Being Used?

In the years that I was a Gamestop manager — dark days in which the sun was blotted from the sky and malevolence slouched through the halls of dingy shopping malls in the guise of poison-tongued high schoolers – I took quiet exception with countless official policies and products. Eventually I purged myself of these demons in a number of articles back around 2005, a very public exorcism which discussed at length how the company conducted its business and more importantly how talking about it made me feel a hell of a lot better, or at least cleaner.

In all that time, however, the one widely lodged complaint for which I could never really generate enthusiastic ire was on the matter of used games. To my addled mind, used games continue to seem like a pretty nice idea; a prime example of how the rare capitalistic initiative can benefit both retailer and consumer.

If you are a developer or publisher, I get it. I sympathize; really, I do. There’s a big damn hole in the bucket, dear Liza, and Gamestop chairman Dick Fontaine is standing there unapologetically holding a drill. But as a consumer I have to say that in the first, second and third place I’m watching out for numero uno, and I like not spending money. Or more precisely spending a little less money, so I continue to be baffled when well-meaning game buyers rise in a single voice against the anathema of used game sales.

Let’s not sugar coat it, when you trade in your game at Gamestop you are getting a return dramatically below the retained market value of your product. The company then turns around, often without doing anything but printing up a sticker, and resells your game at a substantial increase. As a trade-in customer, I accept when I walk in with my trades that I am substituting value for convenience. Yes, I could probably, nay certainly, demand higher through Ebay, but honest to God who has that kind of time any more?

That said, I don’t think there’s a big “A Ha!” moment when the monster profit margin is revealed between the cost at which the retailer buys the game from you and the price at which they resell the game. Here’s a hint, it’s big — really big. It is, by far, the biggest margin in the stores, but — and here’s the key — only if they manage to sell it.

The profit potential on used games is without question the goal of a strong used games market, but the real benefit to consumers in the deal is that we have an unlimited market for our used games. In short, Gamestop never says no.

Outside of clearly broken games or product for systems that aren’t sold anymore, if you walk in with a current or nearly current generation console game, you get something. It may be pennies on the dollar, but it is guaranteed. Imagine, for a moment, the monumental overhead and inventory nightmares this creates on a national level. How many beat up copies of Kameo are sitting in some Indiana Jones warehouse never to be sold? How much loss will the company have to soak up on Tony Hawk: Ride buyback as consumers looked to sell quickly while the value was high.

I don’t argue that Gamestop doesn’t make quite a bit of money by reselling games like Dragon Age or Borderlands, but the error that many armchair critics make is in not realizing how much of that money goes against the loss on Fusion Frenzy 2 or CSI game trades.

Still, it’s not like the proposition hasn’t worked out. This is a little bit like oil companies complaining about the cost of refinery and drilling development as they make tens of billions in a quarter, or pharmaceutical companies cashing in only on designer drugs for profitable illnesses … except of course, we are talking about a luxury product whose stagnant price point hasn’t kept up with inflation for decades. But, I’m not equivocating or making excuses, because let’s face it. Gamestop has been rolling in the money pool for a few years now.

Even if the Gamestops of the world pulled in monster profit on every single used game taken in, I still can’t get behind the consumer based fury. I am a fan of choice, of being offered the option of a reduced price. The math behind how Gamestop manages their inventory doesn’t factor into the question of would I like a given game for $59.99 or $54.99.

This is the point in the conversation, I suppose, where hearts bleed for the starving developers who never see the profit of those resell transactions. Bleeding hearts which I assume are asleep at the switch in the discussion of Ebay and other consumer resell avenues. Bleeding hearts which seem to get a nice healthy clotting agent when issues of Day One DLC or the proclaimed need for price point hikes to address the rising costs of development and piracy issues come up.

Forgive my cynicism, but a lot of the arguments against trade-ins and used game sales seem awfully convenient. There is something, which I admit I understand in my amygdala if not my more cognitive brain centers, about knowing that when you hand over your $50 bucks to the counter jockey, you are paying for something at double the price the company bought at. What I don’t understand is why it is better to buy essentially the same product for five or ten dollars more just because it bites into the margin of your supplier.

