Gamestop stories

[Smashed Brother]

How much does a retail outlet make per unit sold? I know they (retail) have to be making profit, else the product would not be sold...specially at work where employees get a commission from the sale (1%).

So a store has to make some profit, but how much? Probably like $20 or so per console?

Nope...more like $8. At least for an Xbox 360. When I did Loss Prevention management for one of the 'big 3' retailers, I had access to this info. In fact, the way my bosses explained it to me (and consequently, me to my cronies), if an Xbox 360 was taken, the store would have to sell about 32 more units to make up the difference.

Since they sell the systems for the same price at Gamestop, I imagine that the profit margin is similar. But then, maybe since Gamestop orders more in bulk, they might be given a better deal so there could be a little more money to be had.

[Diatribal Deity]

For systems like the 360/PS3 the profit is very minimal if anything because most retailers will look more at tie ratios. Your probably looking at $8-$10 profit per system sold, but most buyers will tell you it is basically nothing after all other expenses are factored in. If a system is sold with games and accessories they boost the profit margin considerably. That is why you see the bundles everywhere obviously. The Wii is a different story because Nintendo's development costs are significantly lower for the minimilistic system specs compared to the other two.

For NEW games (roughly):

Retailer makes 20% initially (before they start their manipulation of factoring in all other costs)

Publisher makes about $16 per sale on average.

Wholesalers typically pay around $30 per game.

Costs of getting the goods to the wholesalers, any co-op advertising or marketing, and return of good contingencies are roughly $14 per game, the publisher is going to typically get $16 for every unit sold as stated above.

Average development cost of medium to semi-high profile title for 360/PS3 title is +$15 million. Wii game is $10 million. With manufacturing, promoting and marketing these amounts jump to $20-$60 million and 15-20 respectively. Obviously these numbers can be considerably higher or lower.

Casual games built on flash can be as low as $25,000 to develop thus prices can be reduced significantly. This is often the case with Wii titles.

Lower profile titles can get by with 500k in sales to break even but obviously strive for the 1 million plus mark.

USED games:

Profit 40-50% (give or take factoring aggregate costs)

Going back some years, I started in a small town store only selling new systems, games and accessories generating 900k a year with a 18% profit margin annually.

When I left we were generating 2.3 million in sales per year with a 31-34% profit margin (greatly attributable to used or pre-played sales).

Trying to figure out profit margin for Gamestop or other big retailers is the equivalent of trying to figure out government or hospital billing/costs. Your not just paying for the aspirin, your also paying for the doctor's salary and everything else that they deem connected to it.

[Dobie]

truthfully i think alot of you people exaggerate or walk in with the mentality that the workers there are automatically going to be dicks because of threads like this


maybe i just have good luck, at the gamestops i've been to, usually they guys are cool and knowledgable, once in a while i'll get some fucking jackass trying to tell me a game didnt come out for whatever system i asked about, like "beyond good & evil was a ps2 exclusive" which i can kind of forgive seeing as it wasnt a very popular game



only stories i have were the managers routinely wearing their xbox fanboy badge in front of me and playfully telling me to cross over into the darkside whenever i bought something for the ps3, but it was never done to the point where i would feel genuine anger for it, lol i'd just laugh and tell em go fuck himself (playfully of course, i was a regular a few years back)


they would even do me favors, like if they didnt have the game, they'd call a couple other stores until they found 1 with it and tell them to hold it for me, i guess my only complaint story ever was a new employee who was a dick about that, and when i asked if he could check other stores in the area for me he just bluntly said no and walked away to the backroom

Same here. Maybe I'm just lucky, but my Gamestop isn't so bad. For every bad experience, I've had many more positive transactions.

[wingzrow]

The way I see it, most people who actually know anything about games are too smart to work at a gamestop in the first place. For what it's worth though, the gamestop I go to when a great pre order bonus rolls by ( scribblenauts hat ) is run by nice people and is a very organized shop. They've given me display items they were throwing out many times before and I barely even buy from them.

EDIT: I do remember recently having to correct someone selling a red wii mario bros. bundle to a guy at gamestop. It wasn't common knowledge but kinda annoyed me so I stepped in.

"Ok so you can only return it with your warranty for 30 days, after that you would have to go through nintendo for another 30"

"you know you can just register your wii on clubnintendo for free and get a year warranty right?"

"oh! I never knew that"

[Ponyponypony]

The gamestop in Laurel, MD, on two separate occasions, denied that I had pre-ordered games (Fable 2 and Halo 3), despite having the receipt. That particularly bothered me, but I'd only put $5 on them, so it didn't hurt.

