With rumors rampant that the latest and greatest from Sony & Microsoft won't support GameStop's cash cow that is
used games, it isn't hard to fathom that the $2.5 billion (with a b) company isn't utterly
shaking in its boots about the future. There is hope for GameStop, however. It just needs to do two things: sell themselves as a
service, and (oh please, oh please) leverage their retail locations and store-to-store distribution network to bring out-of-circulation "retro" gaming back to the masses.
Part 1: Be Useful
When GameStop sells you any of the "big three" consoles available on the market, you're presented with four options. Brand new in box, used, Microsoft refurbished, or GameStop refurbished. It's the last piece that the retailer has absolutely neglected in terms of selling themselves as a service.
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| Oh look, now I'm a console repair guy. |
For the cost of a few torx/security screwdrivers and a little low-wage elbow grease, Gamestop could fashion themselves their own little "Game Refurbishment" enterprise. Consider the fact that a "refurbished" NES could set someone back
about $60-$70 on eBay and compete against that. Refurbishing a NES, SNES, or a Genesis/Master System usually only requires a little cleaning, some compressed air, and a
pin connector or
two. These are items that can be easily sold at a lower price with the buying power that GameStop offers, and takes little to no technological know-how. Some companies have already
picked up where the old Nintendo Repair Center concept has left off, but that's an online mail-in affair that shuns the timid and excludes the younger generations. It doesn't have to stop there - imagine being able to take last-generation consoles, or even current-gen platforms in. Bring the console to the front desk, ask for a refurb job, get the console packed shipped and returned within 14 days tidied up and with a handy 30 day warranty to boot. All for the low price of $30 (retro), $50 (last-gen), or $70 (current-gen).
Be useful to your customers, GameStop. Let's even skip refurbs. How about offering a $20 service to handle all returns/battles with console OEMs? Let's say GameStop's warranty is over on my Xbox 360 and I red-ring (for the third time). Personally, I'm tired of talking with Microsoft. What if I had a "deal with tech support's garbage" plan with GameStop? Drop off the console, and GameStop will get it shipped to the OEM repair facility on your behalf, and they'll notify you by e-mail/phone/text message when the console gets back. Even better, if you want an immediate switch, no questions asked, swap the console with a refurb/used one and just pay the cost of repair.
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Deal with these guys on my behalf,
and I'll love you forever. |
Scratched game? Often
game companies have a program to replace them for a small fee. Why not alleviate that hassle from gamers and tack on another $5-$10 per game as a "convenience charge?" Take the game, take the $20, then give them a replacement used game (refurbished by your staff first, of course), and let them go their merry way. If your store doesn't have the title in-hand, then leverage your store count and get it transferred. It'll be faster for the customer to get the title than through the return policy, and GameStop will get a shiny new copy for the hassle (and profit!)
Part 2: Go Retro (Again)
I never really understood why GameStop bagged out on retro gaming altogether. I used to pillage storefront after storefront for used Dreamcast games like some drunkard addict with nothing better to do than shell out money for less-than-stellar titles... just because it was for the Dreamcast.
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Retro games can be a treasure trove,
just capitalize on it, GameStop! |
GameStop, go back to retro sales. I promise you the old consoles will still play used games for years to come. Remember that for your customers, dumping a dusty box of Atari titles for $10 is far easier than itemizing, cataloging and posting each cartridge (with pictures and description) for $0.25/post on eBay, and it's
far safer than going the Craigslist route. Take the cartridges - NES, SNES, Genesis, TG16, etc - and
clean the crap out of them. See refurbing games/consoles above. Then, turn around and sell them "GameStop certified" at 25% over current online value. Leverage the convenience of brick & mortar, plus your vast network of stores, and keep gamers gaming! Refurbish the consoles and games, slap a 30-day "store credit" warranty on everything, and
be useful for a change! Focus on
volume, not margins. I could envision a customer walking in and putting down $150 on a "GameStop Certified" SNES with 2 controllers ($75 on eBay w/ shipping), Super Mario All Stars & World ($34 on eBay w/ shipping), and NBA Jam T.E. ($25 on eBay w/ shipping). You're talking a $16 profit, here, and that's just if you bought it at online retail. Never
mind how you handle profit margins on current used games. Heck, you could even jack up your margins by extending the warranties for 6 months. Lord knows if the "anti-used titles" rumor is true, you'll have plenty of shelf space to fill at your locations, why not do it this way?
GameStop, the pain train is a-comin'. If Microsoft and Sony truly wish to beat you over the head with the steel pipe of DRM, and Steam has already cornered the PC avenue, then you need to rethink your margin strategy. Simply taking a 25% hit to your profit is sure to cheese off your investors to no end.
