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GameStop and the Used Game

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Quite the little dust up today about comments made by GameStop’s executive vice president Michael Mauler to Edge Magazine regarding the “damage” that used game sales has on the industry.

Mauler (that name is perfect, by the way) tried his best to defend the practice of selling used games a week after release, saving gamers a few bucks while allowing GameStop to double dip.

“We the industry have done it to ourselves,” Mauler says of the second hand market. “We take all the great releases and put them all in a two-month period. “If you’re an FPS fan, you look at all the games that are coming out this fall, and you’d have to be pretty wealthy to buy all of them. There are going to be people who buy Battlefield 3, and they’re not going to have €60 for at least another month or two…they’re all coming out so close together.”

Mauler also claims that second hand sales in fact help the industry because it keeps gamers interested in yearly franchises (like sports games).

“I can understand the feelings [but] we’ve sat down with developers and publishers and really gone through the data,” Mauler told the magazine’s website. “I personally think there’s a lot of benefit to the publisher. “A great example is sequels, where there’s a large percentage of people who are just not going to spend $60 every single year without being able to do something. They’ll look at their shelf and see ten FIFAs, Pro Evos or Maddens.“

Of course, this has nothing to do with GameStop simply making a killing selling used games at a small discount a week (sometimes less) after release and then banking all the cash and slipping past the publisher, waving at them like Albert Ganz in 48 Hours as he flees via the subway.

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I really don’t mind GameStop selling these games used and making money. It’s legal and is working.

Just don’t play me by coming up with altruistic reasons why you are doing it as if somehow this practice helps the industry in any other way, from GameStop’s point of view, other than pocketbook lining.

In the immortal words of Fletcher in the classic film The Outlaw Josey Wales: There’s another old saying, Senator: Don’t piss down my back and tell me it’s raining.

Our friends over at Game Politics have some ready made quotes from those on the other side of the issue to Mr. Mauler that are wroth reading.

My favorite: Chris Taylor – Gas Powered Games:

“Well, it’s all going to be moot in the coming years, so we can analyze this all day long, but it doesn’t matter. I agree with the comments about being offered used, when you walked into the store to buy new… that’s where Gamestop’s arguments fall down. Take that sales pitch out of the equation, and they’ll gain some ground with me.”

Bill Abner

Bill has been writing about games for the past 16 years for such outlets as Computer Games Magazine, GameSpy, The Escapist, GameShark, and Crispy Gamer. He will continue to do so until his wife tells him to get a real job.

44 thoughts to “GameStop and the Used Game”

  1. I think I see why it took George R R Martin so long to write “Dance With Dragons”. He’s been spending all of his free time at the GameStop.

  2. In a weird and twisted way, I think that, again, the industry is at least partially responsible for the situation with regards to used game sales.

    If you sell me a game for $60 (or the regional equivalent of your choice) and it gives me 8 hours or less of game time with little to no replay value, then I will sure as s*** look for a way to not keep that sitting on my shelf forever catching dust. I’ll want to recuperate at least part of the expense, by selling or trading it away, either for cash or for credit towards another game. If I don’t want to spend 60 bucks on a new game, I’ll wait for the price drop or – surprise – an opportunity to buy a second hand copy for less. There were times when I was able to do that with my PC games… (Starcraft 2 sits on my shelf, with 4 hours game time total, never to be touched again, and I can’t even get rid of the sucker because thanks to DRM it has the value of a coaster now…)

    Long story short, I gather that Gamestop aren’t the most favourite outlet in the States, and their argument does sound a bit like they’re unintentionally crapping on their own doorstep. But selling and trading games second-hand is legit, and if the publisher try to curb that, especially on consoles, they might end up shooting themselves in the foot.

  3. Why is this even being argued at this point? Isn’t it inevitable that, probably within the next gen console cycle, new releases with go entirely DLC? It’s the most logical progression in technology, and it’s the only way to correct the issue at large. All in all, we’re the ones who will suffer… paying top dollar for an 8 hour game without the ability to sell it back. Although, you could argue that with some patience you could simply wait till the price drops. I say this entire argument becomes moot in 3 years if not sooner.

