The Retail Game, Part 1: Profit

As recently promised, I have a backlog of opinions to eject regarding the current state of specialty gaming retail. Having been a twice-successful manager for two major gaming retail outlets, most recently EB, I speak from a position of some authority on the matter. My goal here is not to whistle-blow or take some kind of revenge against my former employers - they both treated me fairly and honestly most of the time - but to make you, the consumer, more knowledgeable about how and why your favorite gaming store transacts business with you in the increasingly infamous fashion which I regularly hear espoused. However, instead of trying to jam everything into one monstrous article, what I'd like to do is break these comments into slightly more bite-sized pieces, and so, to begin, I want to talk about the foundation from which every action retailers take is born. In short, it's all about the profit.

If one were inclined to diminish specialty retail into three laws of business, much like Asimov's three laws of robotics it would be as follows. Law 1: Associates must make every effort to turn a profit on every sale. Law 2: Associates must satisfy promotional and corporate partnerships, except where such actions conflict with the First Law. Law 3: Make the customer happy, except where such actions conflict with the First or Second Law.

This obviously contradicts the traditional and increasingly anachronistic supposition that The Customer Is Always Right. It's simply not the case anymore. That's not to say that customer service is dead - though, it certainly seems to be gushing arterial spray from a wound the size of softball - but that the maxim has been altered to The Customer Is Probably Right, Unless You Can Convince Them They Are Wrong. And, even if the customer ends up being right, then the next goal is to make satisfying the customer as profitable to the company as possible.

If it seems to you like these assumptions put customers at odds with staff, then you're right.

So, let's talk about that primary law, the law of profitability. Assume for now, and I'll go into the details later, that it is beneficial to employees and more particularly management to make every point-of-purchase sale as profitable as possible. Then the question is what constitutes a profitable sale, and what does not. First, and obviously, the most profitable items that can be included in a transaction are those where the difference between what the company pays to stock and sell the item and what the associate sells it for is the greatest. This is why, ultimately, most specialty retailers would much prefer to sell a fifteen dollar used copy of Ratchet and Clank, than a brand new, full price copy of a niche game like, say, Xenosaga II or Forza Motorsports. This is because most stores pay as little as five dollars in trade value for the copy of Ratchet, meaning that the margin on that used game is probably double or more of what it is for the new title. Even though the total sale is dramatically less, a company that deals in used games actually makes more money off the lower priced title.

With this focus on the margin, it becomes fairly obvious why stores pay as little as they do for your trades, and why the used copies aren't marked down more. The goal is not in providing a 'fair' price for your games - you can almost always sell them for far more if you do it yourself - but in offering the closest value to what the market will bear. In my personal experience, I've seen time and again customers bring in their trade, be disappointed with the values, but then, and this is the important part, trade the games anyway. Like I said, the goal is not to make you happy, but to get you to engage in the transaction regardless.

After all, and I will go into this at a later date, the informed and savvy gamer hasn't been the target market for these companies in a very long time.

This is why the corporate policy of most outlets, and the practice of many managers, is to never offer trade prices over the phone. If you've already taken the trouble to pack up your games, get in the car, and bring them in the store, then you're far more likely to just take whatever price is offered.

The actual game consoles offer an even more dramatic example of this mindset. Despite spending as much as $250 for a system (say, a PSP), the margin on these products is painfully small; as little as a few dollars. And, of course, the ends companies must go to in order to procure stock only serves to exacerbate this issue (the surprising conflict between publishers, distributors, and retailers that leave customers with the short end of the stick being a point for later discussion). But consider for the moment that we have a customer who wants to buy a Playstation 2. Given the option of selling a new $150 system that was purchased into inventory for virtually the same as the MSRP, or a used system for $130 that was purchased directly from a customer for $70 or less, you can imagine which option retail outlets prefer. It really is as dramatic as a margin of $5-$10 for a new product versus $50 for a used product, despite the lower price tag.

So, what we've got is a strict policy of providing the lowest competitive value for trades, selling as many pieces of used product as possible at the highest possible price, and all balanced against keeping customers satisfied enough that they don't shop somewhere else. Providing the customer discount card on used items - a discount card that still permits a satisfying profit margin, not to mention the opportunity to track your customer information and buying habits - to encourage repeat business is one way to get customers back in the door. Personable salespeople with skill enough to make you think you're getting a good deal is another way. But, the biggest advantage most retail outlets have is simply that people will become habitual in their purchases. They will keep shopping at the same place, simply because it is where they go.