Impulse is garbage, and you really should think twice before taking on Valve. So you're left with very few avenues. Please, GameStop.
Be useful to your customers by taking care of what you
can leverage; offer services - repairs, refurbs, and OEM handling. Then,
sell retro and keep the velocity of used product high, while still maintaining your margins.
People will give you their money. You just need to give them a good reason.
I rike this post
ReplyDelete1. Gamestop already has a disc insurance plan that varys from 1-3 bucks depending on the value of the game and it lasts for the year. disc breaks or stops working? Boom, used one on the spot (or brand new of you added the insurance plan to a new game)
ReplyDeleteThe issue with dealing with OEM bullshit is that everyone, and I mean EVERYONE goes to gamestop with broken shit. Every day, at least 4 systems per store are turned down for being too fucked up. The insane amount of manpower, time, and money on gamestops behalf required for someones shitty PS2 outweighs the value of the system entirely. Yes, it would be nice, but gamestop would lose soo much money in all the hassle.
Last note: the sheer volume. If gamestop decided to open its doors to any and all systems and games.....the stores themselves just wouldnt be big enough to convey them all. As of right now gamestop sells pc, ps2, psp, wii, gamecube, xbox 360, ps3, ds, 3ds, vita, tablets, and idevices. That all had to be condensed to fit an entire store, and it still barely manages. If you open the doors to the wackjobs with 485 snes, nes, n64, and other worthless garbage games or broken systems, it would take a store at least twice as large to manage. Most gamestops have as much space as the normal verizonwireless stores....including a very limited backroom. There just isnt enough space, and to be honest, with the current generation looking for the newest thing, a very small portion of gamers would actually be looking for.classic consoles. Gamestop would lose so much money in time and sheer inventory to be able to open their doors that way. Yes, it would be fantastic if they could, but from a business perspective? Get real.
Also (still me, btw), most games that go through gamestop that predate 2006 are instantly 5 bucks and under (not counting insanely rare games like baulders gate, which still goes for a whopping 40). That means that any games that arent insanely rare coming from systems that ended in the 90s would be at most a dollar per game. That kind of chump change does nothing for a corporation that strives for "latest and greatest" at a lowest average dollar per transaction of 50.
ReplyDeleteAnd also again: Gamestop decides the fate of video games through pre-orders. Look at games like call of duty or borlderlands 2. Not only do those companies send boxes of free shit for employees that convey the message of goodwill about this game to the masses, but the bonuses to committing to the purchase of this game are staggering. Gamestop OWNS that ground, and for a console development company to decide to go all digital and condemn preowned sales, they basically take out every game developing company at the knees. If there isnt a solid foundation of people going "omfg you have to get this game" and all a game company has is youtube, commercials, and their own website, they have royally fucked themselves. Many people will wander into gamestop, and when asked if they had preordered a new game, over half of them go "omg they made that?" Gamestop uses preorders as a solid foundation for game companies to establish just how well their game will sell. If 1.3 million gamers preorder black ops 2, then thats a guaranteed 1.3 million copies sold, thats not an estimate. Game companies need that kind of feedback to understand what the game community wants, and is willing to pay for it with bonuses. If sony and microsoft decide to fuck gamestop over by going "all digital" or no more pre-owned, you can be damn sure that half life 3 will be pc and WiiU exclusive.
ReplyDelete"Digital only" is not part of the rumor thrown about by sources at Sony and Microsoft. It looks like the system they're employing centers around placing unique product IDs on each disc they sell to the customer, and binding your XBL/PSN account to that product ID. That way, if you were to let a friend borrow your copy, it'd be considerably less feature-rich (Demo mode? No multiplayer?) than when you purchased it. The end-game to that probably results in something akin to paying $15 for an unlock code to regain all those features on your "used" copy. This doesn't affect GameStop's 50% profit margin in any way.
ReplyDeleteWhat it DOES accomplish is a.) Disincentivizing used sales for the consumer by eradicating the cost savings, and/or b.) Grossly cutting the profit margin GameStop gains by buying low and selling high. My argument is that if GameStop is about to lose such a huge margin with this new "anti-used" system, then they would benefit by cutting down their floor and shelf space (and they do dedicate tons of it) for such a system. Instead they'd benefit by diversifying their used inventory for cheaper, easy-to-pick-up product, and that means retro.
Obviously GameStop doesn't need to support every single system under the sun. They're not going to find a market for used Neo Geos out there. However, if they decided to focus on unboxed NES, SNES, Genesis and N64 - effectively toe the line against the Wii's Virtual Console - they'd be able to refill their shelves with SOME demand, instead of selling gimped copies of software and trying to balance the cost of these online passes against the middle.