224: Behind the Counter at GameStop

[Nurb]

I can relate to the author, I worked an an EB games in college before they were bought out and it was the best job of my life. I stayed away from Gamestop because of their business pracitces of bullying you into pre orders and punishing gamers who don't get them by witholding content perks and denying sales on release day.

but at any rate, retail ultimately destroys your soul. It makes you bitter towards everything and everyone, ESPECIALLY if you've worked at best buy or Circuit City. Oh god I hated everyone that walked in through those doors and knowing I had to do a sales pitch for netflix or the disc doctors to customers that just wanted to browse movies and music...

...oh my I've gotten off on a tangent!

 

[AngryFrenchCanadian]

I can't help but feel like having to work selling games and know all about them regardless of whether or not I've played them like that would have quite a negative effect on my personal gaming.

I'm also surprised by the lack of mention about grievances provided by a lot of gamespot employees (see Zero Originality [http://www.dailymotion.com/relevance/search/zero%2Boriginality/video/x6wnow_zero-originality-episode-1_videogames]).

Pretty good imitation of Zero Punctuation. I knew GameStop was ripping off customers, but not that badly!

 

[Gunner 51]

I'll admit this article sounded like a recruitment advert for Gamestop.

Probably not the author's fault. I expect he had to ask approval from GameStop before submitting this piece. (And even if he didn't, I imagine he's smart enough to work out what sorts of comments would damage his career.)

Good thinking. I totally forgot to factor in that most workplaces don't like inflammatory things said about them by their own workforce. My mum's work colleague had appeared on some BBC program called Would Like to Meet and he had to get permission from the school he worked at to appear on the show. (But this could have something to do with the BBC actually filming there.)

 

[Eudaemonian]

Dispute, in specific terms, the veracity of the charges I have leveled against the store then, if you think they're undeserved.

Well, in order for me to be more specific, you'll have to be more specific, too. For instance, you mention that they get people to "sell games for far less than they are worth" and "buy used games in dubious condition for more than they could be acquired elsewhere." How do you define how much a a game is worth, and the rate at which they can sell? Note that just because it's possible to acquire something for less in one location does not necessarily mean that it needs to sell at the same price elsewhere. For instance, I could drive over to Maryland and buy gas at 2.30/gallon, but that doesn't mean that the stores in Chicago shouldn't charge 2.70/gal.

As for pre-orders being an interest-free loan to the store, okay, I'll bite. That means that you pay ~15-16 cents for what amounts to a courtesy call for a 2 month pre-order...if you're a credit card company and would get a whopping 20% rate on whatever money you lend. If you're a regular guy and instead put that money in a 3.2% CD (apparently a good rate for a 5 year one), you paid less than 3 cents on that courtesy call. This is net as well; I have no idea how much that courtesy call costs, but I don't know if it's less than 3 cents, not to mention maintaining a database of customers, what they preordered, how much they put down, and so forth, but I wouldn't be surprised if the whole ordeal cost the company money. Instead, it's a tool that they use to help with the other parts of the business.

Were there any other points I should comment on?

View the videos linked on the first page "Zero Originality." I see no reason to re-tread them in text form, but I will respond to your specific explanations.

Your gas example is a non sequitur. Gas prices are taxed and manipulated a great deal based on state and local ordinances, there is significant price competition between different stations, and the specific location of the station can change price dramatically. NONE of these are the case with video games. I cannot take anyone who claims that less than half of the resale price available only in store credit is fair value. That's quite a convenience fee. Still, "fair value" is whatever people are willing to take. I don't villify them for lowball prices, I think people are stupid for accepting them.

I'm not going to try and make a big deal about pre-orders. There are a lot of stories of games not being held, reserves never being mentioned again, and similar misconduct. These are individuals not the company, though the company's incentive system encourages them. Once again, the problem isn't Gamestop, it's people putting up with it. There's plenty of stuff on the internet as to why pre-orders are a pain. I don't see any reason to try and restate these ideas better than they already have been. But it seems like gamestop or not this junk is here to stay as pre-order bonuses get more and more significant. Dragon Age is offering DLC now, a real cash value, so it seems like it's come full circle to actually being a good thing.

