Gamestop Offers Glimpse Into Their Used-Games Facility

from the they're-tired-of-being-labeled-the-villain dept

IGN has a very cool story about what happens to the used games that get traded into Gamestop Stores. The entire article is quite fascinating and a rare glimpse into a notoriously secretive company's business, but it's the why of this article I want to focus on. Or, more specifically, why Gamestop opened their doors for this piece.

Used-game sellers generally, and Game Stop specifically, have been a constant target of game producers. They claim that used game sales keep people from buying games in their awesome new shrinkwrap. As the IGN article notes, this is a case of only looking at one side of the coin (those that are going to Game Stop to buy used games) without acknowledging the other side (those that are going to Game Stop to trade in used games). The article expands on this:

"GameStop’s bosses are obviously tired of hearing about how used games are killing gaming, about how unfair they are on the producers of the games who get nothing from their resale.

One astonishing stat is repeated by three different managers during presentations. 70 percent of income consumers make from trading games goes straight back into buying brand new games. GameStop argues that used games are an essential currency in supporting the games business."

So, if that number is correct, the interest in used games by some consumers is what drives the purchase of new games by other consumers. This is similar to what we've seen in book sales, where used books fuel the new book market. Being able to trade in games doesn't simply result in money collected for the retailer; it results in money collected by game producers as well. This goes beyond simply mentioning first sale rights. If used games are fueling the purchase of new games, what are producers complaining about? If Gamestop is to be believed, it's a significant part of the new games market:

"GameStop says 17 percent of its sales are paid in trade credits. The implication is clear - if the games industry lost 17 percent of its sales tomorrow, that would be a bad day for the publishers and developers."

So maybe game producers should be thanking Game Stop instead of griping.

Filed Under: business models, economics, used sales, video games
Companies: gamestop