Feature Article

GameStop's Involvement in Development Is Another Black Mark on Pre-Order Bonuses

Please stop messing with our games.

There are people sitting around a conference table determining how best to monetize fun. It's been obvious for years that games are often consumer products that exist as a way to separate us from our hard-earned money, and we accepted this relationship because we place such a premium on our own entertainment. However, there comes a point when a line is crossed and those idealistic dreams we hold dear--that games are more than cash vacuums--are dashed. GameStop, the corporation that serves as the gatekeeper for so much of the retail sector, has disclosed plans to invest in the development of games. Those pre-order bonuses that dangle precious content above our heads like a carrot taunting a hungry donkey may be influenced by GameStop if their goal is realized.

GameStop CEO Paul Raines spoke to Time about their plans in a recent interview. “I do foresee a world where we can help facilitate create [sic] great content,” Raines admitted. Pre-order bonuses have been used as an incentive to rope in those who crave an undiluted experience for some time, although the origin of such content has never been fully revealed. There was no way to know if the development team was behind such practices, or the marketers who control the outward message. We just knew that certain content was being held hostage unless we ponied up our money before a game was even completed, and had to stomach this questionable practice if we desired a complete game. Any illusion about who controls the strings has been dashed with this revelation from Raines. It's GameStop that not only wants said bonuses, but is willing to facilitate their creation.

This is a troubling truth to swallow. Regardless of the warning signs that the biggest, most heavily marketed games were birthed from a place of greed, I still had hopes that labeling them as consumer products was cynical. A game is a work of art, so much more personal than a washing machine or dustbuster, that I refused to believe what was staring me right in the face. Those pre-order bonuses that separate a game into so many pieces that it's nearly impossible to get everything out there could have been created for any number of reasons. Granted, I can't think of any altruistic reason why Watch Dogs would be sliced into so many bits, but it was at least possible that such things were designed with the best interests of players in mind. Well, it's safe to wave goodbye to that state of mind. If GameStop is influencing development, there's no happy explanation for what this portends.

Any illusion about who controls the strings has been dashed with this revelation.

I should note that GameStop isn't going to force those who man the register to try their hands at coding. Said Raines, “We will not be involved in the artistic or creative process.” That's a mild relief, considering GameStop is in the business of, well, business rather than creation, but that doesn't change what's going on behind the scenes. We know that GameStop wants to be involved in pre-order bonuses, wrestling control away from those who have devoted their lives to developing games and putting it in the hands of those who just sell them. “When you think about the business of gaming and the cost of developing games, we think there’s an opportunity to put capital at risk with publishers and developers in exchange for exclusive content that would be distributed through our online platforms, in stores, our download business, et cetera.” said Raines.

Did GameStop have a hand in this Watch Dogs' fiasco?

It's clear how GameStop would benefit from this practice; people would spend their money at the specialty retailer rather than elsewhere, giving them money in advance of release to secure a copy the day it comes out. And, as Raines said, the developers would win in this deal as well. “The upside for developers will be much stronger guarantees around distribution and audience with our loyalty program and so forth.” That sounds good, right? Except for that part of guaranteeing distribution. If a developer doesn't agree to work with GameStop to create DLC, would that put the distribution of their game at risk? I have no idea if that's what Raines meant or not, but the implication is certainly there, and limiting distribution unless developers churn out pre-order content sounds like a terrible situation for those who design our games.

Furthermore, you may notice that one part of the pillar is completely ignored in this scenario. What do consumers get from GameStop meddling with our games? If we shop at another store, or decide to buy a game after release rather than blindly plunking down money before we know if it's any good, we miss out on aspects of the game. Sure, there are certain situations when pre-order bonuses are offered later on for everyone if they're willing to shell out more money, but that's a poor solution to the problem. Games are expensive. When your choice for all of these bits and pieces is to either shell out money before a game is released or spend even more money for downloadable content, it's much easier (and cheaper) to look elsewhere. There are so many excellent games for less than $20, that aren't designed to drain every dollar bill from our wallets, that it's hard to stomach supporting such business practices.

