GameStop Says Publishers Can Participate in Their Used Game Business

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.