What Economic Crisis? - BlyGilmore's Blog

BlyGilmore's Blog

What Economic Crisis?

Posted on February 20, 2009 at 03:05 PM.

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With banks on the verge of collapse, car makers struggling to avoid bankruptcy, and the economy mostly in shambles, there is one shining beacon in the financial market for us all to turn to.

Gamestop?

Yep. Seems Gamestop is doing just fine despite the slumping economy, not only seeing some great results in 2008, but expecting 10 to 12 percent growth on top of that in 2009.

The key? Gamers like you being nice enough to trade in a game for $10 that they sell for $35.

Per Reuters:

Quote:


	Moreover, the company's profit margins have benefited from an active trade-in system, where shoppers return used games for a fraction of the purchase price or credit toward future sales. The returned games are sold at a higher profit margin than new games.

Keep this in mind when you are trading in your winter sports titles for MLB 2k9 and The Show - you are doing your part to keep the Gamestop shareholders filthy rich!

And considering folks are scrimping and saving, I think you are likely to see many more gamers opt to wait a bit and pick up a used version of whatever is this month's shiny new title, instead of buying new.

Meanwhile, keep this whole thing tucked in the back corners of your mind. Trust me - EA and other video game companies have noticed Gamestop is making a boat-load of ducats on used games - profitting from developers' work in a time when game studios are slashing jobs left and right.

It will be interesting to see if the big gaming companies come up with a way to try and either share in the riches of used game sales, bypass the Gamestops of the world, or kill the whole thing all together with registration codes ala PC titles.

Comments

# 1 ChaseB @ Feb 20

Bly, I'm just unstickying the blog until after the conference call so it's at the top of the page.

# 2 BlyGilmore @ Feb 20

cool man

# 3 stlstudios189 @ Feb 20

some companies are doing well in this ecomony. I work at Chick-fil-a in the mall and our sales are up 12.5% for the year and we are missing a day because of the leap year. Gamestop has a good business plan, but, keep in mind that even though they only give you $5 credit and sell for $20-35 they have a lot of overhead with many games sitting on the shelves and being mostly in malls they pay at least $6000 a month in rent before extras such as trash, security, mall maintance, 1-3% of sales go to the mall, etc..... if it does bother you trading in sell your games on ebay.

# 4 BlyGilmore @ Mar 11

PA has an funny comic on this topic ...