Well if anyone is dumb enough to purchase all their games (used or new) at GameStop, then they deserve to be ripped off by GameStop's $5 "savings" racket.

In this economy, the smarter gamer rents; preferably via an all-you-can-eat service like GameFly. And if they find a game they like enough, they purchase it pre-owned (or even brand new) from somewhere like eBay, Half.com or even direct from GameFly, at tremendous savings vs. new or used from GameStop.

Case and point: just last week, I picked up Prince of Persia (Xbox 360), brand new on eBay. Only paid $28 for it, plus another $5 in shipping. The game still retails brand new at GameStop for $59.99 (plus a local sales tax of 7.5%). That's a savings of $31.49 over picking it up a GameStop, and I still got it new, in the original seal.

And a good thing too. Prince of Persia, like most games from last year (Army of Two, Gears of War 2, Mirror's Edge, Resistance 2, etc.), while awesome, is pretty short. and can be beaten over the course of a single weekend - technically making it rental material. So like most games last year, it was not even worth a $60 (plus tax) purchase in the first place.

Anyway, keeping this on topic. Despite sounding like an arrogant arse, GameStop's CEO, Dan DeMatteo is likely spot on the money about the pre-owned setup not working for Amazon.

Firstly, the entire waiting to get your money on a gift card via snail mail, is enough to put an end to Amazon's pre-order initiative right there. They'd have been much smarter just to credit the cash amount directly to people's Amazon account. Then there is the matter of trade-in value. Following the GameStop model, the set price for trade-ins will be very low, while the sell prices for the same games, will be relatively high. Most gamers with the patience and savvy to shop/sell pre-owned games online already know they get a far better deal by skipping the middle man, and using Amazon's (or eBay's or Half.com's or Craig's List's) service to sell their used game directly to the consumer and pay a small listing/selling fee. Likewise, most consumers who shop for pre-owned games online, know they can get better deals by shopping directly with the seller.

Matter of fact, the deals you get from shopping/selling directly online are usually so damned good, that the only reason GameStop is even in business, is society has managed to train most consumers to seek out instant gratification. GameStop made over $8 billion last year; as I understand, around 75% of it from the sell of pre-owned software. It is very likely that 70% to 90% of the consumers who gave GameStop the means to turnover that $8 billion, are all very aware you can get much better deals (buying or selling) on eBay, yet chose the path of instant gratification over getting a much better deal, anyway.

Unlike GameStop, Amazon does not have any means of delivering the instant gratification pill to it's customers. Even if they credited the money from trade-ins directly to Amazon accounts, you still have to wait the 2 to 5 business days for the game to get to Amazon via the mail, plus however long it takes for Amazon to process your trade-in and credit the cash to your account. All told, depending on which day you sent your game off in the mail, you could be waiting for as many as ten days before you see any money.

There are ways that Amazon could make it worth consumer's time and streamline the service. As stated before, they could credit money directly to Amazon accounts. They could also establish a postal printing system similar to Paypal, so that customers can use their Amazon accounts to print their own postage labels, when they ship a game to Amazon. If Amazon is really bullish, they could offer to pay for said shipping (possibly credit it back to the user's account once the game shows up). On that note, if they are feeling extremely bullish, they could credit "qualified" customer's accounts for the game as soon as the customer ships the game (ie. the barcode on the Amazon shipping label they printed out on their home computer, was scanned by into the USPS system, by the local postmaster). I could see where that would work if they only credited between 50% and 70% of the trade-in value at time of shipping, and the rest once the game reaches and is verified at the Amazon processing center. And even then, only customer's who Amazon accounts are associated to a creditcard (not debit), and the TOS of the service, gave Amazon permission to get their money back via said creditcard, should the customer in question be attempting to scam Amazon. This would cut what could have been a week or two wait for money, down into something much closer to instant gratification.

Other options open to Amazon, is give better deals on trade-in/sell values than GameStop. The last time I checked, this option is working particularly well for Game Crazy, one of GameStop's up and coming competitors across the West Coast. They could even extend the program to cover other forms of popular media: books, music CDs, SACDs, DVD-Audios, and blu-rays.

All told, if Amazon is willing to stick their neck out a little and take on some risk, they actually could get this to work out well for them. Maybe not on the level of GameStop, but at least to the tune of a few hundred million $$$$ in profit annually. However, if the only thing they are going to do is merely attempt to emulate GameStop, point for point, then with Best Buy and Toys R Us also jumping unto the pre-owned bandwagon, and places like Game Crazy still expanding rapidly, they do not stand much of a chance unless they eliminate as many obstacles as possible as well as create differentiators for their trade-in service, vs those of the competition.