GameStop: "We're Not Ashamed Of The Pre-Owned Business"
See Full ImageThe pre-owned video game market has become controversial in a number of different ways. GameStop, a pioneer in the used game market, doesn't apologize for such a lucrative business.
In speaking to Gamasutra, GameStop president Paul Raines revealed that 70% of all income taken from the sale of used games is spent immediately on new titles. And they're also proud of how they've brought pre-owned software to the US High Street. Said Raines:
"We are not ashamed of the pre-owned business and in fact we believe that it's good for the industry. We're really not cannibalizing new game sales. That's a common misconception. The knowledge of how this model helps drive sales really resides at the publisher level.
A lot of our consumers tell us that the pre-owned business has allowed them to learn more about video gaming. There's a disconnect between a lot of the blogosphere and what consumers tell us."
That's not really surprising. And the majority of complaints still center around the fact that developers are struggling, due in part to one big problem: They see no money from the sale of pre-owned games. But Raines still believes in the used game market, and says game makers just don't understand how much it really helps.
We have not been successful in communicating to developers how this business really helps. So my answer to developers is that we are driving growth in a category that needs to grow.
We think there's a real lack of awareness as far as how it's good for the industry. The transparency you're seeing from us is because we want people to know about it, helping people understand what we're trying to do for the industry."
There's a lot of truth there. ...of course, we can't really forget that GameStop pulls in $1 billion/year from the sale of pre-owned products. That's worth noting.
Tags: gamestop, used games, preowned games, used video games
8/6/2012 12:13:54 PM Ben Dutka
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Comments (33 posts)
matt99
Monday, August 06, 2012 @ 2:28:35 PM
8 up, 1 down
kay Oss
Monday, August 06, 2012 @ 4:03:15 PM
2 up, 3 down
Nerull
Monday, August 06, 2012 @ 4:10:00 PM
Think of it like an emperor, that actually can reincarnate itself.
Last edited by Nerull on 8/6/2012 4:11:26 PM
3 up, 0 down
xenris
Monday, August 06, 2012 @ 5:56:21 PM
I have often argued that I don't think the used game industry is bad, and I still stand by it.
3 up, 0 down
Beamboom
Monday, August 06, 2012 @ 10:14:06 PM
I buy them new cause there's hardly anything to earn from buying them used. But I would not have bought all those games if I could not at the same time trade in other games that I didn't want any more.
I would be much more careful with what games I purchased if they had no value after purchase.
2 up, 0 down
Temjin001
Monday, August 06, 2012 @ 1:11:07 PM
Reply
I was going to pre-order DOA5 from them, but when I went into their store two associates were just hounding a couple about buying a warranty for a used PS2 and getting warranties on their used games, even though they're "garunteed to work." And these employees persisted even after the couple objected several times to the warranties.
It's also not hard to see just how much floor and shelf space is allotted and product placement is positioned to spotlight used game products before the new game sections for respective platforms.
But whatever, give it until the next-gen and Gamestop will have shrunk and closed many stores as the publishers will have taken back a percentage of the market through various DRM's and service contingencies.
At the end of the day I see the problem ultimately tied to an industry that built itself on a format of duplicateble code and where value is placed first in what is intellectual over physical at a mass market level.
3 up, 0 down
Highlander
Monday, August 06, 2012 @ 3:36:01 PM
1 up, 1 down
Hourn
Monday, August 06, 2012 @ 4:55:29 PM
Reply
0 up, 1 down
BikerSaint
Monday, August 06, 2012 @ 5:39:51 PM
Reply
Also, there are a lot of games I need for the collection(such as, sports,RTS, & RPG's titles) that I'll never play, but are still needed.
And now that I've been out of work for over 13 months & have just about exhausted most of my savings, I'll be buying a lot more used games, rather than new ones.
1 up, 0 down
xenris
Monday, August 06, 2012 @ 6:01:00 PM
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That seems like a win win to me. I only say this because I know people who wouldn't be able to buy games without trading old ones in.
I definitely think the people who made the game should get money from the used game sales. A percentage or whatever.
2 up, 0 down
Fane1024
Tuesday, August 07, 2012 @ 8:27:38 PM
0 up, 0 down
Knightzane
Monday, August 06, 2012 @ 7:41:38 PM
Reply
1 up, 0 down
Underdog15
Monday, August 06, 2012 @ 8:00:43 PM
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I'm not so sure.
Obviously, Gamestop is going to focus on only one side of the story. They say the evidence of the benefits show on the publisher side of things. But the rest of the industry disagrees. There's obviously 2 sides to this story.
I wonder how many people will read this one sided POV and say, "YEAH! And I always knew it!"
I still think the used market needs to stay for it's benefits, but it needs a bit of tweaking to maximize the benefit to the industry and be more fair to consumers. It's an unbalanced model that, in my opinion, rips off consumers and publisher/developers. it just seems beneficial because it's better than nothing at all. I think his point of view doesn't change that. He's definitely right. He just doesn't share the whole picture. I definitely don't get people being 100% ok with the model... especially when they should be getting more from it. (Not less. And not zero used market, either)
Last edited by Underdog15 on 8/6/2012 8:04:04 PM
3 up, 0 down
Neo_Aeon666
Monday, August 06, 2012 @ 8:49:01 PM
There is NO profit or merely any on selling new games/consoles. I know, I work in that domain.
Their only salvation for proper profit is used games.
How about that: Devs give a bit more % of a new sale to resellers and then we can talk about giving them a share of used gaming.
