Wal-Mart Goes Big On Used Games

Wal-Mart is apparently not just dabbling in used games, they're jumping in with both feet. That's at over 500 stores in the US. Analysts expect them to focus on the under-$20 segment, in keeping with Wal-Mart's position as the low-price leader. Which is good news for GameStop, as they watch Target, Best Buy and others rush into selling GameStop's bread-and-butter product, used games. Best Buy is pushing the used game sales, as you can see from the photo. As new game sales have slowed, retailers are pushing the lower cost used titles as a way to keep gamers spending.

This may be great for retailers looking to goose their sales, but all it does for publishers is make a bad sales picture worse. A widespread availability of used titles means less incentive to purchase the title new. It's not like you can see wear and tear on the pixels; a used game plays just as well as a new one. The only difference is in the packaging; customers who care about that are probably buying Collector's Editions anyway, because they are, you know, collectors.

So what's a publisher to do? Publishers complain about used games, but they're certainly not going to be putting pressure on retailers to stop selling them, when ALL of their big retail customers are doing it. The online play pass is one answer, which seems to be working for EA. Many are looking at subscription models, but the market segment built around subscription revenue is the MMO game, which are busily heading towards the freemium model.

It seems clear to me that used games are becoming more widespread, which is forcing publishers to look even more swiftly to other revenue models. It's going to help keep overall dollar sales down for games, and keep downward pressure on new titles, which is going to make the chance for profitability even lower for traditional titles. Marketers are going to have to run to keep up.