GameStop Used Game Sales Account For 42% Of Profits
GameStop is a company that just can't be stopped right now, and it's due in large part to the explosion of their used games business.
According to recent statistics gathered by Edge, used game revenue for the world's largest video game retailer hit $2 billion this fiscal year (which ends January 31). Now, that's nearly 1/4 - about 23% - of the company's total revenue, which is $400 million more than the previous year. Overall, the Wall Street Journal says that 42% of GameStop's profits come from used game sales, and as far as we're concerned, this isn't exactly surprising. As a side note, the Journal went on to talk about how publishers are trying to coerce consumers into buying extra content that can "only be used once." They say it's an example of "an effort to diminish the appeal of buying a used game," which does make some sense. However, as it stands right now, GameStop is raking in the big bucks by taking your used games in trade and selling 'em all over again...and for not much less than the initial price tag. Some may look down on this practice, but most gamers like the idea of trading in products they won't use anymore, if only to nab some extra cash for a new purchase.
Personally, the numbers don't surprise me in the least. And I hate to say this, but it's because GameStop gives less than they used to for trade-ins...but still sells them for the same amount. When I worked there during the late PS1 and early PS2 days, we'd give about half of what the game was worth in trade. So if a new game cost $50 and someone traded it in the next day, they'd get $25, or at least $20. Then we'd turn around and sell it for $45. Well, GameStop is now giving about 1/3 of what the game is worth, so a $50 or $60 might only get you $15 or $20, and they'll still sell it for only $5 less than the new retail price. So yeah...they're making a lot of money.
1/23/2009 Ben Dutka