  4. I’m kind of tired of hearing about this from game publishers. There are plenty of other industries that are impacted by second hand sales. People buy used books, dvds, and music cds all the time. Having your sales numbers impacted by second hand sales is cost of doing business. Give me a compelling reason to buy a game new instead of saving $10 on the used copy and I will do so.

  5. Because it saves you 10 dollars. It looses the company 60. It doesnt cost 50-150 million dollars to make a book or a CD or even a DVD for that matter and on DVD thats just extra dip vs the movie ticket price.

    Its not the same comparison. Selling used especially before the game is 2 or three months old is stealing money from the company that made the product.

    They dont release the dvd bluray the week after the movie comes out. They wait 3-6 months.

    Honestly its legalized stealing morally speaking.

  6. I try not to buy used or from GameStop but when I go in there the used copy is usually only $5 US less than the new copy. When you factor in how many games are including bonus content or multiplayer through a one time use code or $10 add-on it is generally cheaper to go with the new copy. As much as I don’t care for EA, Ubisoft, and especially Activision as companies I would rather give them money than GameStop.

  7. He is right, and then in 5 years when DLC is the main way to get a game, we will have even more piracy on our hands because all of the games are digital. The argument will then shift to, “Dont pirate games, because the publishers are losing money”

  8. We’re not going to see download only in the next gen for one major reason if console makers are smart. That reason is the internet provided by ISPs isn’t fast or broad enough for it. I would guess the size of the average next gen game will be 15 gb. Since the US average broadband speed is about 3 mb/s that’s quite a bit of time. The way ISPs are trying in implement tiered pricing and speed restrictions I’m thinking that we’ll be lucky to see 5 mb/s average in 5 years. When download tiers are discussed the breaks between tiers seems to be in the 25 gb size. This would mean that just downloading 2 games a month would bump you up to the next tier, thus effectively increasing the price of your game.

    I’m only looking at U.S. numbers as we have a tendency to fall in the middle for usage, speed, etc. Personally I’ve had broadband for 15 years in 3 different countries and I haven’t seen any real increases except in my monthly bill. There are a whole lot of other reasons I can see going download only as a bad idea, but what I posted above is the real key.

  9. This is the way publishers should combat used game sales. Give incentives for buying the game new. Also give reasons to keep the game and not trade it in within a week. If the company spent 50 million dollars making a game and I as the consumer feel like I am done with it after a few days, that is their fault, not Gamestop’s. All of those used copies sitting on the shelf three days after release are from people who didn’t find the game worth keeping for more than three days.

    Quit complaining about Gamestop and address the real issue.

  10. “They dont release the dvd bluray the week after the movie comes out. They wait 3-6 months.”

    And then people start selling used copies of the DVD a couple days after that.

    What’s your point again? It is exactly like selling used books, et al. You bought it. It’s yours. It is your property. What you do with your property (including selling it) is your business.

  11. I was looking at Deus Ex on Amazon yesterday, and was amazed by the prices. $60 on the 360. $60 on the PS3. $50 for the PC. So console gamers start out paying a $10 price premium for the same content.

    The other half of that: there is very good reason for prices to fall over time. It’s called “price discrimination”. There is a certain segment of the population who will buy your product at any price. Then there’s the people who will buy it for a high, but sane, price. And people who will pay less. And less. And less. And finally you hit people you’d have to pay to own your thing. Steam manages to capture this dynamic very well.

    Console games tend to come out at $60 and stay there for years- or totally disappear from the shelves. Gamestop seemed to fulfill a legitimate market function of allowing customers to pay what they wanted to, at any price point. Industry response to this has been to artificially raise the price back to $60.

    Contrast this with book publishers. They release a hardback copy for (reader price) $30. When they’re ready to reach a new market segment, they _buy back the unsold books_, and then release a trade paper version for (reader price) $15. Eventually they buy those back and release the paperback for $8. Consumers willing to wait will get the price they want.