Used product is a satisfying way toward profitability, as are the well known high-margin items like accessories and hintbooks, but the best way to make a profit is to transact a charge without providing anything tangible in return. Enter warranties and guarantees. Guaranteeing your fifty dollar new game for a year for an extra three dollar nearly doubles the profit margin on that title, and when transacted on as little as ten percent of the games sold, most stores can create thousands of dollars of additional bottom-line profit per year. Make no mistake, the Gameplay Guarantee from EB - and the recent test marketing of a similar promotions at Gamestop - will prove so profitable as to be industry standard in the coming years. With training and a sales focused staff, the promotion can easily be attached to 15% of all sales, and with a shockingly negligible return rate on these guarantees this promotion can mean hundreds of thousands or millions of dollars per year to the corporation.

But, all this is the goal designed on the corporate level, and as experience probably tells you the level of dedication to these policies on the store level is not necessarily equal to the theoretical I describe. Which is probably why I noticed such an effort toward the end of my tenure to directly tie rewards and wages for staff to the store's performance against budget. EB, for example, recently changed its bonus structure for store managers to be directly linked to the store's success in meeting and exceeding its budgeted bottom line. And, those stores that do not meet and exceed budget, well not only will the manager receive no yearly bonus, but it's very unlikely (read: nearly impossible) that said manager will receive any wage increase come review time. Not a cost of living increase, nothing. Frankly, they'll be lucky to keep their position.

Worse, you'd be surprised at how many stores operate at a loss. Even those that beat their budget, often do so at a loss, only succeeding to not lose quite as much money as expected. You might imagine that since a store has some degree of margin on virtually every sale, then virtually every store operates at a profit, but there are dozens of factors beyond the simple cost of inventory when judging the bottom line. Stores are ultimately responsible for all controllable costs, including but certainly not limited to rent (significant), mall/strip center fees, payroll, shipping, supplies, shrink (lost/damaged/stolen product), AC, lights, monitoring services, merchant fees, bank fees, and so on. As a side note, these costs are regularly much higher for mall based locations - particularly for trendy and competitive suburban mall locations - than strip centers which, is the primary reason that your favorite specialty game store is often closing up shop in your nearest mall.

So, stores must sell high margin items to mitigate the substantial costs associated with doing business. New product simply doesn't provide the dollars to offset the costs of employing a staff, shipping the product, providing a comfortable professional environment, and the inevitable degrees of loss and theft associated with retail. Take my personal performance with the Halo 2 launch for example; my store sold hundreds of copies of the game last November, and brought in a huge volume of sales. But, those hundreds of sales, even with frequent hint book purchases, only translated into an insignificant few hundred dollars of actual profit for the location. Essentially the most noteworthy gaming software launch I'd seen managed to only match the same levels of profitability as selling, perhaps, four used PS2s with a warranty attached to each.

In the end, it's all about profit and loss, and these corporations are increasingly tying compensation and even employment to the ability of salespeople and management to create a profitable location. EB rededicated itself earlier this year to essentially doubling the volume of used games sold for fiscal '06, aiming for the goal of 35% of all sales being preowned product. Further, Gamestop had already been dominating the preowned retail market prior to the announced merger, and is likely to push the joined company toward even greater volumes of trade and pre-owned sales in the coming year, while at the same time incorporating the profitable promotions of EB. Used is the ideal sale, a game at a price point lower than the "big-box" competition like Best Buy, that requires less controllable expenses to deliver (no shipping, or processing at a central location), and provides a doubled and trebled profit margin, and the only thing that makes it better is when the salesperson convinces the consumer to drop an extra couple of bucks for a protection that the vast majority of people never need or use. You should only expect stores to push harder and harder for these ideal profitable promotions and products, as it's not just the corporation's goal, but it's how employees get paid and keep their jobs.

With that foundation of profitability now in place as the cornerstone of the discussion, next time I will talk about how this restrictive emphasis on preowned and high-margin sales affects customer service. Are used games actually as good as new? Are preowned systems reliable or even tested? Are the warranties and guarantees worth their price? Why won't these companies permit refunds? And, how can you get the store to remember that you, the customer, are supposed to be right?

