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Retail

Pre-owned pre-orders... a step too far?

Fri 04 Mar 2011 3:01pm GMT / 10:01am EST / 7:01am PST
Retail

GAME has started a trial on its website, offering games not yet released as pre-owned pre-orders. It's by no means a step to something more permanent, and it's perfectly within the retailer's right to experiment with business models - but is it a step too far?

The relationship between publisher and retailer has, in recent years, become somewhat strained as the former increasingly seeks to cut out the 'middleman' with more and more investment into digital distribution and cloud gaming, among other things.

Meanwhile, as the market for specialist retailers in the UK sets itself against a tough economy, an increasing emphasis on franchises and the onward march of supermarkets, the practice of offering pre-owned games for sale - where the profit is pure, other than the cost of shelf space, wages, and so on - has provided a needed (and over time, more important) financial contribution to the bottom line.

It's fair to say that neither party is entirely happy with the others' practices, but a kind of equilibrium has come into play that would suggest both sides can live with the situation - at least for the time being.

Of the primary arguments on the side of the retailer, it's clear that there is consumer demand for a trade-in service - after all, the committed gamers will probably buy a title on day one, particularly if they know they can get what they want from it, move on once it's complete and recoup something in the process.

"Until now the emphasis has remained largely on new product; you can't help but feel a pre-owned pre-order system alters that somewhat."

As an extension of that line of thought, most pre-owned schemes offer more benefit for trading-in to buy other games, rather than just providing cash alone and thereby - in theory - stimulating sales of new games once more, and indirectly adding revenue to the publishers.

Both of those arguments are credible. However, GAME's move to offer pre-owned options on games not yet released seems a little aggressive, and is unlikely to be received well by the game-creating community.

While the practical nature of the pre-owned business means that the games in question won't be available until a week after official release - and will be dependent on trade-ins becoming available - it's a move that de-emphasises the status of new games.

Clearly, a significant number of new games will need to be purchased and returned - nobody would argue that won't happen, no matter the release - and economically the value to a gamer of trading in a game will obviously decrease with time. This much isn't news.

But - this trial does change the emphasis of the retailer's view on its business models. Until now the emphasis has remained largely on new product; you can't help but feel a pre-owned pre-order system alters that somewhat.

Naturally, there's an argument to say that a gamer who pre-orders a pre-owned game through this service would have only waited to pick it up in their local store at the reduced rate anyway. But it's also fair to say that, with only a week's delay and potential savings of up to £21 (off the RRP, not necessarily the in-store price), people who might have jumped for a new box on day one (or two, or three) will consider a new option - perhaps for the first time.

So far the publishers with games involved in the trial are yet to comment, and it's possible they'll choose to observe for a time before committing - but if anything, it will only seek to strengthen resolve to move away from a reliance on the retail business model, and try ever harder to connect with consumers directly.

9 Comments

Private Industry

1,176 182 0.2
I think it`s very disrespectful towards all the people who work on those games if you see on their website pre orders for pre owned games 1 week after the release. The only thing missing would be in the description saying "Suck on that you are not going to see any money from those sales a short time after your game is released and we are going to advertise that big, muhahaha"

Instead of finding a solution that works for both they just show the middle finger and if they don`t make enough money I may suggest to not have 3 stores within a very small radius. That would work wonders in reducing costs and increasing the profit. Nobody needs several stores of the same brand within a few minutes of walking.

Posted:3 years ago

#1

Jamie Watson Studying Bachelor of Games & Interactive Entertainment, Queensland University of Technology

179 0 0.0
they should skip retail shops (but still sell new and pre-owed games) like this and instead have a factory outlet were all of there games (new and old) are ready to purchase brand new!

now that would be a win/win for everyone!

consumers win becuase they get games cheaper/also get game which are classic and hard to find to retail stores

and the devlopers win becuase they get the money direct from the sales!

Posted:3 years ago

#2

Private Industry

1,176 182 0.2
While I`m not a big fan of some of the practices of retail stores if you take them out that leaves Sony, MS or whoever deciding on the price and I`m sure nobody would like that to happen. In such a case as example nothing would prevent MS to release the next Halo for 80 bucks because people buy it anyway. The retailers may it be brick and mortar or online keep the prices somehow in check because there is competition so nobody can go crazy. MS could still say RRP is 80, but you would have the stores competing with each and constantly trying to have a little bit of a cheaper price and bring it down to a reasonable price.

