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Trade rocked by HMV assault on pre-owned

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Trade rocked by HMV assault on pre-owned

Publishers left reeling as entertainment giant guns for specialist retailers with trade-ins

HMV has left publishers fearing for revenues on new and catalogue stock with the introduction of its pre-owned offering.

In a canny move that further cements its position as a specialist games retailer, HMV’s new Re/Play initiative will pile further pressure on publishers and rival retailers as the pivotal Christmas sales frenzy begins.

And highly-placed sources within the publishing community aren’t happy.

“Pre-owned cannibalises our catalogue sales without a doubt,” said one top publishing executive.

“You could always rely on the likes of HMV and Zavvi to work with you on new releases and catalogue stock. It’s disappointing that someone else is going down this route.”

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HMV’s Re/Play manager Martin Baxter is confident that the new offering can take on the likes of GAME and Gamestation – and win.

“Our suppliers have known for some time about our proposal to move into this area, and we would therefore hope they view it as a part of our growing commitment to games, taking in increased footage, range and marketing focus,” Baxter told MCV.

“We looked at the HMV offer as a standalone proposition, and although there is no doubt GAME and Gamestation are experts in this area, we feel our offer is more tailored to the needs of HMV consumers.

“We came up with a proposition that nobody else has – trade in against all the products that we sell in-store, not just games.”

And HMV could even introduce a pre-owned offering online, added Baxter: “We are concentrating on the in-store launch, but I’m sure we’ll consider online activity when it’s appropriate for us to do so.”

GAME UK and Eire MD Tricia Brennan remains defiant, despite the increased competition, and emphasised the retailer’s pre-owned experience and range:

“Trade-in and pre-owned have been part of the GAME offer for 11 years, and customers tell us they love it because it helps them buy more mint products,” Brennan told MCV.

“We remain focused on giving excellent value on a massive range of pre-owned products, so customers can play more games for less.”

the only reason

posted by Onehunglow Oct 23, 2008 at 2:53 pm
1

why dumps like Game/station make any kind of profit is because of pre-owned. Never before have these kind of companies been allowed to de-value the games industry and get away with it.

The sooner Publishers/developers wake up and actually move more of their work to digital distribution the better. Only one person wins here 1) is the retailer

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Re: the only reason

posted by A publisher Oct 23, 2008 at 2:59 pm
2
A publisher

Very sad move, a great retail partner going down the secondhand grubby store route. Agree as soon as publishers clamp down or remove the dependence on retail the better.

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Re: Re: the only reason

posted by Another publisher Oct 23, 2008 at 3:05 pm
3
Another publisher

"growing commitment to games, taking in increased footage"

Errr... the store I looked at had turned existing space into preowned not increased footage.

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Sell Direct

posted by Asinine Monkey Oct 23, 2008 at 3:10 pm
4
Asinine Monkey

It's quite simple: developers and publishers please sell direct via PSN or Xbox Live.

I'm getting sick and tired of swapping discs to play one game or another and have gladly paid for PSN versions of titles I am interested in because I know the money goes direct to developer/publisher. Just look at the cash being made on Apple's App Store.

Game and other similarly despised stores need to die.

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the real problem?

posted by so called grubby store owner Oct 23, 2008 at 3:27 pm
5
so called grubby store owner

Ok so can you really blame HMV for changing there tactics?

pre owned games can make profit yes profit thats what it is all about this retailing business.

as a publisher (2) maybe HMV would be happy to stock your new releases but fact is you are allowing the supermarkets to de-value your product.

example trade price for Pro evolution soccer around £28 + VAT

ASDA price for Pro evolution soccer £25 including VAT

how can a shop have a business selling new releases where trade prices are higher than that of your local supermarket.

oh and it can change i remember when supermarkets used to sell football shirts below trade value does that happen anymore?

and no i dont work for HMV but i do sell pre-owned games i would probably be out of business if i just sold new releases (now who is the greedy one?)

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Re: the real problem?

posted by Oct 23, 2008 at 3:56 pm
6

Have no fear, its only the minority of people who want to see retail fade away.The sad pathetic people that have no social skill and have no personal interaction skills. All they want to do is look at a computer screen all day.
Get a life, retail is a massive industry and brings this country huge amounts of money. Do you really want to see that. All the profits go to the USA in Microsoft and Japan with Sony.

Grow up and get a life

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Re: Re: the real problem?

posted by Oct 23, 2008 at 4:02 pm
7

While the software is easily distributable via the net because it is data, hardware is not which is why i think retail will always have some role to play.

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Retail are paying more for games now than they've ever done.

posted by koti Oct 23, 2008 at 4:14 pm
8

...and in a tougher climate.

Some people in their glass offices need to wake up and smell the recession.

