GameStop likes selling used games. The majority of their business model is based off of the revenue generated by the sales of huge quantities of pre-owned titles. Publishers do not like used games because they don’t get any money off of the game past its initial purchase. For example, say Activision gets $30 for each new copy of Call of Duty: Black Ops sold, then that copy gets sold back to GameStop, who then marks it up something along the lines of 300% or higher and sells it again. GameStop gets all the profit and nothing goes to the publisher. With this model you can see why game publishers like EA include codes in new titles in an attempt to remove the incentive to buy used. However, according to a GameStop executive, publishers are starting to see the benefit to used games.
Mike Mauler, Executive Vice President of GameStop International, recently spoke to MCV regarding why he feels that used games are not the threat that game publishers originally thought they were:
“There has been a shift in the way publishers see used. More and more they see it as a way to fuel the sale of new games. It’s a way for that person to trade in a couple of used games for a new FIFA or Call of Duty. If you think about some of the sequels — who needs seven years of a franchise on your shelf? But if you can buy them in, or trade in hardware for a new console when it comes out, it’s a win for everyone.”
The point he is trying to make is the one that GameStop has argued for years and that is that people trade in games in order to buy new ones. He makes a valid point considering how many sequels this industry produces each year. Would people continue to buy the new Madden year after year if they weren’t able to get rid of the old season’s game for some cash? Or would they just keep their old copy? If you have seen the overflow of used EA Sports games in your local GameStop you may understand the point he is trying to get across.
When asked about the online pass system that EA and THQ have implemented in games like Need for Speed: Hot Pursuit and this year’s UFC game, Mauler responded that it doesn’t affect his customers very much:
“We have not seen any negative impact — surveys and research shows us that the user who buys used games actually plays a lot less online.
While Mauler makes some interesting points about how trade in games can lead to new game sales he completely skirts around the issue of actually selling those trade ins. Yes, EA may like people buying the new Madden every year, but I imagine they are not happy when GameStop sells the traded in copies for money EA will never see. After all, isn’t the entire point of DLC and online passes just a way to keep you from trading in the game or squeezing some money out of people who buy used games?
I think Mauler is making a lot of assumptions about how game makers view the used market. If publishers have shifted their viewpoint about used games, why do they continue to do everything they can with multiplayer, DLC, Online Passes, and other features to keep you from trading their game in?