Tag Archives: secondhand

Amazon UK has started to accept trade-ins on used games, following a successful roll-out of the scheme in the US.

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Tesco’s told MCV its expanding its used games sales operation to include all its smaller Extra stores.

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Speaking at the BMO Capital Markets 18th Annual Digital Entertainment Conference in New York yesterday, Take-Two boss Strauss Zelnick said that moaning about the used games market is pointless: you beat secondhand sales with quality, apparently.

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Used games supplied almost 50 percent gross profit margin (gross profit divided by total revenue) to Gamestop’s in the last fiscal year, according to this Gamasutra piece.

The figure compares to 21 percent for new software, and a shocking 6 cents in the dollar for new hardware.

Gross profit margins on used software have, however, increased only 1.44 percent in the past three years.

Every other segment has seen a decrease in gross profit margins during the same period: new hardware down 1.4 percent and new software down 2.6 percent.

Thanks, Kotaku.

Gamestop’s share price dropped 13 percent yesterday following Amazon’s announcement that it’s to enter the used game space, Joystiq reports.

Amazon said it is to start offering vouchers in return for secondhand games, a ploy Gamestop slapped last night as unworkable.

UBS analyst Ben Schachter concurred, saying the market was overreacting.

“Online game sales currently comprise less than 2% of GME’s total business (via the gamestop.com website) and we estimate well-less than 10% of industry game sales,” he wrote in a research note reported by Variety.

“We believe the ‘instant gratification’ of the trade-in process at physical stores remains a key advantage for GME, and we note that GME once offered online/mail-in trade-ins but stopped after issues w/product quality/shipping expenses. The bottom line is that [Amazon] is a formidable competitor, but we don’t see any meaningful near-term risk, and online used just isn’t a particularly big market.”

Plenty more through the links.

Gamestop’s grip on the secondhand market has been responsible for its financial success in 2008, according to this Wall Street Journal report. The retailer showed a 22 percent increase in sales last year.

Sales of used games are expected to reach $2 billion, or 23 percent, of GameStop’s revenue for its fiscal year ending Jan. 31, according to Pacific Crest Securities.

That’s up from $1.6 billion, or 22.4 percent, of revenue a year earlier.

The focus on used game sales has kept Gamestop ahead of competition such as Best Buy and Circuit City, the former dropping 12 percent of sales last year, the latter learning a far harder lesson: it’s been liquidated.

“Nobody else has that used-games draw,” said retail analyst Joseph Feldman of Telsey Advisory Group.

“Once you have played a game awhile and it loses its value, GameStop is pretty much the only place where you can get something for it, and that’s a big deal in this economy.”

Lots more through there.

Eurogamer’s got a quote from Nintendo UK confirming you can sell on Wii Speak, despite the fact each comes with a unique code.

“Nintendo can confirm that when consumers purchase the Wii Speak accessory, they are provided with a Wii Download Ticket with a unique number. The ticket, which can be redeemed via the Wii Shop Channel, will enable the user to download the Wii Speak Channel free of charge to a single Wii console,” said a rep.

“Any consumer who may have misplaced their Wii Download Ticket number for the Wii Speak Channel or require a new number following a Wii exchange may contact their local Nintendo Customer Services department, where they can request a replacement Wii Download Ticket number.”

The story originated from this MTV article, which then turned into this bit from Kotaku, but now you need never fret: you will be able to sell your Wii microphone after all.

Frontier boss David Braben has stepped up his campaign against secondhand games sales, telling Eurogamer at Game City in Nottingham that retailers are essentially fiddling the trade.

“The shops are not giving us a way of distinguishing between pre-owned and new,” he said. “So the shops are essentially defrauding the industry.”

Braben added: “We’ve got a lot of retailers eating our lunch and refusing to sell full-priced games.

“I’ve been in a shop where I’ve tried to buy a copy of a relatively recent game, and I’ve taken an empty box off the shelf and they’ve given me a pre-owned copy. That, I think, is disgraceful.

“Not holding stock of new games, substituting them with pre-owned games at the same or much the same price… That is really destroying the shelf-life of our games.”

There’s more through there. None of it’s pretty.

Secondhand games sales are hurting single-player games, Frontier’s David Braben has told GI. Goddamn those secondhand games.

“I think it’s really damaging to the single-player experience,” he said. “Games like BioShock and Assassin’s Creed, where they’re perfectly valid games, but once you’ve played them they go into the pre-owned section.”

“The sales don’t reflect the actual sales of people playing them because someone has gone out and bought, at almost the same price, a pre-owned copy because they couldn’t get an original. It’s very frustrating that they don’t carry that stock any more.”

More though there.

According to this Gamasutra report, 49 million American gamers buy both used and new games.

At this year’s MI6 game marketing conference in San Francisco, the MI6 organizers exclusively commissioned global consumer research and consultancy firm OTX to study the video game resale market in the United States.

These details, provided by its creators alongside today’s presentation, include the fact that 60% of gamers purchase both new and used titles, and that sellers (who make up a third of all gamers) tend to reinvest their money in the industry with new game purchases.

Click through for some splendid Venn diagrams with words on them.

Eric Villain boss of “media and entertainment insights” for OTX, said that the future of the game resale market is online at marketing conference MI6 yesterday. From Gamercyte:

The future of the game resale market, said Villain, is a greater presence in online selling and trading. Currently, only 35% of gamers are making sales or purchases online, through eBay, craigslist, Goozex, or otherwise, but OTX predicts a sharp increase for 2008. In addition, the overall marketplace for used games will see an increase this year–during an economic downturn, Villain predicts, more gamers are going to start turning to used games in order to keep their hobby affordable.

Gamercyte seems to be the only site on the internet that bothered to attend MI6 in San Francisco yesterday, so more power to you.

Major US retailer Circuit City is to start selling secondhand games, according to this.

The store chain is to trial the service in 10 outlets, with plans to expand to other shops if the test is a success. Which it almost certainly will be. The move by Circuit City is a second step to get into the games business, after recently launching a discount plan called the Gamer Savings Club, which has now attracted more than 25,000 members.

In case you’re wondering why this matters, or why American publishers are probably reading this news through the gaps in their fingers, take a look at this.