Just because you're pumping **** loads through a channel that's discounting doesn't mean the games industry is immune to the economic down turn.

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Can't wait for tomorrow

posted by Jack Black Oct 23, 2008 at 4:53 pm
9
Jack Black

I will be very interested to see how much trade ins are worth at HMV, imagine taking in say Saints Row 2 which they might charge £50 for and they offer you £20 what a joke it will be.

I compare CEX to anyone else.

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Re: Can't wait for tomorrow

posted by Onehunglow Oct 23, 2008 at 4:58 pm
10

@6
So its ok for retail to take a massive slice of the pie and NOT pass on anything to publishers/developers? With the costs of making games at an all time high, its only fair that if retail are going to increase their space for pre-owned, that they pass on a royality to the publishers. Failing that, Publishers should cut them out totally by going digital.

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To one hung low.

posted by koti Oct 23, 2008 at 5:22 pm
11

Can you define a massive slice of the pie?

Quantify for us all exactly how much we're making on games will you.

I'm not going to go into the cost to return ratio you touch on but in response to your comment re: the cost of making games - don't you think the cost of retailing is going up aswell?

Should retail ask for a cut of the drm attached extra content sold - because if boxed product hadn't been sold in the first place - the add ons wouldn't be either.

100% digital eh? First one to do that will either reverse their decision after the trial or go bankrupt - and that's a fact.

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A unique proposition?

posted by Kinetic Oct 23, 2008 at 5:41 pm
12
Kinetic

“We came up with a proposition that nobody else has – trade in against all the products that we sell in-store, not just games.”

And what about CEX? Offers more for trade ins (despite Gamestations "will not be beaten" bull) and credit goes towards anything in any store.

Hardly unique.

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Re: A unique proposition?

posted by Oct 23, 2008 at 5:50 pm
13

Do second hand car dealers sell a ford then give a slice of their profits to ford?

No, think about it!

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Re: Re: A unique proposition?

posted by theone Oct 23, 2008 at 6:20 pm
14
theone

@10 - retail take hardly anything! the distribution costs are extremely high, just shows you know nothing about the industry...which is what this site is meant for!!! go do something else

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Re: Re: A unique proposition?

posted by Bob Oct 23, 2008 at 6:30 pm
15
Bob

Publishers - You are a bitter lot.

Face facts, your not entitled to a portion of preowned sales, the only people with the opinion you are, are fellow publishers.

If HMV were still able to turn a profit on the new games they sell then they wouldn't need to sell preowned games. It is you the publishers that have forced them to make this change in strategy by your obsession with dumping loads of cheap stock into supermarkets.

"Pre-owned cannibalises our catalogue sales without a doubt" said one top publishing executive.

Wake up - What do you think supermarkets selling games at below cost does to specialist retailers.

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Re: Re: Re: A unique proposition?

posted by Jon Oct 23, 2008 at 7:43 pm
16
Jon

Its time publsihers woke up to the real world. Look at the next six weeks; Gears Of War 2, End War, Call Of Duty 5, Fallout 3, Fable 2, Tomb Raider Underworld, Guitar Hero World Tour, Far Cry 2....and scores more.

How are normal people supposed to be able to afford to buy all these eh? Trade ins are the only way the regular consumer can afford it.

I won't buy digital distribution titles because all the current ones pass on no benefit whatsoever to the consumer and only give the publisher MORE money. Look at Steam, Half Life 2 cost the same at launch online as it did at retail and I had to use my net connection downloading it! Ea likewise, all its games online are equal or more than current retail prices. Why the hell do I want to care who gets what from the money I pay if I'm getting less for my money - digital distribution is rubbish for consumers.

Retail keeps this industry alive, without it all but the hardcore wouldn't even be buying the consoles needed to keep publishers in business, retail hypes the games, retail drives the sales.

Publishers should shut up and remember that those who keep them alive can also hurt them, as HMV is doing now. All it takes for a new release to fail spectacularly is for the retail trade not to back it - like Fifa Street 3 - and not many publishers outside of EA and UBI plus first parties can survive that.

Publishers made selling new only product exclusively a no-go because they wanted more money, serves them right that they are in the position they are in now.

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Re: Re: Re: Re: A unique proposition?

posted by keatsmeister Oct 23, 2008 at 10:12 pm
17
keatsmeister

To all those crying for publishers to get a slice of preowned sales, that will only cut into the price a CUSTOMER will be given on their traded items.

Preowned provides an alternative to customers who want to shop with a known games retailer (not the shop who sells everything and knows nothing ie supermarkets) but want to pay a minimum. Retailers just cannot undercut all the time to the levels in supermarkets, and preowned is a way to compete.