And, that's the point. It seems totally unreasonable to me to reject, even demand the elimination of a lower price point option simply because you don't like how much money the provider is making on the deal. It is a gut check reaction that seems more based out of an anti-Gamestop cultural undercurrent than anything else. If, for example Valve offered a way to resell your games back to them through Steam -- and this is a genius idea that I endorse with what can only be termed 'gusto' -- and buy through a digital used market, I have a hard time imagining the same fiery torches and proverbial pitchforks being raised.

I am willing to concede the argument from those who simply prefer a product in pristine, new condition. I have no beef with them, and even join their ranks on many games, but that doesn’t discredit the idea of having choice. Ultimately, used sales work to the benefit of both retailer and consumers keeping costs low and retailers competitive. Yes, one side usually comes out of the deal a little better, but that’s the way of good business.

For all the things that Gamestop and other retailers deserve to be criticized for, this once perhaps we should just take our $5.00 off and go about our business.

Comments

Folks wanting a greater discount on a used brick-n-mortar shopping experience can always wait until a B2G1F promotion, which basically brings their product in line with prices that can be found online.

Definitely

Me, I'd rather pay the 5 dollars for the new copy and get that unboxing feel.

Me too.

Used game sales are just a help? I think it goes way beyond that. Their entire market penetration would be much smaller without their used games business. Gamasutra did a breakdown of GS's profits in April 2009 based on their SEC filings and they concluded that between 41 and 46% of GS gross profit comes from used sales alone. Used software sales are more than a help, they are the fuel for GS' growth and it is their differentiator in the marketplace. They offer a consistent on demand buying experience.

I'm sure they will be up for 2009. The economy played some role in it, as well as the continued growth of gaming in general. According to the company's 8-K released in November (going through the end of October 2009) Used game products represented 27.7% of sales while new game products represented 59.4% of sales. Profits were another story. New products represented 30.9% while used represented 47.3%. Obviously margins are astronomically different on new game sales vs used (not that it was ever a question, we all know that).

I said they could survive without used game sales, not thrive. I think people would still go to GS because they know it, even if they were only able to purchase new games. Sure they would be a completely different company after that, but I doubt (after closing down some stores) they would completely dissolve.

They're going to have to make adjustments sooner than later because of the growth of downloadable/streaming content.

Don't forget this illustrious post!

Game Stores = Child in Corner Eating Paint Chips
http://mobile.gamerswithjobs.com/nod...

or the followup:

Penny Arcade - More Paint Chips
http://www.gamerswithjobs.com/node/4...

The one thing GameStop/EBGames did that got me wondering about the company was taking unclaimed deposits and putting it into the revenue. I understand why they did it, but working there at the time, I didn't like doing it. Although, going through the 50-70 people on the deposit list, a majority (maybe 75-80%?) were disconnected phones, wrong numbers, or people who didn't know what the hell I was talking about.

What are you going to do? People hated and continue to hate Microsoft, governments, corporations, yet they still use them. I will say that Unreal Tournament III for the 360 for $8.99 was a fekkin' steal!

I will sell my games to Gamestop or EBGames(Canada) but I do not buy used anymore. I find there is usually only $10 difference between buying new and buying used on games within a year old. And I spend that $10 to same myself the frustration of dealing with a disc that has been scratched.

Despite that these companies charge people a disc cleaning charge when they are buying games from people, I don’t believe they actually clean the discs, and if they are they don’t do a good job.

I think that it's useful to distinguish between personal dislike-- as in, I personally dislike Gamestop because to me the convenience they offer isn't worth paying extra when 99% of the time I can find a better deal elsewhere-- and the sort of dislike that seems to flourish on the Internet in which one is actually offended by the mere existence of a place like Gamestop, which for lack of a better term I shall call "butt-hurtedness."

I don't care for Gamestop. The prices for used games are too high, the trade-in rates are too low, the staff is pushy and ill-informed, and the store is cramped and messy. So I take my business elsewhere-- I use eBay if I'm willing to take the trouble that week, or Bookmans or Play n Trade or whatever when I'm not.

That's the wonderful thing about capitalism. You don't like it? You're always free to take your business elsewhere. It's fine to dislike Gamestop, but there's no reason to get butt-hurt about it.

hbi2k wrote:

It's fine to dislike Gamestop, but there's no reason to get butt-hurt about it.

Show me on the doll where Gamestop touched you.

