GameStop CEO: No 'end in sight' for Wii shortages

Well, they got burned with the GameCube. They had way more capacity to manufacture them than demand required. Now they've got a hit, and they're equally baffled as to what the golden ratio is. Not that it's an easy problem to solve, but obviously they're in a better position to figure it out now.

The shortage is wisely manufactured by Nintendo. People always want what they can't get. If people have a hard time finding a Wii, they think that it must be a hot item and want to try it even more, and suddenly see one in a store, and they will immediately buy one they think it might be their only chance for a while. If every store had a hundred Wiis on stock, people will just think "I don't need to buy one today, I can just get one later". Nintendo has obviously had a very smart strategy this time around, and this is just one more aspect of it.

As soon as sales start to slow down, Nintendo will start making more of them, the price will drop a little bit, and then the stores will be packed with them.

REally, I'll use it as my avatar if ya don't mind

Any1 can help me here, I want to change my avatar, but i'm trying to enter my profile and keeps on telling me my pass is incorrect.

Isn't the password the one i comment with???

If I'm wrong, with who I can see wich password should it be?

I actually think his argument has merit. I'd wager that a lot of people would hold off on buying new cars if they couldn't trade in old ones.

I know it's the popular thing to do to hate on Gamestop, but how can you really argue that games shouldn't be sold and bought used? Why should games be treated differently than virtually every other consumer good on the market outside consumables (e.g. food)? It's one thing to complain about the amount of cahs they give you on a trade in, but claming they somehow steal from publishers via their used market is an entirely different debate.

I don't have a problem with people selling new/used games. I have a problem with the way Gamestop does it.

Lets say we have three people who want to buy Diablo 3 at Gamestop. The game was recently released so it will retail for $60.00 new, and $55.00 used. They buy used copies of Diablo 3 for $25.00. We will also assume that Gamestop has a markup of 250% on all new items. We will not calculate tax.

Customer A buys the game new for 60.00, netting Gamestop $36.00 and the publisher $24.00 and the customer $0.00.

Customer B buys the game used for $55.00, netting Gamestop $20.00 and the publisher nothing and netting the customer $5.00

Customer C sells a game for $10.00, and buys Diablo 3 for $60.00, netting Gamestop $50.00 and the publisher nothing and netting the customer $10.00.

In these scenarios, the customer and Gamestop both profit. I don't have a problem with the buying and selling of used games. I have a problem with how Gamestop operates in general, from their sales people (I know they are being told to try and sell me subscriptions and pre-orders and whatnot) to their business structure; i.e. locking people into their system of buying and selling using their points system. If Gamestop did not exist, savvy people could still buy and sell used games and publishers could get more money because there would be a less public outlet to buy and sell used games.

Also, as a side note, Gamestop seems to make it almost impossible for a small/local game shop to exist because of their business model. That, more than anything, makes me a sad panda.

At least a used game continues to work with the system it is designed for year after year. However, text books get a new edition every year that is soeme how required to take the class.

The worst was when I once took two classes from the same profesor that required the same text book as on of the texts (of course authored by the profesor).

Each class made you turn in your homework on the perforated pages that came with the book. Without the perforated page you got a zero for the assignment.

How amazing it was that two of the assignments crosssed over from both classes so if you threw away your homework from the first class (or never went to the professor's office to pick it up) you would have to buy the book again for his other class as nearly every student was forcet to do.

I agree with what you are saying but I also think Gamestop's price model is pretty bad for the consumer as well. Like you said, in most cases Gamestop will sell a recently released used game for $55. Why anyone would pay that price for a used game is beyond me. First off, to me the extra $5 is worth it for a brand new copy of the game. Second, if you buy at an online store that doesn't charge tax you can generally get the game for the exact same price brand new as you would get it used at gamestop.

For example in GA a used game at gamestop will cost $59.39. On amazon.com, $59.99. Ill pay the extra $0.50 for a new copy.

The other problem with their pricing is that compared to other retailers they are usually less competitive with price, (e.g. fewer deals, coupons, gift cards back) and slower to respond to price drops, (I cant even count how many times ive seen a game drop to the greatest hits $19.99 price while gamestop will still be selling the game used at $25.)

@Titanium_Orchid

Your logic is way off, as is your sense of how much new games are marked up. A $60 game, at any retailer, is marked up about $8. For the sake of ease, we'll say its marked up $10.

Customer A buys the game for $60, giving the publisher $50 and Gamestop $10. In order for Gamestop to get new games in, the customer had to pre-order the game. Why is this? The amount of a certain title Gamestop receives is based off of their pre-order numbers. They usually get about 5% more copies than the number that was pre-ordered. THIS MEANS GAMESTOP WANTS YOU TO BUY A NEW COPY OF THE GAME. We'll save that comment for later though.

