This is interesting. If the game distributors can work out some sort of cost sharing deal with BB this could seriously impact GS practices. I figure it’s in the best interest of the publisher/developer since, from what I understand, if I go to GS and buy a week old used copy of a new release for $5 under the cost of a new one the publisher/dev doesn’t see a dime of that. If I go to BB under this program I’m guessing the pub/dev DOES see some amount of $$ that they wouldn’t otherwise see from GS. I don’t see BB eating the difference on their own though since, from what I gather, the margin on video games isn’t very high to begin with.
I think this will die in the test marketing. $5 will make zero difference to the average consumer, especially if BB ties the price matching to ads, which GameStop only puts out sporadically.
Also, I read through the entire Cheap Ass Gamer thread and even though several people said “That’s my local Best Buy! I’m heading down there!”, not a single one of them asked an employee how it works.
If bargain hunters aren’t interested finding out the details of the program, what hope does BB have that the rest of their test market will be interested?
I suspect it’s intended to put pressure on game publishers to lower prices which would increase profits, especially profits for retailers. It’s hard to argue that games are not overpriced when the secondary market has completely overrun the industry.
But I agree with Justin. Games aren’t overpriced by $5, they’re overpriced by $25 to $30.
I rather hope this works, but I can’t see it working at every price level. Most of GameStop’s (newer) used games are only $5 less than new, but there are some games for which they’re $10-25, depending on sales and stock.
I work for a retail instance of the big GS, but as a gamer I would actually much prefer if there were more competition in the industry. This, however, seems like a stopgap measure - either BB or the game publishers are eating the cost of that extra $5, and, if it evens out, the only solution is to lower the cost of games again or only offer the price-matching on certain titles. Sure, not every game shopper is going to be aware of it, but the fact of being able to bring a printout GameStop’s price to Best Buy and have them match it will soon start hurting someone’s wallet, if it lasts long enough to become widespread knowledge. The very fact that a site for CheapAssGamers exists should point to the fact that gamers are some of the most knowledgeable and information-hungry shoppers out there, which leads me to think this promotion isn’t going to last very long once it becomes well known.
Truth be told, this still won’t affect my reason for buying used games: most resale locations will let you do an exchange within seven days if you end up not liking a used game, as the product’s already been opened and regulations on new software are quite strict (thus why you don’t see used PC games). New games, no matter whether they’re price-matched or not, won’t be eligible for exchanges.
I think the solution lies more in more stores getting in to used games with the same distribution and pricing structure that GS has. There’s a franchise brand called Play N’ Trade opening stores rather everywhere, but their stores I’ve patronized are a bit understocked, since they don’t have the same distribution channels for new or used games. A local one I like has been doing a lot of free tournaments, tho, so there is definitely room for growth in the market if people are willing to innovate or at least offer something new.
The only “regulation” is that the seller can’t keep any of the code which means they have to uninstall it before they sell it. Besides the obvious channels (eBay, Amazon resellers) I’ve been in numerous stores that sell used PC games and even Electronic Boutique used to do it. The real reason you don’t see used PC games at Gamestop is the same reason that the new PC games section has shrunk to near nothing there: there isn’t enough demand for them.
“Regulation” I meant as something ambiguous between ‘actual law’ and ‘company policy,’ since for retail drones the two are mostly identical. Do you actually know of any retailers/publishers who trust their customers enough to believe they’ve uninstalled something they’re attempting to return? Besides, I’ve had enough irate customers threaten me bodily harm over not being able to return a $60 game they hate that I’m willing to convince just about anyone who’ll listen that returning new software is not a right anyone has, period.
And, for reference, Electronics Boutique hasn’t sold used PC software since 2005, when they got bought out by the larger and failing GameStop.
Anyone know if this is for console games only or if PC games are effected too? I guess PC gamers already get ‘used’ prices by console standards though, with games only costing $40 - $50 new rather then $60… so maybe not. I haven’t seen anything about it on any of the news articles either way.
Anyway if $5 is not such a big deal to most people then why is the used game market so big in the first place?
It’s not the $5 discount that’s the problem for game makers; it’s the fact that they’re competing with product that can be bought for $30 to $40 off. There’s a finite amount of dollars people can spend on games and if they can get effectively the same experience by spending $20 instead of $50 to $60 then it becomes a very attractive option (obviously that’s ignoring all the fiddly details that keep new game sales running for just the big economic factors).
I’ve thought for a very long time that they would make a lot more money by dropping the price significantly. People will still spend 50 bucks on a game, but instead of buying L4D or Halo, they'll buy both. If they cut the price in half but have 210% more sales they'll do phenomenally well. At 50 for a game, I pause and give it thought. For $ 15 a game I might just make an impulse buy on steam one day when I am bored.
Especially since so much PC software needs to be “Activated” to work now.
You brought Empire: Total War and you’ve activated it on your Steam account but it barely runs even though your system meets the minimum requirements? Tough, as far as the retailer is concerned.
They can’t take it back because it can’t be re-sold, they can’t return it to the distributor for a credit without insane amounts of hassle and time-lag (it might take literally months to get it sorted out), and they can’t just take a hit on an AUD$90 game because someone’s computer isn’t quite as powerful as they thought it was.
When I was working in retail, we used to tell people who brought software- and, in fact, we printed it on their receipt- that as soon they opened the shrink wrap, they were stuck with it, unless there were exceptional circumstances.