As has already been said, it is often the only way MANY customers can afford to buy their games when you get to Q4 and the bombardment of new titles. We are lucky that we can sell retail, preowned or rent the titles to customers, and give a choice, and if HMV have decided to join the party, then bully for them. As I commented on a previous article, they'll need to do it well to avoid a disaster, but at least they are willing to look into alternatives to compete.

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Re: Re: Re: Re: Re: A unique proposition?

posted by Pantythief Oct 24, 2008 at 9:47 am
18
Pantythief

@12

The difference with HMV vs CEX is that you can trade against new products. I pop into the CEX at TCR often and 95% of the gear in there is second hand also. Very rarely is it new.

Scratched Ipods and stolen phones is usually the case.

So with that thought, I think HMV's offer IS pretty unique.

Plus, CEX dont sell books........ well, at least not at TCR.

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fools

posted by Oct 24, 2008 at 10:12 am
19

publishers have no rights on used games, i better send a cut of my washing machine sale to hotpoint eh ?? foolish people, 2nd isnt gubby, damn, i couldnt afford to be a gamer if i didnt work in the sector, used games are great esecially in this climate, familys appreciate it and games that are no long wanted get extended life, what is wrong with you people? if it was all download this would slow sales,as you have nothing to trade in !! people cant always buy every new title, with trade ins they have more options

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@ 15

posted by james holden Oct 24, 2008 at 10:15 am
20
james holden

i totally agree with all your comments, well said, some of the people on here dont live in the real world, who could afford to buy all the games they really want without trade ins ?
publishers should start to release in summer, like MGS4 nothing is out, then in 1 month way too many triple A titles, its crazy

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See the light.... Price is King

posted by Dan Oct 24, 2008 at 10:22 am
21
Dan

On itunes the singer makes 12p if that!

The job cuts if everything was a download will be a joke.

People like to own things. They like to go shopping they like the air in there face. They like the buzz of handing cards and cash over.

They like to own a game and trade it in.

A download is worth nothing...

Lets think of this a world with only downloads. Hands up if you still have a job today? The DVD box seller? The DVD maker? The art guy? Book maker? The sales team? The PR teams? Do you think they need a UK head office with a download? The list is endless...

Your moaning about something that keeps everything oiled!!

Shops are here to stay (Remember i told you) LOL

Price is KING

The day downloads come will be the day you sell on itunes for 79p LOL Good luck with your 12p LOL

Think is time for a big HUG now!!!

WE all need jobs...

When was the last time you paid a person to park?

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Nice idea from System 3

posted by Oct 24, 2008 at 11:03 am
22

They are incorporating new tech into their games which effectively gives console games a license. If the game gets sold second hand the user has to pay 10 euros to play the online parts by registering for a new licence for the different console.

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CEX

posted by Indie Oct 24, 2008 at 11:50 am
23
Indie

What people forget about CEX is that they are great to trade in and cash in but awful to buy from as their prices are well too high. They sell pre-owned games more expensive than the new price.

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Re: CEX

posted by Oct 24, 2008 at 11:58 am
24

I don't see what all the fuss is about. Keep the RRP's realistic and the trade pricing then the gap between preowned and a new title will not be that great so whilst the retailer makes his money on the preowned and the customer gets their cash or credit against a new purchase everyone is happy and with realistic RRP's and cost pricing the publisher shouldn't feel that their products are being devalued becuase although the preowned will be cheaper it wouldn't be too cheap that it becomes a problem.

That's my humble opinion.

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Re: Re: CEX

posted by Oct 24, 2008 at 12:13 pm
25

Personally I won;t buy any game on a download that's more than about £3 - should games go that way i'll stop buying them.

When I'm in France next week I'll be picking up Ratchet and Clank Quest for Booty on blu-ray and I'm ahppy to pay more for it.

Pre-owned games exist because the game itself either isn't very good, doesn't last long enough or simply there is no reason to go back to play it again. Look at games like COD4 and you'll see there is no second hand market for it which means new copies still go for £50. If teh game is worth keeping the second hand market for it dies and keeps the cost of a new copy up.

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Re: Re: Re: CEX

posted by Oct 24, 2008 at 1:09 pm
26

Well Said certain games hold their price/value while others don't

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Re: Re: Re: Re: CEX

posted by Oct 24, 2008 at 2:33 pm
27

Retail for games will go the same way as travel agents, horse-whip shops and public phone boxes.

The current problem with downloads is that too many publishers are being greedy and trying to cut the customer out of the equation (by trampling over their rights with DRM) as well as the retailer. The backlash from various downloadable music shops "going dark" (locking people out from stuff they have already paid for) has not really kicked in yet but it will.

But looking at metacritic it seems that I will have to get downloads working on my new 360 since some of the top-rated games (Braid, N+) are only available via download.
Perhaps one day publishers will act more consumer friendly and the punters will respond.

