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GameStop: "We Wouldn't Be Here" Without Used Sales

| 13 Jul 2010 16:02
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GameStop's Niall Lawlor says the company actually doesn't like being in the used videogame business but without it, it'd be out of business completely.

Arguments over the ethics of the used game trade have been raging for ages and show no sign of abating. It's common knowledge that retailers earn a much greater profit margin from the sale of pre-owned videogames than they do from new, but according to Lawlor, the managing director of GameStop Nordic, it's not just about making more money, it's a matter of survival.

"We discovered the used business was a way of preserving our margins. We don't like being in the used business, it's very difficult to manage," Lawlor said at the 2010 Develop Conference, currently underway in Brighton. "If we hadn't got the used business we wouldn't be here."

But he emphasized that GameStop is still a positive force in the industry. "We like to think GameStop evangelizes the business," he added. "We're still opening more stores, we're still pushing the industry. We have to be in it otherwise, if you take a look at our margins you'd realize we need to be in used."

His argument didn't sway InstantAction CEO Louis Castle, though. He described GameStop's participation in used game sales as "parasitic" and predicted that in the end, it would do more harm than good. "While you're preserving some margins, used is accelerating changes," Castle said. "I can see the train wreck, it's coming. Pretty soon everyone is losing money. Used is accelerating the decline of profitability for publishers. The oxygen is being sucked out of the room."

Source: GamesIndustry

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