I have admittedly irrational hatred for Gamestop. I would cackle endlessly watching them liquidate everything in a fire sale as their creditors howl. Won't happen, but cackle I would. I need not explain it, I admit it's irrational. But it's my own irrationality.

I would too. But mostly because, though they may not be much different, I preferred Game Crazy. And if I had to pick a mega-chain video game store to survive the EB (pre merger), Game Crazy, GameStop, etc. battles of the 00s it wouldn't have been GameStop. In fact, they've consistently been my least favorite of all the chains.

Darko wrote:
Me, I'd rather pay the 5 dollars for the new copy and get that unboxing feel.

Me too.

The one advantage of buying a used game at Gamestop is the return policy. Try it out for seven days, and if you don't like it take it back. I generally buy used when possible for this reason alone.

Elysium wrote:

I actually buy all my games at a local Play N Trade. I used GS in the article because they are so recognized, but this is a growing retailer that I endorse as an excellent alternative.

While Gamestop has a dominant position in the used retail box store market, there are still plenty of game buying options. I agree that it would be ideal if Best Buy or another prominent specialty retailer provided a healthy competition, but that's really beyond the scope of what I'm saying.

My point is that it's better to have the Gamestop used choice, even under current prices and coditions, than no used choice at all, and I think there's a healthy group of people that might argue against that.

I can't say that I'm entirely with you. See, unless a person is buying games on a regular basis, almost as though they're collectors, there really is no point to saving only $5 on a game when the used version you're buying could potentially be flawed due to improper use and abuse. And sure, you could turn the game back in after having also purchased an insurance plan (Which further closes the already diminutive gap in prices between new and used games), but while that's money saved, it's also time wasted and a certain degree of grief sustained. The only point in time at which buying a used game works is when it has been out long enough to warrant a dramatic drop in price for the used version of a product. However, doing so would involve exercising a great deal of delay gratification. When it comes to video games these days (especially with games best played online with friends-- MW2, for example), such a delay just doesn't cut it.

I wouldn't say there's much of a choice when the turnaround on used products are arbitrarily (and often inaccurately) imposed, usually to a point of exorbitance.

The best way to handle used products which are not always assured to have been competently serviced and refurbished is to introduce bargaining.

I dont even go to my local Gamestop i have Play n trade which i like and are alot nicer than my gamestop

From what I can tell, it just depends on where you are. The closest GameCrazy to me is an abomination, while the closest Gamestop has a great manager and employees.

But out south where I used to work, it was the opposite. They are just game stores, and it just depends on who is running a location.

We have a Gamestop in one mall that is cluster of a mess, and feels claustrophobic. Another mall has a Gamestop with a wide open setting, and a some great employees.

In the end, I have some idea how much a game I might want should cost, and I could really care less if it is one of the great stores, or a crappy one. I will favor the store where the manager held a Wii back for me, however.

But then again, I buy games online from Amazon or Ebay. I bought my Rock Band from a guy on Craigslist. Sometimes I buy at Best Buy or Target. It really comes down to when I want to buy a game, the price I have to pay, and where I happen to be when I see the game.

For the life of me, I can't figure out why anyone could actually hate one method over the other. It's cool to just leave and purchase the game somewhere else.

CapnDorry wrote:

I can't say that I'm entirely with you. See, unless a person is buying games on a regular basis, almost as though they're collectors, there really is no point to saving only $5 on a game when the used version you're buying could potentially be flawed due to improper use and abuse.

I think I found the point. It may not be worthwhile to you (which is your choice as a consumer), but not everyone clips coupons, either. If my fellow gamer wants to save a couple bucks on a game, I say more power to them.

wordsmythe wrote:
CapnDorry wrote:

I can't say that I'm entirely with you. See, unless a person is buying games on a regular basis, almost as though they're collectors, there really is no point to saving only $5 on a game when the used version you're buying could potentially be flawed due to improper use and abuse.

I think I found the point. It may not be worthwhile to you (which is your choice as a consumer), but not everyone clips coupons, either. If my fellow gamer wants to save a couple bucks on a game, I say more power to them.

There is also another good reason to save the $5 at Gamestop. You have seven days to return the game for any reason. So if the game totally blows, you can get a refund on the game. So not only do you save $5, but you are given what is probably an even more valuable service.

This also means that the risk of a damaged disk is pretty much nil, as you can return the game if it doesn't work.

