I’m Not Going To Gamestop!

I am the kind of gentleman who keeps a list of companies I refuse to do business with.  Some of the entries on this list are political or a matter of principle, some are because of poor first impressions.  Either way I simply refuse to do business with these organizations or patronize them in any way, shape, or function.

I can go more into depth later with the full list, but for now I’ll just talk about one particular entry on the list: Gamestop.

Now I used to be a huge fan of Electronics Boutique back in the day, I always got great service, good deals, and felt like a valued customer no matter how much or how little I was spending.  But when Gamestop bought out EB everything went downhill.  Now I can’t even stand to walk past a Gamestop, even if it used to be an EB once upon a time.

Why?

Well, of course this is aside from their shady business plan wherein they profit entirely off of somebody else’s work for high profits, which I can at least respect for their shrewdness.  In case you aren’t aware how Gamestop makes it money, they sell video games.  They sell ‘brand new’ video games (I’ll explain the quotes in a moment) and they also let you trade in used games for store credit, or a very small sum of cash (if they still even pay cash at all), at which point they re-sell those used games.

Here’s how the numbers work out:

For each game that you buy brand new at $60, the people who made the game get about 20-30% of that.  So Gamestop keeps $42 and the publishers/developers get $18, per game.  So you’ve bought the game for $60 and played it, beat it, and shelved it for a month.  What to do with it?  Well…take it back to Gamestop and get $25 in store credit for it, which you can use to purchase another game from them.  Keeping in mind that they’re actually still in the black for that; if you buy another $60 game then their profits are only down to $17, instead of $42.

But wait a minute!  What happens to that used game you traded in?

Goes back on the shelve for $54.99 (i.e., 5 dollars less than ‘brand new’).  Now for a cash-strapped non millionaire, that’s a pretty good deal.  You get to buy a game for $5 less than normal, and Gamestop guarantees you can return it if it doesn’t work (within 7 days, of course).  How can they possibly afford to do this?

Simple, that $55 is all in their pocket, they get to keep 100% of the proceeds from it.  So they have now, having sold the same game twice, paid the makers of the game $18 and have paid themselves $97; well admittedly, only $72 when you include the $25 store credit they ‘awarded’ you to give it back to them in the first place.

So the actual folks who made the game and put their money on the line for it, wind up getting a very minimal amount of the game’s actual income.

Now that fact is changing as digital distribution becomes more popular, like Valve’s Steam, which is estimated to pay between 60 and 70 percent profit share to the developers.  So that means that the game makers can charge $40 for what Gamestop would sell for $60 and still make more money on it (Steam’s $28 against Gamestop’s $18).  If they kept the price the same they’d be making Gamestop money for their own projects!  Unfortunately while Steam has 75% of the digital distribution sales, digital distribution only accounted for 10% of video game sales last year.  Which means that Gamestop’s certainly not feeling a ton of pressure on its shoulders by any means.

But enough preachy stuff about Gamestop’s practices, there are other industries who do this kind of crap, too; it’s the main idea of being a middle-man.  The game makers need Gamestop because if I go in there to buy Final Fantasy 37 and see Medal of Duty: Call of Battlefield Honor next to it on the shelves, I’m more likely to buy both games than just FF37 from Square-Enix’s website.  I can also order from Gamestop’s website and buy 6 games from 6 different publishers/developers and pay only $7.00 shipping for the whole order (total of $367, at $60 a game); compared to$7 a piece if I bought each game from their own makers’ website (total of $402 at $60 a game).  Steam is the way of the future, or very well could be, but not until it gets majority of the market share, or at least close to half.  And there are ways to do that.  Here are two of my thoughts, before I totally leave the topic:

1. Publishers need to put Gamestop in their place.

Right now Gamestop runs the business and the game makers quietly acquiesce to how they do it.  Well, not really quietly anymore, what with the first-purchase DLC stuff wherein you get a special code in the box that only works once and if you buy the game used you have to pay $10 or so to get the same stuff that originally came with the game in the first place; in other words you can buy it new give the game makers $18 or buy it used for 5 dollars less pay ten bucks to get the same stuff you would have gotten for the original amount (i.e. you’re now five dollars in the hole).

This cannot be made clearer than earlier in the year when Gamestop employees were ordered to open up the PC versions of Deus Ex: Human Revolution and remove a code that the publisher Square-Enix had placed in their for a deal for online play from a competitor to Gamestop’s own online play service.  In the end, Square-Enix pandered to Gamestop with nothing more than a passive-agressive backhanded compliment:

“Square Enix invites gamers who want to purchase the PC version of Deus Ex: Human Revolution without additional coupons to buy the game at any one of over 4,000 GameStop stores[…]”

Not  good way to win the battle, especially for a company as big as Square-Enix.  Imagine if Ubisoft’s big recent release Assassin’s Creed III came with a special code for online play through that same Ars Technica company and Gamestop employees broke into the copy of the game to steal the code (even though the box still says it’s in there, by the way) and replaced it with a Gamestop-owned online play advertisement, instead?  And what if, as a result, Ubisoft just looked at the players who wanted to buy their games with the originally packaged goods and said, “Sorry, Master says we isn’t allowed you give yous thats.”

Or imagine if Electronic Arts, one of the largest companies on the market, put out The Sims 4 with a special product code in the box that gave you 6 free outfits for buying new and Gamestop removed those codes so that you’d have to pay the ‘used game’ fee of $10 to get them, even if you bought them fresh out of the box?  That way buying the game at $55 and paying the extra $10 would be a better deal than buying it ‘new’ for $60 and then having to pay the $10 fee for stuff that EA wanted to give you to reward you for buying new and giving them money.  And once again, if EA just said, “Sorry valued customers, it’s Gamestop’s choice not ours.  We can’t afford to make them mad or they won’t sell our games anymore.”

Well that’s bullshit.  Imagine, instead, in a world where these big companies cared about the person who matters: The guy walking around with cash in his hand and a desire to purchase their games.  If EA, Ubisoft, and Square said, “Fuck you Gamestop, we’re not going to release our games to you to sell anymore, not until you give us 50% of the proceeds from used game sales and stop opening our boxes!”

Gamestop would tell them to suck an egg…for a while.  And Gamestop would rake in the cash for a little bit, too, honestly.  They’d offer extra money for trade-ins on used EA, Ubisoft, and Square games; because they can also sell them for more than normal.  If you go to the website and buy Assassin’s Creed III for $50 from Ubisoft’s website, play it for a month, then trade it in to Gamestop for $35 in store credit, you’ve done a pretty good turn for yourself.  Ubisoft made more money, you lost less money in the ensuing trades, and even Gamestop can make more money because they can charge $50 for it, too; since they’ll have the only physical copies without buying from the publisher’s webs–

Oh wait, no they won’t.  Because Walmart, Target, Best Buy (for now) all still exist.  Ubisoft, EA, and Square games will still be sold at those places, too.  So Gamestop will have to work harder to match these other places that don’t make their money off the backs of others without at least giving them the pittance they’re entitled to.

How long until Gamestop caves and concedes to at least 15 or 20 percent of the used game proceeds just to compete with other big electronics retailers.

2. ….ummm?

Nope, actually that’s about it.  Just man up and tell Gamestop to shut the fuck up and be the distributor it’s supposed to be.  That way the folks who make the games make more money, the customers get to keep more of our money, and Gamestop doesn’t make money hand over foot on other people’s work…at least not nearly as much money as they do now.

This wasn’t what I originally intended to talk about today, by the way, but I’ll cut it off here and maybe bring up my original point some other time.

~RCS

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