GameStop states its case for used games and trade-ins to developers

by Randy Nelson { Jan 16th 2009 at 3:17PM }

With developer ire growing over the re-sale of games -- from which they see no additional monies -- GameStop stated its case for the practice at Southern Methodist University's Game Business Law summit. The audience included attorneys ... along with developers and game company execs.

As Gamasutra reports, GameStop's marketing chief, Mike Hogan, supported the practice with an analogy, saying, "If you couldn't sell your old car -- would the [automotive] industry sell more cars?" Hogan went on to state that most re-sold games have been out for more than 90 days, and that 75% of trade-in credit goes immediately towards the purchase of a new game. Hogan stated that 20% of the new copies of Call of Duty: World at War the company has sold were purchased in part with trade-in credit.

Hogan admitted that "there are other perspectives, but ours is: trades and used fuel growth in the category." One thing's for certain: a game traded in for $12 and re-sold for $35 fuels growth in GameStop's wallet.

Tags: gamestop, pure-profit, trade-ins, used-games

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Reader Comments (Page 1 of 4)

acefondu @ Jan 16th 2009 3:21PM

Now if only they'd stop making new games used games by putting them in their stupid security envelopes. Maybe then I'd buy from them again.

Psycho300x @ Jan 16th 2009 3:38PM

THAT IS EXACTLY WHY I DON'T EVER BUY FROM THEM. I can't stand buying a used game for the full new price, and as far as I'm concerned if its not factory sealed, its used.

RPGJock @ Jan 16th 2009 3:52PM

Especially knowing damn well that if you bought in a new game unopened, they wouldn't buy it back at full retail price. So why would I buy a game from them if its already been open at full retail price. I have laughed at them for trying to pull that on me before. Ridiculous.

Sean @ Jan 16th 2009 4:36PM

It's a great business but there is NO business who gives as little and charges as much for used product.

zero2dash @ Jan 16th 2009 4:46PM

The four local Gamestop stores have never done this when I've shopped there. ???

Slackers does this, but none of my local Gamestop stores.

SoCoolCurt (PSN: KillaKornbread - XBL: SoCoolCurt) @ Jan 16th 2009 4:54PM

its never happened to me either. maybe its because i live in a smaller college town and all the stores there are the smaller ones. they just built one of the larger ones in the resort town a half hour away but i havent been to it yet cause the town is dead except during the summer.

DEEZNUTZ @ Jan 16th 2009 5:09PM

Developers should just not deal with Gamestop anymore if they feel so strongly about it. It's not like they really need them as a retail channel. By not selling new games through gamestop, you kill a big part of their foot traffic, which comes from people buying games on release days. This affects their sales. While they may not go out of business, it would sure hurt their bottom line.

Gamestop could also meet them half way and agree not to buy back new releases for at least the first 90 days, thereby assuring developers they are making money on the front end of a games release.

I like the idea of buying and selling used games, but I also understand that developers should be compensated for their efforts. Afterall, they are not in it for charity.

Vol @ Jan 16th 2009 5:25PM

It's called free enterprise. Everyone doesn't realize the margins you have to make in order to succeed in the retail business. GameStop has expenses like: leases, equipment, inventory, labor, utilities, marketing and everything else that is the cost of doing business. Making money isn't a sin.

There are other choices you have to rid yourself of used games. Most people are too lazy to put their games on eBay and take the effort of selling them.

PSN: Erdie @ Jan 16th 2009 6:20PM

Yeah, I'll join this bandwagon. The gutted games are bad enough, but I was handed a "new" copy that was missing the manual last time I visited. I got my money back when I returned later, but what a pointless hassle. I'll stick to other retailers.

Complaining about price margins is pretty stupid, though. I work in a business where I can buy a part I need for $350 from the company that built the machine, or buy that same part direct from the people who actually make it for $15.

Ryan LN @ Jan 16th 2009 8:23PM

Hear hear. It is complete bullshit that they sell an opened game as new and yet they will not take a game that you open back and give you a refund. I miss Electronics Boutique, where you could return any game within seven days after purchase for a full refund, opened or not as long as you had the receipt. In the entirety of their existence I think I returned two games- Super Mario All-Stars and Wanderers from Ys III- but I would always, always ALWAYS buy my games there because I knew I wasn't going to get screwed if I bought a P.O.S. Customer service always wins friends and influences people, and Gamestop as a chain could stand to learn that.

finaldarklord @ Jan 16th 2009 8:52PM

Free enterprise? In the US?