    Until the games publishers figure out how to take $30 from the people who are only willing to spend $30 for their games, they’re gonna be in a world of pain. Attacking Gamestop won’t help them.

  12. Pc games are now basically a non-transferable license to play a game rather than a copy of a game you can do what you want with. How long until this is the case with consoles?

  13. Not really hard at all. Show me the store where you can readily get the used dvd within the same week all the time. Its not out there. 9.9 times out of ten you can get the brand new game within the same week of release for a game.

    Also again a game costs a company 50-150 million to make. A book does not. Simply by buying the used game you cheated the invested company of the money they deserve for putting thier money on the line to try to make a product you like.

    By not purchasing the game new you contribute to the next game costing more in order for the company to make the next 50-150 million dollar game profitable.

    You guys continue to look at it thru your own woe is me they rip me off world.

    If you spent your money and 6 years making a game and put it out you would expect that those playing it paid you for it. Not stealing it online, not having your distributors steal it by selling it used. Blockbuster and movie stores never ever sell thier used copies till at least a month old usuallyy longer. The studios will not let them rent them if they did. I can easily see them shutting gamestops used games right down. All they really need to do is cut the used and give gamestop a little more share for the new. It would save gamestop tons of money in the end from the time and energies exausted to take caore of the used stuff not to mention all the wasted store space.

    But no, Ill get flamed again because people without thier own company with nothing to lose will simply flame me. The defense is well they sell me crap. the answer to that is no you bought crap they didnt sell you anything. You didnt have to buy every game that comes out before you know if its good.

  14. No one bill. lol. I was just saying I expect to because Im well aware my position is not on the side of the user.

  15. Buying used or new is not a moral choice. If someone wants to sell something they own 3 days after they bought it they should be able to. That is how the whole system of ownership works. My wife bought a baby carrier and didn’t like it so she sold it for 80% of its original price a week after we got it and bought a new a different one, were our actions immoral as you accusation of “cheating” would imply?

    How is the cost to develop a game relevant? The cost of developing games goes up because the companies are making enough money to justify spending more, and who do you think makes more money a book publisher or a games publisher?

    Blockbuster is also an irrelevant and I think now bankrupt example. They are a rental store they buy a bunch of copies that are in demand as rentals for a few months and then they sell the excess copies when the demand has dropped. It is a business decision. Selling used copies would be competing with the rentals which is their main source of income.

    I don’t do the used game thing being a PC gamer but gamestop largely deal in in-store credit when buying used games right? So when a customer sells them an old game they are ensuring that the money they pay for it will be spent on games in the future.

  16. Yeah no-one is flaming you Mike. You seem to be arguing that the onus is on the consumer to support game companies making 50 million dollar games by paying more and then holding onto the game for some arbitrary time after they are finished with it. And that Gamestop should not be allowed to offer a service that is both profitable to them and beneficial to their customers.
    I am saying that the onus should be on the company making and publishing the game to compel me to buy it new and hold onto it.

    Also, at least if someone is trading the game back to Gamestop they could be using the credit toward the purchase of another game. If Gamestop didn’t exist then the games could just get sold on ebay where the publisher still wouldn’t be getting the money and it might not be reinvested into the industry at all.

  17. That’s an interesting point about store credit. If that credit is used on a new game, (re)sales of used games directly increase new game sales. Kind of a critical “if,” there.

  18. Thankfully, Gamestop will have to change their ways soon.
    The heart of this problem is that game publishers are selling a software product as if it was a physical commodity. The physical medium is convenient, but at the end of the day is easily replaced. You aren’t just buying a DVD and plastic case, you’re buying the software contained in it.

    This is why, to game producers, there’s no difference between a used game market and a pirate game market. It is their fault for selling the games in this way. Hopefully it’ll be fixed soon.

    Even for customers, what’s the difference between buying used and pirating? The amount of money saved, the installation procedure, and the legal status of your action. You’ve still got the same product at the end of the day.

