Conjecture: Best Buy

They are looking to take down Gamestop, and honestly, I’m glad. This isn’t about some lingering hatred for Gamestop. I think Gamestop does what it does very well, and has enough going for it that it rolls mostly like a snowball down hill. But Best Buy is starting some bonfires on that hill.

Is Gamestop the best value for your money? Aside from selling a game online or on the street, yes. They are your best bet on a guaranteed immediate buy of an item. Will you get a lot for it? Of course not. They have no limiters on what they buy. If they did, they could offer more. But since they don’t, and since they will still take Madden 08 for a quarter, that is factored into how much they can offer across the board. Will they buy your broken stuff for the same price? If it’s not obviously broken, then yes. They will. And that costs a lot of money too. Will they give you a lot of cash? No, but you can finagle a good chunk of store credit from them, which you can use to buy….

More games. Good for them, mediocre for you. Maybe you want something else. Maybe you just want a soda and some chips. Maybe you want a refrigerator. Or a CD. Or a car stereo and a book bag. Too bad. There are no affiliates of Gamestop that will honor your store credit, so your options are games or game accessories. This doesn’t much matter when you have 4,500 stores though. Gamestop stores print money. It’s just been a little hard for anyone else to compete.

That’s not a coincidence, by the way. Gamestop actively seeks and destroys competition. They will let a given store offer aggressive discounts if another competing used game store is around. That used game store will have cheaper prices, but Gamestop will lower their prices and raise trade in values until the consumer, finally getting what they feel they deserve for a game, chooses Gamestop and the other company is forced to close. Once they close, prices return to normal. Crisis averted!

In the case of larger companies, (such as Blockbuster) the inclusion of a used game service seemed like a successful idea, but their main business was already failing for many other reasons. Even though Gamestop can stay open with just games, they rely on a lot of in store advertisements (paid for by game companies) agreements with companies, and a huge inventory. I shutter to think how many games are owned by Gamestop at any given moment. So, when Game Crazy and Game Rush failed, it might have been a little bit because of Gamestop, but mostly of their own downward trend.

Best Buy is different. Best Buy is a very successful, well advertised electronics giant. Best Buy is diverse in their product offerings and is poised to take a risk. They have seen the numbers on the size and potential growth of the gaming industry. They have increased the presence of cell phones in their stores (which play games) have always sold ipods and computers (which play games) and also sell video game systems (which… you know). If they could merely impact Gamestop, they could gain quite a bit. They could possibly do to Gamestop what Gamestop has done to most everyone else: beat them and then either adopt them or watch them die.They have roughly xeroxed the back of the gamestop nametag already, copying their circle concept directly. Do they intend to be a mini electronics complex broken down into individual stores within a store, with one of them being a Gamestop?

And do you think Gamestop knows this? They have been acquiring quite a few other things lately of the digital variety. Do they perceive their brick and mortar store to be a cash cow that is aging quickly? Even though they make money, it costs money to run that business. There are excessive amounts of shipping that happens from stores to other stores. All those ringed, scratched games are shipped to the warehouse as defective where, if they are fixed, are shipped back out again. Ask your local Gamestop what they have had stolen from their store. Few (to none) of them can honestly say “nothing.” Many of the items they buy in can be defective, or become defective after purchase, which they also foot the bill for. Or rather, you foot the bill for in some degree. It’s expensive to them, so it’s expensive to you.

Maybe Gamestop will cheerfully pass the torch to Best Buy, ushering in a new brick and mortar games king. Maybe the acquisition of digital properties and beefing up of their website are the first notes of “closing time.” Previously it has been said that they make all their money on used games, but if the format starts to die, what choice do they have for survival besides going digital?

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