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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.
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.
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.
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