Where Does GameStop Make Its Money?

It makes it selling video games. Used video games, especially. But if you've ever wanted to break that question down a little more, and see where it makes its money both in the US and overseas, here's your chance.

Gamasutra's Matt Matthews has broken down the multinational retailer's latest fiscal year results and translated them into a language we can all understand: one of charts and pretty colours.

While the chain's share of the US market is held in check by stores like Best Buy and Wal-Mart, in Europe sales are through the roof, with non-American stores now providing a serious chunk of the retailer's overall income.

So next time you complain about pre-owned game prices, Americans, remember: you're not alone!

In-Depth: Inside The Business Of GameStop, Part Two [Gamasutra]


Comments

    Just so everybody knows GameStop and EB are the same company. So essentially we know EB makes 530 million US in Australia every year.

      Ohhhhhhh.. I get it now. Cheers!

        Let's all make sure this slip-up will not reoccur in the future ;)

    Hah, take that Canada! Except we pay heaps more for our games so it's actually us being screwed. Never mind.

    They are dirty.
    They make all their money offering you peanuts for your games and then selling them $5 cheaper than the new version.

    The staff are told to offer "Preowned in 60 seconds" (literally) when speaking to a customer.

    Also when selling you a preowned game which they pressured you into getting when you asked for a new one, they will offer you a "game guarantee" which is a slice of thin air under the guise of a 1 year warranty on the game.
    Considering their preowned games carry that 1 year warranty already they are just extorting you more.

    The staff are told not to question the condition of anything they trade in, and just sell it. I was once reprimanded for doing so.

    Eb also trade in preorder bonuses and sell them as preowned items.
    Example:

    The legend of Zelda Windwaker came with an extra disc with ocarina of time on it.
    When the game was traded back in, the customer got no extra value for the 2nd disc yet they seperate it when they sell the game and sell it alone for $49.95.

    They also don't pay their staff properly.
    The casual employees are slaves that are expected to stay back and clean the shop unpaid and the area managers themselves get shitty salaries.

    Don't even get me started on Extended Service Agreements on consoles.

      I'd like to note also that when windwaker came out, they split part of the shipment with the bonus disc and were selling it "pre-owned" on the launch day as a seperate item. Also when you traded in that bonus disc it does have a pre-owned SKU in the system and they should have given you trade credit for it.

      Let's clear up some misconceptions here.

      Yes, EB offers peanuts for trades and sell them $5 cheaper than the new version. Shitty? Yes. But on the other hand, it's really good business acumen if you can get away with it. Which, obviously, they can. There is a massive business for preowned, and while this is the case, EB is going to make as much money as they can out of it.

      Staff are told that preowned should be mentioned or offered within a short time of engaging the customer. When you make most of your money from preowned, you want your staff to mention it. Again, good business acumen.

      If you chose to get a preowned version of the game at their suggestion when you actually wanted a new copy, then you are an idiot, and that certainly isn't the salesperson's fault. Some staff will offer a game guarantee on preowned games, which covers the game for damage to the game that happens AFTER the sale itself. So if you happen to scratch the hell out of the disk after you've bought it, it'll be replaced. The 12-month warranty on preowned covers the game for the condition it leaves the store.

      Your statement about staff being told not to question the condition of trade-ins is a huge generalisation. Just because your manager told you to do this, doesn't mean it applies across the board. In fact, when I worked for EB, you would get reprimanded for trading in games that wouldn't work. If the game was scratched but would probably work, it would be traded in and sent away to be cleaned, so customers wouldn't be sold defective software.

      I certainly can't defend the practice of trading in certain bonuses and selling them as preowned items. But this was also up to the digression of the store manager. This didn't occur in my region when I worked there. You also seem to be under the illusion that EB is the only store that does this. I've seen this occur quite commonly at Game, JB HiFi and even GameTraders.

      Their staff certainly aren't paid properly, you are correct about that. They are used, and are expected to stay back and clean the shop unpaid. Managers and area/regional managers are poorly paid as well. I'm sure they're not the only business that does this either. It is crappy, but not uncommon.

      People constantly badmouth preowned, but this is because they don't know how to make it work for them. You sure as hell are not going to get Shadow of the Colossus new anymore. It was hard enough to get when it was being produced. But a year ago, you could go into an EB and get them to get a preowned copy in immaculate condition sent to that store for you. The game would cost you $12.95.

      I hope this clears up some misconceptions for people. While I can understand some people's misgivings for the company (I have my own), a lot of it is either because they want to jump on the bandwagon, or through misconception. Plus, the misinformed badmouthing I hear on this site is starting to get old.

    Do they still have EB stores in the US or are they all branded Gamestop? (I first heard of the chain in the ads in US gaming mags back in the 90s)

    Pre owned is a massive rip off, they basically make double the money on every game they sell by buying it back at ridiculously low prices and selling for near new.

    Ebay is the way to go to buy games in australia. look up game-shop australia on ebay under stores, you can find any new titles for literally half price.

    Those figures are a bit worrying. For Australia to be contributing that much to the bottom line when we would have to be the smallest install base out of the four demographics EB must be raking it in here. Also preowned is killing the industry, do your part.

    And yet, despite the figures, most ppl prefer EB Games. We Should all support the independents. I would hate to think that all majors inc EB, GAME etc are taking over. Not only they have bad service and shit trading deals, they are arragont as hell. Support Local Aussie stores!

      Any names of local Aussie stores I can check out?

      I've got nothing against people giving EB business, some people prefer to pay more for less I guess. It's how places like David Jones and Myer stay in business! Just don't buy used games.

      Considering how geared EB/Gamestop's model is gears to trade ins they might very well go out of business anyway if you follow that rule.

      any time i go to a local indy store i am served by some arrogant moron who has FA idea what he is doing. the last 2 visits to gametraders has been appalling. my local eb has good staff that know what they are doing and treat their customers with respect. the main reason i shop there is because they have the return policy. i rarely use it but its nice to know i can. i always price match and only buy used if it is seriously cheap.

      @Ridwan: game-shop australia seem to have a lot of neg feedback due to their games being shipped from overseas. seems like they are selling asian versions. it'll suck when you go to buy dlc from the aussie store and it dont work huh.

        Brad: Sorry to hear your local gametraders is shithouse. The one in Perth is Ace. Always get great service and good price i.e well below JB prices. As far as you price matching, seems a bit cheap isnt it. If you are going to support EB, why not support thier prices aswell. Cant have your own cake and eat it too..

    I only order in pre-owned PS2 games from EB. You pay around 20 bucks for a AAA title, and it's about the only way to get them these days. I wouldn't touch any of the current gen pre-owned crap, you can buy all of that for about 20 bucks less on Play-Asia easily.

    Speaking of Shadow of the Colossus, I ordered it in at EB last year in April and it didn't arrive until July. All it had to do was travel 17 hours drive in the same state. When it arrived it was obviously scratched as all hell in a tattered box and even the staffer apologised before I even took it home it was that obvious it wouldn't work, which it didn't. I took it back and they ordered in another one, which only took 1 month this time and it was in good condition. It only took 5 months and three visits to get my game.

    You would have to be incredibly lazy or brain dead to trade in games at EB. At the moment, eBay is a great alternative if you can be bothered to deal with simple postage.

    The sooner people switch to Play-Asia and alternatives, the better.

      Good idea, support a company that's outside of Australian borders and doesn't benefit local jobs, great.

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