 

[pneuma08]

Spoiler

Dispute, in specific terms, the veracity of the charges I have leveled against the store then, if you think they're undeserved.

Well, in order for me to be more specific, you'll have to be more specific, too. For instance, you mention that they get people to "sell games for far less than they are worth" and "buy used games in dubious condition for more than they could be acquired elsewhere." How do you define how much a a game is worth, and the rate at which they can sell? Note that just because it's possible to acquire something for less in one location does not necessarily mean that it needs to sell at the same price elsewhere. For instance, I could drive over to Maryland and buy gas at 2.30/gallon, but that doesn't mean that the stores in Chicago shouldn't charge 2.70/gal.

As for pre-orders being an interest-free loan to the store, okay, I'll bite. That means that you pay ~15-16 cents for what amounts to a courtesy call for a 2 month pre-order...if you're a credit card company and would get a whopping 20% rate on whatever money you lend. If you're a regular guy and instead put that money in a 3.2% CD (apparently a good rate for a 5 year one), you paid less than 3 cents on that courtesy call. This is net as well; I have no idea how much that courtesy call costs, but I don't know if it's less than 3 cents, not to mention maintaining a database of customers, what they preordered, how much they put down, and so forth, but I wouldn't be surprised if the whole ordeal cost the company money. Instead, it's a tool that they use to help with the other parts of the business.

Were there any other points I should comment on?

View the videos linked on the first page "Zero Originality." I see no reason to re-tread them in text form, but I will respond to your specific explanations.

Your gas example is a non sequitur. Gas prices are taxed and manipulated a great deal based on state and local ordinances, there is significant price competition between different stations, and the specific location of the station can change price dramatically. NONE of these are the case with video games. I cannot take anyone who claims that less than half of the resale price available only in store credit is fair value. That's quite a convenience fee. Still, "fair value" is whatever people are willing to take. I don't villify them for lowball prices, I think people are stupid for accepting them.

I'm not going to try and make a big deal about pre-orders. There are a lot of stories of games not being held, reserves never being mentioned again, and similar misconduct. These are individuals not the company, though the company's incentive system encourages them. Once again, the problem isn't Gamestop, it's people putting up with it. There's plenty of stuff on the internet as to why pre-orders are a pain. I don't see any reason to try and restate these ideas better than they already have been. But it seems like gamestop or not this junk is here to stay as pre-order bonuses get more and more significant. Dragon Age is offering DLC now, a real cash value, so it seems like it's come full circle to actually being a good thing.

Fair enough. Most people just don't think about where prices come from and sort of just assume they're the highest/lowest amount people will pay. There's a lot that goes into it, and that's what the gas analogy was really meant to say. (It's really hard to make up an analogy that accurately describes they way specific markets behave - it's best to tackle in pieces, instead. But I digress.)

Actually, I'm curious now. Has anyone done price-matching across the board to actually compare Gamestop and Ebay in a realistic setting? I took the time to look up ODST, and I'm a bit surprised about how closely they do relate. That said, it's really hard to get a bead on prices on Ebay because of the whole "acution" thing. Now I'm not saying that Ebay doesn't consistently beat Gamestop, but I'm curious enough to wait until these auctions finish to compare some hard numbers. And of course, this is one game across many, and there are a lot of factors I don't know to put into this analysis, such as the ever-important "how much of a cut does Ebay get?"

Last word I have on pre-orders: companies love, love, love them because they are a statistical sample of people willing to buy the game. As of right now, it's by far the best (if not the only) model of predicting how many games will sell, and thus, how many games to buy (and if you take it one step further, how many game discs to produce). There are still plenty of kinks in the system (in all of the buying, selling, and preserving of pre-orders), but until someone else gets a better idea, they're here to stay.

