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GameStop buys EB
Dram writes "Business Week, among others, is reporting that GameStop will buy Electronics Boutique for $1.4 billion. Hopefully this will allow both chains to better compete with Wal-Mart and Best Buy for our gaming dollars."
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Hopefully this will allow both chains to better compete with Wal-Mart and Best Buy for our gaming dollars.
I don't understand, both GameStop and EB suffer from varying degrees of suckiness. I've had to deal with enough crap from both stores to wish they'd just go out of business altogether.
While Walmart and Best Buy might not be all that great either, they are ALWAYS, WITHOUT EXCEPTION cheaper or equal in pricing to GameStop/EB for new games.
Used games are a different story, but when I see games that retail new for $19.99 selling for $17.99 used, or $49.99 games selling for $44.99 used, I feel like you're a sucker for buying used games there (this intarweb thing works pretty well for that). On top of which is the fact that you won't get more than $5 cash/store credit for selling that $49.99 game that they turn around and sell for $44.99. Bastards.
Mod me a troll if you must, but I doubt I'm the only one with these complaints.
why? forty-two.
So I wonder why it was Gamestop that took the initiative to issue a bunch of debt to buy EB?
Given the co-operation of the EB people in the vote, it seems more like a merger than an acquasition.
I really hope that EB doesn't get it's great service dilluted by GS's management.
My local mall already has TWO Gamestops and TWO EBs. Either some people are going to be out of jobs, or it's going to be hilarious seeing four Gamestops in one mall.
In this case, though, the idea is valid. EB, Gamestop, and the rest of the specialty retailers are getting creamed by Walmart, Target, Kmart, Toys R Us, Best Buy, and the rest of the superstores. I can't specify numbers, but one could ignore the specialty retailers and still have quite healthy sales.
In other words, EB / Gamestop / etc aren't competing with eachother, they're competing with the superstores. And they're losing. And they're in danger of disappearing.
I've not been terribly happy with EB in the past 10 years, and their employees have been legendarily unhappy with corporate policies. I would much rather Funco have taken over EB, and not the reverse. But Funco was even more of a specialty store, catering to the used NES game crowd.
In my not-so-humble opinion, EB / Gamespot need to work on getting more space, bigger aisles, and not cluttering their stores like they were libraries. Their stores are an intimidating wall of noise, noise which continues inside. Even if they're not going to go full Apple store sleek, they should at least go Suncoast. Simplifying their inventory might be a first step. I don't see how it would be possible for EB to reduce service any, short of slapping every customer that walks in the door. But reducing the noise and helping people to find good games (recommended section?) should be their first steps.
The ______ Agenda
I'd like to address some of the concerns people are having with this merger.
;)
1) Their customer service is going to change.
- Not entirely true. I've worked at both EB and Gamestop, and EB has a strong and well-developed program in customer service and sales training while Gamestop has almost none (as of 2000). Once both companies sit down and analyze each other's practices it'd be logical to assume that EB's method of training will be incorporated. This is also backed by the fact that EB employees make more annually than Gamestop employees, and EB still turned a higher profit last year.
As for the matter of the return policy, it changed because of copyright laws, not some corporate mandate.
2) It's going to affect the used games market.
- It should affect it at all, honestly. Rather, it should help stabilize it. There is a huge glut on the market as far as used product goes. Trade in prices are dictated by the amount the company has already vs the rate at which it's selling. That's why sports games trade in at such a low rate: once the current version comes out, previous versions get traded in at a huge rate and it devalues. Both companies rely on trades, so if trades stifled they would definitely addresss it, therefore it's safe to assume the prices would drop too.
Btw, the $44.99 game likely had a trade in price of $25 to $35. This is how retailers like EB and Gamestop make profit. Average cost of a game is around $47. Companies like this can't keep their lights on just by selling hardware (which they sometimes lose money on) and new software. The profit margins from preowned is what keeps these companies afloat.
Plus, with discount programs available, a preowned version of a new release being priced at $40 is actually a good deal sometimes (especially with BOGO sales).
3) Gamestop is going to close stores in malls with multiple locations.
