that put them on par with Gamestop's used selection. Toys R' Us and Best Buy are trying to one up each in 2for1 sales. For what they did to Babbage's, Software Etc, and EB Games, (places I used to enjoy shopping at) Gamestop deserves all the hate it receives and then some.
Jason_wilson
January 25, 2010
[quote]I have nothing against used markets in general, but there's something underhanded about the primary videogame retailer selling used games right next to their plastic-wrapped counterparts. That's something you don't see in any other industry. [/quote] Go to any car dealership that sells new and used (or "preowned, as they like to call them) cars. You'll find new and used cars sitting next to each other on the lot. Many salespeople even ask if you're looking for a new or used car when you arrive. Same with bookstores that carry new and used copies of books. [quote]I find something missing on this conversation, why we MUST buy if the price is not right? why we MUST support this broken bussiness model?[/quote] No one's making you buy something. I buy things on my terms. For food, I look at four markets and go with the best quality/price. For clothes, I buy at sales, often on the large markdowns at the end of a given season. For cars, I call dealerships in the area, find the lowest price, and tell the others to beat it. For a house, we bought on our terms, not the homeseller's terms. For games, I buy a game I want when it's at the price I want. If I feel it's worth $60, I buy it at $60. But if I see it at 75 percent off on, say, a Steam sale, I buy it there, too. It's my money; I decide what to do with it. No other company "deserves" it. Make something that's so good that I want to pay your price for it -- that's the key. As for GameStop, well, I don't like them because I want to be left alone when I go to a store, and the workers there always bug me. And GameStop doesn't always have the niche games I love. But I have no problem with their sale of used games -- no one's making you buy them or even acknowledge their pitch. How you react is your decision; how you spend your dollar is your decision.
Default_picture
January 25, 2010
You made a lot of great points Rob, but I'm still not a fan of Gamestop due to their policies that encourage employees to aggressively sell goods that have little value. I've also noticed that very few of their employees know anything about the products they sell and they're oftentimes rude. I'm supportive of the used games market, because I think people of all walk's of life should have the opportunity to purchase games, but I don't like how Gamestop sells many of their used titles for $5 under their new price. When I want a used game, I usually turn to Craigslist, Amazon, or Ebay since I can often get the games in better condition and at a significantly lower cost.
January 25, 2010
[quote]The Industry needs to stop crying and grow up. They made their bed and now they need to sleep in it. We are forced to pay over $60 when we buy your games, and that is simply outrageous. You FORCED us into buying used, you FORCED us into renting games, and you FORCED us into trading our games in to afford new ones. Maybe you should have thought twice about being so greedy when you upped the price of 360 games $10.[/quote] What makes paying $60 outrageous for a game but buying used for $55 often without a book or box art acceptable? A ten dollar price hike just means that instead of buying 10 games in a year you buy 8. Or, considering inflation and whatnot maybe you buy 9. Nobody's forcing you into anything. [quote]What do you think is going to happen when they cut out the middle man? Why would they need someone like steam when they can do it all by themselves. Currently, on Steam, they have to compete with everyone else on that network. They ARE going to cut out the middle man and begin selling their games directly. That equals 100% pure profit for themselves, and now they are not competing with anybody. [/quote] I have to take issue with this too. Computer game developers/publishers will never do away with the 'middlemen' like steam unless they all collectively get together and make their own mass distribution system. The odds of that are about nil. Blizzard can do it because their three franchises have such massive support. The rest of them... not so much. I'm assuming the average PC consumer doesn't want to go to twenty different websites just to buy games. That and using distributors like steam helps publishers with their distribution and advertising costs. As far as console games going all digital... I very much doubt that will happen for a long time. Lets assume that about 75% of console owners have them connected to the internet. That would cut out 25% of overall sales for a console. Let's say that in 10 years 100% of console owners will have their consoles connected to the internet. Some might say that all digital distribution will work for consoles at that point, but realistically, how many of those internet connections will be good enough to download a 10GB or larger file? Sorry I didn't comment on the actual story, this is getting a little long. Rob, thank you for the... thought provoking story.
Brett_new_profile
January 25, 2010
Here's my question for you, Rob: You defend GameStop's used game business as a healthy business decision for them -- but couldn't you defend the actions of EA and Epic in the very same way? Like any public company, they live and die on profit, so can you really blame them for incentivizing new game sales? They're just trying to make more money, same as GameStop.
Robsavillo
January 25, 2010
Brett, I think the key difference is that GameStop is increasing availability and exposure of all games, specifically through the used-market approach; therefore, the chain is benefiting the industry as a whole. (Although, I agree that their decision to drop trading older console titles is frustrating.) EA or Epic increasing their personal profits isn't going to do much to affect the entire industry's well-being.
Default_picture
January 25, 2010
That argument is barely tenable, considering the fact that EA and Epic specifically count for a major part of the industry and GameStop's approach to selling used games undercuts the prosperity of these publishers. I honestly think that argument for GameStop's positive effect on the industry is as paper-thin as the argument that they have a measurable negative effect on the industry. Without seeing GameStop's actual numbers as well as the imaginary statistics of lost new game sales, it's sort of fruitless for the consumer to speculate what effects these market forces have.