As for "Zero Originality.", I did take the time to watch his videos, and there are a lot of things that the guy is mistaken about or are misleading. GTA IV, for instance, was in a price bubble in Gamestop - for a while the price was Way Too High (as far as I could tell - there was always tons of copies no matter where I went) and they ended up with a ton of stock. The price dropped, and now prices are comparable. Again, this doesn't mean that you can't find it cheaper, but it the "convenience tax" becomes much more reasonable in comparison.

Sigh, it's hard to really demonstrate without the (admittedly rough) numbers.

The ZO guy also kind of rubs me the wrong way in that, while I'm not sure if it's true, I get the impression that the guy didn't actually try to solve the problems the company had (by, say, going above the District Manager, the Better Business Bureau, and the like) and instead decided to cash in his 15 min of fame by bitching and mudslinging on the internet. Yes, it's good that problems are pointed out so that they are fixed, but at the same time I can't help but wonder if it could have been handled better.

 

[Eudaemonian]

Actually, I'm curious now. Has anyone done price-matching across the board to actually compare Gamestop and Ebay in a realistic setting? I took the time to look up ODST, and I'm a bit surprised about how closely they do relate. That said, it's really hard to get a bead on prices on Ebay because of the whole "acution" thing. Now I'm not saying that Ebay doesn't consistently beat Gamestop, but I'm curious enough to wait until these auctions finish to compare some hard numbers. And of course, this is one game across many, and there are a lot of factors I don't know to put into this analysis, such as the ever-important "how much of a cut does Ebay get?"

According to eBay's seller FAQ, for single item video games, it's 8% of the final sale value. Buy It Now is becoming extraordinarily common nowadays (making eBay and Amazon's Marketplace fairly comparable). Depending on how the transaction is structured, that just offsets local sales tax, so it's a non-issue. Shipping is often free (especially on Amazon). The prices aren't usually a huge savings, though there are exceptions.

The biggest thing for me is that with a direct sale via individual sellers on the Amazon Marketplace or Ebay, those services are taking some percentage cut. Let's call it 10% instead of 8, just so it's easy. Let's also presume that after the discount card, shipping, and whatever else, the prices are exactly the same, 50 bucks for whatever you want. In the Gamestop situation, someone trades in the game for 25 dollars (if they're fortunate) in store credit and you then buy the game for 50, leaving Gamestop with a 25 dollar gross profit. In the p2p example, you pay 50 bucks, Amazon takes 5, maybe shipping is another 5 that the seller loses, the person who owns the game gets 40 dollars cash. You likely get a game that has an instruction manual and case. The seller gets more for his game.

On balance, I have to say one somewhat thing about gamestop pricing. In days of yore you could find some real deals (less common now that they've gotten sophisticated). Before they stopped selling PS1 games, I manage to drive two cities over and buy a copy of Valkyrie Profile for 40 dollars, much less than what I'd say its "true value" is or was. The downside was that it was caseless and in awful condition. On a second playthrough the disc would hang during all the FMVs, necessitating a purchase of a copy off eBay for ~100. Used sales are great for the "rare game" market, but increasingly these things are getting re-released on portable systems relatively cheaply (as VP was, eventually).

Digital distrubtion may yet herald the end of game "rarity". But I've gone way far afield by this point...

There is by no means a universal truth to pricing, but the naive are often ill-served by listening to Gamestop's GA's about "deals"... they only have themselves to blame though, as the info is out there

 

[GonzoGamer]

I'm just left wondering how much the Escapist was paid for this article.

I hope it was a good chunk of change.

The crowds at game conventions are already a deterrent, Add a legion of fruitcakes who work at Gamestop and it'll be like Idiocracy. They should just open up their own little convention as suggested; unless of course those meetings are really Bilderberg like conclaves where they figure out new ways of ripping off gamers. Then I can see why they wouldn't want their minimum wage grunts know how much money the company is really pulling in.

Why would they be paid? Some dude who works at GameStop and has a journalism degree checked out the site's submission guidelines, pitched them a story and they ran it. Then they paid the dude who wrote it. Bummer...

