Gamestop's used game sales data in beautiful chart form

by Kyle Orland { Feb 5th 2008 at 11:00PM }

We've long known that used games are the key to profitability for a growing number of video game retailers. But just how key are they? Over at Next Generation, Matt Matthews digs into Gamestop's latest SEC financial report and extracts the answer to that question in handy, easy-to-read chart format. Among the key findings:

Gamestop's used software sales grew a whopping 444% from 2003 to 2007, compared to a "mere" 384% for new software.
Used sales account for 44% of Gamespot's gross profit in 2007.
Gamestop makes a ridiculous 50% gross profit margin on used game sales, compared to just 21% for new games (i.e. Gamespot keeps 50 cents for every dollar of used game revenue it receives, but only 21 cents of new game dollars).
An estimated 53% of all games Gamestop sells are used games.

While this might sound like bad news for publishers that only make money off new game sales, remember that consumers tend to take trade-in value into account when making those new game purchases. A bloated $65 price tag for a new game is a lot easier to swallow if you know you can get a good portion of that back once you're done with it, after all.

Tags: gamestop, retail, sales, used, used-games

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Reader Comments (Page 1 of 1)

joshua @ Feb 5th 2008 11:06PM

Could anyone tell me why the hell GameStop now puts yellow stickers all over the spine of the actual paper covers? Why do they now deface the box art on games?

I would NEVER buy a game in that condition... it could be a game I want, the used game with that sticker could be $1 and the new game could be $100, and I'd buy the new game. I have my limits.

MarkHawk @ Feb 5th 2008 11:42PM

So you cant resell it as easy.

Farseer (GDI) @ Feb 5th 2008 11:46PM

Unless, of course, you resell it at GameStop...

capt_carl @ Feb 6th 2008 12:20AM

The reason they're put on the spine is for doing TOH (title on-hand) counts. Most used titles are on shelves with the spines facing out. It's painless and simple to just run the phazer down the spines when you're doing TOHs.

I'm a Gamestop employee and I hated the fact that they started doing it. However, from an efficiency standpoint it does make a huge amount of sense. I don't blame people for not wanting to buy used though, I won't buy used unless I can't find it new somewhere. I'll resort to buying it new on ebay then buy it used in the store if I have too.

xenajedi @ Feb 6th 2008 2:10AM

I'm pretty fortunate. The GameStop I frequent keeps the paper backing of the sticker intact and just tears it and slips in on the spine. It is easy to remove and doesn't damage cover art. You should suggest that to the people at your GameStop.

Austin @ Feb 5th 2008 11:07PM

I always buy new games because I'd rather see the money get back to developers. Except EA games, after they monopolized the NFL games, I kinda feel like they're an evil corp.

dustandechoes91 @ Feb 5th 2008 11:32PM

i think because next gen games cost so much, if you go in 3 days after a game comes out, they usually already have a used copy-depending on the population in your area. Some people trade them right after they beat them, so you cant tell the difference-and save $5-$10

BIGGEN @ Feb 5th 2008 11:33PM

matt matthews? come on, seriously?
well where's john johnson, mitch mitchell, pete peters, and richard noggin? ok, you may have to think about that last one kids ;D

Shmil @ Feb 5th 2008 11:39PM

i don't know where those guys are
but i do know that carl carlson and lenny leonard are in springfield

BIGGEN @ Feb 5th 2008 11:43PM

HA! good show Shmil Shmilson. now, who can keep this name train going? hm?

Manvir (El Homer) @ Feb 6th 2008 12:03AM

haha how bout some jack jackson or eric ericson or biggen biggalton

Vegnagun bwf @ Feb 5th 2008 11:48PM

Well the Gamestop near me sells me used games and I don't even know it til I open up the box and *surprise*!

Christopher Grant @ Feb 6th 2008 12:31AM

I just bought a game tonight "new" which, to Lamestop (lulz) means shrinkwrap off, open box, sticker on the case. Any other store would consider that a serious breach of consumer trust, but Gamestop just shrugs it off, explaining why that makes it easier for them (like their corporate efficiency matters to me at all). Just a really lousy retailer and I hate myself everytime I spend a nickel in their stores.

