Yeah, it's a fence.

Image courtesy of Joystiq.

This is my email response to a few questions I got from an NPR reporter vis a vis the market for video game re-resellers, like GameStop.

As for the question du jour, GameStop is generally held in fairly low regard — they are, essentially, seen as little better than a narrowly-focused pawn shop. In a nutshell: (there was some existing animosity between GS and Penny Arcade, however, which may color the latter’s opinion somewhat; — this is partly a result of some of the stuff I’ll get into below).

I haven’t personally interacted with GS for several years (due primarily to gaming budget cuts, and also some personal issues that are not GS’s fault per se, but…). My neighborhood is rife with traditional pawn shops, so if I really need to unload this stack of out-of-date Xbox Classic stuff, I’ll just carry it a block to one of them, rather than go out of my way to find a GS. It’s not the lesser of two evils, just the more convenient one.

As far as current trends, I see several things happening:

  • The increased use and distribution of micropayment-based supplemental content (like music packs for Rock Band and the like). This has had some unusual implementations and reactions; traditional micropayments of $.99 in some games for functional in-game items are viewed somewhat derisively by people who will drop $10 on Li’l KT (, which is merely a vanity item.  This may be publisher-based bias in the marketplace, or something else altogether.  Full Disclosure: I’ve bought Rock Band/Guitar Hero tracks.
  • Pre-Orders have gotten absolutely ridiculous. For instance, the hotly-anticipated Star Trek Online is available for pre-order from a number of different retailers, from brick & mortar to several online sources (whether those sources will be shipping actual media, or offering a downloadable copy); that’s not unusual. What’s driving people crazy is that there are different inducements and extras depending on where you buy it. [Correction: Klingons are available to all players, they just have to live flagged as PvP from the very outset in their starting area.] Another gives you the chance to pilot the Enterprise. Nowhere can you get everything (but, and this is unsubstantiated conjecture, I bet you’ll be able to purchase these other features after the game launches… for a nominal fee). From everyone I’ve spoken with, the overarching reaction can be summed up as, “Seriously? WTF.
  • Online purchase and distribution (through services like Steam) is growing, and will keep doing so for a while. Broadband and improved download mechanisms (be they high-capacity single-source sites, or torrent-based distributed source models) mean that folks don’t have to head to brick-and-mortar outlets. I can certainly see the allure of buying online, downloading several GB while I sleep, and having it ready to rock the next morning… which means I don’t need to go to whichever store to get it. There’s a lot less uncertainty about how “real” a downloaded copy of the game is as compared to CD or DVD media if something goes awry; my girlfriend has several Big Fish titles, and when she got a new computer, they didn’t all make the move successfully. An email to Big Fish with a bit of account and order info, and the game files were made available. Gone are the days where folks wanted to have something in their hands to be 100% confident that they owned the game.
  • As far as the video game resale market, it’s probably not hugely robust (I don’t have dollar figures, or percentage of the game market as a whole).For the purposes of this subject, you simply can’t resell a game that the original buyer downloaded. “There’s no there there,” as the man said. The resellers know it, and they’re freaking out. Whether there’s the same level of freakout by consumers, if there’s a subset of the gaming public that actually keeps resale value in mind when they make a purchase decision, I can’t say. There probably are folks who do this (those folks with a penchant for tearing through a new title every three days), but they’re not the majority of the marketplace. Most folks buy a game, and keep it, unless something forces their hand (unemployment means “sell some stuff to make rent,” migration to an incompatible platform — both of these have happened to me in the past). Unless folks run out of shelf space, they’ve probably got years’ and years’ worth of previously purchased game media hanging around; some folks do this intentionally (nostalgia, collectors, or just pride and enjoyment), some others merely out of forgetfulness until it’s time for wholesale cleaning…. and these latter folks may indeed take their old titles to a resale outlet to see what kind of pittance they can get for these things, or if they’re merely stylish coasters.
  • There are certainly plenty of folks who use sites like Craigslist to buy, sell, and trade games, but I couldn’t say how substantial this market is.

I don’t think the market is saturated, but the soft economy probably didn’t spare the game industry this year. I know that I’ve been a lot more frugal when it comes to discretionary purchases (and the one game I did buy this year, Aion, ended up causing a fairly serious case of buyer’s remorse).  For folks who put a higher priority on keeping their gaming collection fresh and current, and who have the budget to do so, I don’t imagine there’s been a huge shift in purchasing behavior, except maybe going for more of the downloadable content instead of hard media.

Games from major developers are trending in much the same way movies are — towards a few huge blockbusters, rather than a wider array of things with a few less-successful titles (there is still a robust independent development field, as well as a big market of free and low-budget stuff like PopCap’s fare or the various games on sites like Facebook game; “casual” or “clicky” games, instead of the huge productions). So you end up with titles like Modern Warfare 2 setting sales records after being hyped to the nines.  Doesn’t matter where folks get them, they’re just deployed like juggernauts. And, much like video games, movies have adopted the Netflix model, in some cases leapfrogging the DVD release with a streaming media version.

Streaming media/digital online distribution is cheaper for the producers and distributors — no media, printing, or shipping costs (they might even try to spin a “green” angle on this, if they’re savvy, though the environmental costs of running the distribution servers and such are non-zero). Basically, I see industry profit margins driving distribution modes and channels, so GameStop and other used-game resellers are ill-suited to compete in a more dynamic marketplace (translation: there is no way for them to buy digital-only titles on the cheap and resell them at a profit).  To which my reaction is, “That’s too fucking bad.”

1 Comment

  1. Couple of thoughts, more or less in order:

    Honestly, I think GS made themselves irrelevant or ignorable by their very target market: the knowledgeable gamer. Their new games are set spot on “MSRP”, their used games used to be pretty much “what the market will bear” but are now instead “$5 off new price”, pretty much for the life of the hardware platform. It took until the beginning of 2009 for them to start treating the majority of PS2 games as the chaff they are. (Yes, they may be entertaining to play, but be honest: there’s no way that Gran Turismo 3 A-Spec could be considered a collectible thing. There’s probably a million copies available for sale at any given moment.) So, between Amazon (cheap for new stuff), (cheap for used stuff), and Best Buy (immediate gratification with occasional sales and coupons), there’s no reason someone with any knowledge would set foot into the place. And the “gamer funk” still colors how NON-gamers see the place, meaning they won’t go there either. Who’s left to shop there?

    Steam has been my vendor of choice for about a month. Not that that’s a particularly long time, but I’ve spent more there in that month than I have otherwise spent on video games in the prior year, even including the fact that Steam isn’t doing PS3 games (which tend to be Very Expensive, even used or by Amazon deals), and most of the Steam games tend to be pretty cheap (<$10). The reason for this is two-fold: First, I CAN use them on any computer I'm using long enough to download the games to and has enough horsepower to run. Which means that copy of Torchlight I just bought goes on all the machines, Secondly, If my house burns down, I get my games back, as soon as I get another computer out of the insurance company.

    Steam's got its problems, though. The noticeable one so far is that they're kind of lacking on the the customer support end. Usually an email to a support desk about a billing issue will get at least a "Hey, we're looking into this" within a couple of business hours from any online service seller, especially when it's a problem that interferes with .. you know… buying shit from them. The Geek's gone a whole day with nary a peep. Additionally, it'd be really slick if shutting down a game pushed the saved game info BACK out to the cloud, so it would update the installs on the other machines, when they get signed on.

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