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The View From GameStop's Window: Retail Giant Talks Gaming In 2007
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The View From GameStop's Window: Retail Giant Talks Gaming In 2007

September 19, 2007 Article Start Previous Page 2 of 8 Next

Starting out at Software Etc., can you talk about the evolution where Babbages, FuncoLand, and finally EB came in?

BM: It's really been fun to be a part of it over the last 18 years, to where the company is now. There were a lot of good years and there were a lot of tough years in between. The mergers that we've had -- the most recent being with EB, which was very successful, we're very happy with how the merger went. It really got a lot of synergy, which is the goal that we look to accomplish. The prior merger to that, with FuncoLand, brought a lot of unique opportunities to us at GameStop, and really helped us get full-time into the pre-used merchandise.

FuncoLand's focus when they emerged was used games, whereas at the time, the other stores were more focused on the new games. Now, obviously, GameStop is very driven toward used games as well.

BM: Yeah, it's a great blend. It really gives the consumer a unique opportunity, to provide them currency with their trade-ins. I know first-hand from having a couple gamers in my house, we often visit the local GameStop and bring in some of the games that my 7 year old has already grown tired of. It gives him an opportunity to find something new, and it's exciting to see that some of the games that he plays the most are some of the older games.

It seems like you're really focusing on getting people to bring in their games, and then selling those games back to consumers. Why is that such a strong focus?

BM: It really helps to extend the life-cycle, and give the consumer more choices. You know, gaming is all we do, and so we offer the broadest selection of merchandise, both new and used. We'll stay with platforms like the PS2. There's a lot of life left in PS2, and there's a lot of life left in the older titles.

There's a lot of good content, to expand that gaming experience for the consumer. Now that we're entering into a different era with Nintendo, on the Wii, and really broadening, expanding the consumer base, it's bringing in a consumer that may not have shopped in our stores previously. So it gives them an opportunity to expose them to gaming, and get them involved with our trade-in process, and that unique currency that we've got.

So you look at it more as a way to keep people coming back in? Or is there a financial benefit to it, as opposed to selling new games?

BM: Oh, it definitely is a financial benefit -- for the consumer! When they're coming in to buy a PlayStation 3, or an Xbox 360, or even a Wii or a DS, this makes it easier for the customer. You know, a lot of people don't realize what the value of their old inventory is, and it really is currency for them.

What about for the company?

BM: For the company, it is a great benefit. Obviously, as has been reported, the used games are a big portion of our business.

How do the publishers feel about the used games? Do they feel that it takes away from the new games sales, or are all of the relationships good?

BM: All of our vendor relationships are very good, and very strong. For the publishers, I think, there was a period of time a few years ago where it was a little bit confusing. The publishers didn't understand the model, so we spent a lot of time educating publishers to the benefit.

The consumer, typically, puts 80% of a trade transaction toward a new game purchase. So then we're able to sit down with the manufacturer, and provide that type of information to them, to make them realize that really it is a type of currency within our stores.

One thing about GameStop that strikes gamers is that big games won't be in any shortage, but you can find the smaller, more niche titles more readily. How is it, working with the small publishers? How important do you consider them?

BM: Oh, they're very important. All of our publishing partners are important, from the smallest to the largest. We value our relationships with our partners, and we enjoy seeing the small guys have a game, and for that one title that they may ship a year, we want it to be as successful as something that's coming out from Sony or Microsoft. I want to say all of our publishing partners are going to be present during the show. It supports the value relationship that we have with our partners, and they have with us.

Are you finding that the small publishers' games sell well for you because you attract more of a hardcore audience?

BM: I think that not all of the smaller publishers are for hardcore gamers. Definitely in the past, our consumer was more focused on the hardcore, but as I mentioned, Nintendo's done a great job. Two years ago, they made a statement, and they've proven it and delivered on it, that they were going to expand the consumer base and bring in a more casual gamer. They've done an excellent job of it. Microsoft has done a good job of bringing in the casual gamer with Xbox Live, and the more social gaming aspects that that involves. With Sony, they have the opportunity with Home coming. It all comes together, and there's definitely an opportunity for the smaller players to coexist within that environment.

Article Start Previous Page 2 of 8 Next

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