MS hurting second-hand sales?! SAY IT AIN’T SO!

I couldn’t help laughing a little when I read this article just now. Not because of the people getting banned, though. Rather, because of the silly analyst who commented on the banning applying to consoles rather than users:

Microsoft, he said, “needs to find a way to address this, or else it risks annoying the modders who make up 1 percent of their audience and the second-hand purchasers.”

Would someone care to explain to me why in the world Microsoft would care about this? Modders are violating the terms of service, without question. And second-hand purchasers are the core reason why developers lose money these days. This is so ridiculous I can’t even begin to explain. Allow me to try.

GameStop is evil. There, I said it. I wholly admit that I say this as someone from within the industry. Their business of buying and selling used games is pure 100% profit for them, and developers see NOTHING out of that. It hurts developers when the day after a game is released, you can buy the same game for $5 less used, because we see none of the money from that sale. Now, on a personal level, I’m not willing to buy a used game just to save $5. I like ripping open the packaging for the first time. But on a bigger level, this strategy is hurting development of games.

So when Microsoft is “hurting second-hand sales” of Xbox consoles, why shouldn’t they be? Do they see a cent of money from the selling/buying of used consoles? Of course not! This is probably intentional, and it should be!

Whew. I’m spent. Those comments in the article really got my goat.

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5 Responses

  1. Don’t get me wrong, I’m not Gamestop’s biggest fan, but isn’t all this hate on the secondary market of games a bit much?

    Even a rudimentary knowledge of economics should suffice to suggest that trade-ins increase the perceived value of retail games and cause increased sales?

    I purchase relatively few console games due to my preferences and cashflow, but I’m far more likely to do so knowing I can trade it in for a reduction in the cost of a game time card when I inevitably tire of it. Perhaps game makers should try to make more games with lasting appeal rather than ones that are fun for a week and then replaced.

    Oddly enough, the games that I keep around rather than trade in usually cost less to begin with. Katamari Damacy only set me back 20$ when I bought it new and I’ll keep it and play it forever, but Borderlands, as great a game as it was for a time, lost my attention after a week. Fact of the matter is, I knew this would happen, and would never have purchased it at full retail at all if not for a giftcard burning a whole in my pocket.

    • Not really. You’re not the sort of customer that Gamestop is banking on in this case.

      there’s a couple of facets to this that makes Gamestop the way it is that doesn’t apply to most other re-sellers:

      1. GS has no qualms about putting recent releases up used for maybe five dollars less than the new retail, after they’ve only given maybe half the retail value to the person that brought it in(incidentally, this half-price was given in store credit, which means the money’s staying in the company).

      2. Gamestop doesn’t so much encourage employees to suggest buying used as they REQUIRE it. GS employees can be FIRED if they don’t make a serious attempt to convince customers to buy a used copy.

      Developers lose out big time with this kind of policy in place. Most of the people that buy a used copy of a game that just released would have bought it anyway at a few dollars more, but take the used one to save a couple of bucks, especially when GS employees frequently pull a used copy of the shelf by default. Developers and publishers don’t make any money at all off of resales, just the initial sale. Gamestop, however, makes 30 or so USD every time they do it, which is why they do it. And chances are good that Gamestop will end up selling the same copy of a game three or four times this way.

      Yes, the industry would be well-served providing better play value, or otherwise making it preferable to buy new. It probably wouldn’t change that much, because GS’s model is based around the inobservant, the ill-informed, the impatient, etcetera. The sorts of customers that will buy a game on release day, beat it, bring it back tomorrow for trade-in so they can grab the other new game, and basically just keep doing it over and over again. Followed by the parent that comes in the day after release looking for that game their kid is on about and doesn’t really notice or care about a used sticker as long as the kid gets the game they wanted.

      I see this little dance play out *really* often when I do wander into Gamestop. It’s actually pretty insidious, though some stores push gentler than others.

      I was recently assured by a manager at one of the stores in town that they don’t sell used new releases for like a week unless it’s specifically asked for anymore, because of the industry backlash… but then she also turned around five minutes later and recommended I buy Wet used because she didn’t think I’d want to keep it. >.>

      • The thing is, it’s not just me.

        Sure, they’ll always be able to take in the disinterested parents and such.

        However, people even marginally interested in purchasing and playing games will subconsciously act to maximize their utility when buying them. It happens in all markets, and is one of the foundations of microeconomic behavior.

  2. Gamestop drives me nuts. If it wasn’t for the preorder goodies, I’d probably wash my hands of the store entirely(I get better benefits buying at Best Buy anyway).

    What really gets me is how they insist on talking me into buying used if I go to any of the local stores other than my “usual” store. The guys at my usual understand that I want to buy new unless I ask otherwise. they respect that, and that’s cool.

    But everywhere else, they’re always pushing used. It drives me up the wall, especially since they don’t take no for an answer easily. Even if I give up and explain the reasons, they argue with me. I don’t often bring up the whole developers-versus-Gamestop issue often, but the last time I did, I got fed a big ol’ company line about how they put forth this big study and analyzed their sales data and it totally proves that the used game market feeds back into new releases, etc, etc.

    It drives me nuts. Gamestop’s the ONLY store that does it. Microcenter sells used, but they don’t try and ram it down your throat. Numerous small stores sell used, but only fork a used copy over if you actually ask for one, etc.

  3. The thing that shocked me when I moved out to California was that GameStop is angelic if you compare them to GameCrazy.

    GameCrazy tried to slip in “Disc Protection” when I was buying a game without asking or mentioning it. When I caught it, they fought me about it and tried to explain that games suffer from “laser burn” if you play them too much. Is that so? Raise your hand if your game has ever stopped working because of laser burn. Yeah, didn’t think so. After three visits to GameCrazy, I swore them off forever. The GameStop around here knows us at this point, and knows we work at a video game company, so they don’t even try to sell us the used copies, which I appreciate.

    The other thing that I always keep in mind (having worked retail), is that you can’t be angry at the people who work there. They’re just doing their job. Feel free to be mad at the evil corporation, but the guys at the GameStop here are awesome guys, and are always really nice. Even if they work for a company with an unfortunate business model.

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