Amazon.com launched a used game sales service today where gamers can trade in used games for store credit. Toys ‘R Us is also starting to test sales of used games in its stores. And so is Best Buy.
The Amazon news prompted a 14 percent drop in GameStop’s stock price today, falling $3.84 a share to $23.46. That’s because GameStop gets about 25 percent of its sales from used games. The practice draws the ire of game industry professionals and game publishers, who feel the retailers aren’t sharing enough of the profits with them. It’s particularly irksome because GameStop pays high prices for recent games and thereby blunts the sales of brand-new games. Game publishers and developers only get a cut of the brand-new game sales, so they feel they’re being robbed by the likes of GameStop.
That feeling is only going to worsen now. Game retailers are clearly trying to pad the bottom line during the recession. In tough economic times, consumers are far more likely to buy used games than pay as much as $60 for full-price new ones.
There are likely to be consequences. Smaller used-game sellers such as Dawdle are going to have to be quick on their feet to adjust to the new environment. Consumers may like having new ways to get cheaper games in more places. But the game retailers had better consider the long-term costs. In the short term, they can make more money. But in the long run, it won’t pay to hurt the game publishers and developers. And it will only hasten the move to digital distribution that will leave retail out in the cold.
For more on the game industry, check out VentureBeat’s GamesBeat 09 game conference on March 24.