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Re: Re: Re: Re: Re: CEX

posted by Oct 24, 2008 at 3:27 pm
28

CEX is a not a reference point for anything. What a dive

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Re: Re: Re: Re: Re: Re: CEX

posted by Oct 24, 2008 at 8:07 pm
29

@ Onehunglow, Asinine Monkey etc.. your dimwitted, myopic view on the retail sector and digital distribution is what makes this place so entertaining.

And publishers, please try to look at the pre-owned market sensibly and not with your over stuffed wallets as your arguments against the pre-owned market are utterly flawed. What is it with you publishers? Greed first, business sense second?

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Re: Re: Re: Re: Re: Re: Re: CEX

posted by LeeC Oct 27, 2008 at 1:12 pm
30
LeeC

I'd love to know what some of you whining retailers would do if we did all go digital? You'd all be out of jobs... makes you wonder what the downside is really, doesn't it?

And if you think the profits made from digital distribution go into the hands of the developer then you clearly haven't been a developer.

Developers work at a fixed cost for the production of a product. If you get into a fight for a pitch, you can guarantee that the lowest priced pitch will get most attention, because that means more money for the publisher.

If developer A makes "DeathZone 9" for £X thousand pounds, regardless of whether that game sells 10,000 or 10 million copies, that developer still only gets £X thousand pounds. You won't see the publisher saying "here ya go, we sold loads, have some extra money", not in a million years.

It's why so many developers want to be their own publishers, so they don't keep getting shafted on the games that sell by the bucket load. Even with digital distribution, there will still be publishers and developers in separate baskets.

I make games for the public to play, not for you greed mongers to get rich off. If you want to get rich, learn to programme, make the games yourself, just stop using developers as your cash cow for once.

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quit moaning

posted by another publisher Oct 27, 2008 at 6:54 pm
31
another publisher

Second hand games is a life line for many retailers yes, the sales of second hand games reduces revenues of back cat to publishers, publishers will struggle and drop off leaving the few mega publishers to deal with the few retailers still in business. Revenue will raise once more as terms can prevent second hand sales. Who wins - Game, GS, EA, Acti, Microsoft, Sony. Who lose - Indies, small publishers all left with nothing but the memory of bitter e-mails defending pre-owned.

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Re: quit moaning

posted by keatsmeister Oct 27, 2008 at 9:09 pm
32
keatsmeister

@31

OK, so where does the customer fit into your equation? No matter how good your games are, customers get bored of games, customers find themselves short of cash, the only reasonable solution for them is to sell it on.

The customers pay quite a huge chunk of money, which gets split between the retailers, publishers and developers, so when they tire of it, which MANY customers do, what do you SERIOUSLY expect them to do? Throw it away? You then end up with devious nerks collecting discarded games, selling them at car boots, and we ALL lose out.

As to this argument of publishers and developers never seeing a penny from Preowned sales, I simply say codswallop.

The margins retailers like ourselves make from Preowned help us to buy in the extra volume of Catalogue product that you wish us to sell on for you. Retailers are often seen as the money-grubbing mark-up mercenaries, yet we still have to find the capital to get the product from publishers in the first place, complete with their own margins. You may not see it, you may just think you'd like a larger slice of the preowned mark-up, but you cannot escape the fact that preowned games help shift your retail product.

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whats the issue?

posted by Dave Oct 28, 2008 at 8:11 am
33
Dave

sure preowned takes some sales away from the publishers but there are people who buy new game and people who don't simple if there wasn't a place at retail for pre owned they would all go to places like ebay.
whats wrong with preowned anyway i've found some gems in the preowned section as well as some brilliant bargins. i've also played alot of games that are now in my top ten which I would of never of brought new but i got for about £10 preowned so let them I say.

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How is it a bad thing?

posted by Sony Pony Oct 29, 2008 at 1:02 pm
34
Sony Pony

What I would like to know is how is it a bad thing!!!

I've bought many games pre-owned that I never would have bought if having to pay full price. The productions companies have already made there profit of the first selling of the game, the fact that someone else is going in buying that game again is like a free advertising. A lot of these games are games that would never get shelf space, especially a few months after release. The best case I have is Tomb Raider Legend, I bought it pre-owned, I loved it! I never would have thought of buying it new, the fact I got it on the cheap I picked it up. Now I'm currently dying to play the new one. I'll be going out to buy it the day it's out. If anything it helps the companies that are making the games.

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Re: How is it a bad thing?

posted by keatsmeister Oct 30, 2008 at 9:11 pm
35
keatsmeister

Sony Pony is bang on the money. Take Gears of War for example. Huge, huge game, so many copies floating around right now, so with the sequel imminent, we're able to use our preowned copies to get customers into the Gears of War mindset, love the game, and secure presales on retail copies of GOW2. It's a complete no-brainer.

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