Game Marketing Tips, Analysis, and News

Wednesday, July 14, 2010

GameStop Doesn't Like Used Games

GameStop says they really don't like being in the used games business, according to their CEO Niall Lawlor. "We discovered the used business was a way of preserving our margins," Lawlor said. "We don't like being in the used business, it's very difficult to manage. If we hadn't got the used business, we wouldn't be there." Lawlor added that GameStop "evangelizes" for the industry by its existence. "We have to be in it, otherwise if you take a look at our margins you'd realize we need to be in used."

Before you weep for them at being forced to peddle used games against their will, it should be noted that GameStop sales were up more than 5% their first fiscal quarter this year, as reported by Gamasutra here. So the used game business is doing quite well, thank you very much. Why should GameStop profess to dislike this part of their business (which has a 48% profit margin, by the way)?

They're trying to keep game publishers happy; well, maybe not happy, but at least keep them from getting too pissed off. Game publishers see sales of used games as a drain on their sales of new games, since the publishers get no revenue from used sales.

EA has already taken a step to try and get around this conundrum by implementing their online pass, where you have to pay $10 to be able to play their game online. So a used game buyer will still need to give EA $10 in order to play the game he just bought online against other players. There's been some griping about this, but it seems perfectly reasonable to me. Somebody has to pay for those servers, after all.

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