In the previous two (Part 1, Part 2) segments of this series we examined the policies, methods, tactics, practices, and goals of specialty gaming retail. We've seen the increasing dominance of used sales in these markets as ground is increasingly given to larger outlets in the battle over new product. We've talked about the sacrifice of customer service in the necessary pursuit of turning a profit, and we've seen a few of the ways that this intense focus is played out and occasionally abused. With this final offering, it's time to talk about what the future holds for specialty gaming retail, and what you can do as a customer to keep what authority you have left.

With Gamestop's purchase of EB, only the latest in a series of companies that have been folded into the Gamestop name, the number of significant gaming specific retailers has dwindled to essentially one. While movie rental outlets feebly try to sneak a slice out of gaming's retail dollars, and independent retailers struggle against the Herculean task of acquiring tightly allocated product from distributors, Gamestop has put itself into a remarkably powerful and controlling position. No longer forced into competing with loss leaders and cutthroat pricing from Wal-Marts, Targets, and Best Buys as their sales emphasis changes to preowned product, Gamestop's need to win customers through their service and attention to traditional gamers has, essentially, been negated. Dominating the lower-priced, higher-profit market for used games is their objective, and to facilitate that, they eliminated the competition.

So, the 1.5 billion dollar purchase of EB Games by Gamestop is a risky but potentially rewarding move by a company that has never feared bold strokes in the past. But, the truth seems to be that both EB and Gamestop have long been positioning themselves to try and buy one another. In fact, several sources within EB management suggested that this final bout was precipitated by an attempt from EB to buy Gamestop. In return Gamestop, no longer owned by Barnes and Noble, but likely bolstered by the weight of its buying power in conjunction with its own, was able to cobble together an appealing response.

According to the press release, the buyout pays approximately $38 plus roughly a ¾ share of Gamestop stock per share of EB sold. With EB Chairman James Kim, CEO Jeff Griffiths and senior management at EB representing 47% of all shares owned, the buyout is a windfall for EB's key shareholders, which may very well be exactly the reason that EB is the victim (or beneficiary, depending on your perspective) of the buyout instead of the reverse. Where EB's executives and directors represent nearly half of all shares in the company – in this case, in a position to divide nearly half of the $1.5 billion among a very few individuals – Gamestop's top brass, prior to the merger, represents only 16% of the shares in that company. Not only does this mean that in a large deal such as this one EB's highest officials have far more to gain than do Gamestop's, it also means that they have enough voting power among shareholders to push the deal forward. Further, they will remain, earning 3 shares in Gamestop to every 4 shares of EB they sell, significant shareholders in the merged company, at the price of only their jobs.

With time expired for the FCC to intervene, had they had been so inclined, the only impediment for the merger seems to be if Gamestop's shareholders reject the proposal. And, that seems extraordinarily unlikely. The deal should be finalized some time in the third quarter. The next logical question is: what happens next?

The short answer is, for a while, almost nothing; at least from the perspective of the customer. In the immediate days following completion of the merger virtually no change is likely to be evident at the store level, the most important reason for this being that retail lives and dies by the Christmas season, and there's no good reason to send stores into chaos at precisely the moment they need to be shoring up for the holidays. The same staffs will be running the same fundamental procedure in the same locations under the same banners – meaning that your favorite EB Games will probably remain an EB Games probably well into early 2006. Meanwhile, the upper brass at Gamestop will be assessing the policies and procedures of the EB outlets to their own stores, and deciding what and who to keep and toss.

In general, it's been suggested that the further down the corporate food chain any one individual is, the less likely they are to feel the effects of the merger. Where senior executives, regional management, and corporate employees will be completely reevaluated with a wide range of changes, from the district managers down to the store level there's not likely to be any dramatic events. In other words, you as a customer are far more likely to feel the effects of the Gamestop dominance than is the part-timer who works for them.

And what can you expect? To put it simply, more preowned, less value for your trades, more reservations with more tightly controlled allocations, and the expansion of profit generating promotions. We've talked before about why Gamestop and EB focus so tightly on preowned and promotions, and considering Gamestop's far more cautious offers of spiffs on these items (note: spiffs are bonuses paid out to employees for executing specific promotions, for example every EB employee receives twenty cents to each dollar of Gameplay Gurantees sold) the focus will be on ever increasing the margins on those items, which is why you can expect fewer dollars for your trades. Without EB to compete on the trade-in market, Gamestop has little incentive to hold the line on values. Further, without EB as a competitor for new title distribution, Gamestop can be far more aggressive in pushing reservations for upcoming titles, and then specifically targeting release allocation.

