GameStop: Profit Margins Rise on Used Games as Economy Sinks
by Chris Faylor, Aug 21, 2008 1:13pm PDTWithout any major promotions, retailer GameStop has recently seen an increase in the amount of games being traded in, a feat it attributes to the sluggish US economy.
"Because of the economic condition, we did not have to be as promotional on the buy side of games, because it just seems like we were naturally getting consumers trading [games in]," COO Dan Matteo said today, according to Edge Online. "That's why our margins are slightly better than they were in the second quarter last year."
In exchange for used games, GameStop offers in-store credit that's generally around 30% of the title's worth, with the game then sold for about $5 less than a new copy. In other words, the retailer buys low and sells high.
The used game market has been an extremely lucrative source of profit for GameStop. Despite accounting for 26.1% of the company's total sales in Q2 2008, used games sales made up 49.7%, some $234M, of its quarterly profit.
High profit margins on used games have long represented a sore spot for some publisher and developers, as they do not see a kickback from used games.
Trend Micro offers internet security for Vita
Super Stardust Delta launches with day-one DLC
Unreal 'Samaritan' demo requires ten times Xbox 360's processing power
Sony spending $50 million on Vita marketing campaign
Minecraft Pocket for Android adds zombies, Survival mode
Comments
Thread Truncated. Click to see all 3 replies.
Thread Truncated. Click to see all 6 replies.
Sure it's annoying to be asked to reserve stuff, etc, no one likes to be bothered. But get your heads out of your asses and try to think of this rationally.
ALSO when you buy USED from GS you can return it in a week no questions asked. You can literally buy Bad Company for 50 bucks, beat it, and tell them you beat it and get 50 in store credit and just pick something else out. Why not buy used? I don't fucking get it. You can return it in a week for any reason, save 10 bucks, and get more value out of the 50 bucks you plopped down. If the game is good, and you dont want to trade it back in or exchange it, then give yourself a pat on the back, you just got a good deal.
Thread Truncated. Click to see all 11 replies.
Thread Truncated. Click to see all 9 replies.
This should shut them up over how used games are taking money away from them.
Thread Truncated. Click to see all 3 replies.
but when i do, i dont go to EB (no gamestops in canada), ill usually go to a video store where they are even cheaper.
Thread Truncated. Click to see all 2 replies.
Thread Truncated. Click to see all 2 replies.