Robsavillo
January 25, 2010
I don't necessarily agree, primarily because stuffing the coffers of two major players will be at the expense of the others. It's all just internal reshuffling, which doesn't do anything to provide long-term solvency. On the other hand, I definitely believe that used games lower the barrier to entry, and thus, increase the potential pool of consumers. I don't see how that isn't a benefit to the industry at large. I also don't think that used games "undercut" the prosperity of publishers. Keep in mind that while some will buy their games used, that isn't all just lost profit -- it's branding. If a buyer is interested in a game (say, Gears of War) but isn't entirely sure about spending $60, he may bite on a used copy that's cheaper. If he ends up enjoying the game, now he's much more likely to buy Gears of War 2 brand new.
Default_picture
January 25, 2010
[quote][b]If[/b] a buyer is interested in a game (say, Gears of War) but isn't entirely sure about spending $60, he [b]may[/b] bite on a used copy that's cheaper. [b]If[/b] he ends up enjoying the game, now he's [b]much more likely[/b] to buy Gears of War 2 brand new.[/quote] This is all I'm saying. Similarly, let me simulate a counterpoint: [quote][b]If[/b] someone buys a game used from GameStop, [b]chances are[/b] they won't buy the game again new so that sale will be considered a lost one to the publisher. Furthermore, [b]if[/b] someone sees a used copy of a game for $5 less than a new copy, they [b]might[/b] buy the used copy without considering the total lack of profit to the publisher or developer. And finally, there's [b]a good possibility[/b] that the used sales of hardcore games on consoles like the Wii possibly deter publishers from putting more of them out in the future.[/quote] What I'm trying to say is that without solid numbers, all of those bolded words are just that - ifs, possiblies, or likelies. Sure, I think people undervalue the effect of branding and on a completely unrelated note, don't completely understand the effects of some marketing strategies that may be an attempt at establishing a brand. I just think that it's a stretch to say that the positive effects of GameStop easily overcome the negative effects, because there's just no evidence of that.
Profile_pic4
January 25, 2010
People are really making this issue complex. I see it as very simple: make a game with great replay value and provide DLC of decent worth, and less people will sell their games back. Make a crappy game, and you will sell less and see your title(s) fill the Gamestop shelves. Likewise, buy a crappy game and decide to sell it back and you deserve to take the $25 hit on the sell-back. Live and learn, people.
Brett_new_profile
January 25, 2010
@Rob: But what if they use those profits to push more experimental and niche games? If the profits from Mass Effect 2 can fund something like Mirror's Edge, doesn't that help the industry as a whole?
Robsavillo
January 25, 2010
I'll acknowledge that the one-use code strategy may provide short-term profits; however, the industry is shrinking the consumer base over the long-term by artificially raising the barrier to entry. That such profits from Mass Effect 2 could fund a Mirror's Edge is pointless if there are fewer consumers willing to buy. This also means that another Mirror's Edge becomes more unlikely as those short-term gains are lost.
Imbarkus_picard_avatar
January 25, 2010
So can we just agree that, as consumers, if we want to buy old, weird, or experimental games at Gamestop that you wouldn't pay full price for new, than the used games market is not a problem. But the practice of buying a new release for $5 off used really doesn't save you enough money to justify giving all the profit to Gamestop instead of the publisher? How 'bout we make our points with our wallets?
100media_imag0065
January 26, 2010
@Jordan. Who says that when we buy used games they are only $5 cheaper?? When I buy a used game I save $30 or more. Used games drop in price quickly. You are only going to pay $5 cheaper if you decide to buy a used game a week after release. For instance, Darksiders is now $40 at my EB Games. That is a $20 savings. Multiply that by how many games you buy a year, and you just saved a bundle. I have had this conversation before. And I have done the math already. 2 years ago I kept track of my purchases. I only bought used games, and only 3 or 4 New. With each game I purchased, I listed the used price that I was paying, and the New price. Honestly, I did this for every single game I purchased for the entire year. I saved about $1,300. For a Hardcore Game like me who likes to play games, that is a ton of money. There is no arguing with that figure. This article does not pertain to someone who is not a Hardcore gamer, since they are not buying $65 games every week. For a core gamer who purchases a lot of games, saving $15 or more dollars per purchases is incredibly essential. Plus, I never buy a used game unless the box is mint and all the manuals and packaging is included, which isn't a problem at all. I don't know why you would assume all used games do not include the original packaging. Now, onto to Steam. Have you not seen what has been happening on the Internet. Music labels are pulling out of Itunes to sell their music exclusively on their own website. Television studios are removing their content from Hulu and other sites. Youtube has to take down thousands of videos a day. Why wouldn't they want to sell their own content?? It is absurd to think they wouldn't. They do not need Steam. If someone wants their game, you go to their website, and download it. It is as simple as that. If you want to talk on the EA forums, do you not have to go to their website first? If you want to talk on the Ubisoft forums, do you not need to go to their website first?? Why would you think that people would resist going to a Developers website to download their game?? Their is no such thing as a useful middleman. Take it from me, I used to be in the importing business and as soon as you can cut your ties with a non-essential company, you do. Now, on to Digital Distribution. You think that they are not going to go that route because some people do not have internet connections??? You are forgetting about all the money they are going to save in the first place that will offset any loss from cave men who still have not accepted the 21st century. When they go Digital Distribution, they no longer have to pay for boxing, cases, manuals, plastic, warehousing, shipping, docking, wages, etc. Their will also be hundreds of people they are currently paying who will be let go, since what is the use of having a Shipping Boxer when their is nothing to ship? They are going to save millions, and they are not going to care about the few people who can't download the game.
