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8 Bit Central - Retro Gaming Blog

January 2014 Retro Gaming Article

January 8, 2014 Retro Gaming Blog Post:

Does GameStop suffer an infrastructure problem or are they doomed by more favorable sales models?

When you're standing in one of GameStop's smaller stores, wondering if there's enough oxygen to sustain life until you get through the line at the register, its easy to forget what GameStop really is. They are part of GameStop Corporation. Primarily a gaming retailer, it's an amalgamation (via mergers) of several video game and software retailers.

Back in the day I loved FuncoLand. As a retro gamer, how could I not love a store that was wall-to-wall game cartridges spanning from my childhood up to the latest releases? I was devastated as the chain was reduced and locations began closing. Unbeknownst to me, FuncoLand was just one of several retailers that was part of a larger gaming entity - although perhaps not at that time - GameStop Corporation. Other components are EB Games, Babbage's, Software ETC among others.

Location, Location, Location

In my travels I have found two predominant store scenarios. One is the tiny store with inadequate space for any single game platform. The second is the large expansive store that places stock on all the walls and leaves a large void of wasted space in the store's center. Many of their stores are in shopping malls which leads me to compare them to some of their neighbors. When it comes to maximizing space, Spencer Gifts and Hot Topic have it nailed - not an inch of wasted space. From floor to ceiling, they know how to present product. They aren't even daunted by maximizing walls with 15' ceilings. No drop-ceilings are installed, the product goes vertical!

Despite my love of old and new video games, GameStop is one of the few retailers that consistently angers me. From selling used game discs that appear to have been sand-blasted and new games that are sold in broken cases without manuals to disorganized product display and rude employees - I seldom have good experiences there.

With all the mergers with similar (gaming) retailers, why do GameStop's store locations suffer such disarray? I visited one of their larger locations this past weekend and was astounded to see how poorly product was displayed, and through that, what a disservice they do to their customers.

Poor Display of Used Games

I decided to dig through their remaining PS2 titles and managed to find 4 titles of interest. Of those discs I had to go through 2 or more copies in order to find a disc that wasn't pockmarked & scratched beyond believable reliable use. I was able to sift through the PS2 discs themselves because GameStop has discarded all the cases with box art in favor of discs in paper envelopes. Are you a collector or have a few shelves of PS2 games in cases? How do you like getting a disc in a paper envelope? That's a poor way to sell a product - no case, no manual and scratched!

Namco Museum on PS2 As an example, I saw Namco Museum for PS2 selling for $11 and the 50th Anniversary version was $20... as a disc in a paper sleeve!! Are you kidding me!?! These discs were selling at these prices in a paper sleeve... complete with scratches! For a scratched game disc in a paper sleeve, I'd risk as much as $4 providing it was an outstanding title and I can return it. $20?? No way!

While browsing the scratched PS2 stock, I noticed a very long wall contained a lot of used Xbox titles. It caught my eye because the wall was almost a solid green color. This color was attributed to the generic green cases that GameStop puts Xbox games in when the do not have the original case with it's artwork. None of the other game platforms were this disproportionately sold in generic cases and this makes me wonder if Xbox gamers care about buying complete games. Obviously the game disc is the important component, but I think the packaging has more merit than GameStop seems to offer.

I come from the vinyl record era and was sad to see the miniaturization of album-art when CDs were introduced. I have always felt video game box art and manuals (with artwork and/or screen shots) were important components to the package. For me, it's not only about the game itself. This poor treatment of PS2 game display has been going on for at least a year now and will likely continue until it's more cost effective to dump these games in a landfill.

DS Games get the "Sleeve Display" Treatment

You may have noticed the same treatment of Nintendo DS games. I used to buy GBA titles from a locked case as a cart-only sale. However this sale's scenario came after viable hardware was no longer available. Now, I'm seeing the same treatment for DS titles. GameStop is now placing DS games into both paper disc-sleeves or small plastic flat-packs which may be more of a theft deterrent packaging system. Both the 3DS and 2DS (both currently in the sales channel) are compatible with the older DS format. The practice of discarding original packaging and manuals is a disservice to GameStop customers!

GameStop Employee Response

When I ask GameStop employees about original cases or manuals, they say that "corporate" is saving space by discarding these items. When I ask why there are so many games sold in generic cases, they have a variety of answers that all boil down to determining if a title has resale value. This is done via the title itself, not it's condition or completeness of original packaging.

I'm not saying that any retailer, GameStop or otherwise, should be selling only complete mint-condition games, but I believe the PS2 and DS paper sleeve model will quickly be extended to Xbox 360, PS3 and Wii titles as the new 8th Generation games begin to require more shelf space. It may not be long before GameStop presents more troughs of used game titles, festering in disorder, as they try to focus customers on buying new $400 - $500 game consoles.

Used Tablets

As gaming goes digital and physical products are disappearing in favor of downloads, GameStop is selling used phones and tablets. If they are to have brick & mortar locations, they will need to sell products. Downloads can be sold by manufacturers - they don't need middlemen like GameStop to do that. And even if they did the margins would likely be slimmer than present physical on-shelf products.

I can assure you that I will never by a used tablet or any used hardware from GameStop. When I see the deplorable conditions of their used game discs and the general disorganization of their display on shelves, what condition might a used iPad be in?

Math May Reveal a Solution to Product Display

I've worked for national retailers who had real estate departments dedicated to finding appropriate retail space as the company grew or product demand changed. It's a good strategy to have a mix of location types for a chain like GameStop. Smaller locations have benefits as do larger ones.

The issue I see is that they don't appear to have a solid formula for gauging needed space. Wii U, PS4 and Xbone will quickly expand their libraries and GameStop knows that this new wave (they had it easy for the last 7 years) will become the dominant force as former console titles dwindle. The lack of backward compatibility will quickly negate the value of most PS3 and Xbox 360 titles, but they currently require shelf space.

GameStop's retail floor contains very little stock. Each store's pubic space is primarily comprised of empty display cases (often generic), so they don't have to worry about re-stocking the floor in the same way other retailers do. Part of their lease rate is based on floor space, so they must maximize every inch of it and know how much product can be displayed. This is very formulaic and necessary.

Game packaging (cases, inserts, manuals) have been deemed unimportant, by GameStop, by nature of how they display product. Why then, do generic cases have the same shelf space as original packages? Why decimate the value of older games via paper-sleeve displays when useless generic cases waste prime retail space? If they insist on placing game cases on the sales floor, I think they need to prioritize physical products by demand rather than alphabetizing them and provide customer kiosks for overall availability. They could also benefit from better attention to quality control of the physical media traded-in and sold.

What if they opted not to have empty cases on the sales floor? Couldn't they take some of those used iPads and repurpose them as customer kiosks to aid game sales (new and used)? At the register, the clerk simply locates the actual game media and puts it in a case. The clerk doesn't need an empty case, he/she only needs to know what title you want to buy. But would you go to a GameStop to buy via kiosk when you have the Internet at home?

Hey, wait a minute! Amazon can do all of this without brick & mortar locations! GameStop needs to provide a compelling reason for gamers to shop there rather than online!

The first European to travel the length of the Amazon River was Francisco de Orellana in 1542.
It's been swell, GameStop... but the swelling's gone!

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