- Again, this is not entirely true. Right now, an EB is open because it's getting business. If Gamestop closes a store because it is too close to another, it's a perfect opportunity for a competitor, say... Gamecrazy to move right in because they know that store gets traffic. As it stands, there are actually malls in America that have three EB stores in them, and they all get good traffic. I know there will be closings, but there will be many more openings.
4) Prices will go up.
- But they may go down. Prices are dictated by cost vs profits. Right now, the bulk quantity that EB and Gamestop purchase at gets a resulting cost of about $47 a game, as I mentioned earlier. Now, with some 3000+ stores in the US (more in Europe and Asia) Gamestop can now purchase games in a higher quantity, meaning a higher bulk discount and more profit from the $49.99 price point. If anything, it'd be an incentive for prices to stay where they are and more incentive to have sales on games.
As an EB employee, I'm very optimistic about this merger. If nothing else, I at least made a quick 1k off of stock sales
(From the Laws of Japanese Animation) Law of Inherent Combustibility -- Everything explodes. Everything.
Everytime I go into any of these little gaming specialty stores (GameStop, EB, GameCrazy), there's always the dude in there who has to bash my system. If I'm in there looking at Nintendo stuff, they'll tell me that Nintendo is dead. The other day I was in there just playing a demo and the two employees were talking loudly back and forth about how the Nintendo DS stood for "Nintendo Dead System". I kept thinking, "Wow, this really makes me want to buy my DS games here!".
Perhaps they need to be screen out the fanboy's in their hiring process.
Forget the whales - save the babies.
Gamestop showed up to pick up their EB today, but were informed that since they didn't pre-order, there were none in stock for them. They were able to special order it, but it may be a few weeks.
-Cliff
For all the people that complain about EB, when I worked at EB (3+ years as an assistant manager), there were good, solid, friendly people who visited our store more than once a week. They loved us, and we loved them. These people had been customers since opening day. Our relationships with these people reminded me very much of how it must have been like to run a smalltown hardware store at the turn of the century; we did them good by working deals in their favor when we could, and they always came to us when they bought games. Basically, the way business should work.
That all changed when they brought Steve Morgan on board, maybe a year after I'd been working there. Up to that point, EB had been essentially a family business. The board had hired people from inside the company to run itself. But Morgan was from a department store. I knew someone who was inside the company enough to have talked to Morgan, and Morgan was quoted as saying that he'd never played a game in his life and never would. He didn't have children, and never wanted them.
Joe Firestone, on the other hand, was CEO when Morgan was brought on. This guy exemplified leadership. He'd write inspirational, funny columns in our mailbox newsletter every week. Think of a fireside chat for video game employees. He knew what it was like to be one of us, and his emphasis was always the customer.
The first thing Morgan did was set quotas on the stores for selling Game Doctors. It went downhill from there. When I left, they were changing the return policy to a Best Buy variant (you breath on it and you cannot refund it). He revamped the training that focused less on customer relationships and more on the bottom line.
Firestone retired soon after they brought Morgan onboard. Jeff Griffiths replaced him, but it was clear even to the 5 hour a week part time employee that he was a puppet for Morgan. I haven't been in EB for two years now, but I have no doubt that Morgan had something to do with this buyout. Only people from outside the company, who had no vested interest in the company itself, no history, would have sold out EB.
It's sad, actually. Many of the things people complain about when they're talking about EB stem from Morgan's policies. Sure, EB has always had arrogant assholes behind the counter or "unfair" trade-in values, but the underlying philosophy is now (obviously) completely different. The customers were first. Likewise, under Firestone, employees were treated fairly well and with respect. That started to change when Morgan came in.
Morale of the story? Watch out for outsiders coming in, because they don't give a damn about anything except their own stock values - especially not the customer.
I can't help but think that this decision hurts the people it really shouldn't hurt: the customers (who no have no choice or direct competition), and the hard working EB employees who will no doubt have to fend for their own jobs against longtime Gamestop employees. You think the clueless employees are bad now? Wait until EB/Gamestop starts to resemble the only competition they have left: Best Buy and Walmart. My guess is that the internal employee relations will reflect the same practices as Best Buy and Walmart too.
Get out, video game store employees, while you can.