Son... you got a lot to learn.

Deck @ Jan 16th 2009 8:54PM

To people saying that it has never happened to them before:

I have had it happen a couple times. It seems to happen on a new game purchase of a game that wasn't very recently released. For instance at one point I went in to buy a copy of Oblivion GOTY edition. They didn't have any "used" copies in that section but they did have one in the "new" section. But because it wasn't recently released, (thus not having it behind the counter in their locked glass case along with the rest of their plastic wrapped games) they had it in their "security" envelope saying it was brand new.

ruibing @ Jan 16th 2009 10:16PM

Depends on the store and time, at my GS I got a bunch of new ones with the discs in sleeves during the summer sale, but when I recently visited to get a copy of RE4 for $10 they gave me a sealed copy.

JazzmanSA80 @ Jan 17th 2009 12:52AM

@ Sean

Clearly you have never bought/sold textbooks. Try $150 new, $20 for them to buy back.

In response to the article, I don't see why this is an issue between the game companies and Game Stop. I'm not saying I like Game Stop, but in what way are game companies entitled to controlling or profiting from game resale? Ridiculous.

I DeX I @ Jan 17th 2009 3:11AM

Ryan LN, why on earth would you return Super Mario All-Stars? I really miss those days. Mario All-Stars was the fahh-jizzle, dah bomb. I'm drunk and in my mid-thirties and the kids of these days don't know what game'n fun is!

Skunk Ape @ Jan 17th 2009 3:24AM

Just putting this out there- most of those "New" gutted copies are actually used. The employees take them home and play them before selling them a lot of the time. Next time they try to pull a gutted copy out and sell it to you as new, tell them they can fuck right off and drive over to Best Buy or something.

NeoX360 @ Jan 17th 2009 5:07PM

I always ask if they have a New Sealed copy. The reason you get the gutted copy is they do that to the first copy they get to use as a display. If it is a recent release you will get a sealed copy. If they sold out of all the sealed copies, you end up with the gutted one. I usually do not accept that unless it is a hard to find game elsewhere, older or out of print.

dsub @ Jan 22nd 2009 9:48AM

Not every new game that gamestop sells has been opened. You will only encounter an "opened" new game if you are getting one of the last copies of a game that Gamestop has in stock.

The problem could easily be solved if gamestop would just pony up the cash to have "dummy" cases made up to display on the floor. Instead their idea is to just open one or two copies of every game and store the disc behind the counter. Based on what I know about gamestop, their stubborness to listen to new, much better ideas about how to run the company will not be listened to. I've worked for gamestop for nearly 4 years as a side job and for a good while as a manager and I've come up with better solutions to alot of the ways they do things. I've sent emails and told DM's and the like. They basically pretend to listen to you and thats it.

Every year they give employees a chance to "speak their mind" but all that means is they get to take a ridiculous survey that basically asks if you like your job, and they give you know chance to actually create your own response to any of the questions or to offer suggestions. I could've saved gamestop and its employees alot of time and money with some of the ideas I've had, but oh well.

Dummy00001 @ Jan 16th 2009 3:24PM

And here I thought that game companies would be happy that gamers play more...

It is even stupid to argue: S/H market and game exchange sites are thriving. And nobody went out of business because of that.

More business and more people are involved. That is good sign for any market.

bobartig @ Jan 16th 2009 5:59PM

Nobody went out of business? Game developers are shutting down and laying off left and right. It's not entirely due to second hand sales, but the point is that these things are connected. Second hand sales is antagonistic to developers who only get money from new sales. In that way, GameStop's success is at the cost of the developers. GS would argue otherwise, but these things are all related.

Aaron F @ Jan 16th 2009 6:15PM

@bobartig:

> Nobody went out of business? Game developers are shutting down and laying
> off left and right. It's not entirely due to second hand sales, but the point is
> that these things are connected.

And you base this assumption on what? Is the auto industry on the brink of collapse because people are able to sell their used cars?

> Second hand sales is antagonistic to developers who only get money from
> new sales. In that way, GameStop's success is at the cost of the developers.
> GS would argue otherwise, but these things are all related.

The recording industry tried to pull this same nonsensical argument, and it has clearly been shown to prove false. Explain how making gamers keep their used games laying around in their entertainment center, never to be played again, is better than letting them get some credit to buy a new game.

