Web Retailer Bails on Games Industry, Hard

Online retailer DVD Empire has gotten out of the sale of videogames, and on their way out the door they made a point to call out the industry on a number of sore spots. As reported by Gamespot, the company felt that they actually lost money by offering games to customers. In their eyes big publishers only care about large chain stores, leaving small and medium-sized retailers to pick up enormous overhead costs on the titles they carried. They have an extensive list of frustrations on the former 'games' page, including: "When we sell a game we make on average 8.3% gross margin. That does not take into account any of the cost to store the video game or labor to receive/ship an item. The only way we can make a profit on an item is to sell it over the MSRP, but unfortunately we are not allowed to do this. Take a $400 console; we only make $5 on the sale--that is a .01% gross margin (note the decimal point). The game companies make their profit selling to us. We make no profit selling to you." Besides Gamestop there are two other videogame stores in my town ... but both of them are exclusively used game resellers. Are used games the only way to make videogame sales profitable?

Comments

Yes used games = $$$$

[master_kaos]

The only way EB Games, and Gamestop stays in business is from their used game sales. Depending on the game, they will buy it off of you for 10-20 bucks, and resell it for 90% of the normal retail price, making a huge margin. Now EB and GS probably make a bit extra than an independent store, but not much.

Re:No loss to me.

[WinterSolstice]

I buy mine used at GameStop for two reasons
1) 90% or so of the retail cost, with an additional 10% discount (for a mag subscription that I enjoy)
2) If the game reeks I can take it back within 10 days and return it, exhange it, etc. 90 days if it just doesn't work

Walmart and Target don't give me that.

-WS

Re:Referrer link?

[Valdrax]

I fail to see what so many people here have against someone getting a small return on passing on some potentially interesting information to people as long as it doesn't cost the end users.

Because people hate being used as rubes for someone else's gain. Referrer links should either be publicly disclosed or stripped. To do otherwise is to try to make a buck on the sly.

It also calls into question the integrity of Slashdot as this is very close to being an advertisement. Yeah, yeah, a game company posts a big publicity-gaining screed about how selling games sucks.... oh, and hey! 20% off! With nobody credited with the story, I have to wonder whose user id this might be. I'm just saying it creates a bad impression.