- Elysium

Read Part 2: Policy and Method - here
Read Part 3: What's Next - here

Comments

Like others have written, there's nothing shocking or "unnatural" in the pure capitolism model with what you described. In all transactions the participants attempt to maximize their profits or minimize their losses or both. The guarantee add-on is the extended service option from the appliance world, which with, one hopes, consumers are by now wary.

When I look at the trends, it seems clear to me that the brick-and-mortar gaming stores, to survive, must really turn into primarily used game trading (and assorted accessories) locations -- not primarily new game vendors. New games are going to be mostly sold through the heavyweight discount chains (Best Buy, WalMart) and internet-only businesses. What few new games these "game trading" shops carry will be the "guaranteed blockbuster" megagames, even though they won't have much (if any) profit -- they're used to bring customers into the store.

Now, why is it that this is so different from, say, the bookselling game? Maybe it isn't, and we're just in the early wild pendulum swings of a new industry that'll take a while before it gets stable.

I wonder (since I'm employed now, and have been for 25 years or so, as a software engineer) where the "real" profits are going to for games? We know it isn't the low level developers/artists -- witness EA. It doesn't seem to be at the originating game development company; otherwise they wouldn't all be going out of business so fast and often, at least it seems to me. We are told here that there's little profit for the end retailer. Is it all the
"middle men" that win big here? Or does it really now cost $50+ a game (for average sales) to cover everyone's costs? (Maybe this is a subject of a future article in this series?)

1)Where does the money go? Based on net income, I'd say it goes to the publishers-- EA, Take Two, and so on. They seem to be getting the greatest share of the dough.

2)One problem with going into used games is the question of who buys the new games? If more used games will be sold, less money will flow to publishers and devlopers. How will they deal with that? Will they attempt to raise prices to offset lower sales? Bottom line-- I think there's a largely set number of dollars out there that will be spent on video games, and I don't see how this can be an "everybody wins" scenario.

Well said Poppinfresh, I agree totally. As for the profitability on new titles, it totally goes into publishers' pockets. Witness EA. Witness Rockstar. Witness Vivendi. Hell, for the seven year period Vivendi Universal Games published for both Valve and Blizzard (they no longer publish for Valve) they had a license to print money. There's no mystery there.

systems cost stores money. buy near cost, shipping, all that labor nonsense, all lose money for the company. but man, recently we've sold so many 'EB refurb' units that have crapped out within 1 hour of play, it's insane.

I am curious as to how the prices payed by EB/Gamestop are determined. In most other "used" business, ie books,records,antiques, the merchant is obligated to pay a fair wholesale rate to the person bringing in the item. I believe this is usually in the range of 30%-50% of what the merchant will sell the item for. The desirability of the item will effects its place in that wholesale range, for example a very common used book might fetch 30% wholesale, while a First Edition or a rare piece of early american furniture would require 50% wholesale.

Also, all of the above is a matter of law, with the onus on the merchant to provided fair wholesale prices. If I take a book in to a used bookstore, not knowing that it is a collecters item, the dealer can not take advantage of this buy paying me $5.00 and then turn around and sell it for $500.00. Are sellers of games treated in roughly this way? Will Halo 2 allways be bought at the going rate, even if a little ol grandma has brought it in to sell? Does the amount offered scale to how desirable the title is? Paying $5.00 for an item that will sell for $15.00 in the store is OK, that around 30% for presumably a title that is not a fast mover, but If the stores only pay 30% even on titles that they now will fly out of the store and at a higher price, then thats not so kosher.

Great read Elysium, I'm looking forward to future articles. The value of the used game sale to the company was enlightning.

Whats interesting...and I've heard some rumblings.. is when the Publishers decide they want a piece of the "used" market...

I don't know of any laws dictating percentage values for trade-in values. I would say the curve roughly follows the 30-50% scheme you are talking about, but in certain cases it can dip as low as 10% (for old, unpopular games) and go as high as 70% (for highly desirable brand-spanking-new releases).

All of the trade-in prices are standardized through the Point of Sale (POS) computer system. Grandma gets the same value as everyone else. The only thing that can change the values in the POS are promotions or penalties for poor condition materials. The cash value of trades is also a 20% knockdown of the trade-in value across the board.

but man, recently we've sold so many 'EB refurb' units that have crapped out within 1 hour of play, it's insane.

Absolutely true! One of the topics I want to cover.

I believe this is usually in the range of 30%-50% of what the merchant will sell the item for. The desirability of the item will effects its place in that wholesale range, for example a very common used book might fetch 30% wholesale, while a First Edition or a rare piece of early american furniture would require 50% wholesale.