The fact is, the gaming industry isn't the first to claim the sky is falling due to used sales. I'm sure they won't be the last. But every industry who has tried to use this argument to limit the rights of the consumer has been proven wrong every single time.

Used game sales opponents have failed to produce one SINGLE example of any industry suffering from used sales. Books are still being published and sold. Music CDs are being sold. Movies are still being sold. If you can't make a solid case based on facts rather than emotion, than you don't have a case at all.

Brit @ Jan 17th 2009 5:25AM

Well, you can't really expect game-developers to be "happy" about used game sales because even though more people are playing, the game developers aren't getting paid when a second person buys the used game. However, someone bought the game originally, so there is that. Anyway, the "right of first sale" says that consumers are allowed to re-sell stuff they bought. I don't see how game companies have a leg to stand on. The book publishers tried this "you can't resell your books" argument back in 1908 (which is why the "first sale doctrine" exists).

I think game companies should just back off on this one. There's just certain rights consumers have that can't/shouldn't be taken away.

- A Game Developer

TimeLord_Master @ Jan 17th 2009 6:03AM

@ bobartig:

"Nobody went out of business? Game developers are shutting down and laying off left and right."

That has much more to do with developers making bad games than Gamestop.

Dummy00001 @ Jan 17th 2009 6:34AM

@Brit: """Well, you can't really expect game-developers to be "happy" about used game sales because even though more people are playing, the game developers aren't getting paid when a second person buys the used game."""

This is very very big lie publishers try very hard make you to believe.

Publishers - not game developers - are getting most of the money off the game. Game developers might be paid bonus (since publisher already paid for game development) percent off initial sales - but rest goes to publishers.

This are game publishers who are not happy about S/H games, since they dream about pwning and taxing on everybody who once touched what they have copyright for.

Strategy_Panda (The Sandwich Poisoning Crew) @ Jan 16th 2009 3:25PM

what this article needs is a walrus shouting "death to gamestop"

Moptimus Slime (Leader of the Ryan Scott Defense Force, A Wurr? My Burr) @ Jan 16th 2009 3:34PM

Paul McCartney was busy, maybe next time

Heh @ Jan 16th 2009 4:59PM

We could always get Dirty to do it..

Nap @ Jan 16th 2009 3:27PM

I bought Sonic Unleashed for $50 at Gamestop

Played it for 15 mins. Went to return it THE SAME DAY and they only gave me $30 for it

I bought Left 4 Dead for another $50

So in strife I paid $80 for Left 4 Dead

Power to the gamers!

Longhorn4Life @ Jan 16th 2009 3:32PM

Why would you buy Sonic Unleashed?

That was your fault not Gamestop

ApolloIV @ Jan 16th 2009 3:33PM

I bought Sonic Unleashed for $50 at Gamestop

Wut

afoote @ Jan 16th 2009 4:23PM

@Longhorn4Life

He obviously bought Sonic Unleashed because he has the mind of a 2nd grader. How else would he conclude that 50 - 30 + 50 = 80.

Zertoss @ Jan 16th 2009 4:29PM

You forgot to include the tax, which bumps it up to around $80 (depending on your local sales tax rate).

Levi @ Jan 16th 2009 4:34PM

If you return anything within a week they should have given you a full refund. I think you just got screwed into trading it in rather than returnin it

esmith @ Jan 16th 2009 4:49PM

The irony is that you are mad at Gamestop for its shady practices, yet you STILL sold that game to them after they gave you a lowball price, and then at the end of the day you STILL didn't get the math right.

Thats why people like YOU are whats keeping the gamestop business model afloat. They wouldnt use it if you didnt fall for it

P.S. You paid $70 for left for dead. -50 + 30 - 50 = -70

KCVocals @ Jan 16th 2009 5:07PM

Ok, nevermind the fact that you did not pay $80 for L4D, I want to know how you can say that you bought a game, played it, returned it THAT DAY and expected a refund? There are two scenarios that could have happened here:

1: You bought the game used. If that is the case, then the GS employee should have given you a refund IF YOU ASKED FOR IT. Or at the least offered you something else, say, L4D which, if it were the same price, should have been an even swap. (The only way this would not have happened is if for some strange reason you did not have your receipt, and also went to a different store, or could not remember which register you bought your game at, the employee you dealt with 15 minutes prior was not there and no one else remembered seeing you...)

