A Bright Spot in the Dim Video Game Picture
Old NY Times article on the subject, the most relevant bit being:
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Quote:
Meanwhile, the used games business does not sound exciting until you look at the numbers. GameStop, which recently acquired Electronics Boutique to become the No. 2 video game retailer behind Wal-Mart, has made used games one of its pillars and that is a big reason its shares are up 89 percent since the beginning of last year; Electronic Arts shares are down 11 percent over the period.
Over all, GameStop appears on track to generate about $3 billion in revenue this year. Of that, it looks like $800 million to $1 billion will come from the sale of used software, hardware and accessories. Just how profitable that segment is has only recently become clear to investors.
The quarter that ended in October was the most recent with GameStop results and was the first in which the company broke out results for its used segment. They were eye-popping. Used products made up almost 32 percent of the company's total retail sales and almost 44 percent of gross profit. Even more impressive, while GameStop's gross profit margin on new hardware sales in the quarter was less than 11 percent, and on new software less than 25 percent, the company generated a whopping 45 percent profit margin in its used segment.
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Also, my friend who currently works at a GameStop says reserves aside, few at the local branch actually buy 360 stuff new, they just wait until it goes used and buy it at $50.
So, all told, I don't think the "give us your games!" crunch is because of hard times, they just want a
really good fourth quarter.
Jam it back in, in the dark.
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SonicPanda