I largely agree with the video except on two points:
EDIT: I went back and rewatched the video, and sure enough, I misheard.
It was "Indie RETAILERS".
Fair point. And I'm pretty sure Gamestop has been shafting local game retailers just by proxy for over a decade now.
2) Gamestop will not benefit from controlled Used Game sales.
Used Games is profitable because of something called "Arbitrage".
Arbitrage is basically buying a good at a lower price in one market, and selling it at a higher price in a similar but separate market. In this case, between the New Game Market and the Used Game Market.
Arbitrage is more effective the less restrictive the market is. (well, until you get into the topic of Black Markets and smuggling which can get complicated very quickly)
Gamestop grew filthy rich by exploiting arbitrage. Normally, I'd agree with those developers and publishers who say that Gamestop is ripping their sales figures a new one, because logically, they were.
However, I don't feel sorry at all for those same publishers when they continued to do business with Gamestop anyway; they're obviously still benefiting from exposure and exclusive deals enough to warrant doing business with them.
Anyway, by restricting that supply of second-hand goods AT ALL, regardless of what the customer gets in the second-hand market (which at Gamestop, is pittance) they are restricting the source of games Gamestop can resell at a full margin; That is, the cut of the cash the shop receives on the deal.
100% is always going to be the largest cut Gamestop can get, and they get it *only* from Used Games.
Yet, on the Xbone, the only way Gamestop will be included in M$'s Used Game program, (which is being done on a per-game basis) is if the Publisher OKs it for their game.
So, why would the Publisher OK it unless they can get a cut of the deal?
Say what you want about crony-ism, there is no backroom deal or threat that Gamestop can make that would end with the publisher giving the entire sale to Gamestop.
Gamestop stands to LOSE a lot of revenue from this no matter how you slice it, because arbitrage works best between markets with few to no restrictions. (Incidentally, for anyone who wonders why those annoying and seemingly unnecessary Region Locks exist; it's mostly to prevent arbitrage between relatively rich and poor markets)
EDIT: I went back and rewatched the video, and sure enough, I misheard.
It was "Indie RETAILERS".
Fair point. And I'm pretty sure Gamestop has been shafting local game retailers just by proxy for over a decade now.
2) Gamestop will not benefit from controlled Used Game sales.
Used Games is profitable because of something called "Arbitrage".
Arbitrage is basically buying a good at a lower price in one market, and selling it at a higher price in a similar but separate market. In this case, between the New Game Market and the Used Game Market.
Arbitrage is more effective the less restrictive the market is. (well, until you get into the topic of Black Markets and smuggling which can get complicated very quickly)
Gamestop grew filthy rich by exploiting arbitrage. Normally, I'd agree with those developers and publishers who say that Gamestop is ripping their sales figures a new one, because logically, they were.
However, I don't feel sorry at all for those same publishers when they continued to do business with Gamestop anyway; they're obviously still benefiting from exposure and exclusive deals enough to warrant doing business with them.
Anyway, by restricting that supply of second-hand goods AT ALL, regardless of what the customer gets in the second-hand market (which at Gamestop, is pittance) they are restricting the source of games Gamestop can resell at a full margin; That is, the cut of the cash the shop receives on the deal.
100% is always going to be the largest cut Gamestop can get, and they get it *only* from Used Games.
Yet, on the Xbone, the only way Gamestop will be included in M$'s Used Game program, (which is being done on a per-game basis) is if the Publisher OKs it for their game.
So, why would the Publisher OK it unless they can get a cut of the deal?
Say what you want about crony-ism, there is no backroom deal or threat that Gamestop can make that would end with the publisher giving the entire sale to Gamestop.
Gamestop stands to LOSE a lot of revenue from this no matter how you slice it, because arbitrage works best between markets with few to no restrictions. (Incidentally, for anyone who wonders why those annoying and seemingly unnecessary Region Locks exist; it's mostly to prevent arbitrage between relatively rich and poor markets)