But it's easier for me to say we should ignore such distasteful ideas than to convince others to follow suit. Like I said earlier, we are being held hostage by these corporations. Even though the industry is more diverse and exciting than it's ever been, smaller developers can't replicate what their bigger competitors are churning out. And when Evolve, Alien: Isolation, Destiny, every Ubisoft game, and countless other projects are in the habit of nickel-and-diming us, we either have to find our entertainment elsewhere or swallow what they're serving. It's a bad situation, and with GameStop's open involvement in securing exclusive content, it's only going to get worse in the future. I can't force others to follow my lead in how to deal with this problem. However, there comes a point when we have to take a look at how we're being treated. And if we decide we deserve better, only then can we enact change.

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Discussion

408 comments
Aero_Slasher
Aero_Slasher

I've largely abandoned GameStop since I'm sick of them being the only dog in town. I prefer to go to smaller ma and pa shops now. Some get new games in and still do retro games, something GameStop refuses to even acknowledge exists (and if it does, will probably overcharge them worse than an ebay or convention merchant.)


I'd love to see them go down in flames so we can at least get back a healthy competitive market, but people will not stop going there for all the garbage they produce because of one simple reason: convenience. Miami area has a proportion of GameStops per square mile akin to Starbucks. I know of five within a mile of each other. They all have the same look, the same smell (ever notice walking into a GameStop always smells like going to a urinal?), and the same forced up-selling or else the GA is fired and the next kid is dragged in. It's disgusting.


All I regret is they will not let me shut down my PowerUp Account.

mcmickelmick
mcmickelmick

Great article Tom, I wouldnt say I enjoyed in as much as it  got my blood boiling, I agree with everything you say mate im lucky as Im from the UK I dont really encounter Gamestop but we have another empire of evil Game and I snapped my Game reward card up and have never been back the other issue thats winding me rite up is how effin poor the PS4 and PSplus has become but thats off topic and all I will get from that is the usual PS fanboys say well if hes saying anything remotely negative about the PS4 or telling the truth about the lack of decent games both currantly and upcoming then I cant own a PS4 ( I do and thats why im mad loosers  ;  ))

theepicman145
theepicman145

You can scream and out shout and try to get people to stop buying games from game stop. But the truth is, people will still go get games from game stop. And people will still pre order. Not for the extra content, but for the fact that they can at least know their getting the game!

DeFiLeDTitan
DeFiLeDTitan

Meh, you guys should just do what I do. Just wait for the prices to go down. There is no possible way you've played ALL the good games out there. I play non-stop and I'm just now getting to games like the Batman arkham games, borderlands, and Mass Effect series. I got them all with their entire DLC list for like $75. So complain all you want while I get over 1000 hours worth of gaming out of all that. Thanks to (gasp) gamestop.

elheber
elheber

I do not pre-order. I refuse to buy into this system. The only game i have on pre-order, much to my own chagrin, is SSB for the 3DS because I went to the Best Buy event and I'm getting the exclusive coin for my nephew who was with me.

I'd rather buy the game digitally like the rest of my games.

AK_the_Twilight
AK_the_Twilight

I don't know anyone who actually goes to Gamestop anymore. Digital distribution like Steam and online retailers like Amazon are making their business near-obsolete and their terrible reputation with consumers is only making their has-been days even more numbered. You'd think Gamestop would try to be more consumer-friendly since they're one step away from kicking the bucket like Sam Goody and Blockbuster, but this practice is just another firm push toward the exit.

StammBladecastr
StammBladecastr

Hey Tom, there's one thing that game journalists can do right now in response to this kind of thing.  Let the industry know that  you will only review games based on the core retail version.  DLC and pre-order bonuses will be reviewed separately, if at all.  If you don't even mention content that isn't part of the retail game, then developers and publishers will have a disincentive to keep valuable content locked away from the basic game.

hitomo
hitomo

the question is why are they so negative about one of there biggest sponsores all of a sudden ?

chriscoleman834
chriscoleman834

This is why I buy all of my games, typically used a week later for a big discount, from Amazon.

grizzlybear191
grizzlybear191

With such a huge library of older games that people can buy 5 or 6 for the price of a brand new release, it is really hard to justify purchasing something at full price.  I'm enjoying waiting for Steam sales, and buying 3 or 4 games for 5 bucks each that will keep me busy until the next sale.