Sure, sure.
And the guys who made the "I want a psp for Xmas" blog were really just big fans of the psp.

 

[pneuma08]

Alright, here we go:

All prices in USD. Sources: Gamestop.com; this Console Heroes thread [http://www.consoleheroes.com/forums/showthread.php?t=15170], Ebay.com (seller fees page [http://pages.ebay.com/help/sell/fees.html]). For convenience' sake, tax is assumed to be flat 10%, and undefined shipping costs are assumed to be $2.50 (approx. the rate of US to US priority mail) as a cost to the seller. Flat rate shipping is assumed to be neutral to both parties (i.e. paid in full to the postal office), and thus is simply a cost added to a buyer. Prices were pulled off of auctions that ended today (Oct. 21, 2009) within an hour or so from when this post was made. Rounding was made against the consumer (towards Ebay or Gamestop), except 0.99 is rounded to 1 for convenience' sake. Finally, be aware that the conclusive numbers are recorded as "Convenience Tax" or extra money you pay to shop or sell at Gamestop over Ebay. Thus, higher numbers favor Ebay over Gamestop, and lower numbers the reverse.

Halo 3 ODST
Gamestop: Buy From: $50 ($55 after tax)
Sell to: $30 (store credit); $24 cash
Notes: Edge card bonus here is avoided for convenience' sake. Store credit isn't taxed, which essentially means it's worth the tax rate more than cash in store (which is the only place that you can use it). Further, if the seller intends to buy certain titles (listed here [http://www.gamestop.com/gs/specialty/tradeins/]), they can take advantage of the "Power Trade" offer that goes on. Thus I consider both "base store credit" at a value of $33, and "extended store credit" at a value of (30*1.25)*1.1 = $41.25. (The current environment only serves as an approximation; this number changes constantly, but represents a theoretical maximum you can stretch your dollar.)

Ebay: Auction 1 [http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=270471147827]
Winning Bid: $45 + $4 shipping
Ebay fees: $3.17 to $4.07 = 2.19 + (45-20)*3.5% + (flat fee from $0.10 to $1)
Buyer Convenience Tax: $6
Seller Convenience Tax: Cash: $17.83 to $16.93 = $21 - (3.17 to 4.07)
- Base Store Credit: $8.73 to $7.83 = $12 - (3.17 to 4.07)
- Extended Store Credit: $0.58 to -$0.32 = $3.75 - 3.17

Auction 2 [http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=170394594874]
Winning Bid: $42 + $4 shipping
Ebay fees: $3.06 to $3.96 = 2.19+ (42-20)*3.5% + (0.10 to 1)
Buyer Convenience Tax: $9
Seller Convenience Tax: Cash: $15.04 = $18 - (3.06 to 3.96)
- Base Store Credit: $5.94 to $5.04 = $9 - (3.06 to 3.96)
- Extended Store Credit: -$2.31 to - $3.21 = 0.75 - (3.06 to 3.96)

I had a third auction [http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=270472061680] lined up but it turns out that someone paid $41+$4 shipping for the campaign disc half of the game. I have a sinking feeling that guy got ripped off.

Buy It Now Example [http://cgi.ebay.com/Halo-3-ODST-Xbox-360_W0QQitemZ170397163570QQcmdZViewItemQQ_pidZ56270292QQmediaitemZ1QQptZVideo_Games_Games?hash=item27ac766032]
Cost: $38 + $4 shipping
Ebay Fees: $5.85 = 0.15 + 38*15% (Fixed price listings have much less variable fees)
Buyer Convenience Tax: $13
Seller Convenience Tax: Cash: $8.15 = 14 - 5.85
- Base Store Credit: -$0.85 = 5 - 5.85
- Extended Store Credit: -$9.10 = -3.25 - 5.85
It should be noted that store credit is very much irrelevant in this scenario; the Buy it Now option is most likely to be used by merchants rather than individuals, who are out to make profit rather than out to get the new best game (making the Extended Store Credit model to be doubly irrelevant). They are included here for completeness.

