Undeterred by EA’s recent Project Ten Dollar, which attempts to curb used game sales by offering new game incentives, GameStop claims that the used game customers purchasing titles at the stores are unswayed by DLC and offered that publishers should work with the company to market DLC to customers.
Speaking to investors yesterday, GameStop’s CEO Dan DeMatteo said that he doesn’t believe DLC incentives matter to cost-conscious customers who are seeking used games to save money. “Through our years in the used business, we have learned that the second-hand user is a value-oriented consumer…we don’t believe that a $10 add-on piece of DLC is compelling to a used game buyer.”
In addition, DeMatteo suggested that, rather than trying to discourage used game sales, publishers should participate with GameStop to deliver DLC content to used game purchasers. “Publishers can participate in our used business by offering add-on content for the most popular used titles, creating a win-win situation for publishers, retailers and consumers.”
Late last year GameStop announced that they will begin offering services in which gamers can purchase new games and, in addition, will be informed at the register that they can also purchase DLC directly from the store. The DLC would then be sent directly into their download queue on their Xbox 360, Wii, or PlayStation 3. While the service hasn’t begun yet, DeMatteo believes it represents an opportunity for GameStop to market DLC for publishers. “We can market and execute DLC sales right in-store. There’s a tremendous opportunity for us to encourage software developers and publishers to create DLC because we’ll be able to market it. It’s very difficult to discover, find…add-on content with the tools available [currently].”
The ramifications of EA’s Project Ten Dollar, which is certain to inspire other publishers to utilize similar tactics, are yet to be felt across the industry. There’s a strong possibility that GameStop and other used retailers will find customers unwilling to pay the standard $55 used game price for a recently-released and popular title because of the massive value loss in a used copy without a DLC access code. If so, there are several scenarios which may work out.
GameStop could encourage used game sales by lowering the price from $55 to $40 to compensate for the lack of a DLC code, which costs used game buyers $15. Thus, GameStop would encourage used game sales to continue while still making a significant profit, as newly released titles often fetch between $20 and $30 in trade-in value at the national retailer.
The other scenario see’s GameStop working with publishers to encourage an environment in which used game sales and the development industry aren’t at odds. The problem the publishers and developers have with used game sales is that they don’t realize any income at all from used game sales. As many gamers will point out, GameStop buys titles from gamers at significantly reduced prices and makes full profit on the difference because they don’t have to pay any royalties on used game sales. Some feel that this is essentially stealing, and publishers are irked that a title can be sold 3 or 4 times while they receive income from only one sale. It’s an unfair system that has allowed gamers to purchase newer games at cheaper prices but has left publishers and developers in the cold. If GameStop wants to continue selling used games, they should work with publishers on a fair agreement that will benefit the retailer and the publisher while still providing gamers with an affordable, used alternative.
Unfortunately, GameStop’s point of view in suggesting that publishers can participate in their used game business by “offering add-on content for the most popular used titles, creating a win-win situation for publishers, retailers and consumers” highlights GameStop’s continuing commitment to living in a world of fantasy. Publishers aren’t interested in offering DLC content for used titles because the sale of those used titles doesn’t feed into their bottom line. The reason behind Project Ten Dollar and similar incentives is to encourage gamers to purchase new games, which feed directly into the publishers and developer’s profits. DLC codes for used gamers are seen as an incentive to purchase new rather than an additional source of income and certainly, publishers don’t intend to work with GameStop to facilitate used game sales. What GameStop is suggesting is essentially equivalent to them saying, “You should get in on this opportunity to help us sell used copies of your games, from which you see no profits.” As far as publishers are concerned, their directive is to erase the sales of used games rather than encourage them.
GameStop and publishers currently sit on opposite poles of the earth. And they aren’t going to become closer any time soon. While GameStop may indeed begin offering DLC in-store, the fact remains that publishers want to cease the used game business. GameStop isn’t a solution for publishers, in fact, one could argue that GameStop led to the necessity for Project Ten Dollar, a direct attempt by publishers to compete against GameStop.
How is it like stealing? They buy a game at 40 bucks (Canada) and sell it for 55 bucks. Yeah, they made a profit, many second hand shops make profits from buying used games and selling them at a increased priced, all the time. Also, alot of these second hand shops do not even carry new games.
Good ol’ Bobby Kotick made a f— load of cash from selling us that miserable Modern Warfare 2 game.
@evan – While I loved MW 2′s single player campaign, the multiplayer is so bug-riddled it’s a joke. Of course, I think Activision had a large part to play in that – i.e. I think they made the work environment at IW awful and as a result, the team lost interest in the work.
Along the lines of “stealing”, here in the states they purchase a recent game such as God of War III used for $25 and resell it for $55. That’s a massive $30 profit, of which the developer and publisher receive nothing and for each new game sold the publisher and developer earn far less than $30 per copy. So, it’s only stealing in the sense that GameStop makes a killing off used game sales while the people who made the game receive nothing from those used sales.
Sounds like you get a good deal in Canada, though! $40 for a game?? That’s awesome!
I’m confused, if companies don’t like the fact that Gamestop sells their games used , why do publishers offer pre-order bonuses through them?
@Ahjumbie – They offer pre-order bonuses through them because they are THE major games retailer in the U.S. GameStop makes up a large portion of their sales, but that doesn’t mean that they don’t want to curb GameStop’s used game sales.
Trade credit isn’t bad here in Canada. Traded in Dantes Inferno for 40, also traded in Bayonetta and got 60, no joke.
Business is business, but personally i’d rather buy a new game than used. Gaming is a costly habit, they’re expensive to buy, and even more expensive to make. I support EA on this one, for the simple fact I’d rather see my money go to the developers and publishers who made the game, rather than the company that sells them.
I traded in Mass Effect 2, and got $23.00 worth of credit, so no trade credit is bad even here in Canada. On the other hand, I understand it’s a business trying to make money.
If GameStop were to ever stop taking in and selling used games, they would lose a lot of customers, like more than half of their customer base is used game customers. I work at GameStop and even the people that come in to buy new games bring in old games to trade toward that new game, if they couldn’t sell used games they couldn’t take them in and a lot of people depend on trade-in store credit to, say, get their copy of God of War III on release day. Yes they get quite a profit from taking in games for $25 and selling them for $55, but that is pretty much where most of their profit comes from, they would go out of business if all they depended on was buying new games and accessories for only $5-$10 less then what they can sell them for.
Didn’t Garth Brooks talk the same shit about music in the 90′s. If you buy a car and then sell it used, do you owe Honda money? Most people who buy used games are buying them six months to a year after release. They’ve made their money by then.
Ask a GS employee how many copies of L4D2 or Modern Warfare they have used on their shelves. Did you know that you buy games in Thailand for $10.00 over the internet and they’re not even bootlegs? Check it out.