wilson2k9
wilson2k9

GameStop has been bad for gaming since they bought out Funcoland. Since then they done nothing but gone away with any and all old games. Go into a Gamestop store, they suck, very bland boring store with nothing going on. Gamestop could go away and never comeback I'd wouldn't miss them. Best places are the independent video game stores the ones that still sell any and every game someone is willing to buy, old or new. 

nameaprice
nameaprice

Just like most people are saying, this kind of nickel and dimming is going to be a thing of the past just like the old music industry. If a VERY small group of people can make a game like "No Man's Sky", and yes I know we still have to see it before we confirm its a good game, by using the new technologies they're pioneering then maybe JUST maybe we will be free of this kind of garbage AND companies like EA that meddle in the production of IP's/games. Maybe an all digital platform like Steam will finally help to put creative control back where it belongs, the hands of the dev's, because they wont NEED a publisher.   

vicsrealms
vicsrealms

Another reasons I don't purchase games from Gamespot.  Not that I need much reason if you get a look at the PC gaming section.

saturatedbutter
saturatedbutter

Wow, an article by Tom McShea that people will actually agree with.


It seems more and more these days hardcore gamers are warming up to the idea that the industry needs to crash. That way of thinking got a big boost when Microsoft was planning all their anti-consumer policies like locking used games to your system so that only businesses like GameStop could unlock them and sell used games. Now this is another boost. Big corporations are taking advantage of this industry in ways that line their pockets and take away their risks while delivering no benefit to the players. This is creating a bubble and when it bursts it won't be fun for anyone but some of us will see it as necessary.

daikkenaurora12
daikkenaurora12

They want money so bad that they are willing to ruin the industry.

Aero_Slasher
Aero_Slasher

Also, pre-ordering for digital content is dumb. The only time I think a pre-order is ever warranted is when there's a cool physical item or it's one of those limited run special editions: see Tales of Xillia 2's Collector's Edition or that controversial Ni no Kuni special edition (controversial not from the content, but how it was distributed.)

theepicman145
theepicman145

@AK_the_Twilight I go to game stop, everybody i know goes to game stop! I have their power up rewards thing. Unlike amazon, you can buy it, and then play it with in 20 minutes! Amazon you have to wait. 

saturatedbutter
saturatedbutter

@AK_the_Twilight They're actually still making higher and higher revenue every year. As far as brick and motrar retail shops for video games go, they're #1 in the world. They also own EB Games, which is what we have here in Canada instead of GameStop. They're bigger for console games and console hardware than PC gaming.

xantufrog
xantufrog

@Thanatos2k exactly. Also, if GS wants to play tough (they won't) there are plenty of other places to buy these games and then GS will go out of business (which is why they won't exclude games from their stock if the devs refuse to give them exclusive content).

Thanatos2k
Thanatos2k

@wilson2k9 They ruined Funcoland.  They ruined Electronics Boutique.  Fu.ck Gamestop, seriously.

saturatedbutter
saturatedbutter

@nameaprice Hello Games isn't pioneering any new technology. Gamespot's "Next Big Game" segment may have got you thinking that procedural generation is a new thing, but that was misinformative. Procedural generation has been around for a long time already, Hello Games is just using it in a new way to generate a whole galaxy. Even then, they aren't really doing it in a way that Minecraft hasn't done.

Darth_Tyrranus
Darth_Tyrranus

@saturatedbutter  To be honest, I think Tom has had a number of very insightful articles.  It's just that he has been so dead wrong on a couple of them that he has incurred the collective wrath of many of the users here.  In general though, I appreciate how he always tries to question the norms and provides new ways of looking at gaming related issues, which is more than I can say of the some of the other writers Gamespot employs.  This is real journalism, even when he is wrong.

j_galindo
j_galindo

@saturatedbutter The DRM Microsoft had planned would have actually been a good thing for the industry. It was ill-received because it wasn't thought through all the way, described to the consumer great, and Sony didn't follow suit. Believe that Sony had similar ideas for DRM, but they backed out before E3 to see how the public would react to the new policy. The DRM and digital only product would have hurt retail stores and second hand stores, but in the long run it would have paid off for gamers. There was actually a plan set in place so that digital games COULD be lent to friends, but the gaming community failed to listen to reason, Game review sites added to the fire by condemning it, and retail giants added backlash as well.

