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More gamers turning to pawn shops due to recession
Most gamers who've possessed a longtime penchant for frugality know the pawn shop business model quite well thanks to a certain pre-owned retail juggernaut -- however, due to the aforementioned retailer, we've traditionally rarely taken our business to actual pawn shops. According to a recent Chicago Tribune article, this trend may be reversing -- the article points out that national pawn shop chains had a highly profitable year in 2008 (thanks to the ailing economy), and that most are seeing an increase in hocked electronics; namely, TVs and "expensive game systems."Sure, it may sound like a depressing trend for gamers to resign themselves to, but really, it's more disastrous news for GameStop. When gamers collectively realize that pawn shops not only offer video games, but also pre-owned Glocks and rings with which to "make that gal an honest woman," they're probably never going to cross the threshold of a GameStop ever again.[Via GamePolitics]
DICE 2009: GameStop exec defends used game sales
A few of the headline-making speeches at the 2009 DICE Summit in Las Vegas have prophesied the rise of digital distribution and the slow decline of brick-and-mortar retail outlets, like the oft-demonized GameStop -- Dave Perry's speech even included a photoshopped jab at the company's logo, re-dubbing it "Used GameStop". However, the retail juggernaut's chief operating officer J. Paul Raines recently took the DICE stage to defend the company's used game sale practices, claiming, "borrowing and lending games are very important ways for people to try new games."He said that the effect GameStop's pre-owned sales have on the success of new games is beneficial -- according to the company's statistics, over 70 percent of trade credits are applied to the purchase of new games. As far as stealing from the coffers of developers and publishers, Raines said that only four percent of used games purchased are titles that were released in the past 60 days. Even with these figures in hand, we still understand developers' protestations -- after all, any slice of a $2 billion pie is highly covetable.
GameStop states its case for used games and trade-ins to developers
With developer ire growing over the re-sale of games -- from which they see no additional monies -- GameStop stated its case for the practice at Southern Methodist University's Game Business Law summit. The audience included attorneys ... along with developers and game company execs. As Gamasutra reports, GameStop's marketing chief, Mike Hogan, supported the practice with an analogy, saying, "If you couldn't sell your old car -- would the [automotive] industry sell more cars?" Hogan went on to state that most re-sold games have been out for more than 90 days, and that 75% of trade-in credit goes immediately towards the purchase of a new game. Hogan stated that 20% of the new copies of Call of Duty: World at War the company has sold were purchased in part with trade-in credit. Hogan admitted that "there are other perspectives, but ours is: trades and used fuel growth in the category." One thing's for certain: a game traded in for $12 and re-sold for $35 fuels growth in GameStop's wallet.
Joystiq interview: Bungie's Marty O'Donnell on the 'digital content crisis'
Marty O'Donnell caused something of an uproar recently following controversial comments aimed at used video game sales. In particular, it was the Bungie audio director's apparent assertion that content creators and publishers "shouldn't stop receiving income from further sales" that served as the biggest sticking point; after all, why should the game industry be given special treatment beyond the initial point of sale? Not long ago we had the opportunity to have a candid conersation with O'Donnell on this topic, during which he clarified his stance, and stated that while he doesn't feel games represent a "special category," he believes that "digital content is creating a crisis for the economic model of new and existing mediums."
Dawdle.com not wasting time challenging GameStop's used sales
Dawdle.com is a relatively new online marketplace specifically for games that's been in beta for a year and is now officially ready for business. GameDaily details how the point of the site is to make it "moronically easy" for gamers to list, buy or sell games.Selling games works by Dawdle taking a 12% commission, which is lower than many sites, and all proceeds from the sales are received by direct deposit. Meaning, the cash gets dropped directly into the seller's checking account (no PayPal). Dawdle says sellers will receive more value for their used items than at the local gaming pawn shop.As for buying used games, Dawdle uses what it calls a "Standing Offers" system. Essentially, a buyer puts a bid out there for what they want and are willing to pay, if the system makes a match then the charge goes through (if you've used Priceline.com, it's the same principle). Dawdle also has some business partnerships that make it stand out from the crowd, but it'll take time to see if gamers begin using the service as an alternative to the almighty GameStop.
Counting Rupees: Feeling used
Each week Jeff Engel and Geoff Brooks contribute Counting Rupees, a column on the business behind gaming: Bungie audio director Marty O'Donnell recently made some controversial remarks regarding used game sales. To quote, "It seems to me that the folks who create and publish a game shouldn't stop receiving income from further sales." Of course, this seems laughable to all of us who have bought and sold used games for years. It's my property, I can do what I want with it, right? This doesn't have any place in the industry, does it? Legally, perhaps not. According to the first sale doctrine in copyright law, copyright holders are expected "to obtain all financial benefit for the article or product embodying the intellectual property at the time of the sale, and prohibits placing limitations on purchased items." This basically means that, once you purchase an item, the intellectual property cannot prevent you from doing whatever you want with the item so long as you don't violate copyright (by, say, copying it and then selling it -- otherwise known as pirating).
