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LONG BLOG

In The Defense of GameStop

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This video is for your listening pleasure. (I left auto play off for you mobile people :D)

In The Defense of GameStop

I am more than aware of the evils that GameStop has done in the past of becoming a giant chain that ate up the brands or resellers of yester years. I am aware of their ignorance of how far they can push consumers before they would reach their own breaking points.

The Loss of GameStop would be a travesty

How can it be that corporate overlords from Texas be a great thing for gaming? Well, I think we have overlooked the fact that GameStop is actually one of the reasons why the 6th generation of video game consoles was the point where commercially video games broke through the glass ceiling of what was possible when it came to retail of video games.

Anyone who was the sole purchaser in 1994 would understand the fact that distribution saves or kills a product.

Most people overlook the good luck Nintendo had with the NES. Nintendo had actually been trying to sell the system for 2 years with no luck before the huge boon of 1987. Today we all know that the Nintendo Entertainment System was a quality product… minus the whole pins issues which we all can that NOA for that redesign to make it look like a VCR… But even with a quality product getting it to consumers was a huge issue.

Which they were lucky that they had past relations with a toy distributor, which allowed them to get the NES to stores like Toys “R” US (RIP), Walmart (why not you?), and smaller dealers across the USA.

Myth #1 Games are very profitable for retailers

It is true, games generally suck when it comes to profits margins. Most retailers gain about 15%-40% per game… which generally means 9:51 or 2:3 dollars profit to investment. And that is if you sell the game the day that it launches or before the first price drop.

Once the game is sold to the retailer it is hard for them to recoup the cost of having the title. Unlike books there is no system for duds. It is all supply and demand and that is why certain Walmart I know of still has a copy of Mario Party 5 on Gamecube for $60… Because they did not sell it and it stayed on the shelf.

In the days and age of the NES, there was some competition, but if you bought NES stock… it was reaching the whole market for the most part until 1989 and even then it was dominant till 1991.

Why do stores like Spencer’s, Hot Topic, and any other specialty place do better than video games? Because they are selling at a surplus. Generally their profit margins are at lest 1:2 or even up to 1:10.

That is why McDonalds will sell you a drink at $1 at any size. Because at the most it will cost them $0.20. So they are getting at worst a 1:5 and at best a 1:9 ratio of investment vs profit.

If you look at Selling new games that include anything but a piece of paper you are still looking at not having the cost of one game cover the cost of another. Which means that the longer a game sits on the shelf the worst off the company is.

Believe it or not but GameStop manages to get things done on time

Other stores have many other products such as: Food, Toothpaste, and Toilet Paper that has higher profit margins and are in higher demand than Video games. For many clerks and stock workers at retailers it is very simple that selling video games is not their first priority nor the bread winner.

Which means it takes time to get the game that you want the day it should be out.

Many stores like Walmart, Target, and other non-electronic focused stores may miss important releases that are not Call of Duty or Mario. I personally have gone into 6 stores on the same day that had the item in stock but were not getting it onto the sales floor because no one was stocking the item till later that day.

On the other hand GameStop, when they are open always has their items ready for purchase. There can be delays sometimes on outstanding circumstances, but I have ran into the past when all the copies of Pokken Tournament in Phoenix Arizona were delayed due to being on the same truck for an entire week. This basically killed and fighting game excitement I had when other people were getting to play it online before me.

GameStop manages to get games on time but generally they mail everything within a day of it coming out. I just got the Dark Souls Amiibo the day that Dark Souls came out and I did not have the expedited shipping.

GameStop is generally at more places than others

My home town was a county seat of a centralized farming community, we had a Walmart, a McDonalds, and eventually a GameStop.

Not that Walmart has not stepped up their in store orders much like that of the now fallen Sears, but 20-15 years ago you bought what was in the store and generally there was not much you could do about it. When Sam Walton died there was a dramatic drop in quality of Walmart, and it become more streamlined and less consumer focused.