AK_the_Twilight
AK_the_Twilight

@theepicman145 But it's usually cheaper on Amazon and there's always launch day delivery if you pre-order it early enough.

saturatedbutter
saturatedbutter

@Darth_Tyrranus

Oh I absolutely agree. I sometimes completely disagree with him. When he says we should not use the term "indie" anymore or calls the Rainbow Six Siege demo sexist for having a female hostage I can't help but see the glaring flaws in his criticism. But I definitely appreciate his input and his ability to start real conversations and important debates. Even when I think he's completely wrong it helps me better articulate my own ideas and thoughts. Having to actually think about these things, to put to words exactly what I see wrong about it, makes my own thoughts on the matter significantly more clear. Which is why I don't hate Tom McShea. I will still read everything he writes and still watch all the livestreams he's on. He's interesting to listen to, and that's how I feel about most of the Gamespot crew. I don't agree with them all the time, sometimes very strongly disagree, but I still really enjoy hearing what they have to say. If I were only to listen to people who were saying things I agree with it would be an echo chamber. You have to be very careful of that, especially on the internet. The internet makes it very easy to get caught up in an echo chamber where you're only hear what you want to hear.

saturatedbutter
saturatedbutter

@j_galindo 

It wouldn't have hurt retail stores in the slightest. GameStop was singing the praises of the Xbox One before the console was even announced. That's because they were aware of the DRM plan, and stores like GameStop had a lot to gain from such a policy. No longer would anyone be able to sell their games on Ebay or craigslist or to friends. With the game locked to your system, only retail stores like GameStop would have access to Microsoft's Azure cloud network, with the ability to unlock those games and resell used games. That would take away their toughest competition, person-to-person trading. Even if the policy meant they had to give a portion of the resale to the game's publisher they would still be making increased profit. In that policy, all the big corporations were getting a piece of the pie. Microsoft would get their cut for setting up the Azure network in all these retail stores, big publishers would finally be getting a cut of used game sales, and retail stores would no longer have to compete with far cheaper person-to-person trading. The only people that stood to lose anything from it were the end consumers who would be forced to sell their games to retail stores at ripoff low prices. The family/friend sharing of digital games would be nothing compared to what consumers would lose.

j_galindo
j_galindo

@saturatedbutter @j_galindo That information is inaccurate. The whole purpose of the DRM was to increase profit directly to developers and publishers by removing the resale of used games. Gamestop's business model is based on the resale of used games, which account for nearly all of the profit margin. There was never anything set up to allow retail stores to sell "used" digital games, which wouldn't even make sense because when you buy digital, you aren't buying a physical item, you are buying rights to the game, therefore selling a "used" digital item would be counter to the whole reason the DRM was proposed, not to mention a huge scam since there can be no "wear and tear" on a digital item. Retail stores had the most to lose because they are the largest provider of the consoles, and it doesn't make sense for a retail store to sell a console at minimal profit margins when they wouldn't be receiving a piece of "the sweetest plum" which was game sales (not including accessories). GameStop stood to lose a huge chunk of business if the DRM had gone into place. The reason the DRM would have been better for gamers in the long run is that it was cutting out a huge portion of profit loss by not having an ability to resale used games, which would mean that to play a game, you had to buy your own copy. The DRM would ultimately have lowered the cost of digital games because there would be no shipping costs, no manufacturing costs, and no profit loss from the reselling of used games. The advantages of digital over physical are becoming more apparent each week that Microsoft increases digital sales by offering significant discounts. Dead Rising 3 was only $29.99 a few weeks ago, while DLC for the game was 50% off as well, Right now at GameStop, Dead Rising 3 is $49.99 used! That means for $10 less than GameStop, Xbox One owners could have purchased the full digital game as well as the season pass of DLC. GameStop IS the worst thing happening to the gaming industry right now, but they made the average gamer believe the opposite.

saturatedbutter
saturatedbutter

@j_galindo @saturatedbutter You are the one who is misinformed. The DRM was for physical game copies, and GameStop was very happy with the policy, which is not directly acknowledged but obvious in this news piece:

http://www.gamespot.com/articles/xbox-720-a-very-hot-compelling-device-says-gamestop/1100-6406315/

"We've been spending a lot of time with Microsoft, but we have to let them take the lead on this, but it will be a very hot, compelling device,"

If Microsoft's plan was to "remove the resale of used games" as you claim, GameStop would never be singing such high praises after having a meeting and discussing Xbox One with Microsoft.

