EB Games is killing the games industry

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By David Field
Apr 8, 2008 | 1 Comment

EB Games is an evil place.

And half of my former retail colleagues just gasped, while the other half nodded sagely.

This evil can be pinpointed: EB Games is a business, specifically a bricks and mortar retailer. And though all businesses are susceptible to many different kinds of evil, EB Games has a special kind of contempt for the other businesses it deals with before making so much as a sale to its customers. Specifically, the publishers and distributors that provide the games for them to sell.

I’m talking, of course, about its evil Pre-owned scheme.

EB Games has decided that instead of paying publishers the $50/60/70-odd (depending on the title, it's somewhere in that range) for a new release game and selling it for $100, it’s cheaper to coax people to sell their games (read: trade in and save!) for $25, after which they’re pushed onto anyone and everyone even remotely interested in a copy of the game for slightly less than the RRP of a new copy.

Other retailers are trying it too. Who can blame them? The system’s got a real nice profit margin. The only problem is that by walking down this path, games retailers are becoming little more than snazzy pawn stores – albeit without the guitars, jewellery and off-putting roller shutters.

Having said that, they do have better lighting, as well as staff who are more clueless and uninterested than even pawn store employees.

EB Games isn’t technically a second hand dealer because they will never give you cash for your games. They will only ever give you in-store credit towards a game. Should you ask for more information, the salesmen are conditioned to recite a list of reasons why it’s better for you, the customer, to buy second hand games. They provide a whimsical guarantee that nothing will go wrong, and when questioned further will offer you a confusing discount card for their range of preowned games that lowers their profit margin by a small percent, but discourages you from looking at new games that have far smaller profit margins anyway.

If you’ve been through the trade-in cycle often enough, you’ll no doubt have started to conjure up your own mental cartoon of the process in action as you are coaxed into parting with your games and money for a scratched and ratty copy of a game you were looking forward to opening, briefly sniffing, and then playing.

For me, I imagine walking into an EB Rentals of the dystopian future. It’s a curved skyscraper adorned with gargoyles. In the top floor, its executives and debt collectors decide how to control the world’s oil and medical supplies. In the basement, painfully fresh, hip and now music plays back -- interrupted occasionally by pre-recorded demands that you trade in all your games immediately. When you do, you get to select between the only games still available in the world -- preowned copies of 50 Cent: Bulletproof, FIFA 2004 or Crazy Frog Racer. For the privilege, you’re charged $50 and have two of your most treasured games revoked.

Finally, you are repeatedly kicked in the balls.

That last part is what’s happening right now to the publishers of the games you traded in. Every time a preowned game is sold instead of a new release, the publishers don’t see a cent. This, along with piracy, is why game publishers are feeling a financial squeeze.

Of course, EB Games will disagree with me, because it takes games seriously. The company will use the analogy that second hand CD stores have never been a major threat to the music industry. And while that may be true on a superficial level, the difference is that none of the major music retailers have ever tried to squeeze their suppliers out of the music market by pushing the sale of goods that do not pass any royalties on to the creators.

Luckily, however, there is something that publishers can do to reclaim their profits, and ideally cut the evil retailers out of the chain entirely to reclaim some of the revenue that the games industry deserves.

It’s digital distribution. It's Steam. Gametap. The Wii shopping channel. It’s a model operated by the same businesses that provide EB Games and other retailers with their first round of merchandise. And it’s been around for years.

It's still mostly a PC thing, but with hard drives showing up in consoles, we might just see an end to the preowned racket at some point in the future.

Digital distribution has, however, been tainted by another form of reversible evil -- exorbitant prices, less choice and reasonless segregation of the world market. It’s also what I started writing about this morning, and what I had planned to segue into until I dropped into EB Games at lunch and got sidetracked.

Tune in tomorrow when we have a closer look at digital distribution, why everyone should care and how the evil can be removed.

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1 Comment

Thoughts on this article? Add a comment below.

Scooter1062

Nov 8, 2009 6:43 PM

I am an independent used DVD and game store owner. Are you telling me that if a friend offered you a new game that he didn't like for 30 dollars less than the new price you would say no, I must go and buy a new copy. You don't bring up the fact that on Amazon, EBay or craigslist you can buy old or recently purchased games from individuals. At least EB and stores such as mine have employees paying taxes and the item is re taxed providing additional revenue. Even funnier you didn't talk about the average person who uses p2p sites for free or rentals. In my store we have cartridges and games going back to the Atari 2600, over 30 years. We provide gamers a low cost way to experiment with inexpensive systems and games while also supporting our local economy. When you write an article on used gaming you should always look at it from multiple angles. Very often the game developers produce a product that sucks. or that the buyer doesn't enjoy. Do you want them to stick it in the closet or on a shelf to waste away ? I guess I look at my business as a way to let someone try a game without paying 60.00 dollars to find out that a game developer produced a poor quality game. Here's a scenario a young boy saves up a ton of money to buy a game that they play for 10 minutes and realize it is shitty he gathers his other shitty games and takes them to a place to exchange them for other possibly shitty games without the high cost of experimentation... Problem solved. TRUTH

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