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GameStop: Publishers should participate in used game market

Project Ten Dollar measures won't work; publishers can profit through DLC sales, says COO

GameStop COO Paul Raines has responded to initiatives such as EA's 'Project Ten Dollar' aimed at deterring consumers from buying used games, saying that publishers should participate in its pre-owned business by releasing DLC for popular titles rather than try to restrict it.

Speaking during a call to investors following the release of GameStop's Q4 financials earlier today, Raines added that he didn't believe a $10 piece of downloadable content would be enough of an incentive for consumers to buy new in any case.

"Through our years in the used business, we have learned that the second-hand user is a value-oriented consumer. The average price of a used Xbox [360] game is twenty dollars, so we don't believe that a ten-dollar add-on piece of downloadable content is compelling to a used-game buyer.

"We are encouraging publishers to offer add-on content for new titles at a higher price and then a lower-price option for used games. In fact, publishers can participate in our used business by offering add-on content for the most popular used titles, creating a win-win situation for publishers, retailers and consumers.

"GameStop will also assist in expanding the sales of DLC as we can market and and execute the sale right in our stores to the millions of customers coming through our doors."

The call also touched on the release of new hardware as the company was quizzed on how devices such as Natal and PlayStation Move were expected to affect forecasts, with marketing EVP Tony Bartel saying that while Natal wasn't included in present forecasts, the retailer was excited by its potential.

"After seeing both Natal as well as Sony Move we are very excited about the amount of product it is going to allow us to sell, not only in terms of the actual peripherals themselves but also in terms of the software that we anticipate will be launched with that as well.

"Both of them will be hardware sellers, so, there is no doubt they will be a major part of our industry by the time the year is done."

On the subject of an upgrade to the Wii hardware, CEO Daniel DeMatteo, unsurprisingly, didn't shed any light on its likelihood.

"We've heard the rumours like you have, on a Nintendo Wii upgrade early next year, but it's just that: a rumour," he said.

"We don't have any confirmation on anything there. And we have nothing in our financial plans for anything different - either price change or new upgrade - of either the PS3 or the 360. I wouldn't be surprised if their total focus was on the new motion-detection devices etc."

GameStop posted a drop in net earnings of 7.1 per cent for Q4, and a drop of 5.3 per cent for fiscal 2009.

Sales for the year increased 3.1 per cent to $9.08bn however, GameStop's second highest earnings year to date.

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