Secondly, used games don't account for "nearly all the profit margin" for GameStop. It's about 25% of their revenue.


Thirdly, the Xbox One was never planned to be a digital-only platform. Look up Azure cloud network. It's Microsoft's system, and their policy was to hook up all the retail stores with it so that you could still resell your used games, but only to retail stores. Once the physical disc was installed in your hard drive that copy of the game would be locked to your console. The console would be always-online (later changed to 24-hour check-in) to secure this process. This is what made GameStop so happy and why they were meeting with Microsoft back in April 2013. GameStop was excited at the idea of person-to-person trading becoming obsolete, making their used game market far more lucrative.

j_galindo
j_galindo

@saturatedbutter @j_galindo Again, your information is inaccurate. 

The article you linked to doesn't give factual evidence for any of your claims. Also, in 2001 GameStop's profit margins were comprised of 61% New game sales and 39% Other. This was very shortly after the acquisition by B&N and the transition of business models. Since 2001, Percentage of new game sales have declined, and been severely over taken by percentage of used game sales each year. As of 2013 Used game sales comprised roughly 61% of total profit by GameStop. My, factual, numbers come from places like Vanguard investing and actual public earning reports made by (GME). It is very easy to find copies of (GME) Earning Statements, just google/bing it, or give your stock broker a call. 

The DRM WOULD NOT have made sense to only effect person-to-person trades and sales because that niche area represents only a small piece of the pie, whereas Used game retailers take a much larger, more lucrative slice itself. And, Yes, Microsoft was going to be a digital only console, that's why the Xbox One's were not going to be shipped with disc drives. Azure Cloud Network is STILL digital, not sure how that isn't obvious. The DRM was widely known, and acknowledge even by Microsoft themselves, to be an unappealing policy to retailers that didn't stand to make money off of software sales because those same retailers would be the ones pushing console sales at minimal profit margins. If the DRM was so praised by retailers like GameStop, why wasn't it more widely applauded by those very same retailers? Several other stores have started used game programs, some have even put a dent into GameStops profit margins (Best Buy), so why didn't they back the policy last year? Why? Because it DID NOT benefit retailers.


It's your misunderstanding of the policy, as well as millions of others, that led to it's demise late last year. Trust me, if retailers thought the DRM was a good idea, the policy would never have gone away, it would have been supported, and a majority of gaming media would have followed suit in hyping the policy.

saturatedbutter
saturatedbutter

@j_galindo and please explain, if Microsoft were planning to cut all used games, why would they be meeting with GameStop, the king of the used game retail market, before the console's announcement, and GameStop being so happy from those meetings that they send out a press release letting the media know that they find Microsoft's unannounced next console to be a "hot, compelling device"? If it were digital-only or even have a disc drive but still cut all used game sales, there's no way in hell Gamestop would be having several meetings with Microsoft about it and be so happy with it.

saturatedbutter
saturatedbutter

@j_galindo You're wrong dude. On both ends. Gamestop does not make a majority of their revenue from used games. 

http://www.joystiq.com/2009/01/23/gamestop-used-games-revenue-estimated-to-be-2-billion/

Just google "Gamestop used games revenue" and you will find mountains of evidence.

And again, Xbox One was never planned to be a digital-only platform. That was purely a rumour that had been going around before the console's announcement. Microsoft never so much as seriously hinted at such an idea. They couldn't because such a mainstream high end console would absolutely need to give the option for physical discs. I see though that you give no source links for your information on this.


The used games policy was set to work exactly as I explained. Here's a link further explaining it:

http://www.gamespot.com/articles/xbox-one-preowned-plan-revealed/1100-6408850/


"The system will reportedly work as such: consumers can trade in physical Xbox One game discs only at retailers that have agreed to Microsoft's terms and conditions and have integrated the company's cloud-enabled Azure preowned technology into their own.

