This statement is tough to swallow also... GameStop will "GIVE" out $1B to their consumers to go and buy new games with. That sounds just fantastic if it were true. Sadly, GameStop's core business is used game sales (see graph below, courtesy of Edge.) You have to sell more used games (on a gross revenue basis) to beat the sales revenue on new games; at the same time, used games get a much higher profit margin for GameStop. So it's just too important a revenue stream for them, if they have to tap-dance to explain it, they will. In reality, gamers turn around and spend that money on used games (more than new games as seen in the chart), with 100% of profits (on those used game sales) going to GameStop. So to make the point really clear: We actually don't mind GameStop selling used games, IF, they did it elsewhere, like on eBay or if they started www.BuyUsedGames.com or something like that. We do care when they are our partner, and when we are sending OUR consumers into their stores (especially when we make them special edition builds – as they commonly request), and then they push their used games business. That's where the line gets crossed.
Finally, he made some crazy reference that "Publishers are afraid to death of piracy." Yet, as we know, piracy (& hacking) can be tamed by server authentication. China is the living proof of this, where they have a non-existent console media business, and a thriving digitally downloaded industry. A digital distribution industry which grew 69.5% last year, dramatically faster than our retail industry.
So, to turn the tables, I personally feel GameStop are just blindly putting their foot on the gas pedal to speed up digital distribution (thanks to their policies); if they are smart they will be investing very, very heavily in digital distribution. If they want their company to still exist in 12-17 years, I'd go and buy STEAM from Gabe Newell, which technically can't exist yet as Gabe is clearly 12-17 years ahead of the curve.
David Perry
CCO Acclaim Games, Inc.
(Yes, we make our living from Digitally Distributed Games. 100% of our games are profitable.)
Reader Comments (2)
Mr. Wells- Your point is well taken about GameStop, and indeed, the industry at large shares some of the credit (blame?) for GameStop's success. However, Mr. Perry does not personally deserve your criticism as Acclaim does not do retail distribution, only digital distribution.
Dear Mr. Perry Before I begin let me tell you that I am the owner – operator of 2 independent game stores. I have been I the game business since the early 90’s and have operated 2 stores for the last 10 years. You can attribute any bias you wish to this fact. Your response to Mr. Dematteo’s interview really intrigued me. You complain that GameStop is your partner, but they undermine your interests by selling YOUR consumers used games. If you and other game companies feel that GameStop is not giving you the proper respect, why do you continue to give them such huge competitive advantages? Are there “special arrangements” going back to the publishers from GameStop? If Acclaim and the other publishers want to sell more new games they should stop giving their “partner” the huge competitive advantage of getting games 1 to 3 days before anyone else (including big box retailers like Wal-Mart) and follow the business model of books, music, and video and establish firm enforced street dates on ALL releases. Many years ago, the movie studios agreed to make one day of the week (I believe it is Tuesday) “New Release” Day. Product was shipped to distributors and direct accounts so it could be in stores for the Street Date. It created excitement for consumers, leveled the playing field for all retailers and video stores, and they spanked those who violated the street date whether they were big or small. The only reason your “partner” Gamestop sells the high percentage of a new release that they do is because Acclaim and the other publishers give them the huge competitive advantage of having the ability to prebook new releases by promising consumers they will have them before anyone else. If you really care about YOUR consumers give them the choice of where to get games on day one. If you really feel that your “partner” is biting the hand that feeds it, take away the “special treatment” they receive on receiving new games. Making say, Thursday as New Release Game day would sell more new games. YOUR consumers would know that they don’t have to prebook with just one retailer to get their game first. There would be more excitement in the business; Wednesday would become mid***ht madness ***ht in many stores as customers line up to get the newest release at Walmart, GameStop, or even my little independent stores. If your dog bites you, why keep giving him treats? Steven W. Wells