The Malgorian Blog

Here's another article from Kotaku. "What your $60 really buys". in a convenient pie chart that, according to people in the comments that claim to be (or claim to have been, or worked at, etc) owners and managers of game stores, is vastly over-estimating the retailer slice of 25%. They say the retailer portion is closer to 5-10 dollars. In effect, they make almost no money on new games at all.

Which of course is why they sell used games: To stay in business.

If a game store has to pay about $45 dollars to get a copy of the game, they have to sell at least 75% of the stock they bought before they actually start to see any profit. Further keep in mind that this is BEFORE the game store has to shell out for employee wages (such as they are) bills for things like electricity/heat, rent if they don't own their own land, land taxes if they do, as well as having money available to handle Unforeseen Circumstances. Broken water valve, theft, vandalism, etc etc. The list can go on.

So as a result of this, I find it rather easy to predict the end of video game stores eventually if the console makers and publishers successfully manage to castrate the used game market. And then what? Well let's see. Not everyone buys their games online. This will not affect some major chains that have the economic might to force publishers to sell cheaper in bulk (Like Wal-mart) but then those types of chains only deal with the either dirt cheap games or the major sure-fire hits. You're just not going to get the same variety available at a dedicated game store.

Do you see where I'm going with this? Can you see which foot the gun is pointed at? If game stores go under because they can't turn a profit when the used market is completely stamped out, the only chains that will still be around to sell games will be the super huge ones such as Wal-mart, Amazon, etc. Companies large enough to effectively say "Yeah we'll buy half a million copies, if you'll sell them for X dollars, otherwise we'll take none at all." <-- this kind of tactic would be devastating on all but the most popular 3-5 games on the go at any given time.

To clarify myself however, I do NOT agree with this bullshit about used games being sold for a couple dollars cheaper than brand new games. I do support the used game market in principle however so long as the games are sold for used game prices. (Which MUST be at least 50% off retail imo.)

Also, I'm still trying to get around the idea that console games these days seem to need installation. I thought that was one of the things we wanted to get AWAY from by moving away from PC gaming.

*edit*

Oh and just to comment about one commenter's smart ass pie chart about used game profits, he got the chart wrong. It conveniently leaves out whatever slice of the sale that was paid to the original owner of the game that the game store had to pay for the game in the first place. (For example: that 2-4 dollars Game Stop paid to Joe Sixpack for his used copy of NFL 2010) So really, the pie should be pac-man you insensitive clod!!1!!1!