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GameStop: Pre-owned games are vital to new game sales

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GameStop: Pre-owned games are vital to new game sales

CEO claims that global games retailer will give out $800 million worth of trade-in credit notes this year

The CEO of leading North American and global games retailer GameStop has insisted that the pre-owned sector is a vital element in the market for new games, and that moves from publishers to limit the ‘transferability’ of titles are a ‘bone of contention’ for consumers.

Speaking to Gamasutra, CEO Dan Matteo stated: “The consumer has been trained that there is a residual value to their video games.

“We will give out approximately $800 million in credits this year – trade-in credits that will go toward the purchase of new video games. The consumer, oftentimes and especially now, needs that residual value from those games as a trade-in to be able to afford a new video game.

“Anything that limits the transferability of a game from consumer to a friend of theirs, to selling it on eBay, to exchanging it and trading it with one of their friends, or selling it back to GameStop – I think is a bone of contention with the consumer.”

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Hit The Nail On The Head

posted by M Nov 26, 2008 at 1:55 pm
1
M

I couldn't agree more. Pre-owned games are the best thing to happen to this industry without them the business is just not sustainable especially for indies.

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No he didn't.

posted by Eduardo Hulshof Nov 26, 2008 at 2:27 pm
2
Eduardo Hulshof

I beg to differ... the industry is made of developers (where the Indies are), publishers and retailers, and pre-owned games are the best thing that ever happened to only one part of that industry, the retailers.
When a new game is sold the money is spread across all three parts (it might not be evenly and maybe that is where the problem is).
When a pre-owned game is sold, the money stays exclusively with the retailers (and quite often you see pre-owned games selling for little less than the new games). The developer who made that game, never get to see any of that money (that makes it even worse for Indies that don't have big bucks behind them).
I agree that the consumer shouldn't be the one to suffer, he should be able to buy cheaper games, and that's the only reason the pre-owned market exists. If you can buy something pre-owned that is exactly the same as a new one and pay 5 quid less, then yeah, as a consumer is a no brainer. Pre-owned rocks, yey!
But the problem is that is unfair to the ones that make the game and spend all the money to market it (developers and publisher respectively).
Greed prevents the three parts from negotiating a fairer deal, something that would allow the profit of pre-owned games to be spread across everyone in the industry. Of course the retailers don't want that and all they like to say is that the Publishers and developers are trying to rip customers off by not allowing pre-owned games to be sold. That is not true. All they're doing is trying to protect their profit which is being damaged by the current way pre-owned games are handled.
On a side note you don't see second hand DVDs and CDs being sold side by side the new ones in the big retailers. That's because the Film and Music industry won’t allow it, and you don't see any customers complaining.
If GameStop (or any other retailer) would open a secondary chain of stores to handled only pre-owned games, that would be fine (not ideal but better nevertheless), but they don't want to do it because it means they would have double the operational cost, hurting their profit.
So I don't expect the Developer/Publisher alliance to be happy with it, and in fact I hope they act upon it as quickly as possible.
If the profit was distributed more evenly you'd have more games, with a bigger quality, because the developer would have more money to spend on them.

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Do car dealers give the proceeds from their used cars back?

posted by koti Nov 26, 2008 at 2:39 pm
3

No. End of story.

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Re: Do car dealers give the proceeds from their used cars back?

posted by BC Nov 26, 2008 at 3:39 pm
4
BC

The way I see it, publishers (and therefore developers) need the retailers to sell their stuff (we're not ready for pure digital yet).

The retailers need the second-hand market to keep their shops open.

The consumer thinks games cost too much and considers the resale value when they make a purchase.

Boxed games can't be sold any cheaper.

...seems a no brainer to me.

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GameStop: Pre-owned games are vital to new game sales

posted by chipsworld Nov 26, 2008 at 4:55 pm
5

So in effect what is being said here is that pre-owned games are really a form of currency and if publishers/developers take away the ability to use this then you will be looking at a potential contraction of the industry

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“No he didn't.”

posted by rob Nov 26, 2008 at 8:56 pm
6
rob

Your comments are solely aimed at retail yet you fail to address kids in the playground swapping games like football stickers ,eBay,R4 cards and the other forms of piracy,. Consumers don’t HAVE to trade games in at Game, HMV, Gamestation or Gamestop they are free to eBay them sell them to who they want (CEX, cash concepts or their mates in the pub or playground. The publishers are the ones who went to the supermarkets cap in hand, and are the only ones responsible for creating the biggest issue in regards of chains slashing orders ( or using buy or return) your sales figures being massaged ( Asda sell at £20, Indie buys at £20 sells at £35= double sales figures if EPOS reporting is used)
Better to friends with your ENEMY (LOL) than create more