2: You bought the game new. I would like you or anyone else, to tell me which retailer of electronic media (games, dvds, music...) will refund your money when you buy a NEW item, open it and return it. (Quick answer NONE!)

GameStop offers a pretty good refund policy on all of their used games. If you are not happy with your used purchase FOR ANY REASON within 7 days of purchase you may return it for a FULL refund.

Zertoss @ Jan 16th 2009 5:15PM

I wish I didn't have to pay sales tax like the rest of you.

Tiptup300 @ Jan 16th 2009 6:06PM

I'm no expert or anything, but I think L4D only costed you 50 bucks.

Evan_ARRRR @ Jan 16th 2009 11:53PM

$50 - $50 = Sonic Unleashed, -Sonic Unleashed = + 30, - 50 = Left 4 Dead. L4D cost you $70, but I can understand how you came up with $80, as I initially thought that was correct as well.

You spent $50 on a game, and got $30 back. So you had $30, and bought another $50 game. -50 + 30 = 20. $50 (L4D) + $20 (Money lost on Sonic Unleashed) = $70, not $80.

Zertoss @ Jan 17th 2009 12:19AM

$50 + state sales tax + local sales tax = ~$55 - $30 = $25 + $50 + state sales tax + local sales tax = ~$80

Now where are all of you people getting your tax exemptions?

afoote @ Jan 17th 2009 6:17PM

We know there are taxes. If he wanted to make a point he should have included tax numbers. He did not. With the numbers he gave us it was 70.

Poisoned Al @ Jan 16th 2009 3:27PM

Wow, way to spin "We are arseholes that like money for nothing."

Burritoclock @ Jan 16th 2009 5:14PM

If liking money for nothing makes you an asshole, then call me an asshole!

I guess your business will be a non-profit?

Poisoned Al @ Jan 16th 2009 6:10PM

No, but I would do more then just put massive mark ups on second hand tat.

Aaron F @ Jan 17th 2009 3:28AM

> Wow, way to spin "We are arseholes that like money for nothing."

Or how about:

"We've found a business model that works for both the consumer and the video game publishers."

Consumers get to trade in games that otherwise would be cluttering up their entertainment center to put towards the purchase of a new game. Which in turn is good for the video game publisher because they make another sale.

When asked what he though about music downloads when the MP3 was starting to hit in the late 90s, Snoop Dogg wisely stated: "What we (artists) should be worried about is if people AREN'T downloading our music."

I think publishers should be worried if people aren't playing their games.

Poisoned Al @ Jan 17th 2009 7:27AM

Fine, keep using Gamestop. Give all of your money to your favorite, soulless company of your choice! You clearly don't deserve it! But hey, I guess some people just like getting fucked. That or they are too lazy to do something about it, and they try to kid themselves they actually do like it.

Aaron F @ Jan 17th 2009 8:53PM

"Fine, keep using Gamestop. Give all of your money to your favorite, soulless company of your choice! You clearly don't deserve it! But hey, I guess some people just like getting fucked. That or they are too lazy to do something about it, and they try to kid themselves they actually do like it."

All companies are technically soulless. But it all really boils down to different opinions on what constitutes "getting fucked". The concept of "value" is entirely subjective. Insulting people who find value in something that you don't just makes you look like an ass.

Dalrint @ Jan 16th 2009 3:28PM

I can understand developer irritation. Gamestop buys a game back that came out two weeks ago for fifteen dollars and turns around and sells it for 55 dollars, of which the developer sees nothing.

But I don't know. My issue with gamestop is less about selling used games and more about the fact that they sell open games as new (which irritates me to no end) and that their employees are typically 'friendly jackasses' who can't take a hint about not wanting to preorder things.

but then again, I can get pretty much any game I want at best buy or amazon, so I've just been avoiding them entirely anymore...

CitizenSnips @ Jan 16th 2009 5:22PM

it's their job to ask for preorders. it's why they get paid to work there. The amount of preorders an employee/store gets is very important for the business model.

s far as the "open games", they only do that because need to take the games out in order to put the case on the wall. Otherwise no customer will know the store has the game. Sure, they could ask, but then the customer isn't 'shopping' are they? what are they supposed to put on the walls if they don't put the opened cases? Photos of the games? Pecies of paper with bar codes?