When talks break out about global recessions and the role that video games seem to play in combating any revenue loss for major players in the industry, a lot of the success that games have seen in terms of sales in these shaky times is put on the shoulders of GameStop. Despite any fluctuation in capacity or retail spending, the company continues to make money hand-over-fist and the attribute much of their success to the strength of their used or repackaged games. Selling used games has been a very lucrative business for the gaming retailer, and it is a strength that many other companies are looking to capitalize on, even those just getting their feet wet in gaming sales.
All things considered, when someone comes in and buys a new titles for $59.99, the companies take very little away from that sale. In most retailers, games and other media are considered “lost leaders” in that they are meant to bring people into the store in order to lure them towards content with higher margins. The games themselves have very little mark-up, if any at all, and even many game consoles go out of the store at a loss, especially during first year or so of launch. Many big-box stores want to lead you into the televisions to play your games on, or perhaps a surround sound system to experience the audio, or even those $150 cables you absolutely must have to avoid evil martian rays. GameStop’s big lead, besides third-party accessories and game “insurance” is the used games that occupy a large portion of their shelving. That $59.99 game may be brought back to the store not but two days later, where the client will receive a strong $40 or less and go onto the next game. That same copy will be sold for five dollars off the normal price, and why not. Instant savings for a game that’s barely seen the inside of a console.
Developers and publishers are not big fans of this system, and while the merits of the used market aiding the game industry as a whole are still on trail, they have good reason to. That money that GameStop goes make off of their work goes directly to GameStop. No licensing, no additional purchases required. The creators and distributors only make money off that initial purchase, and everything else is just another potential full purchase customer lost to what they see as a better deal. A topic that is being discussed much more frequently and publicly is just how to combat the potential losses incurred, and how to entice frugal gamers to buy new copies of the games. Some ideas have been rather creative, and some have just been a little bit frightening.
Micheal Capps of Epic Games (Gears of War, Unreal Tournament), who made headlines earlier this year when he claimed the Wii was “a virus”, has completed an interview with GameIndustry.biz where he said that the concept of having users pay for storied content in games, such as the ending, could be a possibility in driving sales towards new purchases. Week or Month One buyers would be able to grab the DLC as free, displaying the ending of a game prominently and without any issues, but those who come to the party late would be subject to a fee if they wish to find out what happens. Of course, it could just be a one-time activation meant to filter out previously used copies and let the original owner reap the benefits, but it is still a tricky situation.
Capps promotes to his employees at Epic to buy new games, and does indicate that rampant copying and re-use is what is causing companies to steer away from certain models. Yet, he rejects the ideas of DLC, due to the fact that it does restrict many players who may not have the online models in place. It’s a tricky beast, and one that I’m sure will become more prominent in the design and execution of game launches by publishers going forward. DLC can be an effective way to encourage early purchases, with some games like Dead Space offering special suits within the first two weeks of the game’s release for free, that now cost 320 Microsoft Points. Even LittleBigPlanet offered some Halloween costumes for its users, and with more content to come it seems like a good gift back to the fans of the game and a little poke for those waiting it out. Of course, cosmetics aren’t going to be a big draw for some, so what other ways can this be combated?
One way we’re seeing retailers encourage purchases is through pre-order bonuses and swag. Nothing is quite as enticing to some people than a t-shirt branded with a game they are really looking forward to playing, and perhaps may push them over the edge instead of waiting for the next iteration or another game in particular. The PC market is very much a one use only market, which in part could be seen as a detriment to bringing in the used-game enthusiast, and incentive for these games is usually tied to an online authentication system or something of the like. The big issue that needs to be addressed is adding value to the consumer. Right now, they extract value from the price. They spend less on used games, and essentially gather the same experience as a full retail experience. Instead of worrying about taking away that experience from used-game owners, they should look to enhance the experience of those who buy early and often. Give people incentive to make the leap, be it through day one content or even first play content. There are other methods, but it is something that needs to be discussed and understood before we start having to grab games as soon as their out for fear of missing out a year later. It limits their effectiveness in the future, and might also eliminate a future customer.



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