I have had good experiences, mostly, though. I don't generally buy stuff from gamestop unless it's a pre-order that I really really want (fallout new vegas, MW2).

I was about 11/12 when Funcoland went out of business. I remember being very very sad about it. I used to love going to the store and getting the funcoland newspaper that had all their games listed, with the game's prices and finding games that I wanted that I could afford. That, to me, separates them from Gamestop. Gamestop, so far as I know, does not publish current game prices or trade-in values.

The majority of my business now goes to Movie Trading Company in Fort Worth, TX, or Book and Music Exchange in Louisville, KY. They will generally beat out Gamestop's prices, and they also carry Sega CD games. I'd forgive Gamestop all their sins if they'd carry Sega CD games. XD

[Porksta]

Yeah, rule of thumb is trade nothing in there. However, that trade 3 get one free deal that's ALWAYS running and they don't advertise is awesome. Trade any 3 games worth $8 or more in credit in and get a brand new preorder up to $70 fully paid for, no tax? Always a steal if you can get decent trade stuff cheap enough.

Yes, please tell me more about this.

[Sabz5150]

Walked into a Gamestop sporting my Play N Trade shirt a few days back...



Felt like that with how the staff was eyeing me

[kupomogli]

Stuff maxlords said.

Yes, please tell me more about this.

I'm interested in this as well. If you ask an employee at Gamestop are they required to tell you about it or do you have to bring it up whenever you're to put in a preorder?

[Therealqtip]

Anyone have any? Here's mine.

As a Chirstmas gift for my brother I decided to get him a psp, so I went to Gamestop the other day to buy a PSP-1000. Where I live there's quite a few Gamestops in my city (About 4) but only one of them had the 1000 model PSPs. As I'm checking out she rings me up and asks for my debit card and I tell her I'd like to actually look at the system first before buying it. Lo and behold it's missing it's analog numb that she somehow forgot to mention.

I tell her that it's missing a part, and ask her to get me another one or to just grab one off the other PSP. She comes back saying that she can't find it and that the other PSP is missing it's analog nub too! So I tell her I'd like to see the manager and see if I can get some kind of discount because of the flaws on this one, and while she is gone the other casher feels the need to butt into things and tell me straight up that there's no way I'm going to get a discount and that I should just take the PSP the way it is. I respond by simply asking is she's the manager and she responds "...yes, i'm one of them" although it was obvious that she wasn't the store manager. She then begins by giving me a real attitude about how there's nothing they can do about it and then actually tells me that they don't accepted used ones like that! So how the heck did it end up like that? Oh that's right, they must of lost it. I tell her is makes no sense that you shouldnt be selling that PSP at it's full price if it's missing a part and she then takes another customer in line.

My casher comes back and tells me that they can't give me a discount and I tell her "Okay then" so I turn to the girl that was giving me attitude and I say "I'd like to know your name". She then begins to tell me that there's nothing they can do about it (again, lol) and I said that it was fine, I'd just like to know your name at this point. After saying that the REAL manager pops up (Most likely because she realized that I was going to call in about this issue because I asked for a name) and tells me if it's a problem that they would give me a PSP Slim at the price of the PSP-1000 and of course I accept.

Seriously. What a scam... What if a parent came in looking to buy it for their kid and didn't know that it was missing a part? At least I ended up with a good deal in the end.

Wait wait wait, you got a PSP2000 or 3000 for the price of a 1000? What the fuck? Nice job, I have no idea how you did that they're like Activision with their money.

[Sabz5150]

Anyone have any? Here's mine.

As a Chirstmas gift for my brother I decided to get him a psp, so I went to Gamestop the other day to buy a PSP-1000. Where I live there's quite a few Gamestops in my city (About 4) but only one of them had the 1000 model PSPs. As I'm checking out she rings me up and asks for my debit card and I tell her I'd like to actually look at the system first before buying it. Lo and behold it's missing it's analog numb that she somehow forgot to mention.

I tell her that it's missing a part, and ask her to get me another one or to just grab one off the other PSP. She comes back saying that she can't find it and that the other PSP is missing it's analog nub too! So I tell her I'd like to see the manager and see if I can get some kind of discount because of the flaws on this one, and while she is gone the other casher feels the need to butt into things and tell me straight up that there's no way I'm going to get a discount and that I should just take the PSP the way it is. I respond by simply asking is she's the manager and she responds "...yes, i'm one of them" although it was obvious that she wasn't the store manager. She then begins by giving me a real attitude about how there's nothing they can do about it and then actually tells me that they don't accepted used ones like that! So how the heck did it end up like that? Oh that's right, they must of lost it. I tell her is makes no sense that you shouldnt be selling that PSP at it's full price if it's missing a part and she then takes another customer in line.