Conclusions
As a seller, if cash is the goal, then it is always better to pursue Ebay above Gamestop. Even with base store credit, it is also generally better to pursue Ebay, although the convenience tax of $5-6 is not out of the question, especially considering it could be several days or even weeks before you see your money. Seeing as Ebay has no good ways of marketing a product, the final value of an auction is highly variable. While not observed, it is entirely possible to end up with the short end of the stick, selling-wise. Finally, all of Gamestop's offers are taken advantage of, which means the seller is shrewd about when to sell, it is surprisingly possible for Gamestop to come out on top, which was somewhat unexpected.

Note well: with a sample size this small, it is easy to be in error. Furthermore, this is one title and it may be in a unique position compared with other titles; for instance, being a new, in-demand title, its comparative prices may be higher than average. More research is clearly needed. If anything is in error or is misrepresented, feel free to point it out.

Brief Second Opinion
Grand Theft Auto IV (XB360)
Gamestop: Buy from: $25 (27.50)
Sell to: $9 (store credit); $7.2 (cash)
Base Store Credit: $9.90
Extended Store Credit: $12.37

Ebay: Auction 1 [http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=230388338849]
Winning Bid: $16.49 + $4 shipping
Ebay fees: $1.55 to $1.80 = 16.49 * 8.75% + (0.10 to 0.35)
Buyer Convenience Tax: $7.01
Seller Convenience Tax: Cash: $7.74 to $7.49 = 9.29 - (1.55 to 1.80)
- Base Store Credit: $5.04 to $4.79 = 6.59 - (1.55 to 1.80)
- Extended Store Credit: $2.57 to 2.32 = 4.12 - (1.55 to 1.80)

Despite being over a year and half old, GTA IV puts up numbers comparable to ODST, and does nothing to refute the initial conclusions.

 

[Eudaemonian]

I think you're right on the money with regard to popular full-demand titles. More obscure games are likely to garner less, because the odds of finding a buyer are lower. Of course, as the seller, you end up bearing that risk instead of Gamestop so it can even out to some extent.

Just a slight counterpoint with a different example: Wolfenstein XB360, a game that is of dubious quality, but it happens to be on the list of trade-in values on Gamestop's website.

Gamestop is offering "15-19" dollars for it. Since I don't feel like calling a store to get the exact value in that range, I'll take the mean and call it $17, store credit.

They're selling it for $50, at present, though their website informs me that is an "online price only" and there was a "price drop" so stores may still be selling it at $55.

I'd expect, looking on Amazon or Ebay to find a price in the middle, such that the seller is getting more than a $17 dollar store credit and the buyer is getting a better deal than $50-55. That's just what I find:

An auction of a brand new Wolfenstein on eBay is $40 with $4 in shipping. On Amazon a used "like new" condition for $34 with $4 shipping.

On a buyer's end, it's not a huge savings, and it's cost me a small wait (which, if you aren't getting it on launch day, you can probably manage anyway) and a few moments of searching.

On a seller's end, you have to jump through some hoops and hassles, but you're making a significant amount more cash.

In the end, it's a convenience issue, and every game is going to come out slightly differently. Frankly, the obnoxious high-pressure sales pitches that GA's are drilled into making are annoying enough to me and my couple of bucks are valuable enough that I'd rather go online. Everyone's preferences are different.

Still, back on "their side of the counter" which is what the article was about, it was always a selling focus and not a video game focus. You needed to know a few buzzwords, talk fast, and be slick. Video game knowledge optional, breasts a large plus. That's the reality of it, and that's the thing that I'm kind of disappointed that this article papered over. It painted the picture of working in the "gaming industry" (retail industry) taking some time away from your playtime but letting you plug in with a lot of people and instruct. It's possible. I did that. I think I helped quite a few people, but when it came down to it, most of my time was spent doing regular retail drudgery and a heavy helping of sales bs to the naive mothers who (unlike real gamers) hadn't heard the pitches so many times that they would start saying no before you could open your mouth.

