Talking to Gamasutra as part of a major interview
published today, GameStop executives have revealed a "dramatic reduction" in publisher discussions on the used games business model, as the focus moves to digital downloads.
In the Gamasutra interview with GameStop's Bob McKenzie, SVP of merchandising, and Tony Bartel, EVP of merchandise and marketing, the latter explained of their position on used games:
"We really believe, and the reason that we're so passionate about our trade program, is that it drives new games. Last year, alone, we put over $700 million of trade credit back toward new games.
I think that new games is about a $9 billion market. So if you stop and think about the currency that we're generating for the sale of new games, it's an absolutely amazing proposition....what's interesting is that the transactions where we have trade-ins, 80% of those transactions, the credit is applied to the purchase of a new game. Again, it's a significant amount of money that we're generating purchasing power to allow them to buy the games that they want."
Interestingly, when asked how many publisher discussions GameStop was now having on used games, Bartel suggested: "Actually, we had a lot more of those conversations two years ago than we have had in the last two years."
McKenzie added, seemingly implying that used games are in some ways a hedge against the growth of digital downloads:
"I would say in the last year more of the conversations are on digital, and again, our position is as we've stated. We're not afraid to compete against any of our competitors, and if they turn the tables and they create a non-parity situation, and it's not a fair situation where they're giving us a chance to compete."
Bartel more succinctly describes his opinion on the importance of GameStop's used game market to the game industry as follows:
"I really think, again, when you look at the fact that nine percent of the total currency spent on new games last year was generated out of one company's trade program, I guess you'd have to ask yourself, "Okay, if that went away, how much would the industry suffer?"
I think that from a trade perspective, a great example is the used car industry. Let's say that you were just to take out the trade program on used cars. How many new car sales would be impacted by that? I think it would be a dramatic reduction in the sales of new cars. I think the same thing would happen here...
I'd say we've had a dramatic reduction... in the number of discussions on trade and used, simply because trade is becoming such an integral part, especially in this economy, in the affordability of the games coming out."
The full Gamasutra interview with the duo
is now available, with lots more detail on their impressions of the current hardware formats, the family demographics that GameStop reaches, the state of the PC market and more.