Considering that I've seen a trade-in value be as little as four dollars on a game sold for 15-20 dollars, I think there is either no such protection for software, or no one who has pursued it legally.

Will Halo 2 allways be bought at the going rate, even if a little ol grandma has brought it in to sell?

The prices are fixed. Grandma will receive the same price as anyone else.

Does the amount offered scale to how desirable the title is?

Sort of. There does seem to be some effort to provide a higher value vs. similar titles for a game that is considered desirable or rare. I noted recently in some N64 trades that the prices for games that remain desirable were dramatically higher than other N64 titles.

Okies, sounds legit then. I am no legal expert, but I know i have seen cases in the news involving say a baseball card that was worth alot, and the dealer knowing this took advantage of the seller who did not, being ruled in effect as theft.

GG, again not speaking with any strong legal footing, but I dont see how publishers getting a piece of the cake on resells would work. I know authors/publishers/musicans are SOL when it comes to the resell of books/cds. Can't imagine how it would be differnt with games.

Badferret wrote:

Okies, sounds legit then. I am no legal expert, but I know i have seen cases in the news involving say a baseball card that was worth alot, and the dealer knowing this took advantage of the seller who did not, being ruled in effect as theft.

GG, again not speaking with any strong legal footing, but I dont see how publishers getting a piece of the cake on resells would work. I know authors/publishers/musicans are SOL when it comes to the resell of books/cds. Can't imagine how it would be differnt with games.

Yeah, I mean Hollywood and the Music Industry has been trying to get this for decades, but with no luck. The Fair Use doctrine of First Sale is still holding up in court. I don't know how the game publishers could change that without resorting to technical means (DRM, fun fun!) or the court completely reversing their decisions on the matter (which has happened).

recently we've sold so many 'EB refurb' units that have crapped out within 1 hour of play, it's insane.

Yay, this is why I hate buying used. People use the trade-in services to unload the stuff they're ruined, and then I get burned by it.

Dorks.

Great article (and series), Ely.

I'm waiting for Amazon to patent the resale of used games and put EB/Gamestop out of business. Or, hey, why not just patent the sale of any kind of game? Get on it, Amazon!

I've always wondered how Gamestop and EB and the like could operate at a profit selling used games; the chains I've been in seem to have such a small new section, and a mammoth used one. Thanks for shedding some light on that.

I'll be interested to read the next installment. You're quite a good writer.

As someone who NEVER buys new games (unless they are in the GREATEST HITS line), I've often wondered the same thing as Poppinfresh up there-- if everyone buys used, and no one buys new, then what happens to the industry? I mean, if the only way I can get a cheap deal or EB can make a profit depends on some "dupe" paying $50 for the game at some point, what happens when these "dupes" stop buying? I keep waiting for us to reach this critical mass point where the number of front end buyers falls too low to support the whole trade-in system.

I don't know if it's still in effect, but I remember reading articles a few years ago that JAPAN actually outlawed the sale of used videogames because the publishers were complaining about lost revenue. I wonder, given the state of our Hollywood-owned government, if such a thing like this could ever happen here... CDs, Games, DVDs... evey item bought used takes money out of the mouths of the big corporations! DRM! PIRACY!! Blah blah blah.

Another question for ELYSIUM-- what is EB's policy in regards to taking in "used" games/DVDs? Let's be real here... the vast majority of DVDs I see popping up in my local used stores are obviously stolen from large B&M locations. I've seen sellers walk in with 10 copies of the same movie, still in shrinkwrap with a k-mart label on them. Several local stores have been raided by police and made to require ID and other measures. Does this happen with games?

up until a few months ago, I had NEVER in my life traded in a game. Surely I'd rather just keep the game than take the $1 on offer... of course, GAME CRAZY tempted me in with some "get an extra $20 when you trade in 3 games" deal... I almost laughed when they offered me literally $1-2 per title, but again, like an idiot, i had the "coupon" and was already there, so I went along with it.

Dollars to donuts this gets linked by DQ.

JimmDogg you win the cupie doll.

Being a big fan of DQ, I have to wonder if Bill is a lurker or a true goodger, and if so who he posts as.

Edit: Never mind I figured it out. Who else do we knowwho is married, lives in Texas and has one child.
Yeah I guessed... it's the Ducki's :-). Mind you Deva is nothing like how Bill describes Gloria( his wife). But I figure it is just a facade.