In short, the things that are slowly turning the traditional gamer away from specialty retail is exactly of what you can expect more. The slow separation between gamer and gaming store – as incongruous as that may seem – will only accelerate. Informed and savvy gamers make as difficult a customer as they do employee. They are far less likely to preorder, or participate in the profit generating promotions that these companies increasingly rely on, and thus they demand far too much effort for far too little profit. With the steady mainstreaming of gaming, there's no need to struggle for the dollars of the traditional gamer.

Which, is why many of you are turning toward alternative sources for your buying dollars. With the growth of online and independent game retailers perfectly eager to vie for the gamer market, alternatives, as always, exist for those invested enough to search them out. And that brings me to my absolute key point; the thing I've been building up to saying for three articles now. It is the secret to the success of Gamestop, EB, and even larger chains like Best Buy or Target. It is the very reason I put all these words together, and it is this.

These stores rely upon, and succeed because of ignorance.

The ignorant consumer depends on the associate to lead the transaction, and that associate no longer, if they ever did, works to the benefit of the customer but of the corporation. The ignorant consumer does not know whether they need a Gameplay Gurantee, or free magazines, or what value they should get for their used games, or that a used game is more profitable even when it costs less, or even that there are alternative places to shop. The ignorant consumer is trapped in their purchase, can be led and, depending on the associate, misled without ever realizing what's happened.

As I've said before, there's nothing inherently wrong with the stores, or fundamentally with the promotions and policies, as written, they offer. In the end, the customer always has the option of walking out the door with their money instead of a product, but to mitigate that power and push their own agenda retailers withhold the information that allows consumers to make informed decisions. And, we'd be fools to expect otherwise. There's not a store out there that's going to openly disclose anything but the benefits of their promotions, which is why I wrote all of this. So that those interested might take back a portion of that information, and even the playing field if only a bit.

In conclusion, I'd like to offer a short list of tips in dealing with associates for those who continue to patronize stores like EB and Gamestop. These suggestions deal only with specialty retailers, and really don't apply to the larger chain stores.

- The first rule is to remember that there is recourse. If you are dissatisfied with the way you were treated by an employee, contact the store manager. If the store manager is unable to resolve your issue, call the district manager (you can usually be put in contact with the district manager by requesting the office number from a local store manager). Failing that, contact the regional manager. I've only seen one instance where a customer complaint reached the regional manager and was not completely resolved, and that was an instance where the customer was so remarkably out of line, that we all had a good laugh.

- Be nice. You don't have to, and some of you apparently enjoy being passively if not openly rude to associates. Should you choose that route, don't expect a positive outcome. As a manager I took a perverse pleasure in pleasantly throwing up every possible roadblock for people who were intentionally rude to me. You will fight far harder for fewer results with rudeness than you would with politeness. In the end, if you do have to go to someone's superior, the one who seems more reasonable will hold all the cards.

- Ask to see any used product before buying. You can, and should, ask to see any used system you consider purchasing running properly before taking it home. If the associate tells you they have no way to show you the system working, ask them how they tested the system when they took it in on trade. If they can't explain that, then turn and walk out – you're probably dealing either with someone who is being dishonest, lazy, or doesn't test used systems before selling them.

- If you demand a refund hard enough for product that doesn't work for you, you'll probably get one. That PC game didn't work on your system? Don't take no for an answer. Call the store manager, tell them the situation, and when they say no – they probably will – politely tell them you expect them to back the product they sell. Persistence is your best weapon. If they refuse, ask for the district manager's phone number and follow rule one. Don't bother telling them how much trouble they're in, or how you're going to get them fired. Be courteous, transact the situation with civility, and be reasonable.

- Get to know the staff at a location you're likely to frequent. There's no doubt that regulars and familiar friendly faces get treated far better than the average customer. Being on a friendly basis with the staff, particularly the store manager, will make transacting every end of the business far easier.

- Realize there's turnover. Just as you get to know one manager, another will come in and take his/her place. Don't bother telling him how the old manager did things; just establish yourself as a regular anew.

- Remember these are people trying to do a job. I don't like people bugging me about a hundred different promotions any more than I like selling them, which is to say not at all, but failing to even offer these promotions can lead to dismissal for employees. Taking your frustrations out on a part-timer asking if you want to reserve the new Madden does nothing but make you look like a jerk.

- Finally, and perhaps most important, keep your receipt. All other factors put aside, if you have your receipt you have the power. If you don't have a receipt, the store has no responsibility to satisfy you.

- Elysium

Read Part 1: Profit - here
Read Part 2: Policy and Method - here