XBOX vs GAMESTOP

13 03 2012

Reports and rumors are circling the web saying that the next Xbox console by Microsoft will not use a disc drive. While this news and been met with both praise and profanity by consumers, no one is likely pointing a bigger middle finger at Microsoft harder than ol’ Gamestop. But why oh why would Gamestop be mad at Microsoft? Because a discless console could lead to….

Less traffic in stores

 

Remember when you went to that music store last week to buy the latest album by Kanye West? And remember how while you were there, you stumbled upon an old Blink 182 CD? No? That’s because you didn’t. Instead of putting on pants and spending gas money you minimized the porn site on your computer and opened up itunes. And instead of buying the entire album you only paid for songs you actually wanted.

No one can question the online markets impact on retail stores. More and more people are opting to make purchases online and gain instant access of their desired product. You know why you buy apps on your ipad instead of walking into an actual apple store? Because it’s a hell of a lot faster and easier. Now Gamestop clerks (excuse me, “Game Advisors”) can join their friends from Border’s Books in the unemployment line.

Lower used game sales

Gamestop is the pioneer of the game trading industry. When you think about the process it’s really something you’d imagine King Koopa thinking up. You, the consumer, buy a used game from Gamestop because it’s a little cheaper than a new one, and as an American you are probably broke. Since you’re likely a Millennial Child you have the attention span of a puppy, meaning you get sick of your current video game after about 2 weeks. You trade it to Gamestop for credit towards another game and play that till you once again become board. One day while hanging out with some of your hipster friends you see a “1up” wrist band they got at Hot Topic and you are reminded of the fun you had playing Super Mario What-the-hell-ever. You now find yourself buying the very same game you initially traded away from the very same company. And do you know how much of that profit goes to the game manufacturers? NONE.

Gamestop is considered in many US regions to be a pawnshop. In 2010 nearly 50 percent of their profits came from used game sales. Microsoft going Disc less implies that not only will you be able to buy and store current games, but purchase old ones as well. And with cloud servers becoming more popular Gamestop won’t be able to rely on selling memory cards or hard drives.

No more reservations

“Are you excited about that new Resident Evil game? It’s gonna be popular so you better reserve it! No? What about Madden? You sure you want to risk not having it launch day? Not interested? So what about Halo 4?” If you’ve been at a gamestop you’ve likely had someone ask you over and over to reserve a game. You can’t blame the clerk, it’s their job. In fact the number of reservations they have a month is a measured metric for each employee. So how the hoopla over a reservation? Not only is it a guarantee sale for the company, it’s a guarantee you will go to Gamestop instead of another retailer for your business.

If Microsoft allows you to download any game directly to your hard drive of cloud server you won’t need to reserve a game, or sit in line at midnight. You can simply hop online and download the game once you want it

Other companies following suit

Gamestop could likely survive if Microsoft was the only company to go disc less, but if Nintendo and Sony follow suit? You best believe that if Microsoft goes disc less, the other guys will have a vested interest on the sales performance. Sure Sony doesn’t like Microsoft taking some of the Mass Effect 3 pie, but none of them OR the developers like Gamestop pawning and reselling their products.