I mean, if the only way I can get a cheap deal or EB can make a profit depends on some "dupe" paying $50 for the game at some point, what happens when these "dupes" stop buying? I keep waiting for us to reach this critical mass point where the number of front end buyers falls too low to support the whole trade-in system.

Two things. 1) Obviously when the big new game of the month is released, it's worthwhile for EB and Gamestop to move those items, so the market still flows in that respect. Further, the best possible scenario is that we sell the game the day it comes out, get it traded in a few weeks later, and resell it again used. 2) Don't forget that EB and the like aren't the only ones out there selling these games. Best Buy, Circuit City, Target, Wal-Mart, CompUSA, Sam Goody, and so on all sell these games as well. It's worth it to a company like EB to lose the battle on the new front if it means the same volume in the pre-owned front.

ELYSIUM-- what is EB's policy in regards to taking in "used" games/DVDs? Let's be real here... the vast majority of DVDs I see popping up in my local used stores are obviously stolen from large B&M locations. I've seen sellers walk in with 10 copies of the same movie, still in shrinkwrap with a k-mart label on them. Several local stores have been raided by police and made to require ID and other measures. Does this happen with games?

EB's policy is first that we never take in more than one copy of a given title in one transaction (or visit, or whatever seems reasonable). I don't know that every manager follows this rule, but it is fairly strictly enforced in that, if the police seize material from a store that was taken in, then that loss comes out of the individual store's bottom line as shrink. We really have the authority to follow our instincts if we feel uncomfortable about a trade - though it's sometimes hard to be logical when there's a guy standing there with $400 of material that you can sell for a large margin. That said, I've actually asked several customers who I reasonably suspected of stealing to not trade in games at my location anymore, and I was backed up by my manager and corporate on the decision.

I have no problems with anything that Elysium has revealed so far. It makes good business sense and to be honest EB is a business.

Is there anything wrong with offering the game insurance? No difference from you large sizing your happy meal. The problm is with the consumer that does not use the service if he purchased it and his game got scratched.

Buy used games and sell them at a profit, also makes sense.

But to be honest my local EB is well run and I have never had any problems. In fact the have done me a few favours in the past, including letting me return a new opened Game-Boy game in exchange for something else, because it was to advanced in reading for my 6 year old son to play.

Howerver, the following articles about warranties may change my opinion.

You didn't have to write this to get me to hate EB and their schemes - I already did. Thanks for writing it, though, it's a great article.

That was quite a fascinating article for me. Our retail system over here is somewhat different. There are no large games-only retail chains like EB over here. A few online shops, but nothing even remotely comparable. The juggernauts are bigger chains that sell all kind of things ranging from electronics, DVDs, audio CDs to washing machines. If one intends to get used games you have to be lucky enough to have some local store around who trades such things. Otherwise Ebay is pretty much the only major option.

I certainly didn't get the impression that Elysium wanted to portrait EB as dishonest or deceiving, I consider it more of a 'tale' about what customers are willing to go with. Well, that and the whole analysis part, duh.

Garrad wrote:

Being a big fan of DQ, I have to wonder if Bill is a lurker or a true goodger, and if so who he posts as.

I wonder the same thing....

Elysium wrote:
I mean, if the only way I can get a cheap deal or EB can make a profit depends on some "dupe" paying $50 for the game at some point, what happens when these "dupes" stop buying? I keep waiting for us to reach this critical mass point where the number of front end buyers falls too low to support the whole trade-in system.

Two things. 1) Obviously when the big new game of the month is released, it's worthwhile for EB and Gamestop to move those items, so the market still flows in that respect. Further, the best possible scenario is that we sell the game the day it comes out, get it traded in a few weeks later, and resell it again used. 2) Don't forget that EB and the like aren't the only ones out there selling these games. Best Buy, Circuit City, Target, Wal-Mart, CompUSA, Sam Goody, and so on all sell these games as well. It's worth it to a company like EB to lose the battle on the new front if it means the same volume in the pre-owned front.

What I was really trying to get across here was, what happens when TOO FEW consumers are willing to buy a "brand new" game? As you said, selling ONLY new games and consoles at EB will put your store out of business, and that they're looking at having something like 35% of their business be based on used games. Myself, being a cheap skate, only buy used games... but what happens to EB or ME or any other used store if FEWER AND FEWER people buy new?

