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NEWS

GameStop Used Game Sales Pegged for $2b

Kris Graft's picture

By Kris Graft

January 22, 2009

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GameStop's used games business alone will rake in $2 billion this fiscal year, or 23 percent of total revenue, one analyst estimates.

The number is compared to $1.6 billion, or 22.4 percent a year ago. The retailer's fiscal year ends January 31.

An article in The Wall Street Journal said around 42 percent of GameStop's overall gross profits stem from its used games business, a figure that Evan Wilson with Pacific Crest called "astronomical," as most retailers turn only single-digit margins.

GameStop's gross profit margin for used games is nearly 50 percent, versus around 20 percent for a new game sale.

Some publishers have expressed concern over the used games business, as they don't see a penny from the countless used game transactions that take place every day.

WSJ noted Epic Games' move to include a code for free downloadable maps in new copies of Gears of War 2, a practice that adds a bit more incentive for consumers to splurge that extra $5-$10 for a new copy.

Thom's picture
On January 26th Thom said:

Publishers really don't have a leg to stand on here. Once a consumer buys something they can do almost anything they want with it, including trade or sell it for other goods and services. You don't hear Ford complaining about people trading in used cars do you? Besides, physical media will be dead in 10 years and then they can put all the DRM they want in their games.

DoubleTap's picture
On January 26th DoubleTap said:

Some publishers have expressed concern over the used games business, as they don't see a penny from the countless used game transactions that take place every day.................................................and if i could not trade back mediocre titles i would not be getting 20-30 titles a year i would not be able to afford it.Publishers must realise that the secound hand market drives their sales along.Stop this market at your own peril.

Stephen Hancock's picture
On January 25th Stephen Hancock said:

Has anyone ever considered competing against GameStop by offering a profit-sharing program with the publishers? The publishers could offer the hypothetical competitor either price breaks on new games or exclusive content in exchange.

Stephen Hancock's picture
On January 25th Stephen Hancock said:

profit-sharing program with the publishers on used games, not new. Sorry about the slip-up.

quietIdentity's picture
On January 23rd quietIdentity said:

Its a war digital distribution would solve. If only they gave the consoles bigger harddrives.

E. Zachary Knight's picture
On January 26th E. Zachary Knight said:

Harddrives? Your kidding right? Storage size is the least affecting factor of the digital distribution "revolution". The main and most affective problem in the over taking of didgital distribution has always been and always will be bandwidth and broadband penetration.

Without the bandwidth to download a 20gig game in a reasonable amount of time (The time it takes to drive to the store, pick up a copy and drive back to the house) Digital distribution will not take over.

Without the penetration that more than 75% of your potential customers have enough bandwidth to do so, digital distribution will not take over.