Customer B wants to buy the game used, but can't do it yet because no one has traded it in. Customer A beats the game and trades the game in for $25...meaning he only paid $35 for the game...such a deal! That also means Gamestop has paid $50 to the publisher to get a copy of that new game, makes a $10 profit on the sale of it (so we're still -$40 right now) and then buys the game back from customer A for $25, putting thme at -$65 so far.

Now customer B can purchase a used copy for $55. This still puts Gamestop $10 in the hole, and the publisher with $50.

Now, Customer C is when Gamestop finally starts making money, because Customer B beats the game, and sells it back for $25 (Now Gamestop is $35 down) and Customer C buys the game for $55 again. Gamestop has finally made $20...after step 3...and after paying employees, building fees, etc.

Basically, to sum all of this up, your logic is flawed. Gamestop does make money, but it's certainly not to the loss of the publisher. It takes a long time for the profit to be made by Gamestop. Gamestop wants you to pre-order and purchase new games, because it results in more money for the publishers, and over the course of a few people trading it in, more money for Gamestop. If publishers really weren't making money off of Gamestop, then why do they get special privileges to release games a few days early, get exclusive downloadable content, and get pre-order bonuses? It is the poor publishers that allow this to happen because they are making money.

If a publisher is NOT making money, it's not because of Gamestop,it's probably because the game is entitled, "Deadliest Catch: Alaskan Adventure"...and sucks.



Now, in order to buy the game used,

To put it simply, if a store buys a game from a customer for $30 and sells it for $55, they do make $25. However, they also take in hundreds of Xbox1 and PS2 games a week for about $1 - $2 a piece, which almost never sell. That is straight loss. The reason people do take their games to GS is because they take everything as long as the system isn't too old. This is why Blockbuster's trade program failed, they would only take specific titles, and that made it too confusing for the customer. That was also why they could offer more for the games they took, becuase they only took games they would definitely sell and didn't have to make up for that loss. GameStop, however, has to make up for the 25 copies of Madden 08 that got traded in for $5 a piece when the new version came out.

Hey Spud27 - I think your logic is flawed too. Gamestop buys a game for $50, and sells the game for $60. Gamestop gets $60, and profits $10, not -$40.. If Gamestop buys a game back, that's a separate transaction, and doesn't count against the original purchase. If Gamestop then buys the game back for $25, and sells it for $55, they make another $30.

@Spud27

I did some research online and found, to my surprise, that the average markup for a new game is in fact roughly 16-18% of the new price. Shocking! I was basing my assumption on what I know to be the average markup for retail stores in my area.

I don't know how many units the 16-18% number is based upon though. I would guess that Gamestop can negotiate a more favorable deal though, as they can buy in massive numbers. I suspect that they would be able to save roughly 20-25% of msrp.

Gamestop is not in the business of selling new games. It would be counter productive to their business model. The only time Gamestop would want you to buy a new game is when you are pre-ordering it. This way, then can compile more accurate purchasing numbers, and save themselves money.

While reading through your scenario, I noticed that I did in fact have an error in my own. I forgot to include the cost incurred by Gamestop in re-buying Diablo 3 (also in example C, I said that the customer bought a new copy. This was a typo on my part, and was meant to be used). So here is the re-calculated scenario. We will use the markup of $10 for simplicity sake.

Customer A buys Diablo 3 for $60.00 netting Gamestop $10, Publisher 50$ and customer A $0.00

Customer A then sells back Diablo 3 for $35.00 netting Gamestop -$35.00, Publisher $0.00 and customer A $35.00

Customer B buys used Diablo 3 for $55.00 netting Gamestop $55.00, publisher $0.00 and customer B $0.00

Customer A decides he wants Diblo 3 after all and buys a used used copy for $55.00 using his $35.00 credit netting Gamestop -$15.00 (modified to assume that Gamestop purchased another used game from another customer), publisher $0.00 and customer A $0.00

Customer C sells a game for $10.00 and buys a new copy of Diablo 3 for $60.00 netting Gamestop $0.00, publisher $50.00 and customer C $0.00

At the end of these transactions here are the totals:
Customer A: $0.00
Customer B: $0.00
Customer C: $0.00
Publisher: $100.00
Gamestop: $15.00

(I think my logic is sound in these case)

If customer C had bought a used copy of Diablo 3, this is what the numbers would look like
Publisher: $50.00
Gamestop: $60.00

Out of four transactions not favoring Gamestop, the publisher is only paid for two. In four transactions favoring Gamestop, the publisher is paid for one.

I skewed these transactions VERY favorably towards Gamestop. I don't know how frequently they purchase new games, and how much cash they offer per-game.

Gamestop is in the business of making money, so they will take actions that enhance their bottom line. This means removing the publisher as much as possible from the equation.