Jayhawker wrote:

There is also another good reason to save the $5 at Gamestop. You have seven days to return the game for any reason. So if the game totally blows, you can get a refund on the game. So not only do you save $5, but you are given what is probably an even more valuable service.

You can? Maybe the policy is different in the US but here, you can bring a game back if it doesn't play and they'll attempt to fix the disc or failing that, will replace it but they never offer refunds on used titles. I would shop there much more if they had such a policy.

Is the seven day policy a real return, in that they give you your money back, or do you only get store credit?

TheCounselor wrote:

Is the seven day policy a real return, in that they give you your money back, or do you only get store credit?

They will give you your money back on a used title. They also reserve the right to blow you off if you abuse it. But my local Gamestop gave me a refund on Madden 08 even though I bought it new, when I tried to trade it in a day later.

That sounds a lot more like you've found a good store with some customer-friendly staff. I can tell you for certain that it's not Gamestop policy, and it's likely if a big-enough-honcho found out then there would be some unfortunate changes at that location.

Elysium wrote:

That sounds a lot more like you've found a good store with some customer-friendly staff. I can tell you for certain that it's not Gamestop policy, and it's likely if a big-enough-honcho found out then there would be some unfortunate changes at that location.

Really? I've gotten a spiel on this a couple times at Chicagoland locations.

wordsmythe wrote:
Elysium wrote:

That sounds a lot more like you've found a good store with some customer-friendly staff. I can tell you for certain that it's not Gamestop policy, and it's likely if a big-enough-honcho found out then there would be some unfortunate changes at that location.

Really? I've gotten a spiel on this a couple times at Chicagoland locations.

I've had several of the stores in my area push the return policy as a way to push used sales. I've never actually used it, other than returning a defective disc.

Jayhawker wrote:
wordsmythe wrote:
Elysium wrote:

That sounds a lot more like you've found a good store with some customer-friendly staff. I can tell you for certain that it's not Gamestop policy, and it's likely if a big-enough-honcho found out then there would be some unfortunate changes at that location.

Really? I've gotten a spiel on this a couple times at Chicagoland locations.

I've had several of the stores in my area push the return policy as a way to push used sales. I've never actually used it, other than returning a defective disc.

I've never heard about that policy at the EBs here, and I haven't bought anything used at the single GameStop.

Buying used, all the clerks here push the $3 guarantee or whatever it is, so if the disc won't work they'll replace it. Never bought that, and never had to return a non-working disc without it, so I don't know how any kind of return would play out. My guess is: not at all.

I know the GS / EB's near me have a return policy for used purchases also. I took advantage of it once for some crazy King Fu rhythm game on the XBOX that I just didnt like at all. The only concern the clerk had was whether it was free game from a B2G1F purchase because it would've been more keystrokes to process.'

I think the stores near me have dropped the Disc Guarantee entirely (thankfully), because I haven't heard it pushed in ages. They definitely use the Return Policy to encourage their used sales. It gives the shopper more freedom to return / exchange over new.

Oh, the disc guarantee, I had forgotten about that. That caused a lot of GS animosity at one point, because I caught a clerk adding it into the purchase price without asking me.

The other questionable deal is when they put that little sticker to seal a 'gutted but new' copy saying if you break the seal, you cant return / exchange except for the same product. That's definitely questionable.

Still, the local GS has a nice crew of folks working there. It's fun to stop in and browse around a bit.

I read today that Walmart and Best Buy have pulled out of their Used Game Sales experiments. Seems like a tough market to break into profitably if its not with the big box stores time.

I've never actually traded in games, but I've bought a ton used from GS. Went today to look at Batman: Arkham Asylum for the 360, and the used price was $49.99, which is what it's going for new on Amazon. I really want to play this damn game.

On a whim, I decided to ask what I could get for it if I traded it in.

$15.00

I'm pretty sure I'm only going to be buying SpaceBucks and XBL subscription cards from them from now on. I'll continue selling my own used games on Amazon, and buying from reputable third-party sellers there.

That said, I'll repeat my deal from the Trading Post and Batman: AA threads. I have two GS gift cards worth $30.01 total (was $50, but I needed SpaceBucks for Shadow Complex), and they'll go to the first person who wants to sell me their copy of Batman: AA (in good condition). We'll both get a better deal this way.

