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No Impact On GameStop's Used Games Biz From Online Pass?
No Impact On GameStop's Used Games Biz From Online Pass?
May 20, 2010 | By Leigh Alexander

May 20, 2010 | By Leigh Alexander
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    17 comments
More: Console/PC



While paid online codes such as EA's recently-announced Online Pass are partially aimed at discouraging used game sales, GameStop says such moves will benefit it.

GameStop, which today reported a margin of almost 50 percent on used products, says that the more DLC publishers offer, the better its business will be.

"We see that as extending the life of titles and broadening the base of players," explains CEO Dan DeMatteo in a quarterly conference call. "We do not anticipate an impact to our used game margins."

Furthermore, DeMatteo suggests that tactics like Online Pass will help publishers "better leverage their [IP]... through downloadable content sales to both used players and new game buyers."

Helping publishers market and sell online content benefits the retailer, says DeMatteo -- for example, when it promoted Modern Warfare 2's Stimulus Pack map bundle in its stores, it sold notably more Xbox Live point cards, DeMatteo said.

"GameStop consumers are ahead of the mass market in digital adoption," he adds. "Our investments in proprietary point-of-sale tech have put us in a position to partner with publishers as they grow their digital offerings."

And working with publishers to market, promote and sell DLC "extends the reach of the GameStop brand as a multichannel game destination," according to DeMatteo. "We're having convos with multiple publishers on leveraging the potential of digital sales at GameStop stores."


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Comments


K B
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I may be understanding this incorrectly but my initial understanding was that they (the publisher) were going to take a $60 game and include a pass/code/account for online content free of charge (similar to an MMO giving you your first month subscription free when you buy the game). If a player were to buy the game used, the pass/code/account would already be in use and the consumer would have to hand over an additional $10 in order to get that extra online content. If that is the case, buying used at $50 and getting online content is the exact same as buying new at $60 and getting online content, which effectively decreases the value of a used title.



It's been a very long time since I've set foot in a game store (I love my digital downloads), but I remember used titles being resold at pretty high rates. If my choice was between a $45 used copy that would actually cost me $55 after upgrading to online content and a new copy for $60 with online content included, I'll spend the extra $5 and get it new (without jam on the box and scratches on the disc). I don't see how they could say that this sort of practice won't affect the volume of used games that are sold.

Eric Feliu
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Gamestop is pretty big and well established so I can see them benefitting for the immediate future despite publisher efforts to restrict used sales. Eventually Gamestop will be less relevant as games go totally digital like movies are with Netflix. If you can simply download the games you want to play why shop at Gamestop? You can't trade in digital games so there goes Gamestop's big money maker.

Josh Green
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@Andre:



Yeah everyone who buys music really wants a physical cop.... *glances at iTunes* Oh wait nevermind.

Stephen Chin
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@Andre I don't think publishers are trying to stop second-hand sales. Rather, they're looking to get a piece of the money that is made off second-hand sales.

Scott Jonsson
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andre: the idea that people want a physical copy is getting outdated. How often do people buy CDs and Records anymore? Now it's itunes or torrents. The current young generation and those that follow won't have this need of a physical copy that you and I might.

William Olive
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The difference between records and games is that a game is about three times the cost of a new record. If I spend sixty dollars for a game, I want to know damn well that I'll have access to it whenever I wish. The size of a game plus the time it would take to reacquire it should something happen is enough of a reason for me to desire a physical copy. But when you can buy a single song for 99 cents, it's not that big of a deal. If I had to spend another sixty dollars because of an HDD crash or something, I'd be angry.



I still hit up used stores all the time, be it books, games, music, or movies. Not to mention buying directly from the artists themselves. I know plenty of places still prospering, even in the age of ebooks and digital downloads. It's nice just having a physical copy for a backup, sometimes.



But I have to agree that given the choice between spending 5 extra dollars for something new with the same content, I'll make that choice. It's a smart move on the company's part. But let's be honest; with the market for games that aren't even for sale in retail chains anymore, the second-hand stores will prosper.

K B
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Although it doesn't seem like it, digital music sales like iTunes still aren't as popular as CD sales although they are expected to be evenly matched by the end of 2010.

Alejandro Herrera
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Agree with William about costs of games vs music when it comes to owning physical media.

As for the rest of the article, I find it hard to believe used sales will not be affected by pass codes, because some excellent arguments like cost of used games + code almost = new game. AND! What if they put the code on something everyone wants in the game as opposed to extra content or something not everyone gets. Example: I am sure Modern Warfare 2 used sales would freeze if Activision made it so used copies don't get online multiplayer access, and charged the difference between the used and the new. Or how about Street Fighter where you can't fight other people online. Etc.

