We all know that the digital age upon us, and with the new generations of consoles pushing to go digital, I was wondering what will happen to video game retailers like GameStop and PlayNTrade, who mainly deal with used games sales. GameStop and its friends' make a majority of their profits on the used gaming market, by letting us trade in our used games and selling them for cheaper. Customarily, GameStop will allow you to trade in a new release, and receive less than half of the price back, and then turn around and sell it 5 dollars less than full price. Now is that fair? No but that is for another day, today we are going to talk about GameStop after Digital Downloads.
GameStop has earned a yearly profit that is worth up to $1.8 billion a year, mainly because of the selling and reselling of used merchandise, and the developers only get paid once. So the developers and the gaming companies have found a way for them to maximize their profit, and make the games cheaper for the gamers. This move could be what is need to help combat against the rapid decline in video games sale. To help quell the assumption that the used games don't hurt the developer profit, GameStop has gone on record, saying that 70% of the profits of used games go back into the buying new games, but what will happen when that stops? How will they be able to maintain the well-oiled machine that is GameStop? Well who knows there are many of ideas that I have but only one seems to stick out, and to me it will be the most profitable.
GameStop has done a few things that to stay ahead of the curve, it has started taking in iPod and iPhones and selling them used. This is in direct correlation with the new consoles push for digital games and DLC. It is a smart move on their part, and gives them a big profit margin with the selling of used Apple products. It has also been confirmed by TGA that they will be selling cell phone plans in the future. With the addition of selling of cell phones, GameStop will now gain revolving profit. As long as consumers pay their bill every month, GameStop will get a check. So what will GameStop become?
It seems like GameStop is preparing to change their brand over to become a "used stop". UsedStop will be a place where you can trade in all your used gaming and electronics. People will be able to trade in their old TV, computers, Blu-Rays Player, and others to get all of the new products that will be coming out. UsedStop will keep to its old philosophy but will change their products to hit all spectrums and stay a force in the retail game. I believe that UsedStop will still stay gaming oriented, with the game informer and gaming products, but will have to change with the times to stay relevant, i.e. RadioShack.
With all that being said downloading games will be the way of the future and those that think the used game market will survive it won't, and GameStop and its friends' will change to stay in the market. UsedStop in my mind will be the future for GameStop so look out