Quote Originally Posted by maxlords View Post
Um.....from what I understand (having seen the wholesale price lists), the average retail store gets games at wholesale for $3-5 less than retail (this is not counting big stores like Wal-mart who get their stuff for under wholesale). So for a $60 game:

Publisher sells it for $30 to Wholesaler (makes $16)
Wholesaler sells it to game store for $55 (makes $25)
Retailer sells it to you for $60 (makes $5

No way man. It makes no sense that the lion's share of the money would go to the wholesalers.....something's off in your calculations. Maybe there's more to it than the above though. And there are NO retailers making 20% markup on their new games. NONE. Not even Wal-Mart. They all do it by volume.

As for used games, the profit margin is a LOT higher than 40-50%. EB/Gamestop for example pays around $5 or so for most used games. Some of the newer stuff $8-12 sometimes, so say an average of $7. They sell em for $30-55. That's a MINIMUM base profit margin of over 300%!

And some stuff is even HIGHER. If their profit margin was only 50%, they'd be paying $27.50 in cash for every item they sold used for $55. And on top of that, they only pay in credit...which makes the profit margin even higher if you buy used, because they only paid an average of $.25 on the dollar or less for the item you're buying at their markup price with credit!

Any used game store that only has a 40-50% profit margin will be out of business...fast.
While I admit my numbers are older as i have been away from it for some years now...there are many in-depth articles that have discussed this in the past. Obviously, take it for what you will but...(this is one of the more recent in depth articles I have seen, but there are others)....

"Just how lucrative is GameStop's used games business? For every dollar of revenue from pre-owned games and consoles, the company gets 48 cents of gross profits -- that's a margin of nearly 50 percent."

http://www.gamasutra.com/php-bin/new...hp?story=23396