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Re: Re: Do car dealers give the proceeds from their used cars ba

posted by Ex GAME Nov 26, 2008 at 9:59 pm
7
Ex GAME

@ #2
I could write a 5000 word essay on how your methods are flawed and incorrect.....but I don't have the time.
Without pre-owned the industry would not exist in it's present form and the greedy developers/publishers limit the potential income available to retailers. Retailers such as GAME (maybe not so bad) & Gamestation simply would not exist with a pre-owned model. As point #3 points out, no other used trade industry give's money back to the original source.

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Re:

posted by Fezz Nov 27, 2008 at 9:05 am
8
Fezz

That's it retailers, keep pissing off the hand that feeds you i.e developers and publishers. A couple more years of this and digital distribution will really kick in, just needs to be cheaper online and more focus on the online features which can't be transferred to a 2nd owner. Result will be shops left selling consoles, steering wheels and bargain bin crap.

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Re: Re:

posted by Tux Nov 27, 2008 at 4:22 pm
9
Tux

Interesting. However....

If the developers and publishers screw the retailers, then ultimately THEY will suffer. There are MANY people out there who do not have the capability to download content (nor the know-how). Imagine Granny trying to buy downloadable content for little Johnny? So you really sort of need each other.

I for one only buy *some* pre-owned titles because they are simply not worth the £40+ price tag. Better something than nothing??

If someone lends me a game and I like it I'll buy the original (full price if needs be - wouldn't be the first time). If I don't like it, I won't. That holds especially true for games I am unsure about (take Fracture for example - didn't like the demo, borrowed the game, liked it, bought it full price).

So fine - developers limit the game so it can't be shared (and I don't mean pirated here) and they run the risk of missing out on a sale.

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Re: Re: Re:

posted by MrJolly Dec 01, 2008 at 11:09 am
10

Said it before, say it again, what is so special about used games over any other product that has a Design and manufacture process that means they and they alone should not be allowed to be sold second hand and that if they were the creator should get a cut of the sale?

Don't expect downloads to save you, boxed product will be around for a long time to come but there's no way I'll pay 40 notes for a game with no boxed version and no residuals.

I suggest those of you who want restrictions on used items ask if you'd be happy for the same on cars and other items subject to a design and build process and restrict yourselves to only buying new items accross the board...

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The flip side

posted by Dr. Mike Reddy Dec 02, 2008 at 5:10 am
11
Dr. Mike Reddy

Weird how noone has mentioned why and where these ore-owned games have come from: people trade in their old games - often not really very good ones - to get money off new games. This is like the part ex' of the car industry that keep sales flowing and offset lost profits on new "overpriced" models against later deferred income from used vehicles. Assuming that retailers eat into their ownbincome alone, this IS sustainable.

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Re: The flip side

posted by CostaConsole Dec 02, 2008 at 12:36 pm
12

Maybe the entire second hand market should be shut down?

Charity shops, car dealers, game shops, bric a brac, jumble sales etc etc.

Wonder if any of the developers have ever bought a used car?

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Preowned is vital

posted by GamePlayer Dec 02, 2008 at 11:40 pm
13

Our industry is already in a mess, woolworths and supermarkets selling at cost, we dont need developers adding to our problems!
Two points here: 1. For the retailer. Preowned is vital to retail survival as there is zero profit these days in new. The developers can blame themselves as someone else said here for the deals they did long ago through pure greed with the big chains who now have them by the nuts and can name their price. Once that was great when companies thought only of turnover but now credit lines are cut, watch how these big compaines are now falling. But, it is not the retailer causing the problems preowned lets not forget has been around for many years right back even as far back as megadrive as i recall buying them as a kid when the cartridges were outrageously priced.
2. For the consumer. The consumer has the right to re sell the product that they own. By taking this away, this affects not only the pocket as they can no longer get credit on part ex-but were verging here on personel rights. I'd be willing to bet that in the European courts there is some usual "human rights" type law somewhere that we shall see topple this outrageous behaviour from the developers. And of course, people will find a way around this technology-they always do just like everything else. Then piracy just grows more.

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