Xzi said:
But according to all the big publishers like EA and Activision, retailers like these are making billions by greedily taking away their profits. What gives?
Read it carefully, the actual statements seem to be talking around any real NEED for the colusures.
It's a very common practice for businesses to lay off employees and close stores in an area with a lot of stores in one area to increase profits. Less rent/leases, less employee salaries, and perhaps one or two of the remaining stores in an area getting a size boost or whatever to deal with the increased traffic.
The thing is that simply firing a bunch of people to increase profits does not go over well, it generates bad press. Not to mention that in some countries/states it can be outright illegal, or open the company up to being attacked civilly. Thus, companies that want to downsize will talk about how much money they are losing, as a way of justifying the layoffs. It can be very difficult to tell (legally) what a company's finances look like, especially if they resist the process. This is how things like "Enron" managed to snowball into such a bit deal.
One typical way of argueing that your losing money is based on "projected profits". According to some schools of thought company's only succeed if they are growing at a fast rate and expanding. If a company makes money, but it doesn't meet the predictions, this can be argued as "losing money" especially if the company claims it borrowed money from other businesses for products based on projected profits they never received. This is a round about way companies can argue "well sure, we said we made a hundred million dollars in profit here, but we're crying poverty over here because we expected to make a hundred and fifty million dollars according to our projections so we wound up losing fifty million dollars and will be laying off enough people and closing things down to make up that differance". It generally blows chips, and is one of the big reasons why companies go to such lengths to get politicians (including state and local ones) into their pockets (to ease their deceptions, hamper investigations, and other things).
GAME is a major chain in their neck of the woods, and like any big business their motivations are going to be similar.
Right now you'll notice that in general people are talking about the game industry as a growth industry that is worth billions each year. Unlike a truely sick industry that is losing money, people are willing to throw fortunes into game development (like what we saw with Modern Warfare 2). At the same time you have companies, retail chains, etc... all claiming that they are losing money (if they are to be believed everyone involving is losing money, which makes no sense given no shortage of producers, and other reports) and laying off employees, closing stores, or whatever else. It's industry wide.... basically the same BS affecting any other big business with layoff drama, corperate deceptions, etc... is present in the game industry.
Please note that this doesn't mean that the game companies are right about the used game sales and such. It simply means that everyone involved is being less than up front like any other business. The game companies/producers/developers really do believe they could make more money if it wasn't for the used game market, and that retailers are cutting into their piece of the pie. Of course this is largely based on the flawed assumption that us consumers are not spending all we could on games, and would be rushing out to buy more games new, and for full price, if used games were not availible.
So basically my initial guess (being a paranoid cynic) based on what knowlege I have of business in general, is that "Game" is involved in optimizing themselves to increase profits at the expense of employees and stores, they aren't losing any money the way things are now, but they aren't making as much money as they could be through reorganization. Their claims of losing money being the smokescreen.
As pessimistic as it is, I wouldn't be surprised if you'll find that GAME consulted with some kind of business efficiency experts or something fairly recently. People make fun of them/talk about them in movies and such for a reason, they have effectively been heralds of massive layoffs and workplace changes for a looong time. All of the laws put into place to protect employees (not to mention unions in certain businesses) have simply resulted in businesses finding other ways to justify doing the things they want to.
Makes me wonder before this happened how many people working for GAME had to sign or re sign a new copy of an "at will" employee agreement sometime in the last six months before this went down as another way of trying to cover bases.