Anyone who trades used games at Gamespot, consider a really gamer-friendly servicer like Goozex.com or the like.

Farseer (GDI) @ Feb 5th 2008 11:53PM

"remember that consumers tend to take trade-in value into account when making those new game purchases. A bloated $65 price tag for a new game is a lot easier to swallow if you know you can get a good portion of that back once you're done with it, after all."

That's a very good point. As a person who buys games "for keeps" usually - I hadn't thought about it that way.

Regardless, I think the reason I don't sell my games is because I'm pretty insulted when GameStop offers me $10-15 for a game that I see resold on their shelf for $54.99.

I get much more personal benefit lending the game to my friends and family. Sure, I may loose $10-15 (in trade-in value, of course), but I usually save others much more than that, and I like to think that they remember the gesture.

B1gC72 - PSN: KillaKornbread @ Feb 6th 2008 12:07AM

i feel exactly the same way. i pay $60 for a game, trade it in, they give me like $15 for it, and then they resell it for like $50. the way i see it, if i bought the game there and traded it back in there, then they are making about $95 off of that game while ive just paid $45 for an extended rental essentially in this case. i would much rather trade or lend it to a friend then give Gamestop that much money.

me and my buddies always let each other know what games we're getting now and we make a little rotation (as long as it's not online multiplayer, then we all get it). in my eyes, a much better and cheaper system than Gamestops trade.

dukrous @ Feb 5th 2008 11:56PM

I don't buy used...ever. I encourage everyone to buy new or wait for a sale (I didn't think Assassin's Creed was worth $60, so I waited for BB to put it up for $40).

I can't support a model that generates huge profits for a company which it does not share with the producers of their product. It's piracy to my eyes...the developers should profit from every sale. When they don't, it's stealing.

B1gC72 - PSN: KillaKornbread @ Feb 5th 2008 11:57PM

i dont trade my games in there anymore unless they have some kind of good promotion going on. i got like $25 for Far Cry: Vengence on Wii that i had bought for $20 in the Circuit City bargain bin. other than that, i always feel like im getting shafted and would rather just keep um. i was done after i watched my little brother trade an old Madden game in for like $.50 when he paid $50 for it when it came out. ive been buying used game on eBay alot lately when i do purchase used games. otherwise, i feel Gamestop is only good for new games.

KT @ Feb 6th 2008 12:08AM

You do realize that once the new Maddens are out that the previous year is worth virtually nothing...right? Let alone one that came out SEVERAL years ago...

BigD145 @ Feb 6th 2008 2:36AM

Maddens depreciate in value weeks before they even go to retail.

B1gC72 - PSN: KillaKornbread @ Feb 6th 2008 4:42PM

well i was just giving a random example. you think there arent other non sports games out there that take a similar dip? any idiot knows how much Madden depreciates in value but that wasnt my point. my point was that i can get more value out of a game by keeping it or trading it with friends rather than trading to Gamestop.

one i blind @ Feb 6th 2008 12:12AM

Trading in games is such an unnecesary evil. I did a bit of excelling to compare the prices gamestop was offering for the games i sold on half.com. ridiculous gouging. $25 for a brand new game that will get sold for $50 is ridiculous. (as a side note, i found that DS games retain value betteer than xbox 360)

Iridium @ Feb 6th 2008 12:17AM

Gamestop may have made 50% on used games before but that isn't the case anymore. They used to give me $25-30 for a one or two month old highly sought after game. Now they offer me $10-15 for a game that sells for $50 used. Thats a 60% profit right there. What they are trying to do is make 100% back on a game they buy from a publisher. If they make 30-35% on the first sale and 60-65% on the used sale, that is 90-100% profit. Sorry but thats BS.

When they offered me $10 for Motorstorm and $15 for Dirt I told them to go to hell unless they gave me $25 for each since both were still being sold for $45 and $50 used. The guy told me that trade-ins are set by corporate and I told him that the used game inventory at Gamestop is going to dry up pretty fast if they keep ripping people off and I won't ever be back.