If FEWER people buy new, there are less copies to turn up at used stores. If fewer people buy new, the market could drop out... game companies get low sales and go out of business... fewer new games get made, and the ones that do must either be of lower quality/have less development time, or else command an even higher price to make up for the loss of sales. In the end, it's kind of weird... every sale of a used copy directly hurts the game makers & shifts the profits over to the middle men who buy for pennies and sell for $5-10 under retail (talk about your insane margins).

You could argue that this will never happen, as a lot of people are too anal to buy used games, or want them day of release, or don't want to go looking for a used game store... but if retail outlets like EB, Gamestop, etc. are actively teaching people to "buy used" in order to increase their own profits, there might come a day where NO ONE buys new, and the whole thing just collapses like a house of cards.

just speculating...

Yeah, but what percantage of games are sold at dedicated game stores? I'm sure Wal-Mart is the biggest mover, followed by Best Buy and the other big box stores. Wal Mart shoppers are probably not even aware that a used game market exsist. I would wager the new game industry is not going anwhere anytime soon.

Badferret wrote:

Yeah, but what percantage of games are sold at dedicated game stores? I'm sure Wal-Mart is the biggest mover, followed by Best Buy and the other big box stores. Wal Mart shoppers are probably not even aware that a used game market exsist. I would wager the new game industry is not going anwhere anytime soon.

I dont know what the percentages are, and like I said, it's not going to happen tomorrow... but I can see it... esp. if they're talking about raising prices on the next gen systems to $60 a game. Mix rising game prices with other dedicated game stores getting more and more people to buy used, and you never know.

What I was really trying to get across here was, what happens when TOO FEW consumers are willing to buy a "brand new" game? As you said, selling ONLY new games and consoles at EB will put your store out of business, and that they're looking at having something like 35% of their business be based on used games. Myself, being a cheap skate, only buy used games... but what happens to EB or ME or any other used store if FEWER AND FEWER people buy new?

If publishers see a big drop off in the sales of their new titles they have two tracks: One drop the price on new games or stop companies like EB from selling used games.

I don't buy used games since I would rather the publisher/developer get the money than EB or Gamestop. One new titles most of the time EB games are like $5 cheaper and I that isn't a big enough price drop for me to pick them up.

Are preowned systems reliable or even tested? Are the warranties and guarantees worth their price?

No they are not tested or reliable. I know this because I am on my 4th X-Box from EB games. The first two I bought used and they didn't work from the start. The 3rd I got refurbished and it quit after exactly one month (to the day) and the fourth I got refurbished and I've had for over a year. I was pissed about the first two used ones because the EB games was a half hour drive away but the bottom line is that EB didn't lose a sale because of it nor are they likely to. I didn't lose any money out of it save gas money and I didn't take my business elsewhere which is what really counts in the end.

Ulairi wrote:

I don't buy used games since I would rather the publisher/developer get the money than EB or Gamestop. One new titles most of the time EB games are like $5 cheaper and I that isn't a big enough price drop for me to pick them up.

That's what REALLY pisses me off about EB/Gamestop... selling used games for $5 less than retail! Ha. Now THAT'S a crime.

hoochie wrote:

Certis better do something awesome between now and the MN get together, or I might just run away with you, Elysium. Elysia can come with if she wants.

slambie wrote:

Wow, what a well thought out, well constructed article. I think I'll jump on the hoochie bandwagon and come out and live with you. Me and the cats. You like cats, right?

Back off ladies - I saw him first.

Back off ladies - I saw him first.

What about dudes can dudes come?

Could this be slambie?
IMAGE(http://www4.district125.k12.il.us/faculty/ttomaso/WD/directory/quiz19501/images/easy%20-%20cat%20lady.gif)

As a manager with GameStop I can confirm most of what this article says is correct. I can also confirm what the earlier GameStop person said, namely that GameStop does not have a policy about quoting trade prices over the phone.

A few additional points:

1) My understanding is that the GameStop/EB merger will make it the largest gaming retailer in the US, slightly edging out WalMart.

2) The used market is so profitable that other retailers are exploring that part of the business. WalMart and Best Buy are both test marketing offering used product. It will be very interesting to see what the publisher and game industry as a whole do in response to this. At the same time, I suspect that we are not very far from the Steam/HL2 option (downloading the game instead of buying it in a store) being available on most new PC as well as console games. The next gen consoles all have this ability and Nintendo is even touting the ability to buy it's old catalog of games via download as a major feature of it's next system.