The traded-in title is then registered on Microsoft's systems as having been resold, and the data files will be cleared from their Xbox One account. Such a system would explain Microsoft's position that the Xbox One must "check in" with its servers once every 24 hours.

Retailers are then able to resell the used game at whatever price point they see fit. As part of this initiative, the publisher of the game will automatically receive a cut of the sale, along with Microsoft. The rest is revenue for the retailer."

Microsoft was always planning on allowing used game resales.


"Microsoft's official stance on the Xbox One used-game scenario is that the platform has been designed "to enable our customers to trade in and resell games at retail." "


*At retail* being a key word in that official stance.

j_galindo
j_galindo

@saturatedbutter @j_galindo Just to clear things up, this is just a little fun argument on gamespot, no need to get your panties in a bunch. Also, I'm at work and don't have time to cite every bit of factual evidence you are requesting. That being said...


http://www.gamespot.com/articles/microsoft-considered-xbox-one-with-no-disc-drive/1100-6416883/


I hate using sites such as gamespot as citation of evidence, because more often than not, these sites are inaccurate. However, I cannot find the archived page on Microsoft's website to link to, so this will have to suffice for now.


http://ycharts.com/financials/GME/income_statement/quarterly

This link is to show what (GME) has done in the 2013 fiscal year. Just for comparison.

http://www.forbes.com/sites/erikkain/2013/05/24/microsoft-and-game-publishers-will-reportedly-take-a-cut-of-xbox-one-used-game-sales/
This link shows how Microsoft was taking aim at used game retailers, namely (GME), and how Microsoft wanted its cut. It makes sense economically, at least while the game industry remains physical disc compliant, to play nice with retailers; however, when digital sales begin picking up and take hold the way digital sales of music did, retailers like (GME) will have to transition their own business models, and in turn decide to play nice with Sony, Microsoft & Nintendo, if they want to remain a viable company that is.

http://www.forbes.com/sites/greatspeculations/2012/11/14/gamestop-earnings-focus-on-used-game-sales-and-digital-revenues/

and this link shows that according to forbes, a highly reputable (much more-so than gamespot) says: "the gross profit margin for used game sales is significantly higher than new video games. (47% vs 21%)", this was in 2012, consider now, that with the inception of 2 new major consoles, and not a major supply of new games coming in, how these numbers might have an even greater margin between the two.


Even without these links of evidence and citation, anyone with just a slight bit of economic understanding and business savvy would understand why a company like Microsoft would stand to profit more if they cut a business like GameStop off at the legs, rather than doing so to the average consumer.

j_galindo
j_galindo

@saturatedbutter @j_galindo Firstly, your link about GameStops earnings furthers my argument. That article is from 2009, and notes that about 42% of profit comes from used game sales, a figure that has been rising consistently since the start of (GME) in 2001. My figures are taken directly from Earnings reports made by GameStop themselves, and not estimates made before the end of a fiscal year by outside sources such as WSJ.


As for the DRM policy links that give "proof" to your argument, those are all articles that were written AFTER the initial reversal of the ORIGINAL DRM policy, the one that was a bit more restrictive and received so much backlash from retail stores. The second proposed policy was bad for gamers, while the first policy was bad for retailers. Microsoft understood that upsetting retailers was far worse than pissing off the gamer.


Also, the Xbox One was originally supposed to ship without a disc drive, Microsoft admitted to that. But the many reversals and changes made after the backlash changed that. That's part of the reason so many systems (mine included) had that issue with the disc drive reading discs properly, because the disc drive was technically "an afterthought" and was a rushed installation.

saturatedbutter
saturatedbutter

@j_galindo @saturatedbutter That first article is pretty weak evidence. All it really says is that they had some internal talks about it but never went any further than that because of the glaring obvious issues with going disc-less. So that was never a serious consideration. They didn't make any plans or prototypes or even concept art of a digital-only console. They had an internal talk about it and that's as far as it went. It was never planned to be digital only.