HMV (finally) embraces used game sales
HMV, the music, movie, and games retailer with locations throughout the UK, Canada, Singapore, and Hong Kong, is finally catching up with the wants needs of modern gamers. Starting later this year, the chain will begin selling second-hand games at some of its locations, ramping up across the globe in 2009. We're not sure why it took so long for HMV to begin selling used software. Perhaps it thought it was actually in Japan, which lifted its ban on used game sales in 2002? In any event, the move will put HMV on a level playing field with other UK games retailers, including Game and CEX, who have offered used titles for some time (the latter dealing in them exclusively). Now all HMV has to do to recreate the US game-buying experience is to get bought out by GameStop. You know, like New Zealand's Gamesman.
25% off used 360 games at GameStop this week
Ah GameStop, the armpit of the video game retail world. We do our best to avoid it and it's army of winged retail monkeys (no offense if you're reading this) whenever we can. Sometimes however you need to risk being accosted by minions of the Wicked Witch of the West and enter one. You know ... to trade stuff in ... or if there's a deal. Well, this time there is a deal. From today until April 24 you can get 25% off any two used 360 games at GameStop (brick and mortar only, no online). You can print out the full size version if you wish, but the coupon code should work just fine. The code is EBC3005410 in case you didn't notice it in the above pic, or needed a Copy/Paste version.
Circuit City to expand used game sales program
Following an apparently successful ten-store test program started nearly a year ago, Circuit City has decided to broaden its used game sales, according to SmartMoney. No word on how many new stores will be adding a used games section or how quickly the expansion will roll out, but Circuit City Vice President Irynne MacKay said the company wants to be "competitive on pricing." That's a relief. We were worried they wanted to gouge us.High margin used game sales could help the struggling electronics retailer, whose sales fell 11 percent last year in the face of competition from Best Buy (which, incidentally, was also testing out used game sales at one point). The company is also toying with gaming tournaments, a 10% off "Gamer Savings Club" (with a $20 annual fee) and a new store layout that prominently features gaming kiosks. That all sounds well and good, but we'd recommend caution with the placement of those Wii kiosks. There's nothing worse than an overzealous Wii Sports player knocking over an innocent customer looking at big screen TVs.
Gamestop's used game sales data in beautiful chart form
We've long known that used games are the key to profitability for a growing number of video game retailers. But just how key are they? Over at Next Generation, Matt Matthews digs into Gamestop's latest SEC financial report and extracts the answer to that question in handy, easy-to-read chart format. Among the key findings: Gamestop's used software sales grew a whopping 444% from 2003 to 2007, compared to a "mere" 384% for new software. Used sales account for 44% of Gamespot's gross profit in 2007. Gamestop makes a ridiculous 50% gross profit margin on used game sales, compared to just 21% for new games (i.e. Gamespot keeps 50 cents for every dollar of used game revenue it receives, but only 21 cents of new game dollars). An estimated 53% of all games Gamestop sells are used games. While this might sound like bad news for publishers that only make money off new game sales, remember that consumers tend to take trade-in value into account when making those new game purchases. A bloated $65 price tag for a new game is a lot easier to swallow if you know you can get a good portion of that back once you're done with it, after all.
Analysis: Used game prices lowest in November
The internet had brought a wealth of historical pricing data to the fingertips of anyone looking to buy stocks, homes, plane tickets and all sorts of other products big and small. Yet used game buyers have had to rely on intuition and sites like CheapAssGamer to know when to strike for that great deal.No longer. JJ Hendricks, proprietor of online game retailer JJGames, tracked the average sale price of 50 randomly selected games on sites like eBay, Amazon and Half.com. The results (graphed above) show prices generally falling from January through May, leveling off during the summer months, then dipping to their absolute lowest point on Nov. 4. After that, holiday demand sends prices upward again.Hendricks' new Used Video Game Pricing blog promises to look into all sorts of facets of the volatile second-hand gaming market, including the roller-coaster pricing of used Pokémon games and how to make money collecting games. We have a feeling the secret for that last one is going to be having lots of sealed Game and Watch units lying around.
Preserving the culture of games
Curmudgeon Gamer reflects on the likely outcome of GameStop's buyout of the Rhino Games retail franchise: "cultural loss." Rhino will no doubt undergo some significant changes, which will probably include the divestment of its aging inventory. Presumably, the "new" Rhino will not stock console titles that pre-date PlayStation 2. Similarly, GameStop's conquest of the used games market has driven the 'mom & pop' shops that carry retro hardware and software out of business.Curmudgeon Gamer concludes: "[GameStop Corp's] focus on only the most profitable games, the newest ones, will necessarily limit the consumer's focus on those same games ... To me that's a loss, not just personally but for the whole culture that's grown up around videogames." So who is working to preserve our history?Although purists may argue that digital distribution services like Xbox Live Arcade and Wii Virtual Console lack authenticity, these platforms are working to preserve our classic games using viable retail means. Much like old records made the jump to CD (now iTunes and the like), or movies to DVD (now Xbox 360 Video Marketplace), games of yesteryear are finding new platforms for survival. The cynic in us says re-releasing classic (and not-so classic) games is fast money for publishers, but let's not ignore the cultural preservation at work. The hook for these services might be nostalgia, but we can crack a collective smile imagining some youngster discovering The Legend of Zelda for the first time on Virtual Console.
Got any gamer resolutions?
Got any games-specific resolutions that you'd care to share? Here are a few suggested to us by friends and family over the last few weeks as we canvassed for suggestions on this topic:
