14 DAY TRIAL // Industry analysts are saying that for GameStop, the used games sales revenue will reach 23% of the overall value of the business, up to a value of 2 million dollars. In the previous year, the percent value was similar, at 22.4%, but the value was of only 1.6 million dollars.
The used game market accounted for 42% of the overall profits of GameStop in the second quarter of fiscal year 2008, while sales of new games contributed just 21%.
Evan Wilson, who is an analyst for Pacific Crest, told the Wall Street Journal that “When you consider that most retailers operate on single-digit margins, it's astronomical.” There are dedicated gamers who, after finishing the latest and greatest titles, like Gears of War 2 or Fallout 3, immediately trade them in to GameStop in order to gain credit for a future purchase. If this is moral or not has yet to be determined.
There's a debate raging in the gaming world at the moment regarding the benefits and problems related to the secondary used game market. Big publishers seem to believe that the industry (that is to say their revenue) is being hurt by the fact that people are selling their games for a fraction of the original price, as this leads to a severe reduction to the number of new games played. There are several strategies planned to deal with the issue: from more DLC tied to owning a copy of the game to codes for exclusive content that can only be used once.
Still, representatives from GameStop, like Mike Hogan, who is the Chief Marketing Officer, are saying that, in fact, sales of second hand games fuel the acquisition of new games; he has cited a statistic showing that, in shops, 75% of the credit gained from the second hand market is immediately re-invested in new titles.