Once again GME comes within .02 of making yet another new 52 week low. May still happen today towards the closing bell, not too many people dare hold this over a weekend. CFO leaving for all places Wallmart should tell you something. What else is it going to take to convince you guys? Another 15% drop maybe? Just don't understand why you believe this will be the next monster stock or make any movement to the positive side suggesting a breakout? FUNDAMENTALs is what moves stocks not mid-night parties for nerdy gamers. Don't you even read the company's own guidance they put out for 2010? Piss poor performance in 2009 what has changed to make 2010 any better?
You are explaining the letter "A" to a guy who's already on "Y" or "Z". If you take away the benefit of off-setting a new game price with a trade-in, used game sale whatever, to buy your DLC game, you better be prepared to sell your game for the $59.99 - $20 = $39.99 trade-in value I would have gotten presently. According to you, I should have gotten $40 on Craiglist "with no fees and its really convenient too". So your DLC game better sell for $59.99 - $40 = $19.99, according to your scenario. And while you're at it, you aren't getting free game promotion through Gamestop anymore, so after all the AAA titles you are already trying to sell are history, you can rely on a WalMart flyer to sell the other\future games for you.
You don't have to be an introvert to appreciate convenience. This isn't a social experiment it's a business. Consumers want the best service at the right price. Why do you think Wal-mart jumped into burgeoning streaming media business? It's because consumers preferences are changing and people like the convenience of streaming a movie directly into their homes rather than driving down to a store to buy or rent it.
I am talking about the customer's outlay of cash. They want the $59.99 new game. They have a used game to trade-in at GME. They get money off the new sale by whatever the trade-in value is. Right now the trade-in value (if the offer's still there) is huge with the current promotion, better than any alternative way to sell a used game. I am not speaking about GME's profit. If you can get better value on eBay or Craig's for your used game, instead of trading it in, sell it there. If you "never want to leave the house" as you state, great for you. You'll have these options in the future. You're not the consumer GME's going to reach anyway if you are a house-bound introvert.
I really don't get what you mean by the amount subtracted from the $59.99 price. If you're talking about a trade-in for $20 and the used game selling for $40 ($60-$20) that has nothing to do with the way they calculate trade-in values. The total profit is net not cumulative.
As far as costs and convenience, Amazon only collects a modest commission, doesn't use any propietary payment system, and the buyer pays for shipping. Craigslist is even easier because it's local. In some cases I would say it's actually MORE convenient than going to Gamestop. With digital download this process will become even more convenient because you never have to leave the house.
Look, you are a thoughtful poster I can see that, but it's not reality. You stated:
"yet you assume Gamestop can simply tack on the price of a used game to their $59.99 price and call it a wash. You clearly don't understand economics or basic retail and marketing concepts."
Have you been to a Gamestop? The new price is at most $59.99 and the used trade-in or sale by the customer to Gamestop is the amount subtracted from the $59.99 price. Who's tacking anything on? You could buy the new game for $59.99 at Gamestop, sell your used game on eBay for $5 more, subtract the listing fees, the paypal fees, the mailing\shipping fees, and the inconvenience of having to go through that. OR you could walk in a Gamestop (right now the used trade program at GME beats ANY OPTION eBay, Craig's whatever flat-out) and do it veryu efficiently. Gmaestop takes on the worry of having to resell it. That's a convenience, dude.
Ok, going by your advice and thinking about the consumer, do you really believe the people trading in used games are doing so in their best interest? If I were a consumer and I traded in a game at Gamestop for $20 when I could have put it on Amazon or Craigslist for $40, I would say that's pretty against my best interests. The key is educating people and reaching a mass market and if digital delivery can accomplish either of those things then we can effectively say bye bye to the used game market. And I like how you call my scenario overly simplistic (when it was hypothetical to begin with) yet you assume Gamestop can simply tack on the price of a used game to their $59.99 price and call it a wash. You clearly don't understand economics or basic retail and marketing concepts.
"I didn't say developers don't care about retailers"
Well maybe "stealing" was the wrong word because you generally don't care about those who steal from you.
All I'm saying is that there is a place for retailers such as GME and they are not going away. I also agree with many of the posters who have said that they will have a huge cash balance and that will offer them many opportunties to boost the value of the stock. I just don't believe that they will blindly follow the pattern of doom as some shorts are hoping.
My advice to you is consider the consumer not the developer. You're explanation is way too simplified. No after market sales of physical games, DLC downloads, publisher paid DLC unlocking of used licenses (EA), will have this effect. "A giant sucking sound" for your games when the price plummets. As long as the consumer has options to a policy, they will exercise that right in their BEST interest. Selling a game that they are finished with (or ripped a copy of) to offset the price of a new game or a new-to-them game is in the gamer's best interest right now. Take that away, and your new games price better be the difference between $59.99 as it is now and whatever they could have sold your last game used for.
Alan, did you even read my post? I didn't say developers don't care about retailers I said they don't care what happens to the used game market because they make no money from the resale of used games. And maybe stealing was the wrong word but you can't compare used games to any other form of commerce. Most people who go on eBay or Craigslist are simply looking for lower prices. They aren't looking to buy stuff for 50% of it's value and resell it for 150% and that's the fundamental difference. Gamestop has made a business out of this form of arbitrage and up to this point the developers haven't been able to do anything about it. Once digital delivery goes mainstream that will all go out the window. If Gamestop is selling a used game for $20, developers can simply offer that same game on digital download for $15. Their costs go down because it's all digital and they get to extract that consumer surplus previously monopolized by Gamestop.
Wow, and the publishers do not benefit by having their new games sold in 6,000 + stores? You are naive if you think that publishers do not recognize the advantage of having knowledgeable sales personnel assisting the general public. Try asking a WalMart clerk a question about gaming. Do not be surprised if you get a blank look.
With the popularity of the Wii, the casual consumer is a major concern and he may not be ready for the digital world. It's possible that GME will still do a strong business primarily catering to these people despite changes in technology.