The Used Game Solution
This article was written by: Jacob Hruska (snakeman555)So, to have a solution you must first have a problem, I think most of you know what I am referring to when I speak of Game-Stop and the used game problem, but I will quickly outline the situation as I understand it for anyone out of the loop. The issue is with the large incline in used game sales vs. new game sales is that publishers feel they are losing sales to used sales. Which they are.
The publishers can’t stop used game sales due to a supreme court ruling back in 1909 called the First-Sale Doctrine which states that anyone has the right to buy, sell, rent, lend, or giveaway a trademarked good that was obtained legally. This is the basis that many markets work such as the car industry, the movie industry, and even our very own game industry.
According to an article in issue 20 of the official PlayStation Magazine Game-Stop makes a $7 profit on new games, and a whopping $28 dollar profit on used games. In short without rehashing the whole article Game-Stop sells more new games than used games and makes more bank off of the used sales.
So now with all of the above information disclosed I will reveal the solution to this problem. Publishers need to negotiate with used game stores to get a cut of the used game sales and to do that they need to give the Stores cheaper prices on new games so their profit margins will go up and both sides will benefit. Or, publishers need to get into the used sales business, and undercut Game-Stop.
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That’s a little bit shortsighted. Why would Gamestop ever agree to giving a cut to the pulishers? They’re making good money out of the used game sales now.
Take for example Game in the UK. The other day I traded in the latest Tiger Woods on the 360 for £18. At that time they had a couple of preowned copies on the shelves for £29. That’s £11 profit right there.
Was looking for something in depth and with new insight into this issue. Not found here.
And this is why I love mom and pop shops. A little insight into this, if a 360/PS3 game just came out a week ago, Gamestop typically gives $20-$30 in trade for it. Obviously a good amount of profit on it considering they usually sell used for $49.99 to $54.99. (this is by no means meant as a definitive number, it’s just the average of what they give for 360/PS3 titles a week or two after they came out, however if it’s still selling well even a month or two later they’re giving that price for it still because it’s more attractive to customers and they still sell their copies.)
The mom and pop game shop I work at, we typically beat it by anywhere from $5, to as much as $20. Obviously this depends on what they’re giving for it, we typically only beat them by a lot when the price is lower, but we still make a good amount of profit on it. I think Gamestop could offer to give more for the games, and I understand they do a great job at taking in games that aren’t even worth taking, (I’m looking at you, 99 cent sports titles.) because often enough we as a mom and pop shop can’t take in most of the sports titles because A) we really can’t give a fair price on it. B) We would run out of space fairly quickly if we did take it in. We don’t have a huge storeroom like a Gamestop or Gamecrazy. Most of our actual space is dedicated to displaying our merchandise rather than storing stuff.
Also, people forget that most of the time they claim used game business hurts the developer, it doesn’t as much as you would think. Since the actual company (Be it Gamestop, Gamecrazy, mom and pop game stores, etc.) buys the game direct from the company, their wholesaler, whatever. They’re spending the money. Used games allows people who would otherwise not be able to afford the games they want. I mean, even if you trade in just two recent used 360/PS3, you’re still most of the way there. Even though the developers don’t make a cent on the used game market because it’s held completely separate of the new game market, it still spurs new game sales, because the stores make recoup more money if people trade in used games towards new ones, and it allows them to order new games, because technically they still sell, even though other games were used towards the purchase of the new game. Thus still supporting the new games business.
Also I apologize for any grammatical errors in my comment, I posted this at 2:00 in the morning and I am very tired.
I personally have never heard talk suggesting publishers should try to make deals with GameStop, because something along those lines are what need to happen if GameStop wants to stop getting all of the Hate.
On the claim of shortsightedness I would have to disagree. If a developer could negotiate some sort of price reduction with a exclusive pre-order bonus etc. with gamestop to get say $1 of the profit on all used game sales then they both win. (In theory) But really the ball is in gamestop’s court because the publishers really have no power.
Or like I noted at the end of my article the publishers could get in the used game business, with some sort of collaborative effort where whoever is running the company is getting some profit, and the publishers are getting s portion too.
Really I posted this to try to find a solution. I have heard so much bitching lately about used games but nobody really seems to be trying to figure out what to do about it. If anyone here has any “solutions” please leave them in the comments and if there are any good ideas I will put them in a followup article.
Used games sales were created as a solution to a problem as well. Every game that comes out is $50/$60 when only about 30% of them have enough content to warrant that price. So someone said, ‘I know what to do, ill sell people the games used for a cheaper price!”.
If companies didnt gouge us with $60 games that are 6 hours people wouldnt buy it used. There is nothing wrong with what gamestop is doing, if the game industry cant make a profit then thats a flaw with the way games are budgeted and made, not gamestop.
They obviously make enough money otherwise they would have been complaining before hand.
If they are really that bothered, I suggest they open their own chain of pre-owned game stores…