That Forbes article pretty much explains spot-on what I've been saying this entire time. Except for the claim that "Of course, this is terrible news for GameStop." Take note, that article was written in May 2013.  That's a month after the article from GamesIndustry International article where the GameStop CEO says ""We've been spending a lot of time with Microsoft ... it will be a very hot, compelling device." GameStop knew about all the plans explained in the Forbes article and they are very happy with it. Why do you think that is? It's because GameStop's hardest competition in the used game market isn't Best Buy, it's person-to-person trades/sales through places like Craigslist, E-Bay, or good old-fashioned flea markets. Without a middle-man these sales will always bring the seller more money than GameStop would pay and offers a buyers a cheaper price than Gamestop. It's a win-win for both sides and that's why it's such a big problem for GameStop's market. Once used games are locked to a profile, that competition is gone. GameStop would have to give cuts to Microsoft and publishers, but that would easily be compensated by all the more business they would be getting.

j_galindo
j_galindo

@saturatedbutter Also, please note that my linked evidence is from reputable sources, and that your linked evidence comes from articles mostly found on GameSpot. When reading the articles you linked to, words like "reportedly" and phrases like "sources say" are used repeatedly, thus not instilling much confidence in the validity of your "evidence". Things like that would never fly in the real world of investing, it's called here-say and gossip. My numbers about GameStop earnings can easily be confirmed because any company with holdings and investors must disclose their earnings for a fiscal year, and will typically do so quarterly.

j_galindo
j_galindo

@saturatedbutter Also, keep in mind that this is all coming from an investor, and even though I don't invest in (GME) I watch their earnings and reports to make a basis for how I choose to invest in other companies. GameStop doing worse, can often be a sign of Microsoft doing better.

saturatedbutter
saturatedbutter

@j_galindo 

and you still give no evidence for any of your own claims while repeatedly calling mine inaccurate. Cute.

saturatedbutter
saturatedbutter

@j_galindo 

"Xbox One was originally supposed to ship without a disc drive, Microsoft admitted to that."

proof of this? Why would GameStop be so thrilled with them and calling their next console a "hot, compelling device" (before it was even announced, so before any backlash) if the console at that time was planned to have no disc drive?

j_galindo
j_galindo

@saturatedbutter Like I said, the first article was a Gamespot article, which all of your "evidence" has come from, and is, at best, able to prove that the console was considered without a dis drive. However, if you dig a bit deeper and have been following everything since 2011, you would realize that the quotes in the article were coming from Phil Spencer, the NEW head that was brought in to turn around perception of the new console with good PR! Microsoft said shortly after the release of the One, after all of the disc drives issues, that the reason for the bad drives WAS because the disc drive was a late implementation. Also, anyone that pre-ordered a day-one console and paid close attention, noticed that shortly after the 2nd DRM reversal, the original Xbox One SKU was changed, leading many to believe that this was the point in which the firmly decided Blu-Ray drives had to be included.


If your argument was that the DRM was good for GameStop (the original DRM or the revised DRM), then how could an article that explains WHY the DRM would be bad for GameStop be in agreeance with your argument? Don't twist your words or mine just to seem right.


As for the GameStop CEO's comments, it could be for many things. The fact that maybe initial talks would have been good for both parties, but something fell through? Maybe, GameStop forced their hand in the initial talks and lost leverage somehow? Or maybe, and this is what I believe is most realistic, Raines made those comments because she was trying to influence (GME) stock and assure investors that they were going to be seeing growth upon new console releases, something that makes perfect sense after a year of decline and increased loss of market share because of new, and pre-existent,
retailers following suit with similar business models.


I noticed you didn't comment on the fact that GameStop's profit margin comes from a majority of used game sales, cute...


From a business standpoint, it makes sense to play nice with GameStop, from an economical and investment standpoint, not so much. Microsoft would stand to make so much more money if they had stuck with the original DRM because used game sales would have been non-existent all together. There WAS backlash from retailers. Which led to the revision of the DRM, which led to even MORE backlash from the gaming community because at that point it was the gamer that would lose out the most. All of this was the lead up to the departure of Don Mattrick, and Phil Spencer stepping in. Phils job is to come in and make friends with the community again, which he is doing a GREAT job at so far. It makes sense that they would deny past unpleasantness and focus on the good, but for those of us that invest, or have any understanding of the market, we know that he isn't being 100% honest about the past.