3 up, 0 down
Underdog15
Tuesday, August 07, 2012 @ 8:51:14 AM
0 up, 0 down
Highlander
Tuesday, August 07, 2012 @ 10:32:56 AM
0 up, 1 down
cLoudou
Monday, August 06, 2012 @ 9:11:32 PM
Reply
0 up, 1 down
Rogueagent01
Monday, August 06, 2012 @ 9:24:44 PM
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Other shops offer better trade-in value then them and sell their games for cheaper, unforunately these shops are far and few between.
The used game market has allowed for dozens/hundreds of IPs to become stable franchises and everyone knows this. Many people to this day will say things like "I don't know" or "it doesn't interest me" yet when they get it used for cheap some end up becoming fans of that game/franchise, and then end up buying something from that franchise new. So yes the used market is one of the reasons that gaming is where it is, but Gamestop better not try and take any of that credit either.
Gamestop is the definition of greed and they will try and stand up for their rights all the way to the end, I get this, but I don't condone it. Hopefully one day there will be enough small shops around so that people will actually have a real choice as I don't consider online shopping a choice for a lot of people.
1 up, 0 down
Highlander
Tuesday, August 07, 2012 @ 10:53:22 AM
Let's not delude ourselves into thinking that somehow a network of local game stores is going to spring to life to challenge GameStop, Target, Walmart and Amazon. That cannot, and will not happen. What's more likely is that the game industry will go the same way that the video industry has. Gamestop needs to stop shafting customers and change their business model to survive.
0 up, 0 down
Rogueagent01
Tuesday, August 07, 2012 @ 6:44:15 PM
These types of shops may have been extinguished in your area but I guarantee that is not the case for all areas. Other then the online stores each of those you named started small and grew to what they are now, and sorry but that can happen again and in fact it will. Hopefully though they don't lose sight of what got them started like many large chains do.
Mind you I live in a major city which gives these shops a better chance, but even then I have watched dozens of them come and go in the blink of an eye. So I understand what you're saying but at the same time have shops around here that prove it wrong.
0 up, 0 down
Amnesiac
Monday, August 06, 2012 @ 11:40:55 PM
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It is worth noting so why not try this out..
Test the theory.
If all NEW games cost as much as Gamestop's USED games then consumers would be buying the new ones right?
Then the developers would rightly get a piece from the ($1 billion/year in sales) slice, the publisher who complains alot also gets some of that 1 billion dollar pie and Gamestop gets none.
Maybe G-Stop lowers their price? who knows?
if that happens WE gamers pay lower prices.
game, set, match.
there problem solved.
1 up, 1 down
Highlander
Tuesday, August 07, 2012 @ 10:48:43 AM
0 up, 0 down
___________
Tuesday, August 07, 2012 @ 5:31:49 AM
Reply
"The knowledge of how this model helps drive sales really resides at the publisher level."
right, so the only ones that understand that used games are not hurting new sales are publishers?
so then why is it publishers who are releasing online passes, preorder incentives, DLC exclusivity, ect, ect, ect, just so they could KILL used gaming?
hmmmm?
i mean come on dude if your going to make up a BS excuse at least make one that makes sense!
1 up, 1 down
Coffeya
Tuesday, August 07, 2012 @ 7:55:15 AM
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Holly f***ing apple sauce. That is a huge statement and I never knew that. I wonder if they can prove that to us some how?
0 up, 0 down
Underdog15
Tuesday, August 07, 2012 @ 8:52:05 AM
0 up, 0 down
Highlander
Tuesday, August 07, 2012 @ 10:47:33 AM
Wait a minute, that doesn't work at all. Parse that out and look at what is really being said.
Are they saying that GameStop spends 70% of all net income gained through used game sales on new titles? Nope, they're not. They're saying that 70% of the money they pay to consumers for traded titles is eventually spent (according to GS) on new titles. The thing is that the statement is incredibly misleading since it implies that somehow 70% of the revenue from used games goes back to new games, and it doesn't, at all.
The income from use games for gamestop is 2-3 times the trade value paid to consumers. So for a game that GS resells for $55, they give the consumer about $20-$25 in trade value. If 70% of that trade value to consumers is then spent on new games that means that we're really only talking about $14-$15 per game. That doesn't finance the cost of a new game. Meanwhile GS is reaping a windfall of $30-$35 for that traded game. How much of *that* income get's spent on new games? 0%.
The truth of the matter is that the total income that GS sees on used games is in the billions of dollars a year, none of which goes to publishers. If those billions were not being spent on used games, they'd be spent on new ones, which would immediately give the game production business a boost. Oh, but it's deeper than that. What if GS gave consumers 66% on the dollar in trade value. So a game that they will turn around and sell for $55, would earn the customer trading it in $36.63 to spend on their next purchase. GS would still clear nearly $20 on the used game which as has been stated will be visually checked, put back in the case and shrink wrapped before sale.
If 70% of that $36.63 is then spent on new games, then perhaps you could make a case that used sales did not cannibalize new sales so much. The trouble is that consumers get 40% or less for their traded titles, and the resulting 70% spent on new titles is a much smaller amount. But then, if GS gave a more realistic trade value, their cash cow would only be a cash calf. Wouldn't that be a terrible shame?
But then, GS would prefer to mislead and lie, trying to appear like they are somehow beneficial to everyone instead of simply sucking cash out of the pockets of customers and game makers alike. Dishonesty appears to be the name of the game at GS.
0 up, 0 down
wackazoa
Tuesday, August 07, 2012 @ 9:32:10 AM
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0 up, 0 down
poboy975
Friday, August 10, 2012 @ 10:27:34 PM
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0 up, 0 down
TXNBgamer
Tuesday, August 14, 2012 @ 7:31:05 PM
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0 up, 0 down
Beamboom
Reply
Monday, August 06, 2012 @ 12:29:40 PM
Last edited by Beamboom on 8/6/2012 12:32:25 PM