Electronics Boutique here still offer a 7 day change of mind on games, but I am reliably informed that policy is widely abused by people and the staff hate it. Since I wasn’t working for a gaming-exclusive retailer, we didn’t have the return mechanisms in place to deal with activated games and so forth that they did, so we often found ourself having to advise people not to buy software as gifts for people or if they weren’t sure if their computer would run it.
Target is a hidden jewel for buying console games. Twice now I’ve tried to buy a game on release day; Gamestop didn’t have any because they only care about the pre-orders, and Best Buy didn’t have any because everyone thinks of them first so they sell out fast. Yet I can stroll into Target and pick up a copy immediately for a very reasonable price. Once I walked in while they were still unpacking the box, and they just handed me a copy right there. It’s also where I finally got my Wii after a few months of searching.
Going back to the OP, I can’t see that they’ll lose much money even if the program is a rousing success. Best Buy has limited shelf space even for consoles, so they generally just carry the newest/most popular. The newest/most popular being the ones in demand, Gamestop won’t knock their price down very much. It’s only the old/crappy games GS can’t sell easily that they knock $20 off the price, and BB isn’t likely to have them.
It seems to me that Game Stop/EB came up with that policy all on their own.
Their pricing of used games is incomprehensible to me; at the EB closest to me, the used games are all pretty much invariably exactly $5 less than the new box.
I came close to feeling some sympathy for them when I learned how small a margin there was on new games - but I can’t fathom paying $60 for a used game just so that they can continue to pretend that a software outlet with a retail spot in a mall makes any knd of sense in 2009.
Out of wonder, does anyone know the exacr wholesale price of games offhand (hope I’m using that term right, the price the store pays before they mark it up)? I’ve been told by two different prices it’s “less than five dollars” and “almost forty-five dollars” so at least one of those has to be absolute bullshit. If I had to guess it’s closer to the latter because of Gamestop’s tremendous profits on used games compared to new.
Either way, I like this idea. I have noted issues with used games that are still in print, and while I’ve mellowed a little I really don’t like paying for a game where some of the money doesn’t go to the developer/publisher (to prevent a blowup like last time I traveled down this road - on a personal level, I’m not judging you). I’ve compared it to piracy before*, and while I see now that it’s not fair I just, I guess I feel that as long as they’re willing to print and distribute the discs they should get the bulk of the profit since they put the effort into making it, marketing, and all the other stuff. Because of this, getting new games cheaper is a great deal for me. Though I admit the draconian software return policies as mentioned above are still an issue if it causes more people to buy new I consider it a win.
Granted I recently pulled the most underhanded used game scheme of all time with Phantom Hourglass, so I’m not really one to talk…
Jragon, I can’t speak for the stores but the per-unit cost for a major disk release doesn’t even reach $5. Disk pressing is cheap for each individual when you’re doing a million of them and the cases, printing, and packaging aren’t that much more expensive. There are some licensing fees that have to be factored in but you’re looking at only a few dollars per disk when you’re talking about manufacturing costs. That, of course, is strictly for the package you buy; the upfront costs and the best way to defer them is what is really at the heart of the current discussion on game pricing.
(ETA: When I see a lot of these discussions online I want to break out an economics 101 textbook and hit most of the posters over the head with it until the basic concepts sink in. Thank god for the Dope where I don’t have to explain that kind of thing in the discussion.)
I’ve never had to look into the wholesale price to stores or what kind of mark up it has on it; I’ve been told by people in the know that it’s phenomenal and terrible which doesn’t really narrow it down. One point to consider in this is a store that does a lot of throughput on something can make a lot of money on just a few percentage markup.
Well, yeah, the material is cheap, but when you roll in the programmers, modelers, texture artists, writers, QA team…
You get my point. I may shoot a text message off to my friend who used to work at the K-mart electronics department and saw the spreadsheet with all this info sometimes. That was a couple years ago but it shouldn’t have changed that much. I’m still guessing the actual price is closer to $50 than is comfortable. At the size of the current market (and growing!) it’s not like the artists would exactly starve to death if they lowered the cost to the store down to $35-45 if it is indeed that high though (draconian contracts between the publisher and studio notwithstanding). I mean 43% of Americans plan to buy games (cite) and the total revenue of the industry last year was 11.7 billion (same cite)…
I don’t know. GameStop has a ridiculously good thing going. The perceived value of video games is super high, so they have great margins, and they make tons of profit on their resales. They buy the crappiest storefronts in every strip center because they don’t need lots of power, space, or plumbing. The demo systems are provided by the console manufacturers in most cases. They hire high school and early college kids, pay them minimum wage, and because that demographic is wild about video games they play lots of games and trade off the lower wages for the cool factor of working in a game store and getting discounts/access to more games. When payday comes GameStop gets a significant amount of their payroll dollars back immediately and their employees go home and train themselves on all the newest releases, on their own dime. They’ll never unionize because there’s always some other high school kid obsessed with video games who would love to work there, so a “video game advisor” with five years experience can’t demand a real salary. Their real estate costs are low, their profit margins are high, they get a skilled(and self-training) workforce for effectively less than minimum wage. How in the hell is Best Buy or Circuit City supposed to compete with that?
One point to consider in this is a store that does a lot of throughput on something can make a lot of money on just a few percentage markup.