They are favored by publishers because they account for roughly 29% of all video game sales (Gamestop 15% and EB Games 14%). Not because they put more money into the pockets of publishers on the basis of a single transaction.

I think that this is turning into rant though so I'll end on this note: It saddens me to walk into a Gamestop and be constantly pressured to make a pre-order, or subscribe to a magazine or purchase a used game. I know that its not the fault of the employees but instead, it is because of the business model Gamestop has created over the years. Also, as part of their business model, they stress the purchase of used over new. This in of itself is not a bad thing, but when it happens on a massive scale, something is bound to be effected.

Less Gamestop = less buying and selling of used games, which means more money for publishers and developers. More money for publishers and developers = more funding for game development. My reasoning is suspect though, because I am basically arguing for a non-existent and wholly un-provable scenario.

Wow... you guys typed a lot of stuff here, but I'm going to keep it simple.

First, does it really matter how much GS profits off of used games? That's immaterial. A used game sale is a used game sale no matter what GS makes off it. The end result is the same to the publisher and developer.

Second, I would argue that Gamestop's outrageous used game pricing is better for pubs/devs than if they were cheaper. I know for me personally, I've browsed their used games several times and ended up buying new because the price difference was only $5-10. I'd rather have a new copy for only a few bucks more. Think of it this way, you're complaining about the pricing because of how much profit GS takes in, but imagine if they bought used games for $15 and then sold them for $25 instead of $55. GS themselves would make less on each individual sale, but I'd wager that a lot more people would start buying at least some of their games used. Meaning fewer new game sales for pubs/devs.

Hast thou forsaken the great Fernando? Fie! Thou shalt be purged by the fires of the great Blue Glow for thy console of choice's lifetime!

Which is like 4 years.

BUT RUE THE DAY, RUE IT HARD.

I agree there isnt anytime that when i go into target, wallmart or just about any other store that sells games that I DONT see a wii. maybe it's just a shortage for a company that make's a bigger profit off a used console then a new one.

now try finding a wii fit, there's a shortage:)

Same in Ottawa.

Same here, i'm near the ottawa region and there is loads of Wii's that havn't moved for several months now. Same goes for Wii fit... Heck if it's that bad, id be ready to make 50$/Wii and ship it back down to you Americans :P

Same here, i'm near the ottawa region and there is loads of Wii's that havn't moved for several months now. Same goes for Wii fit... Heck if it's that bad, id be ready to make 50$/Wii and ship it back down to you Americans :P

I was in a Costco in Markham (juuuuuuuuust north of Toronto), and on my way out, I saw, no joke, 31 Wiis, just sittin' there.

should have "returned" it to e-bay for twice the money.

Not quite the same bang for your buck you get from the other two systems, but I'm far from disappointed with my Wii, or the other two systems for that matter.

It doesn't work as a primary console if you're the kinda person that buys multiple games per month, but if you're a slower purchaser (like myself, 1 per month at most, with one or two off a year), you certainly get enough

I think what turns off most multi-console owners is that they feel that the software for Wii isn't as compelling as the steady stream of decent (and sometimes great) titles for other consoles.

I've been more than satisfied, as it is Nintendo. Best publishing house in the world

QFT Kahn. There are plenty of decent Wii games that dont fall into the 'mini-game compilations'or 'waggle-ps2-port' catagories:

Mario Galaxy
Re4
SSBB
Metroid Prime 3
Tales of Symphonia 2
Lost Winds
Zelda:Tp
GH3
GHIV
Zack and Wiki
Naruto: Clash of Ninja Revolution (and the imminent sequal)
Metal Slug Anthology
Super Paper Mario
Gyrostarr
The Godfather
Mad World
Star Wars: The Force Unleashed
Okami
No More Heroes
Mario Kart
Tony Hawk Downhill Jam (best in the series IMO)
Sonic and the Secret Rings
Pikmin 3
Disaster: Day of Crysis
The Conduit
Sadness
Fatal Frame IV
Fragile: Farewell Ruins of the Moon

Yes i know some of those aren't out, im just highlighting the now-released and soon-to-be-released quality titles on the system. If that list isn't enough good games (not to mention the multitude of good GC/VC titles) then there is something not right.

foetoid -

The problem is that none of those games stand up to the plethora of multiplatform titles on the PS360. Not to mention the exclusives. Khan said it best. If you are a Nintendo die hard or only own the Wii you will find some good stuff to get you through. Hell, there are more quality XBLA & PSN games than your list (IMO of course).

RE 4
Okami
GH 3 & 4
Godfather

ports, nothing new and inferior to the other console releases.

Not to mention a good 1/4 are unreleased.

If that is your go to "gotcha" list you should be ashamed. No offense.

There is a reason "core" gamers have their pitchforks ready after E3. The system has a real weak lineup.

Guess you got Super Sluggers??!?!?