My casher comes back and tells me that they can't give me a discount and I tell her "Okay then" so I turn to the girl that was giving me attitude and I say "I'd like to know your name". She then begins to tell me that there's nothing they can do about it (again, lol) and I said that it was fine, I'd just like to know your name at this point. After saying that the REAL manager pops up (Most likely because she realized that I was going to call in about this issue because I asked for a name) and tells me if it's a problem that they would give me a PSP Slim at the price of the PSP-1000 and of course I accept.

Seriously. What a scam... What if a parent came in looking to buy it for their kid and didn't know that it was missing a part? At least I ended up with a good deal in the end.

A similar thing happened when I got my PS3... except I didn't open the box in the store. Should have, that thing looked like it had been tied to a truck and taken to the store that way. DEEP scratches, cover missing from the memcard slots and ho-lee hell was it filthy.

I called them up and fortunately they were very nice and gave me an instant replacement, this time opening the box for me to see at the counter.

I suppose its all in the employees and their attitude. Some actually care about their product, others just want to make money and go home.

[Flashback2012]

I was about 11/12 when Funcoland went out of business. I remember being very very sad about it. I used to love going to the store and getting the funcoland newspaper that had all their games listed, with the game's prices and finding games that I wanted that I could afford. That, to me, separates them from Gamestop. Gamestop, so far as I know, does not publish current game prices or trade-in values.

I've seen price changes happen daily. It would be marked one price on Monday and then the price changed again on Tuesday. It was extremely rare, but it DID happen. The Funcoland newspapers were printed once a month I believe. That's for the selling papers. I can't remember how often the trade-in pages were updated, every 2 weeks I think? It's been so long ago.

I always thought the papers were kinda neat but sometimes annoying. People always asked for the cheapest games on the list, which we didn't have 90% of the time. Plus, our DM really pushed the whole cleaning kit nonsense on us constantly. You can imagine how hard it was to try and convince someone with a stack of .19¢ Super Mario/Duck Hunts in their hands to buy a $15 cleaning kit.

[maxlords]

I'm interested in this as well. If you ask an employee at Gamestop are they required to tell you about it or do you have to bring it up whenever you're to put in a preorder?

I don't think they have to tell you about it at all. Here in Canada at least, it's always on, always going, but usually unadvertised. If they're willing to put it into the system for ya, it always works up here. Been doing it literally for YEARS....at least the last 3 years straight. All year round too.

Just trade in 3 games worth $8 each minimum, and bam...you can preorder any title and it's fully paid for up to $70. Works on anything in the computer system. Since it's trade, there's no tax either. Barter isn't taxable AFAIK. You can also cancel the preorders and have whatever the current preorder price is in credit. I've done that a couple times as well.
It's quite possible that some places don't know about it....I can ask and see if you guys want....the manager of the store I go to might know if it's valid in the States too. It's also possible that they know about it and don't want to do it. I mean...good luck proving that they're not honoring an unadvertised trade-in deal right?

[maxlords]

Sales stuff

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.

[Frankie_Says_Relax]

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 there may be instances of 300% profit on a complete used game trade in to retail sale conversion, you're failing to factor in the seemingly very large number of games that are purchased at a trade in price and then sit unsold in inventory for what may be years.

While GameStop's formula is generally a highly profitable one, there's ZERO percent profit made on a used game purchased and not re-sold or sold at a price lower than the trade in (or cash) value paid out for it.

Just because GameStop buys a used game for $5 and they mark that same used game for $29.99 doesn't mean that game is guaranteed to sell at that price.

I'm sure there are millions of dollars worth of games like that just sitting in GameStops company-wide inventory slowly off-setting profits as the games eventually reduce in price to $4.99 or lower.

Yes, I'm sure that GameStop has various outlets to move that type of stock in bulk ... but again, the point is that profit in the used market is never guaranteed.

[maxlords]

I'm not failing to take that into account at all. It's irrelevant. Yes, it's relevant from a business sales standpoint, but my statement was about base gross profit on items that ARE resold, in response to the statement made by Diatribal Deity.

It's assumed that everything we're talking about sells. There's NO way that we can account for non-selling inventory (new OR used) or the losses incurred by discounting due to non-sales in a basic thread like this. That's some people's whole JOB....to figure that stuff out In fact, if we included all non-selling inventory, I'd bet that Gamestop is probably well into the red just from that alone.

All I'm saying is that WHEN they sell a used item, they GROSS 300%+ on AVERAGE above what they paid for it. I'm not an economics major or anything.