Default_picture
January 27, 2010
I completely see the appeal of wanting to buy used games and I've even bought several used games in the past(some really hard to find games too.) After working there for a year I can't say I ever want to shop there again though. The company as a whole is pretty horrible when it comes to how they treat their employees. My entire staff got fired within the span of a two weeks because we couldn't get reservations and Edge card subscriptions. Yes, I completely understand that you have to sell those things, but when customers do not want them I'm not going to shove either product down their throat till they're forced to get one. Apparently GameStop believes otherwise. I've seen employees at other GameStop's do said practice too even when I told them I worked for the company. If the company's practice was better I'd buy more games from them. Until that happens, however, I'll shop elsewhere.
Imbarkus_picard_avatar
January 27, 2010
A hungry corporate structure on the backend makes everything suck after a while. Too many overpaid VPs and CEOs eventually translate into brutal Ferengi-style profit motive management. Then the concentration of wealth in the company gets too great, the injustices become transparent to the customer, and the company gets brought down a peg. My take-away from this whole discussion is that I ended up rallying "in defense of used game sales," while feeling that Gamestop itself doesn't deserve the defense. That said, working at retail is not the same as "workign with games," it's working at retail, shoptending, which is basically sales. Salesmen are measured on sales-performance, and the ones who do it "for life," don't really give a damn what they are selling. Still, I'm glad I worked at Electronics Boutique from 1987-1990, selling Turbografx-16's and C-64 games, before all this bullshit happened.
Waahhninja
January 27, 2010
Damn, this comment page exploded. I'm afraid I'm a little late to the party. I agree with Mr. Castro near the top. Trying to get The World Ends With You at two different Gamestops was the exact same. Woman at the counter scrunched her face in confusion, asked her coworker if they had, "you and the world end" or "the world of you" and then dismissed my efforts at correction. There's a huge turnover rate in my town at Gamestop and it feels like it's because kids trying to enter to job market just apply there as they would a McDonald's or Target. They get a list of things to pimp out (subscriptions, new releases, anything used) and aren't expected to have any other skills. Also, how is Mr. Entwistle commenting from beyond the grave? Spooky!
Img_20100902_162803
January 27, 2010
With all these complaints there might be room in the video game sales market to open a connoisseur type store. The video game sommelier takes your likes and dislikes then offers his recommendations .
Imbarkus_picard_avatar
January 27, 2010
This is such a brilliant idea I might steal it. Bookfinding services are big, and new gamers with more money than time might very well pay to have someone seek out titles unique to their area of interest. Probably wouldn't get rich with it but since buying games, especially unique ones, is such a fun hobby for me, might be fun work too. The book "Used and Rare: Travels in the Book World" started this line of thought for me and my wife. Here it is: [url]http://www.amazon.com/Used-Rare-Travels-Book-World/dp/0312187688[/url]
Default_picture
January 27, 2010
@Dana That's just the kind of job which I've loved to have (or maybe force my offspring to have). So, to this point of the discussion we have spotted two different phenomena: Video Games aftermarket and Gamestop practices; agree on the first, abhor the second, maybe corporate greed is at both sides of the spectrum, and corporativism is something us, smart individuals can fight, right?
Imbarkus_picard_avatar
January 27, 2010
@Luis, I've heard it said that reform is easier to execute as an inside job, yet somehow I've always been sniffed out and removed from power before being able to execute change. Hope springs eternal, however!
Default_picture
January 28, 2010
Some good points are in the article but it ignores another aspect of Gamestop: terrible products. I purchased the following items from Gamestop on back-to-back visits to 3 different stores: - original xbox that wouldn't had a red ring error as soon as you turned it on - returned it 30 minutes later and received another original xbox with the same error - broken copy of a game that wouldn't even get to the "Press Start" menu - a Gamecube with a broken video cable - a new 360 controller that had a broken analog stick On top of the shadiness with their used games policy, they sell broken goods. I shop on eBay and Amazon used all of the time and never have I experienced such many unlisted defects with the products sold. Used car dealerships aren't even this bad. Gamestop should go the way of the dodo. There are other places to buy used at a cheaper price. There are other places to sell your stuff at a higher value. Plus there are other places (ie any other store operating in the United States) that don't sell defective products on a regular basis.

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