    Don’t get all self-righteous about “Why should I pay an extra $10 for a new copy?” when you’re wasting $50 on a legal technicality. They’re morally equivalent.

  19. even EA employees need to pay the extra $10 for the console versions of the game. It really is the extra costs tacked on by Sony and M$ for licensing and junk.

  20. If game companies are spending so much money on a single game, that they can’t make money on it, then I suggest there are three things that may be done:

    1) Don’t spend so much money making the game.
    2) Make sure the game is worth that budget. Make it so good, that people will either pay insane amounts of money to get it (driving up revenue through increased per-unit profits), or that everyone will want to keep their copy, because, you know, that was so good it might be worth playing again.
    3) Go bankrupt.

    I’ll admit I can’t show you a DVD store where disks are available shortly after release. But I hardly ever buy DVDs, so I don’t know the market. I can, trivially, find in most cities used bookstores where I can find new releases. Heck, I bet most of them had several copies of each of the last few Harry Potter books a day or two after they came out. Didn’t exactly hurt new sales much, did it?

    In any medium, there are people who will treat entertainment as disposable. They read a book once, and go directly to the used book store. It would seem that video games has a higher proportion of these people (and a quicker turn-around time). Of course, the governing meme of most of the industry is that if it isn’t current, it’s (quite literally) crap.

    You want to really break the cycle of one person buys new, three people buy that same copy used? Break the meme that video games are disposable entertainment. Convince people that a game that was enjoyable for two days is still enjoyable, just like that DVD they spent two hours watching is still enjoyable. Teach some respect for the medium.

  21. “Show me the store where you can readily get the used dvd within the same week…”

    Serialmike, meet Amazon.com, eBay, or any large used-dvd store in any major city. Amazon.com, eBay, and any large used-dvd store in any major city, meet Serialmike.

    “Also again a game costs a company 50-150 million to make.”

    Speaking of “woe is me,” cry me a river. GS and those who buy/sell used games are not doing anything illegal: when you buy a disc, you own that disc. Part of your property rights include the right to resell it. Game developers (should) know this. If they’re spending too much money in product development to realize a profitable return, that’s a bad business decision on the part of the developer, not a moral failing of consumers. We’re talking about an entertainment product — not medicine or essential infrastructure. No one has an ethical obligation to keep EA or Activision in business (except their appointed corporate officers, of course). Welcome to capitalism.

  22. “Legalized stealing”? Seriously?

    Have we really stooped to casting aspersions on paying customers because they didn’t buy from the source that yields the most revenue? After all, someone else had to sell that game back to Gamestop for me to buy it used, and surely they didn’t do that because the game was just too much of an amazing value.

    Let’s try this instead: secondhand markets, like black markets, spring up wherever demand is not being met. The impetus is on the producer to better meet the demand, not on the consumer to alter their expectations.

  23. I hate to say it, but I always felt that one of Gamestop’s top offerings in used game sales was the simple fact that you could return that game within a week if you didn’t like it. This alone if the reason I have occasionally bought a used game for a genre or title I wasn’t entirely sure I was willing to fork big bucks over on. If I could return a new title in the same fashion, I’d buy new….but that’s not an option, so used games are more tempting when they’re not a “sure bet.”

    In any case, it seems to me that the majority of used buyers in games are not reading forums and many are probably not even playing online; they’re all those “other” gamers who are picking up games more casually, and shopping for the best price. The fact that the game is not new, or may not include exclusive new-only DLC, or any other number of factors are not an issue for the average used buyer….they’re looking for some cheap entertainment that doesn’t strain the budget, that’s all. If publishers want to get their money, competitive budget pricing is the way to go.

  24. Good points guys. Really they are. But again to me it comes down to this. I only BUY games I like. I wait for reviews or opinions and very rarely get burned anymore. I buy new to support the company that made the game. It never costs much more. It puts the money in the pocket of the people that made the game. And helps to decide if theres a number 2.