Join in and don't trade your games back. Dry up Gamestop's cash cow and they'll change thier tune pretty quick. Let them know that offering $10 for a trade in worth $50 to them is a business tactic gamers won't put up with.

capt_carl @ Feb 6th 2008 12:23AM

I tell customers that some stuff they're better off keeping or selling on ebay. Again, I'm a Gamestop employee, but I actually look out for my customers. If I get fired, whoopty-fucking doo. It's only the fun job for me, I don't need to work there to survive, I only work there to feed my addiction.

mateo @ Feb 6th 2008 12:42AM

it looks like the last set of data is flipping me off.

Neil @ Feb 6th 2008 12:46AM

If I know the game is really good I have no problem buying it new, but if the game is a bit weak or too short I buy it used.

B1gC72 - PSN: KillaKornbread @ Feb 6th 2008 4:54PM

i just started renting games again because of those very reasons you stated. buying used only saves you $5-$10 on a game you said you might not really want/dont think will be good. i just rent short games or games im iffy on for like $8 and if i like them still after the week they give me or just dont finish them (which i usually do) then i go buy it used and still stand a chance to save like $2. its a win win for me cause i dont end up stuck with crappy or short games.

t_m @ Feb 6th 2008 12:52AM

Soooo... what this is saying is that consumers are willing to pay the price of used games, but not of new ones.

Therefore, if the companies reduced the price of their new games to that of the used ones they'd get 44% more sales/profits.

Ryudo @ Feb 6th 2008 1:00AM

@ capt Carl as a former longtime Gamestop employee,get a new job while you are still ahead.

That corp fill fuck you in the ass more so than it fucks with the customers eventually I saw them (not the manager I worked with a great manager) fuck over just about every employee they had,I eventually became another.

I hope one day Play N Trade or Gamefly does to them what Netflix has done to blockbuster.

capt_carl @ Feb 6th 2008 9:03AM

Oh I have a full-time that pays well, so don't worry. Gamestop for me is just the part-time "A little extra money to buy games is nice" job. Believe me, I hate all the corporate bullshit. I've been with the company long enough to hold an ASM or even SM position, but I don't want that. My store manager knows I'm more then willing to tell our DM or even Regional to go fuck themselves if they tell me to do something that I think is a poor business practice. I could care less if I get fired, and even if I did, I know my old store would be more then willing to hook an old friend up with discounts.

Ebola @ Feb 6th 2008 4:03AM

They are a freaking rip-off!!! Let's not buy from them!! I went into bored without the intention of buying anything, just looking around and I saw a Used PS2 Katamari Demacy for 30 bucks!!! WTF!! Isn't that the new price? In 2004? What a bunch of douches!! I don't buy anything from them anymore, I'd rather get a price match at Best Buy from Circuit City, beacuse CC never has anything in stock, or Fry's, Target.
THEY CAN GO TO HELL!!
Seriously it's up to us as gamers to send them a message.

Liqideos @ Feb 6th 2008 5:15AM

Bravo. This was the first time I have ever read a story on Joystiq about GameStop that was fair and balanced, taking a look at both ends of the spectrum.

Cloaker @ Feb 6th 2008 6:40AM

80% of new game sales are enabled by trade-in credit. For some big titles, that number actually increases. The developers are starting to understand that their sales are predicated upon a perpetually rejuvenating market, otherwise the risks of a mid 80's crash become far greater due to the buying public's increasing inevitability to afford new generation systems and games.

If you read my earlier posts, you'll see I am a part of the company. And I will say we have made great strides, specifically in the last year, towards redefining ourselves for our customers. We didn't like what we had become (albeit no independent video gaming retailer we have been able to survive without used sales to compete against Best Buy, Circuit City, Wal-mart without reservations and subscriptions, and certainly used sales) and I can say we are changing.

Our performance rankings no longer had reservations or Game Informer subscriptions; starting 3 days ago, we now rank stores on Customer Service feedback scores, Turnover of employees (because we were washing through so many due to the aggressiveness in our reserve/sub culture), total sales comps, trade comps, and shrink.

