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theprof00 on 31 January 2012
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RolStoppable said:
theprof00 said:

Even one extra sale of a game at 50$ makes up the revenue for 5 other games.

The question is, would a ten dollar drop and inability to buy used games, contribute to at least more than 16.7 new game sales increase.

With gamestop making many hundred million in revenue, and most of the profit coming from used, exactly how many used games do you think they sell? I would venture that GS sells twice as many used games as new games. I'd say that probably 60-75% of their revenue is all used games. So, if there are X amount of used games sold per year, and gamestop selling Y percent of them, if we were to extrapolate and find z number of used games sold, can the increase in new games sales be greater than 16.7% of z?

With 25B$ of annual revenue in games, and assuming that 2ndary market = even a modest 25% of that, then every .1% increase over 16.66% would equal 6m$.

So, if the industry were to even reduce price by 16.7%, and sell at least 16.8% more new games, then the result would be a net profit.

But like I said, there's a market to even expand that increase dozens upon dozens of times over.

I have to agree with Damnyouall. You are pulling numbers out of thin air in order to make it look like you wrote something intelligent.

So I'll ignore the majority of your post and just tackle the one important question at the top. As it is in the case of Gamestop (I hope I have this right), they buy used games from people for $30 and sell them for $55, new copies for $60. This means a gamer who makes use of the used games policy of Gamestop, effectively buys his games for $25 or $30 (depending on if he buys a used game or a new copy). A price drop of $10 across the board for new games would bring them to $50, down from $60. So the gamer we are talking about would now have to pay twice as much for his games as before.

The result is that he will buy less games and everyone else that is like him will do the same. The majority of new games will then move into the bargain bin at a quicker rate than now which will have a significant negative impact on the video game industry.

New games are only full price when brand new.
And the used games they sell are generally only 5-10 dollars cheaper than the new ones, and in the case of Call of Duty (which is almost always out of stock used) they sell it for 3$ cheaper.

So your point is invalid.

Furthermore, gamestop doesn't give people 30$ for games, they give them around 12-17.

I hesitate to call you out of touch, but it doesn't seem like you know what you're talking about.

Gamestop earns 2.5B in used game sales annually. You think that 2.5B is just going to disappear instead of people paying 10-20$ more?

But you are right about the numbers. They actually only make 26% of their revenue on Used games. It's in profit where it become >50%.