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GameStop: Used Game Sales Fuel Industry Growth

At a Gamasutra-attended conference, GameStop chief marketing officer Mike Hogan claims that the sale of used games fuels consumer purchases of new titles -- and says that 20 percent of all copies of CoD: World At War sold at the retailer had a trad
Developers like Frontier's David Braben often point to the sale of used games as a revenue leech for video game companies, and publishers like Take-Two are looking aggressively at new business models to discourage it. But GameStop chief marketing officer Mike Hogan defended his company's practices during a question and answer session with the audience of developers, executives, and attorneys at SMU's Game Business Law summit in Dallas. To present his perspective, Hogan used the example of buying a new car every two years. "If you couldn't sell your old car -- would the industry sell more cars?" Without the trade-in value of their current models, Hogan argues, car owners wouldn't buy as many new vehicles. "We track this fairly closely," he says, claiming that well over 90 percent of the used games GameStop sells are over 90 days old. "We believe we're extending the life-cycles of users." Hogan also says 75 percent of all the credits that GameStop issues are utilized, immediately, to purchase a new game. Specifically, Hogan says that more than twenty-percent of all copies of Call of Duty: World At War that GameStop sold had a trade credit attached to the transaction. "I realize there are other perspectives," he says, "but ours is: trades and used fuel growth in the category." After the talk, Gamasutra asked Hogan what the company would do if the ability to sell second-hand games was in some way diminished - perhaps by more online activation of retail titles. The executive noted: "Obviously, we believe in the consumer's right to do what they want, and we want to champion that right. The consumer owns a product, and they want to sell it, because it provides a value to the industry, what we want to do is champion that."

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