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Opinion: Who's Afraid Of GameStop?

Opinion: Who's Afraid Of GameStop? Exclusive

June 2, 2008 | By Brandon Sheffield

[In this editorial, originally printed in Gamasutra sister publication Game Developer magazine, senior editor Brandon Sheffield tackles the difficult relationship between developers/publishers and retailers such as GameStop, suggesting it's time for a change.]

Shamefully, almost everyone in the industry seems to be afraid of retail. I spoke with a number of people at the DICE Summit a while back, and while some agreed that digital downloads are making headway, nobody sees it replacing retail.

One trend I’ve noticed in talking to people about this issue is that there’s a tinge of fear of retailers, GameStop in particular, as though that relationship needs protecting. We don’t want to badmouth them or ignore them because we don’t want to make them mad.

But how much do they really do for us these days? GameStop makes the vast majority of its profits off used games, as we all know, and it’s the largest shop in which to purchase electronic entertainment.

To encourage consumers to buy used games, they often have limited stock of new releases " when was the last time you were able to buy a large new release from GameStop without a preorder? Did you then drive a few miles to a Best Buy or a Target and see the game in piles?

It doesn’t take a genius to see what’s happening here, when GameStop makes 50 cents on the dollar for a used game, versus 21 cents on the dollar for a new one. Since GameStop and Game Crazy are the only major retailers where you can return games, they’ll be the ones re-selling them used, no matter where you bought them.

Why Be Nice?

Why then, do publishers, and developers by extension, so carefully defend GameStop and their ilk? Why not move to digital distribution? Why aren’t downloads the dominant model for PSP games?

Nobody is returning XBLA or PSN titles, and consumers aren’t complaining either, because the games only cost $5-$20 apiece. On top of that, they got to try the game before buying it.

Target has recently announced that it will begin selling more used games. This likely means more games sold, but less profit for the industry itself. So why is everyone afraid to bash retail?

Now is the time to do something about this. Some games already can’t even make it into GameStop, and are only sold online in places like Why then, do we kowtow to GameStop, and indeed, let their buyers choose what games may grace their shelves?

To boil down a very complex issue, it seems to me that it’s because we let them. It’s not possible to outlaw used game sales, I can’t pretend that. It’s been attempted in Japan " almost any import Dreamcast game or early-mid PS2 game will have a ‘not for resale’ warning on the back, but it gets resold anyway.

These companies rely on developers and publishers for content, but they make more money off the games than we do, in many cases.

Cold Feet

Industry leaders seem to be wary of moving online for a few reasons: not everyone has a game-capable PC, downloads can be large and slow, and then there’s piracy. But console game downloads are also becoming quite viable (Warhawk), with full games released on all major consoles now, even on the PSP.

People will wait for downloads, and broadband penetration is better than ever, besides. As for piracy, how many people are pirating World of Warcraft? Or Steam?

My friend Thomas Grové has an idea for a content delivery portal for PCs in which a single person, or group of persons with a little money, put together a non-profit portal. This portal would take only 5-10 percent of the games’ revenue (or whatever it took to maintain minimal staff), and give the rest to the developer directly.

In this scenario you could charge much less, and still make decent money if your game is any good. It would move developers from being work-for-hire to work-for-profit.

If someone had the time, energy, or resources to accomplish this, it would be the de facto delivery platform for game content, and service the industry as a whole more than it would service a specific company. I’m not totally sold on this idea, but it’s a step in the right direction.

That’s what we should be thinking about now " how can we get content into the hands of consumers without giving a third party a big piece of the pie? I’m asking you. I’m not the creative genius here, I just ask the questions.

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