The only Wii game that I have a remote interest in this calendar year is Wario Shake.

Again this is all a matter of opinion.

Yes that list is very questionable, as you can also add Zelda to the port list since it was a gamecube first game for a while.

Also, Tony Hawk and Force Unleashed? Shame on anyone getting those for the wii, unless it's all you have...in which case shame on you for only having a wii. Those games aren't even good on the powerful systems.

Another thing. Many of those games aren't out yet, as you said, but you're depending on all of them being good. The conduit looks like another mediocre shooter, the fact that it's on the wii does nothing to change the notion that it still looks mediocre. Fatal Frame has always been a 2nd tier series behind the silent hills and others. Naruto? We won't go there.

I noticed Tenchu 4 wasn't on your list, but it is on many nintendo fanboys lists. Nevermind that the series hasn't been relevant since ocarina of time came out. I also noticed that there is little gore and that at least some of the fighting is done in first person view with a turn based system. If that's not the definition of fail then I don't know what is.

Speaking of relevance...Sonic? I was a little kid the last time a good Sonic game came out.

You're trying too hard to justify the wii's pathetic lineup. If you truly don't care what people think about it then you shouldn't try so hard making questionable lists.

Immortal Technique

"The problem is that none of those games stand up to the plethora of multiplatform titles on the PS360"

Hear, hear Super Mario Galaxy is one of the best games ever.

That's not an opinion either, it's an objective fact. I can prove it to you on an etch-a-sketch.

"The problem is that none of those games stand up to the plethora of multiplatform titles on the PS360"

.. None of those games do Immortal Technique? Not one? ...riiiiight.

And it dosnt sound like you played RE4 or Godfather for the wii. You do realise they have the same graphics as the other versions but with superior control right?

Actually Twee, i cant speak for The Godfather, but RE4 Wii looks a lot better than RE4:GC since it's in 480p anamorphic-widescreen. I've played and finished both enough times to see a big difference. Obviously the controls are far superior on both, but the graphics are amped a little.

So those 4 games you listed Immortal are the wrong examples. Yes GH3 is better on other systems, but Okami and RE4 have thier best versions on Wii, and GHIV isnt inferior since it has all the same features as the other console versions (including DLC). No i dont have Sluggers (and i didnt list it).

Tmac, Zelda was in development for GC first, released on Wii first with far better graphics, frame-rates and controls. Its a Wii game with a GC version. Tony Hawk Downhill Jam is the most underrated Wii game IMO. Its the most fun in the series to play (when you master the controls) and has the best soundtrack. Sonic on Wii also pleasently surprised me with how decent it was. Naruto: Clash of Ninja Revolution ir probably the 2nd best fighting game on the Wii. It looks and plays brilliantly and is well balanced. Very underrated.

Says the man who shops at Kmart/Walmart.

...Just about everyone shops at walmart for something. It happens to be the closest place to me so I buy most of my games there.

See, i don't shop for games at Kmart and Walmart generally because, though i too object to GameStop's practices, their staff at least is familiar with the terminology, and up to speed on what's going on in the world of gaming. It just helps to go where people actually know about what they're selling.

See, this is what i'm starting to resent about this. The whining about how certain aspects of our hobby are becoming mainstream

Shit. Its as bad as those people who yell "sellout" as soon as their favorite underground band becomes popular

It would be different if those "certain aspects" becoming popular wasn't rampant shovelware. How can you be happy about that?

Btw mr khan, the way you defend nintendo one would think you were a fan a lot earlier than only 1999. That is surprising to say the least, that someone would hop on board during their worst years and defend it to the death. That'd be like me becoming a Chicago Bulls fan the few years after MJ retired and they were terrible, but yet "reminiscing" about how good the old dynasty was in the 90s.

I started with the greats of the N64, and never really looked back. And oh how i used to spout hatred against the PlayStation, PlayStation 2, and especially the first Xbox

I was an arrogant little kid

I was the same Kahn. I was massively pro-N64 and anti-ps1. I used to go down to my local Target, Kmart and Big W, play the machines that were set up, and talk to customers who were trying to decide what to do. I wasnt even working thier (i was like 13 or something at the time) and i sold dozens of machines to people, recommending the best games. It wasnt until later i discovered FFVII lol.

I was generally the same with the Gamecube/Ps2, although i wasnt as badly anti-ps2. I still to this day claim that thier were more quality games on GC than on Ps2/Xbox (especially Xbox 1). Nowadays it's a little more even, i know all three consoles have excellent games, but im still pro-Nintendo and have a dozen quality Wii titles that aren't mini-game compilations or ps2-ports.

great analogy tmac.

eh it's all I could come up with this late at night, I'm tired. I was similar last generation as in I despised the original xbox and still do as there's hardly anything worth playing on it. I absolutely love my 360 though.