And profit in the NEW market is not at all guaranteed either. How many times have we seen games that have been heavily discounted just to get a LITTLE of the money they spent on them back out. Those are being sold at a LOSS. We can't factor in those costs either.

Just saying, there's a MUCH larger profit margin (if you want to say potential profit margin, that's up to you) in used than DD was stating. And a much smaller one in new games than most people realize. It's all about volume for both, but especially for new.

[Frankie_Says_Relax]

I'm not failing to take that into account at all. It's irrelevant. Yes, it's relevant from a business sales standpoint, but my statement was about base gross profit on items that ARE resold, in response to the statement made by Diatribal Deity.

It's assumed that everything we're talking about sells. There's NO way that we can account for non-selling inventory (new OR used) or the losses incurred by discounting due to non-sales in a basic thread like this. That's some people's whole JOB....to figure that stuff out In fact, if we included all non-selling inventory, I'd bet that Gamestop is probably well into the red just from that alone.

All I'm saying is that WHEN they sell a used item, they GROSS 300%+ on AVERAGE above what they paid for it. I'm not an economics major or anything.

And profit in the NEW market is not at all guaranteed either. How many times have we seen games that have been heavily discounted just to get a LITTLE of the money they spent on them back out. Those are being sold at a LOSS. We can't factor in those costs either.

Just saying, there's a MUCH larger profit margin (if you want to say potential profit margin, that's up to you) in used than DD was stating. And a much smaller one in new games than most people realize. It's all about volume for both, but especially for new.

Okay, but instances of 300% profit resale conversions are all offset by a bunch of other things that diminish that profit after the fact.

Loss of revenue via unsold stock, payment of employee salaries, rent on store locations, loss prevention losses, etc.

These are things that every retail business deals with and none of them look at just the bottom line of profit per item sold.

If the crux of your issue is that you perhaps disagree with the concept of a business buying a used game for $5 and re-selling it at upwards of 300% profit, that's fair.

... my concern was only that, if you're taking the issue to any other level you can't ignore the losses and expenses end of the business and you need to keep in mind that when a game is sold it's typically not 300% in pure profit going to the company's bottom line unhindered. When that does happen it's easily offset by many many other expenses including but not limited to those listed above.

[maxlords]

Kinda but not really. My entire aregument is that DD's numbers were rather questionable. We just got sidetracked.

[Frankie_Says_Relax]

Kinda but not really. My entire aregument is that DD's numbers were rather questionable. We just got sidetracked.

Yeah, I can't speak to the specific accuracy of his numbers, but I do agree with his closing statement that trying to figure out the specifics of GameStop's bottom line is very tricky.

[mobiusclimber]

I don't have too many stories about lazy/incompetent/asshole sales clerks, and frankly I don't think that matters, since you find that just about everywhere you go nowadays. I'll just give a few examples of why I don't shop at GS:

1) A few Xmases ago I went in for their B2G1F sale. After spending an hour trying to find three games I wanted at what I thought were reasonable prices and were around the same price, I took them up to the counter. They (including the manager) could not find one of the games' disc and only offered a "go to another store" by way of help. Really, out of the three games I was intending to buy, I really only wanted one of them pretty badly: Tales of Symphonia: Dawn of a New World. I left disgusted only to walk across the street to Best Buy (never the bastion of cheap prices) and find the game new for the same price GS wanted for it used.

2) My friend bought me Devil Summoner 2 for my birthday or Christmas or something, but the corner had a dent in it. So I took to to GS to exchange it. They had several copies but each and every one had some defect. I ended up just keeping the one I originally got.

3) After hearing about some of the great deals GS advertises for games on their website (that can only be purchased in-person in their store), I went specifically looking for some of them. Of them, PSO I+II for the Gamecube was the best deal I'd ever heard of. Come to find out, no GS sells this game b/c of its online component. They don't take them in trade, so they never get them, all b/c you can't play the game online anymore (never mind that the game is perfectly playable offline).

I just give up. Their prices tend to be higher (sometimes twice as high as) online after shipping, and that comes right to my door. Why should I bother?

[Doonzmore]

3) After hearing about some of the great deals GS advertises for games on their website (that can only be purchased in-person in their store), I went specifically looking for some of them. Of them, PSO I+II for the Gamecube was the best deal I'd ever heard of. Come to find out, no GS sells this game b/c of its online component. They don't take them in trade, so they never get them, all b/c you can't play the game online anymore (never mind that the game is perfectly playable offline).?

Wow, that explains why no store within a 100 mile radius of my house has any of the 3.