Most people know that GameStop is what's wrong with the industry right now, amongst other glaring issues, it just doesn't make sense for an already viable and profitable company to take such a big risk by getting in bed with GameStop, just to increase profit margins by such a small percentage.

saturatedbutter
saturatedbutter

@j_galindo 

If the original DRM plan was as you described it, it actually would be terrible for GameStop. According to your perception of the timeline though, Microsoft was planning to make Xbox One a digital-only console. With that plan, they proceeded to have several meetings with GameStop, to which GameStop came out publicly to call Microsoft's new digital-only console a "hot, compelling device." Then a month later the DRM is changed to include physical discs and take a cut from GameStop's used game profits, at which point it became "bad for GameStop".

Please, stop me when this starts making any sense.

saturatedbutter
saturatedbutter

@j_galindo @saturatedbutter I'm not "twisting words" to seem right. The Forbes article explaines the DRM while only 1 sentence says that it would be bad for GameStop. They actually don't go into any detail in that article as to why it would be bad for GameStop. 

GameStop CEO J. Paul Raines is not a "she" as you refer to him. He had been having several meetings with Microsoft and released that information to GamesIndustry International 1 month before your Forbes article. You claim it's because a month later "something fell through" and a whole new plan was built in that month that would have devastating effects on GameStop's business. I go with the more logical conclusion that GameStop knew about the DRM plan (or "Revised DRM" as you like to refer it, because any and all previous internal discussions count as actually plans to you).


The quotes in that article come from Phil Spencer because that article is from 2014. The disc drive was always the planned implementation and despite your claim of disc-drive issues the Xbox One and PS4 both had hardware issues at launch, but both of them had an extremely low failure rate of around 1%.


I didn't respond to your further insistence of GameStop's profit margin being majority used games because I've already addressed it. Numerous google searches all yield my previous comment of it being around 25%. Do I need to repeat myself? "cute..."


From a business standpoint, it makes huge sense to screw over the consumer if it benefits all corporate parties involved. The DRM on physical discs would do just that. Microsoft gets a part of used game sales, publishers get a part of used game sales, Gamestop gets a part of used game sales (plus far more business than ever before in history). Consumers? They would get the raw end of the stick on used game sales.GameStop trade-in values are already a rip-off and with their toughest person-to-person trading competition removed from the equation it only makes sense that they would make it even lower. Just to turn around and resell it at $5 lower than brand new.

j_galindo
j_galindo

@saturatedbutter One of the articles YOU cited states "the gross profit margin for used game sales is significantly higher than new video games. (47% vs 21%)"

Don't talk down to me when you yourself don't seem to have a basic understanding of numbers and factual evidence. It's obvious you are one of those that will twist words and scoff at evidence simply because you have a grandeur of ego that won't allow you to admit you're wrong. Obviously I've lost this debate, but when ignorance overshadows intelligence and critical thinking, everyone loses.

saturatedbutter
saturatedbutter

@j_galindo 

Gamestop sells more than just games. Saying used games is where they get most of their profit because it's higher than sales of new games is either disingenuous or ignorant.

I haven't twisted anything. You scoff at the idea of person-to-person trading being GameStop's hardest competition in the used games market. You brush it off for no reason. Just because Ebay and Craigslist don't put put quarterly earnings reports about how well used games are selling doesn't mean it's a dry market. It makes sense that people would do that when it's cheaper and pays better than retail alternatives. Retail is a nearly useless businessman. The value they add to the used games market is hardly anything and what they do add comes at too high a premium. 

j_galindo
j_galindo

@saturatedbutter Uh-oh, looks like this new service EA is getting into with Microsoft is just another way of combating GameStop. There's no way you can spin this service as a way to hinder person-to-person trading and sales.

j_galindo
j_galindo

@saturatedbutter @j_galindo This will be my last post. Honestly I've grown tired with trying to explain economics to you, and your flip-flopping and changing of your "point" after being presented with evidence to counter your argument is draining. The cost to obtain used games is FAR less than that of a new game, systems and accessories as well. USED is the business model GameStop follows. The profit on a used item might be as high as 5000%, where as profit on a "new" item never exceeds 100%. Simple math and understanding of how the "used" item model works would tell you that.