The Used Games Stew Simmers On

A while back I posted some thoughts on the entry of other retailers into the used-games biz (both here and on Gamasutra) after Best Buy, Amazon and Toys R Us all announced they were jumping into the controversial yet attractive-margin business.

The topic popped into headlines again this week as Walmart floated a test balloon of used-game kiosks in 77 of it's US stores. Walmart isn't running the business itself, but renting retail space to E-Play, the company that runs the kiosks.

The Walmart name prompted some press calls to analysts, I guess, because we saw quotes from Todd Greenwald ("we don't beleive this proposition poses much of a near-term threat") and Michael Pachter ("I can't see this having tremendous appeal to hardcore gamers, unless the credits are substantially higher than those offered at GameStop"), both citing it as sort of a non-issue.

If you cut through the analyst speak though, you can paraphrase to 'not a threat until they get it right', and 'not competitive until they make it so'. 

Does anyone really beleive that won't happen? Walmart is a company that put itself on the map through ruthless attention to efficiency improvement. I think they'll clue in to any customer sentiment that payment terms matter, that buy-back pricing is uncompetitive, that used-game pricing is uncompetitive, or any other metric that matters.

To posit that GameStop won't see a credible assault on their attractive used-game business seems naive to me. It will certainly happen.

And as I claimed last time, I believe this is a good thing for the industry.

Lowering the margins on used game distribution will make games a better value for consumers by increasing the buy-back price or lowering the used game price, and/or make new-game promotion more attractive to retailers because of less incentive to move used games. 

At the end of the day it means more money in either the industry's pockets or consumers, or both, and that's a good thing.

[Cross-posted from my personal blog]