I promise everyone on here; we ain't perfect, but we're trying. This is a young retail company, with a lot of learning left to do. Please still consider us. I am just a District Manager, but I believe in our customers, employees, company, product, and retail model. Should any of you ever endeavor to run your own gaming store, you'll see; your business couldn't survive with used sale profitability to reinvest in new products.

By the way--$1 billion dollars of customer purchasing power to buy new games from games they don't want anymore surely isn't bad for the developers. Consider that if it were removed as an option, and that's all our trade in program is for you; an option.

Thank you all, even for hating us, because it challenges me to want to be better for you.

-Cloaker

capt_carl @ Feb 6th 2008 9:09AM

Well-said. Can you be my DM? Mine's a dick with a fat neck. D:

To touch on what you said, while the company has made a few steps forward, it's also made a few steps backwards. Granted, that's expected with business, but for people who lack sales skills but excellent customer service skills, the required subs/res quota can cause the company to use a great worker. I'm more then positive that if I ever get fired, it'll be for poor subs/res, not for mouthing off to a customer.

Scott @ Feb 6th 2008 1:03PM

Why on earth do you people give 2 shits how much Gamestop sells it for once you've sold it in? Go find a nice best buy employee, ask them to check some of their item costs (Their employee discount is 5% over what company pays). Those 19.99 USB cables, they pay under a dollar for. Those 2000 TV's, they might be jacking up 500 dollars. But since you can't see it, you don't care. But since Gamestop gives you the information, everyone hates them. Kinda ironic.

Kye: Wii60DF @ Feb 6th 2008 7:47AM

I just never sell old games. Not even home alone for the SNES that I got bundled with an Ebay purchase.

I may return or trade-in games that I just bought, but only if I'll get my full money back or at least an equal amount of in-store credit.

I hate it here in the UK when the store tries to tell you it's not their policy to accept unwanted games for refunds. Then they say they'll do it just this one time. Don't believe them, it's the law and your right!

Gerwurztraminer @ Feb 6th 2008 8:08AM

I'm really curious to see what this graph looked like from 1999-2003. That's when I was a poor college student and frequented the used game shops like EB Games and Game Crazy, actually found good deals on good games, and never felt ripped off. And even after I graduated, I never felt too ripped off at EB until the merger with Gamestop.

The last used game I got was sometime last year when I managed to find the Minish Cap for GBA. You think case stickers are annoying? What about stickers on the actual game? Who wants to slide that graying, peeling, greasy, yellow price tag into their portable GBA-playing-device-of-choice?

spddrcr @ Feb 6th 2008 12:02PM

one of the things that really annoys me that was touched on by another poster was the fact that often games are sold as new yet are completly unwrapped and "used". this is due to employees being able to take home games, kinda like a free rental system for gamestop employees's. once a game is unwrapped it's used, in any other buisness if some thing is unwrapped or opened it's used.

another point to remember is that the reason gamestop's numbers are so low on new games being sold is that unless you researve something your not going to get it new there on release week which is a problem that has been talked about over and over. how many times have the posters here been told "you better researve it or you wont get it" from gamestop people? they need to start ordering more new titles and stop the we dont have enough overhead to buy new games crap, there turning into a huge company with stores all over the world, overhead isnt a problem anymore.

kchenisp @ Feb 6th 2008 4:06PM

Seriously guys. Go to gametz.com (or any other trading site, I'm not advertising) and cut out the middleman.

Ted @ Feb 7th 2008 1:14AM

Couple things to consider here.

New means not previously purchased by a customer.
A brand "new" car can have 10 miles to 100 miles on it and it is still "new"

If a game is unwrapped, it does NOT mean that it was used in any way.

Games have been opened to use the case as a display because you can not leave the game in there because of the theft.

So, when done with the display, they wrap it. The game was in a sleeve in a drawer. Therefore, the item is STILL NEW!

Oh, as far as I know, they do not allow employees to take the games home anymore to try them out.

That is one thing I never understood. It is new. It is undamaged and shinny. Even if it was out of the case and in a protective sleeve.

Are the clothes that were tried on (but not bought) at the store new or used?

Just a thought to consider.