So if you lived in a small town you had to drive to a specialty store near you to make the purchase. GameStop in the early 2000s built a huge supply chain that went across the whole US and it was 100% focused around video games. Sure it is self serving and did drive some of the poorly managed mom and pop shops out of business when it came to new and used sales but the rise of GameStop lead to the rise of gaming in popular culture.

The Sixth and Seventh generation of gaming would have never hit the high peaks that they did if GameStop did not have 460 stores for 50 states. (almost 10 per state at 2004)

That means more locations actually hitting projected sales and less waste on pre-orders, sales of accessories, and supplementary items such as strategy guides, figurines, and Cards. (High profit margin items)

Sega was all set up to crush the 5th generation of consoles. Not only did they have the best hardware possible at the time, but they had a system with 8 processors and glorious sound chip that to this day is probably better than what is currently in consoles. Sure the Playstation could pull more triangles and was more standard for PC hardware was concerned but they knew Quads actually were better in the terms of the tech that was out at the time.

The major issue was that they decided to push the date of their system launch to ahead of the Playstation.

That one move killed them.

A lot can be said about Sega of 1995 and multiple reasons as to why the Sega Saturn failed. Some people blame all of the expansions of the Genesis… But there is one really big reason the Saturn did not sell well.

It was not available.

Oh the 90s...

Sega’s major sin of that generation was not pushing lots of hardware. It was not abandoning the Sega Genesis. It was not over hyping a console focused on theoretical rendering system. It was that they decided to launch the system too early and made it an exclusive to a few retailers in the USA.

Some people wonder why the console sold better in Japan? Because it was widely available and easy to purchase.

Sega of USA managed to piss off Walmart, Best Buy, and KB Toys… which in 1994 were the widest hitting retailers of video games in the United States at the time. It was not till 2004 that I had even gone into a Toys “R” Us because the closest one was 1-3 hours away.

It also did not help that in pushing the release date it forced developers into crunching their development time for launch titles… Which many of the launch titles for the Saturn were poorly received because they were rushed and were performing poorly on the hardware. (Most early games were only 30fps because of the rushed releases and got overlooked by PS1 competitors as they were running at 60fps)

There was no way to recover from this sin, as without consoles in hand… you cannot sell games… if you cannot sell games… you don’t make licensing money… and thus loose player base too.

You have to convince retailers and distributors that the cost of video games are worth it

It takes more than just Trucks to send video games to where they need to go. Sometimes they have to travel by boat, air and other forms of transportation to get to the consumer. As with Myth #1, the video game developer needs to convince that it is worth distributors to carry their item.

People say that Nintendo was stingy on the first NES Classic release. But the truth is, it was a niche item that had an unknown future. At the time the Wii U was selling terribly, that the retailers were still dealing with the Skylanders fiasco of over stocking.

So yeah at that time and place a micro console with only 30 games on it was completely niche and to a retailer is investing $40-50 in acquiring the item in the first place… $10-20 or 4:1 or 5:1 investment vs profit ratios the NES Classic stunk…

Even Nintendo did not guess properly the excitement that the US market had for the NES Classic and how that all of the ones stocked the first day it was available would be purchased within minutes.

Products like the NES Classic also have chips that are mass produced to cut costs, which is probably why restocking was another issue. But by then you had all major distributors wanting more stock but not necessarily needing a crazy amount either.

This is generally where issues happen when profitability =/= demand. Nintendo is really bad at that… Like when they had to raise the price of the Wii to $250 before launch because Walmart needed a bigger cut. Sure at $200 it would have been the same system but with the $50 extra profit Walmart could afford to have more in stock because it had a slightly higher profit margin to work off of.

Still not as good a drinks… Which is why every convince store has water, soda, and some form of alcohol. (because those drinks have 10+:1 profitability on the item) Consumers demand a that an item does not reach a certain price so then there is a cap to how much of an item a store can logistically stock because it is not worth having overstock taking away from space of items that do have high profit margins.

