GameStop CEO Predicts Failure For Amazon's Trade-In Program

[Andy Chalk]

GameStop CEO Predicts Failure For Amazon's Trade-In Program

Amazon's [http://www.gamestop.com] new videogame trade-in scheme "zero" chance of working, but the announcement nonetheless knocked the company's share value down by 13 percent.

Amazon's used game trade-in program, announced earlier this week [http://www.escapistmagazine.com/news/view/89930-Amazon-Begins-Taking-Used-Game-Trade-Ins], lets gamers mail their used games to the company in exchange for credit on their Amazon account. The process sounds simple but DeMatteo predicts it will fail because it doesn't have the "immediacy" of trade-ins made at a retail outlet, pointing out that GameStop tried and failed with a similar program itself several years ago.

"Electronics Boutique [http://www.ebgames.com/] also tried it and failed. There's no consumer acceptance. With consumers, there is an immediacy for currency when they want to buy a new game," he said. "It didn't work for us, and I can't see it working for them."

Gamers who want to trade their used titles with Amazon must invoice and ship the games to the company, which will then accept or reject them within two business days. Gift cards for accepted shipments will be immediately deposited into the sender's Amazon account, but delays of as much as a week between shipment and receipt of the payment could still occur. The trades are also only good for credit on Amazon accounts, while GameStop will offer cash for used games.

"I give the probability of this working at zero," DeMatteo said.

Despite his comments, GameStop's share value reacted strongly to the news, dropping from $27.30 the day before to as low as $22.42 following Amazon's announcement. But some analysts have said the market has "overreacted" to Amazon's entry into the used videogame fray, pointing out that its online program is significantly different from GameStop's.

Source: Edge [http://www.edge-online.com/news/001/gamestop-shares-stung-amazon-offer]


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[mattttherman3]

I would have to agree, it would be like ordering dinner and it comes a week later in the mail. People have no patients anymore, so I can't really see this working.

 

[Limos]

How much does Amazon offer for used games? If it's more than Gamestop I could see actual gamers using it.

But the people who trade in duffel bags full of the same games are still going to use Gamestop as their pawn shop.

 

[lumi21]

Amazon seems to be paying, on average, $2 more per game.

 

[WNxSajuukCor]

I think people fail to see that when you trade into Amazon, as far as I know and understand, is that you can use the credit throughout the Amazon site. Gamestop will credit you but only for Gamestop purchases. As for cash, Gamestop will offer a lower amount of cash verses in-store credit.

I believe this can work as it allows you to trade in games you don't play anymore for credit towards things other than gaming materials, including home entertainment systems and such.

 

[PhoenixFlame]

Lots of things have changed since "Several years ago". The consumer may have become less patient, but they also like the convenience of an all-in-one shop, which Amazon now is.

The idea of using credit throughout Amazon is a nice idea if you are looking to get stuff besides games.

I've thought about using game trading peer sites like playswitch instead because even though it is caveat emptor, more bang for the buck ultimately.

 

[Echolocating]

"I give the probability of this working at zero," DeMatteo said.

Somebody feels threatened. ;-)

 

[L33tsauce_Marty]

This guy is the same person that believes that Gamestop 'trade-in' is totally fair. I now want to watch Zero Originality agian...

 

[Cousin_IT]

it probably wont work as the guy says. Most interesting thing about the market price is its another indication that alot of the ppl who invest in the game industry stocks & shares are short sighted money grabbing morons.

 

[GyroCaptain]

it probably wont work as the guy says. Most interesting thing about the market price is its another indication that alot of the ppl who invest in the game industry stocks & shares are short sighted money grabbing morons.

And their being short-sighted money-grubbing morons is news HOW?

I'm not someone who trades in that many games, but I'd rather do so to Amazon than Gamestop, because my games can magically become Terry Pratchett paperbacks and not just other games. Not to mention Gamestop's corporate attitude.

 

[Andraste]

"I give the probability of this working at zero," DeMatteo said.

Somebody feels threatened. ;-)

Personally, I'm shocked he's saying this will never work. Har.

On another note, I hope it doesn't do well. Used game sales are pretty damaging to the industry.

 

[Snotnarok]

I'd rather use Amazon than Gamestop, gamestop never gives you decent money on your trade ins, and amazon always sells new games and they aim to please. Gamestop always tries selling me the "new" game off the shelf that's been opened, and played by the employees and has a bent manual and scratches on the game disc. Amazon sent me a PS2 game without the sticker on top and gave me a 10 dollar refund and let me keep the game if I wanted.

 

[CustomMagnum]

Honestly, I'm hoping that this DOES work, if only to make Gamestop raise their trade-in values to compete.

 

[bkd69]

Yeah, this is nothing more than spin.

Amazon's program isn't designed to eat into Gamestop market share as much as add service to existing Amazon customers. It's only a threat to Gamestop inasmuch as that customer base overlaps.

The X factor here will be how much it costs Amazon in processing and manpower, and will that be enough to cover the customer base.

 

[SenseOfTumour]

Yes, I'm sensing the comments by Gamestop are a simple 'OMG we've been rumbled' remark, someone else has dome some research and realised they can offer Gamestop's trade in service but with better values and prices.

It all remains to see if people will be willing to wait a few days in exchange for more money and the opportunity to spend it on stuff other than more preowned games.

Here's a tip for Amazon in advance tho, don't offer more than a dollar for any sports games that have yearly updates, over here in the UK, every Game and Gamestation I go in has a basket overflowing with copies of PS2 'FIFA' 'WWE' and 'Pro Evo Soccer' games from around 2005 for like 50 pence, and they can't sell them at that price.

Lets hope their pricing system auto adjusts and watches the stock of games they have and the flow of the market, instead of just saying 'Mirror's Edge - $7'

On another note, wouldn't it be a headline that no news channel or newspaper would print if it turned out in the first year that 'Gamers trade in videogames for books more than any other item'. That'd annoy the hell out of FOX and the other media, a story where it proves that gamers choose reading over rape and murder.