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GameStop: Used Games are Good for the Industry

In an interview with Gamasutra, GameStop CEO Paul Raines points out that 70-percent of the income gamers receive from turning in their used games is spent on new gaming products. That, according to his stats, is a nice $1.8 billion injection into the games industry. Yet developers -- and some publishers -- will have everyone believe that the used games market is actually killing the industry.

"My answer to developers is that we are driving growth in a category that needs to grow," he said. "We think there's a real lack of awareness as far as how it's good for the industry. The transparency you're seeing from us is because we want people to know about it, helping people understand what we're trying to do for the industry."

There is a point in the interview that Raines seems to understand where developers are coming from in regards to their angst against the used games sector. After all, the work of art they've poured their life's blood into is now being sold at a discounted price, and they're not seeing a dime. It's understandable, but car manufacturers don't receive royalties from second-hand sales at car lots either.

Many gamers see the trade-in model as currency, a means to purchase a new title they couldn't afford with straight-up cash. And it's not just the games either: used consoles can be traded in towards a newer version, to purchase a batch of used titles or the latest AAA shooter on the market. Either way, the money is usually dumped back into the games industry.

"We're really not cannibalizing new game sales," he said. "That's a common misconception. So my answer to developers is that we are driving growth in a category that needs to grow. We think there's a real lack of awareness as far as how it's good for the industry. The transparency you're seeing from us is because we want people to know about it, helping people understand what we're trying to do for the industry."

Of course, the whole topic of discussion here is used console sales. At one point, GameStop accepted PC gaming trade-ins, but discontinued the program years ago because of piracy and falling sales. Now gamers are lucky to get a few racks for physical copies of recent Windows-based titles, and a slew of digital distribution platforms like Steam and Origin makes it difficult for GameStop to compete without exclusive incentives.

That's where the company's new plan to sell pre-purchased keys come in. It's much easier to sell used PC games by acquiring the activation key itself, a possible service GameStop is currently investigating. "It’s very interesting," said Raines in another recent interview. "There are some technologies out there in Europe, and we’ve looked at a couple that are involved. We’re interested; it’s not a meaningful business yet. Right now we’re not seeing that as a huge market, but I think we’re on the leading edge. There are a few companies, a few startups, out there that we’ve talked to that are doing this."

Still, consumers and retailers like GameStop will seemingly always be considered the bad guys because the former wants to save a buck and the latter wants to make a buck. As Raines points out, there will always be people on the internet saying negative things about the company from time to time.

"It's going to get picked up," he said. "There are a lot of people [on the internet] who tend to be very developer-centric, they love the developers. Anyone who is perceived as doing anything whatsoever to detract from the developer is going to catch some vitriol from the [internet] folks."

The full interview can be accessed here.

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  • phamhlam
    Gamers would spend more if they got back more. Gamestop makes a killing off used games.
    Reply
  • yeah, IT's good for them. Not really US the customers.

    Take in a $60 new game to get told they will give you $20 or so then they resell it for $50.

    Take in an older game, and get told you will get less than $10, then they sell it for $20-25

    Reply
  • dimar
    How about the seller bargains with GameStop, to decide what profit goes to GameStop, when a game is sold?
    Reply
  • bystander
    Let's see. The average gamer who sells a game to GameStop uses 70% of what he gets back towards a new game, while the person who buys that used copy spends 0% towards a new game. That 35% of the money the developer wants.

    I'm sure it's good for GameStop, but not necessarily good for the dev's.
    Reply
  • sp0nger
    I havent stepped into a store to buy a game in years

    I give my money to steam because they have earned my love and trust
    Reply
  • hotroderx
    bystanderLet's see. The average gamer who sells a game to GameStop uses 70% of what he gets back towards a new game, while the person who buys that used copy spends 0% towards a new game. That 35% of the money the developer wants.I'm sure it's good for GameStop, but not necessarily good for the dev's.
    Thats not 100% accurate we can use the same argument that is used with people who pirate. The average person who pirates would not buy the software even if they couldn't get it for free.

    The same could be said here the average customer would not buy the new game if they where having to pay full price for said title instead of getting a % off. Today's games are so hit and miss its impossible to judge them before playing them.

    I wonder how many people would cut back on buying new games if they knew the following

    1. They knew it had no value after it was purchased (cant sell it back).
    2. They knew they would have to pay full price for said title.

    One other thing that has really hurt the industry as a hole is EA Games and Blizzard with there lack luster Block Buster Hits being complete trash. I wonder how much faith people have lose which makes the above even more true then before.
    Reply
  • Vorador2
    Color me surprised that GameStop, the company that makes a killing off used titles, say that. I could have never guessed.
    Reply
  • m32
    If they think everyone is going to spend $60 on new games then they are sadly mistaken. I'll spend it on must have title, but other than that I'll wait 6-12 months and be happy with cheap Steam games.

    LOL. It would be kinda messed up if console makers try make a disc/game unique to the first console it goes into. Talk about killing the used game scene. I wonder if Gamestop could even exist in a few years if they did that?
    Reply
  • gigantor21
    While I hate Gamestop's handling of trade-ins, the CEO is right on one thing. Used games ARE a net positive for developers. They let more people play the games, and give devs more exposure. The simple fact of the matter is that there aren't ANY games worth a $60 base price + DLC for everybody.

    If they really want to crack down on used game sales, they'd better be super aggressive in pricing relative to demand. And judging by how haphazard pricing is on Xbox Live and PSN, I'm not optimistic. It's more likely they'll do a piss-poor job and I'll end up buying far less games for the new consoles.
    Reply
  • g00fysmiley
    bad argument is bad... so they sell back a game and 70% of that credit goes to a new shinty game... but then they try and force used games on you and usually its like $5-10 bucks less htan the new game and good luck convincing them to ell you a new copy if they have used copies there i've left a gamestop without a purchase (but with names of employees and store numebr to write to the store and better buisness burue abotu thier refusal to sell em a enw copy i was looking at on the wall and knew they had in stock)

    used games are a cancer i mostly only get some whackamole games on consoles but am so sick an tires of game stop even if it is a must have or a motion sensor game for kinect i want i will wait the extra time and buy it online... gamestop can't go out of buisness fast enough imo
    Reply