Since GameStop is all about the sales of games, they never have to go through this process as their truck drivers are functioning in two ways: 1) Distributing new games to stores, 2) Distributing used games to stores. I am sure it probably is not quite as profitable of a deal but GameStop is going to be more efficient that any other source at this point.

Last Generation is GameStops jam

Used games are 100% profit for GameStop.

Not only can they give people 1/3 of the actual value of the item but then they can turn around and sell that item for a profit ratio of 3:1.

It seems evil, and maybe criminal to be doing this but it is a great service. If you need to find a game used that you want to save 20% on you can probably find it at GameStop… If it is a last generation title you can probably save 50-60% depending if it is a name brand title or not. That is how I bought Dokapon Kingdom for $40.

Or found the correct USB Mini-B cable to charge my PS3 controller with the PSTV. Sure on Ebay and Amazon I could spend $15 fo a used one and get it shipped in a week.

Or I could get one for $13 at my local GameStop, and take it home that night. Which for anyone that is being smart enough to game in the current previous generation GameStop is amazing. I bought so many AAA or highly acclaimed games for their time for $10-$30 it has completely spoiled me to the modern pricing of $70+ for a new game.

Hands down if you really need something right away, GameStop was the first company to allow you to do online holds on games/accessories and have the item held for you quickly and effectively through their online system. I will say that sometimes they suck because the server goes down or the website does not show everything without searching for it. But the ease of purchasing through them has been amazing.

Myth #3 Buying used is always bad

Used game sales are nothing to be ashamed of. The copy you bought has already paid the developers so you might as well enjoy the game for what it is and not worry about the future of the development team. Yes, it would be great to always support people that support the consoles that you like but…

Lets say you like some games from EA, Activision, or Ubisoft but really hate those companies for certain reasons… GameStop allows you to mostly give them the middle finger and skip giving them money… Or at least until you boot it up and find out how much DLC you have to buy for the game to not be a grind festival.

Sure generally sales a much less than the original price, but at least it is someone giving you a cash value at the right time and place. But then again I generally sell my video games at a different store or on Ebay cause I can get full used prices for them.

But for people that don’t want to hassle with selling off their old games, but don’t want to donate them to Goodwill. GameStop is a great middle stopgap.

If GameStop died it would mean a number of things

1) That the retail gaming world was not doing well.

Seriously though, it would mean that people were not buying video games much and that the overall market was collapsing due to the shift of sales into a different sector. Totally get that digital sales are getting into the video game market… But I think that if a system supported used digital game sales… that would become a new standard and kind of shift how the market runs.

Don’t know how secure that would be in the long run but then again if a CD key = a game… and if disks are just CD keys… then why can’t we just sell numbers that tell other numbers that they just changed ownership?

Complex and perplexing changes of the digital future indeed.

2) Gaming is dead. Or ascended in a higher plane of existence.

That society has shifted against needed a fix for video game, accessories, or figurines. It is possible that a total digital future would eliminate the need for this. But then again it could be an outlier trend in a downward shift for the video game market. Which could then prove that video games were a fad that lasted 30-40 years and now are on their way out for the next big thing.

Frankly I have no idea what a device would do that could cause this to happen… maybe books? I don’t know. Unless there is some neural interface like out of star trek that allows users to jack into a different realm of existence, but then would that really be real or reality or would that simply be people taking a game for that of reality and completely ignoring the real world for a fictional digital world where they conform to strange standards so that there is some form of normalcy in a world where technically everything could be strange and different.

For conceivably humans need distractions and to play, so I think video games will always be around but they could change into forms we never thought of and be just as jarring as it was for Marty McFly in Back to the Future Part 2.

3) People Suck at business

don’t think it is much of a stretch that the overlords of GameStop kind of suck. Granted they made a great platform that allowed gaming to elevate to the level that it is today. But on the other hand there has been a certain level of mismanagement from the corporate level that has gained a huge amount of distrust at the customer or sales associate level.

The whole game shredding thing comes up to mind. I don’t know if that is because we keep getting the same sports/shooting games every year and everyone goes out and buys the latest one and sells the old one at the same time. But GameStop used to and may still be shredding common games.