Robert Schmidt
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The grabbing hands grab all they can, everything counts in large amounts...sorry, for some reason this article reminded me of that song.

gus one
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As well as the key codes games developers should encourage more people to buy the game pre-order and take advantage of the enormous discounts. I got got Red Dead Redemption for $50 and Diablo 3 $34 and Starcraft 2 for $40. That's one way to motivate the person who does not want to stump up $60. It's a win win for the games company because it ramps of the pre-order chart which is self perpetuating by generating more sales from people who think they are going to miss. Hoover up the rest who still insist on buying new with the key codes.

gus one
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Not a good example. You are comparing a collectors item which is valued on it's rarity and demand by collectors to one of the common music digital formats. Not to mention most people cannot play vinyls these days so few would favour a vinyl recording over a more modern musical format anyway.



As for digital delivery rock on. I don't want the disks cluttering up my DVD drive or my shelves. It's not like I will want to play them in 20 years anyway. That's called hoarding.

Eric Feliu
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The argument about the price of games is easily countered. With digital distribution you are not going to be paying $60 for a new title. Most likely the prices will be between $10 and $20. Where is Gamestop going to make money when this happens?

David Whitney
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I bought a copy of BioWare's Dragon Age: Origins when it first came out. It shipped with free DLC in the form of a new character I could play with and an optional quest that went along with him. What I really got was an interesting character with a lousy story behind it and enormous crystals added as random loot randomly throughout the game that were completely out of place.



The same was true with Mass Effect 2. They offered a new character along with a quest (the quest actually fit this time), but the character wasn't integrated with the game the same way the other characters were; the lack of player-driven dialogue was especially lackluster in an otherwise amazing game.



I heard good things about Borderlands when it first came out, and I bought it digitally through GameStop's website. What I failed to realize was that the game only came with 3 installs, and that they expire after a year. While I don't regret the decision to purchase the game online, the fact that I can't reinstall it again without doling out more cash will keep me sticking to cds and dvds. Even with services like Steam that offers unlimited installs of the games I purchase, I have to have reliable internet access to download, install, and, in most cases, play the games I buy through them.



If I had the choice between purchasing a hard copy of a disk with all the fixings or a digital download at the same price with nothing to show for it, I'd pick the disk. If I had the choice between a used copy of a great game for a reduced price or a new version with some half-assed attempt to squeeze a few extra dollars out of my wallet for retail price, I'll stick with the used one. If the DLC is good enough to warrant an extra few bucks, I'll gladly support the company by buying it later.

Eric Feliu
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Why would you ever buy a digital copy of anything from Gamestop is beyond me. I am talking when publishers release games as download only. Hopefully they will put more thought into digital distribution than Gamestop has.

Sean Parton
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Adam Coate pretty much has it in the bag. Of course GameStop doesn't care; they'll just buy back used copies for less.



This only affects the publishers (in a positive way, chance of getting in on some used sales), some customers (who benefit by getting the game cheaper if they don't want the online stuff at all), and some other customers (who lose out because they sell their used game for less than before, since GameStop sure as hell isn't going to buy them back at the same price as before).



Oh, and I suppose it's probably at least slightly inconvenient to have to sign up with their online pass dealy for all your (EA) games, so net loss for most customers, but that's only a concern for the picky people, I guess.



@Eric Feliu: I know friends who bought copies of games like Team Fortress 2 because they're those kinds of people who want the hard copy. Also, the store was selling it for something absurdly low, like $5 or $10 or something (comparable or lower than the Steam price at the time). They definitely don't sell well, but they will make some money.

Joshua McDonald
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" If my choice was between a $45 used copy that would actually cost me $55 after upgrading to online content and a new copy for $60 with online content included, I'll spend the extra $5 and get it new "



In a way, this is why this effort may actually encourage used sales. Your example assumes that you'll like the game enough to buy the DLC



My expectation is that these games will, as you predict, be cheaper to buy used than those that don't implement this, and the extra-cheap used means that I don't have to pay for the full game up front. If I really like the game, I only save $5 (same as I would otherwise), but if I end up disappointed, I'll save $15 because I won't buy the DLC.

Jerry Hall
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Gamestop better pay close attention to this case in the 9th Circuit this week, Vernor v. Autodesk Inc.; Their entire business model is in jeopardy.

http://www.law.com/jsp/cc/PubArticleCC.jsp?id=1202462515286&Who_O
wns_What_Hard_Questions_About_ReSelling_Software


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