    I think maybe I made a mistake. It isnt your guys fault somethign is available legally. Its Gamestop and others stealing from the devs mouths. They are biting the hand that feeds. If you ever worked at one of these shops youd know why they dont deserve the right to sell these games this way.

  25. While I respect the idea that you buy games new in order to support the developers, I’m not sure I buy entirely into the “it’s all Gamestop’s fault” argument. Frankly, all three parties share some blame. Game companies often don’t justify the cost of their games. So many games are released at $60 price points that just aren’t worth it. At the very least, the used market allows some games time to breath, which might not line pockets but does give the developers’ work a second chance to be appreciated. That’s in part how cult classics arise. Now, Gamestop does deserve some blame, of course. But it’s not like new releases are being sold used same day for half price. It’s almost always five dollars less from new. That’s it. For some consumers, that’s all that matters. But it’s up to companies to justify the new price in that case. If you can’t give users a reason why just $5 more for a new game is worth it, you’re doing something wrong.

    And while we’re on the topic of Gamestop versus publishers, if they cared so much about Gamestop maybe they should stop driving business its way with Gamestop-exclusive DLC and other various baubles. You’re sending customers their way then complaining when customers utilize Gamestop’s primary business model down the line.

    And I don’t buy the whole “one user per license” argument for games. This is an entertainment product, not business software. Like others have said though, in the end this won’t matter. Gamestop and everyone else sees the writing on the wall for the used games market, that’s why they bought Impulse. I just wish they’d implement something like Kindle where you can ‘loan’ books to people. You know, since this is an entertainment product and not Photoshop.

  26. And when I buy a DVD, I’m not just buying the disk and a plastic case. When I buy a book, I’m not just buying a mass of wood pulp and ink. In each case, the entire point is that I am buying the content. So what’s your point?

  27. My point is the packaging doesn’t matter, because you are really buying the media. When you buy a book or a DVD used, you aren’t giving any money to the people who authored them. You’re paying into a secondary economy built around packaging. You might as well pirate a PDF or video file.

  28. Yeah whatever. EA and Activision charge 60$ for PC games too, don’t tell me Sony or Microsoft have to license that. Charging more or less is entirely the publisher’s prerogative.

  29. You’re targeting the wrong problem here. The issue is not that you’re not paying the content creators, it’s that the used retailers are creaming off their share of the funds before they’re recycled.

    People sell games so they can buy other games.* If sales are directly between gamers then pretty much 100% of the funds raised will be re-invested into gaming. This is something that the AAA games industry is entirely dependent on, it sustains the new release prices that big budgets demand under the current model. We don’t live in a fantasy world where Joe Gamer, who currently spends $1000/year on games and recoups $500/year from used game sales, will continue to spend $1000/year if he can no longer sell; he will spend $500/year, and you, I and the publishers all know that.

    The big problem for the publishers and, since it’s in our interests as gamers for the profits to lie in game development and publishing rather than retail, for us is that used retailers take so much money out of the system, and that they take it on a recurring basis as games bought used are themselves traded in. The simplistic solution might be to lower new release prices to a level where the market will support them without recycling, but that potentially leads to lower revenues from those of us who pretty much buy all the games we want on release.

    The real solution is for publishers to take over the game trading market, rather than try to kill it off. The real beauty of it is that they don’t need to make a profit from that market because they know, collectively at least, that the funds they return to customers will be coming right back to them. But that would require forward thinking and, more unimaginably, co-operation between the major publishers. That’s why Gamestop are laughing so hard.

    *Sure, there will be a small percentage of edge cases – those quitting gaming, the suddenly-impoverished, and the estates of the deceased, but they’re not statistically relevant.

  30. I’m targeting the same problem you describe: The used game market is a wasteful mess.

    Yes, AAA titles rely in large part on customers being reimbursed in some way for older games. Look at where the money is going. AAA creators get their giant $60 or so price up front, then they’re out of the market completely while Gamestop or whoever handles all used trading.

