Whyos

I posted last week about the apparent entry of several retailers into the business of buying-in and selling used videogames, and someone very insightful in this area mentioned that it would be interesting to see whether someone trading in games at Amazon would put their credit back into new game purchases. He’s right, because this could be pivotal to next steps, if these retailers are successful. -GameStop’s argument is that buying-in pre-owned product is part of a healthy cycle driving new games sales, and generalist retailers getting involved in the model does sort of dilute that benefit.

Obviously, any entity that sells games has to do it as part of a broader retail strategy that enhances margins. I believe publishers have appreciated that GameStop is focused exclusively on games, and that new game sales alone isn’t a viable business. BBY deals with this issue with a focus on entertainment hardware and “solutions,” Target uses games to drive traffic rather than bottom line, etc. A store that actually focuses on games for games’ sake is unique and valuable to the industry, enough so that such focus combines with the “ecosystem” argument to make pre-owned easier to swallow.

At the same time, I think that developers, who tend to have a less strategic and more visceral response to pre-owned, may have less issue with used games at TRU or Amazon. Simply because they feel that Gamestop is an entity that they do a lot for, with in-store marketing, etc., and are just generally a part of the game community that should understand their pain better than an external entity would.

However, if the generalists actually move the needle in sales, I don’t see publishers going along with it, and response would be fast and significant. -My initial guess is that they won’t move the needle, and that there will be a less direct impact from their entry into this area.