Online distribution is a good example here. At retail a game is getting cheaper after 2-3 months even a new copy (in case of like Vanquish or Enslaved even a few weeks after release), in contrast digital content takes longer to get a price reduction because those places the companies of the games decide for how much they sell it and when they want to make a price reduction and the consumer would be completely at their mercy.

Posted:3 years ago

#3
That takes the fun out of going down to the high street to browse the bargain bins

Posted:3 years ago

#4

Martin Mathers Copywriter/Journalist

39 0 0.0
The fact about pre-owned copies becoming available certainly stands, but then it ties into GAME's new approach for the trading in of certain titles - Test Drive Unlimited 2, for instance, holds a trade-in value of only a few pounds less than the purchase price if you traded it in within a few weeks of release, I believe. The more they roll that kind of offer out, the more pre-owned copies they're going to have and the more stock they'll have on hand to provide this kind of pre-order deal.

Very shady, I have to admit.

Posted:3 years ago

#5

Tim Carter Designer - Writer - Producer

585 323 0.6
This may very well be public financing. If so, sooner or later it would run afoul of regulators, such as the SEC in America.

It's sad the game industry should be turning to the gaming audience to have the cajones that the financiers can't muster.

Edited 1 times. Last edit by Tim Carter on 8th March 2011 2:49pm

Posted:3 years ago

#6

Richard Westmoreland Game Desginer, Exient Ltd

138 90 0.7
It's interesting. I often hear people saying that they'll 'wait' until a product gets reduced. With some publishers you know 2 months after release the game will be around half the price.

I suppose a better system for the industry would be a system which alerts you when a game is reduced to the price that you want to pay for it.

Edited 1 times. Last edit by Richard Westmoreland on 8th March 2011 3:12pm

Posted:3 years ago

#7

Bruce Nesbit Programmer

7 0 0.0
I think saying 'potential savings of up to £21' is a misleading here - although it mentions this from the RRP Game are not charging the RRP.
They are charging for example for Homefront £36.99.
If you wanted to Pre order it pre owned is £33.99

A saving of £3. Let me think.. £3 to get a disc thats potentially scratched and I have to wait an extra week.. Or I can pre order for day of release from an online retailer... Hmmm ... Can I phone a friend or take 50/50 ?

Whilst I would agree its a somewhat dubious practice retailers arent the only ones are they ?
Many games on Demand on 360 are almost all £19.99 - for titles that can be bought in a high street on the classic label for £18...

Edited 1 times. Last edit by Bruce Nesbit on 8th March 2011 3:24pm

Posted:3 years ago

#8

Greg Wilcox Creator, Destroy All Fanboys!

2,196 1,176 0.5
Given that the market is PACKED with product and price drops hit some titles a mere 2-3 weeks after they ship, this was inevitable (and NOT at all a "new" thing - I recall one indie game shop used to have a similar deal where customers could "reserve" pre-owned copies of new games when they started coming in used).

I wonder how the games market would have changed if publishers had control of new and used games through online shops they should have started up back in the 90's? Some smaller or niche publishers such as Nippon Ichi America have shops that seem to be doing well with pre-orders and new releases and Play-Asia sells used games (and has taken requests for pre-owned games for years). In the end, trying to kill the used games market is useless... until the suits figure out a way to demonize it to death while reducing the value of used games by restricting content or charging fees to access what SHOULD be available to anyone.

At this point, it doesn't even make much sense to buy some NEW games packed with future DLC potential. In terms of titles I want to play, I new wait it out for the Greatest Hits, Platinum or Game of the Year Edition of some games. This way I can have it all and not be a slave to some insane one time use code that keeps me from giving, trading or selling an otherwise fun game.

BTW... I'm not at all sold on "cloud" storage as no one has explained what happens once something gets hacked into and save files get wiped or worse. I can see a MAJOR issue cooking up and soem folsk waiting to make it happen just because they can (mark my words)...

Posted:3 years ago

#9

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