Elysium wrote:

That sounds a lot more like you've found a good store with some customer-friendly staff. I can tell you for certain that it's not Gamestop policy, and it's likely if a big-enough-honcho found out then there would be some unfortunate changes at that location.

Wrong. At least here in Oregon every store I've ever been to has that policy. They even let you return used hardware. That's happened to me once when I bought a system and literally just changed my mind. I was glad I bought it used from Gamestop.

Gamestop is being sued for misleading customers on a used copy of Dragon Age.

Via Joystiq: http://www.joystiq.com/2010/03/26/lawsuit-claims-gamestop-misleads-consumers-about-bonus-dlc-wit/

Dragon Age comes with free DLC if you buy the game new, but used copies require you to spend $15 for access to the content. The suit alleges that Gamestop employees pushed used copies of the game for close to full price, and implied to customers that they were getting a "full experience."

I'm sorry to see it come down to a lawsuit, but I'm curious to see how this, and other ideas from publishers on how to curb the use game market, pans out.

I'd say this suit is going nowhere.

Included in the suit is this explanation:

INCLUDES:
Downloadable
character and quest
A $15 VALUE

Below this, in small print, is the language: "One-time use code available with full retail purchase. Expires April 30, 2010.

If you are buying a used copy, there is no logical reason to think you are going to get the one-time use code. It may be a bad deal, but I don't see this succeeding as a class-action suit.

They are saying that if I sold a copy of Dragon Age on Ebay, that I would have to legally sell it for less than $35 if I used the code. I think it is much more of a case of caveat emptor. Pricing an item alone cannot be a reason for a lawsuit.

I think the case will go nowhere, but it will raise the debate. I think eventually, it will probably make EA's games trade-in / used prices lower. Maybe.

Yeah. This seems pretty simple to me. Lower the trade-in value and lower the price. Problem solved.

I am willing to concede the argument from those who simply prefer a product in pristine, new condition.

That's me. If it's a game I have a strong desire for I want it new because I want it all new. The case, the manual, the disc, and maps/doodads included -- all new. Becuase I'm not just buying a game. I'm adding to a collection.

Besides I hate the fact that they usually put a price sticker right on the game package itself which is impossible to completely remove and futher mars that collection addition. I'd rather not have a big,ugly, yellow "USED" sticker staring back at me from spine. It's either that or all that damn sticker glue that you can never get completely off should you try to remove it.

About the only time I'll go used is if it's a throw away game that I'm not willing to buy new -- usually something for the kids falls into this category. Witih my budget the way it is right now, I'm often waiting until they hit the reduced priced point anyway. A lot easier to swallow new at $30-$40 than $60+ on launch day. Greatest hits collections: the new of the old.

Great, thought-provoking read, Elysium. Excellence continued.

When I buy a new game I contribute to the costs of running multiplayer servers, updates, maybe some free DLC and, importantly, the game development process.

When I buy a used game the money goes into the pocket of the two sellers (the player who sold the game back to the store, and the store itself).

Here's were I find myself questioning the process: Is the cut of the initial purchase price that the publisher received for the original sale all that they should expect? After all, whether the original purchaser or the used game purchaser plays the game and uses the post-sale services of the publisher, it still amounts to a single user utilizing those services. So whether the original buyer uses those services for (an example period of) 12 months, or for 6 months and then sells the game and the used game player continues for another 6 months there is still the same amount of "use".

However, check the EULA, most publishers grant only the original purchaser a license to use the online services etc.

It's their playing field. The publishers can place restrictions on the use / support of their product (think non-transferable product warranties) - so choose your purchase options wisely. Or don't.

Elysium wrote:

While Gamestop has a dominant position in the used retail box store market, there are still plenty of game buying options. I agree that it would be ideal if Best Buy or another prominent specialty retailer provided a healthy competition, but that's really beyond the scope of what I'm saying.

Oh, Best Buy is certainly trying to provide competition for Gamestop every way they can, and this includes used games. They will actually buy almost any used electronics, though games are the only ones they sell back through the store. They even have a specific gamer reward card you can subscribe to and receive a magazine subscription, just like gamestop. The only thing they haven't done, is actually advertise it.

(In the sense of full disclosure, I must say I currently work for Best Buy selling video games.)