That was my original point. Maybe. It's been a long thread and I'm not really sure anymore. It's my point now at least. I'm not above moving positions a bit.

 

[surgeterrix]

I wouldn't be able to attend events like E3, PAX, or the Tokyo Game Show, as GameStop doesn't have an "industry pass" that employees can use to get in.

I understand an industry pass is required for E3, but PAX and Tokyo Game Show are both open to the public, PAX especially, its akin to "Woodstock" for gamers and caters towards the gaming community, not the commercial/industry side. I've been twice, and I live on the east coast.

 

[MetaKnight19]

This is something I've wanted to do for a long time, but I understand about the 'cutting into personal playing time' thing. I have a friend who used to be a games tester and was pretty much always playing the new games before nearly anyone else.

But before he started working for them, gaming was his major hobby, and when he was constantly surrounded by them he sort of grew out of his hobby because it became his job. I know that those jobs aren't the same thing, but even so it seems to me like being around games nearly 24/7 would become a bit tiresome after a while. So what I'm saying is while it would be cool to work somewhere like that, I can see the downside to working somewhere like that as well

 

[Pimppeter2]

Gosh, I had the same dream, but Gamestop is not the place I would want to work in. It has infact, crushed that dream.

 

[Pirate Brahm]

So, I have one question after having read your article: Can I reserve Battletoads for the Wii?

 

[saintchristopher]

Holy smokes, you must have one nice store out there in King of Prussia.

If you asked my manager or assistant manager to write this, it'd have a decidedly different tone to it.

 

[Weaver]

I like how he complains that having a job doesn't let him play games enough. What the hell, man? I'm in a co-op program at university, and my co-op terms (40 hour a week jobs) give me SO MUCH free time it's insane. Compared to the 90-120 hour a week workload of university it's like a fucking vacation.

Also, why the hell did he think working at a gamestop would let him somehow bump elbows with world famous designers? Did he really think he would spend all day phoning up Sid Meier to let him hear is "awesome ideas" on civ V? Game developers are busy people and in all likelyhood don't care about the stores that sell the games; at least to the level where they would go out of their way to get to know people at them.

Like christ, i wouldn't get a job at walmart's electronics section because I wanted to meet Stephen Spielberg.

 

[Arkhangelsk]

I usually buy my games at GAME instead. They're really friendly. Hell, one of the employees even greet me whenever he sees me there just because I go there so often.

 

[SenseOfTumour]

To be fair, many retail chains operate on 'dead men's shoes', no getting promoted to management unless your manager leaves for some reason, tho if a nearby store loses theirs you can apply.

As has been said, it's obviously hard for him to be too critical while he works there, and in a way it IS balance against the constant abuse that Gamestop gets (which is valid in some cases).

I was lucky enough to have a manager who'd listen to me on basic gaming stuff, as he knew nothing about it and admitted that, sadly I had an assistant manager, who unlike most people who walked or got the train to work, just opened a portal straight from Hell each morning.

We used to have to remove the discs to place the boxes on shelves (until people started copying cd keys), and we had a customer who would not buy anything unsealed, so I talk my boss and he allowed me to hold back one copy each time of things she might want.

The assistant manager hated that as he felt displays were far more important than merely selling things. (yes he was the classic Dilbert case of 'Stupid Evil' and therefore sometimes able to be worked around, but utterly unable to be reasoned with.)

In the end folks, don't moan at him about Gamestop, he aint running the place, just working there, and while, sure, trade ins ARE a robbery, they're only that to people who choose to take 30 games there to get one new release.

 

[jovack22]

This is a shameless commercial for an awful company.

Gamestop has some of the worst customer service policies in the retail business.

I've been to 3-4 different ones in my area, and they all contained a bunch of jerks working behind the counter with the exception of a couple.

I boycotted it long ago, and always tell people not to buy there.

Go to future shop, best buy, toys r us, wherever, just not gamestop.