Gamestop: Used Games Provide Billions for Publishers

| 7 Aug 2012 10:31

Gamestop President Paul Raines claims that pre-owned sales "do not cannibalize new game sales".

The issue of used games sales is among the most contentious of the industry, ranking just below DRM for sparking ire across the internet. Publishers don't like the idea of missing out on games sales, while customers don't like the idea of paying $60 dollars for a game they might not end up enjoying. You're less likely to hear a great deal of support for retailers like Gamestop in the discussion, but they actually might have an interesting perspective to bring to the table. During an interview with Gamasutra, Gamestop President Paul Raines argued that pre-owned sales are far from one-sided transactions, and that they actually benefit the entire games industry in ways few realize.

"We are not ashamed of the pre-owned business and in fact we believe that it's good for the industry," Raines said. "We're really not cannibalizing new game sales. That's a common misconception ... We think there's a real lack of awareness as far as how it's good for the industry."

To back up his claim, Raines noted that 70% of the income customers receive from trading in used games never leaves GameStop, but is immediately spent on new games. According to Raines, that provides approximately $1.8 billion dollars to publishers alone. Customers who trade-in their games tend to do so after approximately six weeks, at which point the process would repeat itself.

Assuming this is true, publishers might have reason to be upset because they still aren't making as much money on sales as they could be. To Raines, that argument doesn't hold water either, because used game sales ultimately draw in new customers. "A lot of our consumers tell us that the pre-owned business has allowed them to learn more about video gaming," Raines notes. "There's a disconnect between a lot of the blogosphere and what consumers tell us."

Whether the numbers Raines quotes are accurate or not, there seems to be a great deal of miscommunication between GameStop and publishers that hurts gamers just as much as anyone else. To change the nature of the discussion, Raines wants to rebrand GameStop as a contributor to the industry as well as a brick-and-mortar retailer. "We don't sell appliances. We don't sell groceries. We are all about gaming," Raines says. "I play four hours of videogames a week. Our office is filled with gamers and people who are into videogames. We are authentically into gaming. This isn't a company that dabbles in it. Yeah, we have a business model, we have to make profits, but we're really into videogaming."

Source: Gamasutra via Eurogamer

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