It makes sense not to hold every copy of Madden ever made for a console as most sport fans either own the latest copy or saved the copy with their favorite players in it. Which even with the Genesis the total number of sports games still to this day is amazing and a testament to sports video game fans are not a number to be messed with. But GameStop becoming so huge, had tons of the same game on hand and very few people that wanted them. So if they shredded 9 million copies and kept 1 million they can keep supply with demand and make their extra copies they kept worth keeping.

The only issue with that is that they lost a lot of trust and respect from the community and still to this day I cannot forget that.

There has been other things with games that they had exclusive rights to print and kept printing new “used” copies to have available at every store like the customer was getting “lucky”… but I cannot necessarily blame them for that as they were printing new copies when most publishers stop after the initial print.

I think right now repurposing and adding a lot more plushies and optional gaming gear is really a smart move on their end. As I actually see people buy things that are not video games at their store, and those items have higher profit margins. Which we can see an ever so slight up tick on their stocks from the dip in mid 2018 being the lowest point they had been since 2005.

GameStop is the booty of the Gaming Industry Retailers

They might not be quite as high profile as other parts of the body...

Butt seriously… seriously, there are some good people that work for GameStop and care about their jobs. People like KnickKnack that work their butts off and really care about gaming and serving people to support gaming. Granted I have worked low wage jobs that I have hated, and I am sure that working in a video game store is torture in various ways. But that is why l have to give respect to the people that make me like going to GameStop.

Right next to me is a store I really hate. The manager is this sleezy guy who is always in a bad mood, trying to upcharge me for the latest games and does not really listen to my needs as a customer. I only go to this store when they have an item that any other GameStop in 10 miles does not have.

 Because by the local Walmart is another GameStop. The one with a cool guy who actually takes an interest in the games I like to play, the one that will talk to me and give me good recommendations on games to get. The one that saw I had a huge problem with playing Metroid Samus Returns on the 3DS, because at the time the 3DS was still $170 for an age old machine and he recommended buying a used one and playing through the game in 7 days and returning it.

He genuinely cared more about me as a customer than the well being of GameStop… Which is something I really appreciate.

If you ever have a bad experience at a store I recommend shopping around and finding one with the people that you like working there. Not only does this store have this guy as a manager but he also has very attractive co-workers there that are just as enthusiastic about their jobs.

Things just feel completely different when the employees care about their job and are genuinely happy and excited to get to know you. I make sure to fill out all the surveys for their store cause they are rocking it!

Back to the rump of this section… GameStop is the Booty of the gaming industry because it is where all the items that have been digested go. There is not much glory in that kind of work, dealing in not the latest items that may have been degraded in the process. Or that eventually they may be expelled into dumpsters everywhere but at least they try to extract all the value of the items and provide the body of gaming with every ounce of usable material so that the masses that are not closely strained next to the mouth or stomach may get a chance at the delivery of the vital nutrients of games.

People need to give them the respect that they deserve. Without GameStop being able to supply a lot of people with the video game consoles, games, and accessories… gaming might not be as big as it is today. I don’t think they need a lot of credit as they have made giant mistakes in the past and still not quite as competitive in pre-order extras swag as Amazon and Best Buy.

But still as a posterior, things are not always glamorous but… they generally are quite functional and adequate for the needs. And when open they provide the needs and services that many require and for that they need respect.

They still are one of the best physical places to pick up games from. (Even if they are run by corporate overlords from Texas)

 

Well that is all I have to say, love to check out your comments below :)

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About Retrofractionone of us since 5:01 PM on 08.24.2009

I play really old video games and enjoy them.

My parents bought an NES and MM6 and Metroid and that is how I got into gaming.

You could say I am a Nintendo fan boy, but I am starting to get off of that train as of recent.

Anyway hope you enjoy my blogs and feel free to leave a comment.

Read more at https://www.destructoid.com/blogs/Retrofraction#4qsKE0ZCdVS243Wk.99