    Publishers can take over the game trading market, and they do so by approaching the games more as software products: you get a license to play the game, the packaging and how you bought it is less important, prices cover a range of tiers to capture a broader audience.

    All of Gamestop is unnecessary. It is a relic of the old concept of “buying a cartridge” rather than “buying a game.”

  31. I agree with you that “Joe Gamer” won’t afford to buy all the games he wants new. I think you’re getting distracted by this, though. The publishers know this now, and that’s why they’re trying to change.

    They didn’t know this a few years ago. That 500$ you estimate Joe gets from used sales? That’s $500 coming indirectly from used buyers. If someone else buys the $500 worth of used games Joe sold, they don’t pay just $500. Gamestop’s markup is a little higher than that. All of that extra margin is what the game publishers could be getting if they had priced their own games lower in the future. Rather than get in on this future market, publishers relied on the stupidly high first sale price.

    “Joe Gamer” is currently only spending $500 a year. Sure, he’s handling others’ money and passing $500 of that on to the AAA producers, but he only contributes $500. If the games were priced more appropriately, Joe’s $500 would be plenty for the games he wants, but the other $500 plus Gamestop markup would still be available to the game producers.

  32. To all the people saying that publishers should just lower their prices to “compete” with used game prices… you do realize that makes no sense, right? People don’t buy used games because they can’t afford new games. And even if they did, that’s a problem for the consumer, not the publisher.

    The used game price is some percentage of the new game price. If publishers lower their price then the price of the used game also goes down. This is not at all an issue of pricing, it’s an issue of multiple economies.

  33. isn’t that book analogy just the equivalent of the Greatest Hits versions of games that come out a few years after initial release?

    Also, someone with $30 can only afford a $30 game, obviously. It isn’t somehow unfair that they don’t get to buy a $60 game. That isn’t a market deficiency. Just because a market does not exist where you can sell a $60 game to someone with $30 is not a reason that market should exist, and it does not make that new market “legitimate.” Yes, the consumer benefits from a lower price, but the creator clearly suffers. Creating a secondary videogame sales market is more akin to scalping tickets than it is to selling books. It’s like selling used cars if those cars could be driven forever without breaking down or losing any value. The publisher and author still gets their cut on a paperback, but the stadium/manufacturer don’t get any of the scalper’s/dealership’s cut.

    If Gamestop could somehow make the impossible argument that they are only selling the game for $30 to the person who only had $30 then it would be okay. The publisher was not going to get that $30 sale anyways because the person couldn’t afford it. However, because they are selling that $30 game instead of the legitimate $60 game, regardless of the customer, they are very literally taking money out of the publisher’s pocket.

  34. I pretty much never buy a relatively new game used – especially if I want to support a particular publisher. But should I feel bad for selling the game back to Gamestop when I’m done (since I’m contributing to the problem, and arguably hurting that same publisher) or should I feel stupid for not selling the game back to Gamestop (since it’s basically free money)??

  35. Thank you for repeating exactly what I said. The problem is the money used retailers extract from the process and not, as you originally claimed, that used buyers aren’t paying content creators.

  36. Hollywood studios recently realized something obvious: every movie does not have to be a blockbuster. In fact, most movies won’t be blockbusters. Even with foreign and DVD sales, the higher the budget, the greater the risk. Meanwhile, the innovation isn’t coming from big-budget, special-effects movies recycling TV shows from the 70s and 80s, but from the smaller-budget films.

    And now we have a game industry that’s complaining because (1) its primary product is a blockbuster-budget AAA title, and (2) they’re losing potential revenue because you can’t stop people who bought their product from re-selling it. Well, here’s a thought: start producing good low-budget games.

    Today, I downloaded Dungeon Siege 2 from Good Old Games. I had forgotten how much fun that title was. How much would it cost to develop Dungeon Siege today, with slightly upgraded graphics? Not very much, a tiny fraction of the latest Call of Duty schlock. And I’d buy it, probably at a price point that would make greater relative profit for the publisher than Call Of Duty.

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