johntonsoup on 20 March 2008
When DVD Empire stopped selling games, they laid out a pretty good rationale that seems to be in line with what kingofwale is saying.
They claimed that they were making $5 margins on most games, consoles, etc. (without factoring in distribution costs).
Furthermore, because they were small compared to the big boys, they were not allowed to return an unsold game. So if they bought a $60 game when it first came out, they payed $55 for it at that time. When the producers dropped the MSRP to $40, they had no other option but to try to sell it.
Now, I know Best Buy and such make some money on advertisement spots and display deals, but I think it is true that the margins for the video game market are incredibly small.
