A Thought On Used GamesThe used games post has been finished for a couple of days now, but I still haven't posted it because it sounded a bit, um, "ranty." So it's going to sit for a few days, and I'll see if I can make it more effective and less emotional.
However, in the meantime, I realized something today that I think is interesting.
I've always been baffled as to why the gaming industry has never confronted Gamestop more directly. Sure, there's heated rhetoric at times, but that's all it is--rhetoric.
If you listen to the words of the gaming industry, Gamestop is an incredible leech. If you listen to their actions, though, Gamestop is a partner. One-use codes are about the strongest action anyone has taken, and that really hasn't hurt them in the least. Based on the actions of the gaming industry, Gamestop is a partner, not an adversary.
Surely, the gaming industry should strong-arm Gamestop. It would be great for the industry if Gamestop shut down tomorrow, right?
No. It wouldn't be great--in fact, it would be catastrophic. That's why the gaming industry isn't trying to crush Gamestop.
They need Gamestop.
Here's why. When you trade in games at Gamestop, it's for store credit. Yes, theoretically, you could trade those games in for cash, but good luck doing that--Gamestop has effectively built a procedural labyrinth to stop you. The degree of "screwed" is so high when trading games in for cash that only burglars would want to use that option.
So what can you buy at Gamestop? Well, games. Gaming hardware. Gaming strategy guides. Maybe some of your trade-in credit is spent on used merchandise, but it's still being spent on gaming merchandise.
Best Buy and Target recently entered the used games market, and they're going full throttle. Amazon, too.What do consumers get when they trade in used games at these retailers?
Gift cards. What can they buy with those gift cards? Anything.
In Gamestop's case, I'm willing to bet that over 95% of used game trade-in credit goes back into the gaming ecosystem.What would that number be at Amazon, though, or Target?
There's the problem. With the broad-line retailers, money actually gets removed from the ecosystem when gamers trade in their games. A significant amount of money. It's not recirculation--it's hemorrhaging.That's the real nightmare scenario for the gaming industry.
That's why gaming companies rattle their swords at Gamestop, but never do anything substantive. Believe it or not, as long as the used game market exists, Gamestop is their best option.