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News - Internet used game retailer is giving back to game makers

Posted by Mikey Dowling at 03:02:02 PM EST on 2.23.2006.

The video game industry is an expensive one. Not only are the prices in games going up, but the price to actually make them is going up as well. But with cost rising, more and more people are joining the used game market and picking up games at a cheaper price. Unfortunately, game developers and publishers don't see a penny of those used sales.

But not anymore, says an online used game retailer.

iTradeVideoGames.com announced in a press release that they are going to give out 10 cents for every dollar made back to the development and publishing community. Whether this means that it's 10 cents each of more of a 50/50 deal is unclear in the release, but it is a bold statement nonetheless.

iTradeVideoGames.com webmaster, Lee Babin, was quoted as saying, "The hard working developers and publishers are the reason that we get to play such amazing games. They work insane hours and they do not get the recognition they deserve. It seems silly that large scale retailers should be getting rich off of the hard work of the people who actually create the games. I think it is time to give something back to the community. While we are not a large-scale retailer, raking in millions of dollars, we will give to the community all that we can."

iTradeVideoGames.com hopes that other, larger scale retailers will follow suite and start to give back as well. It's a bold move, but a step in the right direction to giving back to those who let us have fun playing the games we love.

Comments

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jlkeeton 2.27.2006 at 09:38:50 AM
Wasn't this the very reason Japan was trying to stop the sale of used games (and music CDs) some time ago? I don't think that ever happened or it has lapsed if it did. I really think that CDs are easily copyable now and the used market should pay a royalty for reselling them. Games and DVDs are harder to make exact copies, so it doesn't apply so much. It'd be nice to give back to developers and artists since they most certainly do not see any large portion of the 50$ a game retails for or 13$ for a CD. Without them, we'd have no games or music to begin with.

A little off topic, I think used game are a big RISK for companies. They may be raking in a huge markup on used games, but they can get burned very badly if they get in a lot of trades and no one buys them. Say a game flops and retails for 49.99$ most places. It goes down to 19.99$ somewhere and people buy it and trade it in for maybe a 28$ or 34$ credit. The game reseller then tries to sell it used for 44.99$ but the game inevitably drops in price to 19.99$ everywhere new because it didn't sell. Now, that company is stuck having to TRY to sell a used version of the game for 17.99$ or less - taking at least a 10$ hit per game.

I know a lot of gamers who pounce on the opportunity to go to a TRU or Target or other place clearancing off a game at less than the trade-in value at Gamestop or EB. I think companies who sell used games should be more up-to-date on pricing of competitors to prevent this from being a huge exploit - they currently lag several days if not more depending on the number of trades coming in. I do see this as a valid reason they charge so much for used games at the onset - they need to make a bigger profit for the risk of taking a big loss as well.
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strikerdee 2.26.2006 at 08:30:29 AM
To TTFP: I do agree that most of the profit in the games resale business comes from used games (anywhere as high as 75%, while new games profit tops out at about 15%) Although I do not have the numbers for Gamestop but I Own a Small Anime/Video Game Chain and I know that most of my customers trade in old unwanted games for a discount on the newest games. (Old Madden 05 for New Madden 06). And most of my trades come from "casual" gamers. Meaning they don%u2019t collect or keep there games anyway, and use Frequent Trade ins as kind of extended rental. Again more common for casual gamers. The one demographic all the New, shiny, %u201DExpensive%u201D games are not targeted for.
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ttfp 2.26.2006 at 07:24:13 AM
To strikerdee, it's more likely that someone who trades in games frequently will spend the money on used games. As it stands now, the retailer is making most of the money in the used game trade.
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pixy misao 2.25.2006 at 02:54:07 PM
Most of Gamestop's profit margin is with used sales, (I bet it's more than 75%) and when I was leaving the company (then known as Funcoland) they were becoming a more corporately run machine, desperately watching that bottom dollar. Now that they're the biggest retail chain of video games sales in the world... I don't see them stopping to "give back" to the game makers unless they are liable to do so. Meaning never.
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one2345 2.25.2006 at 01:38:18 AM
"The entire concept of pay to play media needs to be killed in it's birth."

so they should literaly give games away...ohh, i think its not unreasonable that people purchase their entertainment...
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showka 2.24.2006 at 12:49:40 PM
This is ridiculous. The last thing we need is for publishers to think it's okay to make money on used game sales.

The entire concept of pay to play media needs to be killed in it's birth.
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strikerdee 2.24.2006 at 06:18:02 AM
OK , I think we all need to take a step back and look at who is really making all the money in the video game industry, and then decide who to feel sorry for. All the money goes to the one who takes all the RISK. The retail chain is as follows: Developer (Naughty Dog) %u2013 Publisher (Sony) - Distributor (wholesaler) -Retailer (Gamestop) - Consumer (You). Most of the money in the life of a game goes to the Publishers by investing in the development and production of a game, and Retailers by purchasing for resale. As it should because that assume MOST OF THE RISK!
While the developer and wholesaler have safety nets built in the process and lower financial burden. (Funding and wider distribution for developers and return terms for unsold stock for wholesalers.) While I do feel that the developers should make more money, it should not be at the expense of the customers or retailers, and it will have to come out of somebody%u2019s pocket. Consumer WONT PAY! For overpriced games and Publishers WONT take the cut for there investment. So the solution is simple, Developers should drop the publishers and sell directly ether to retail chains, wholesalers, or Customers. But the trade off is they will have to raise there own money for developing and distributing the games they love to make and we love to play. ( And a programmer a business person dose not make.)
Also lots of that returned trade-in revenue customers get for unwanted games goes for new Games, so it does get back to the developers in a way. And the cycle starts over. But in the next generation of video games systems, the publishers are trying to go directly to consumers with direct downloads. While this %u201Ccan%u201D mean lower prices for consumers other side effects will occur like The volume of crappy rehash games going up and quality games going down. And only the publisher will see any of that money.
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one2345 2.24.2006 at 02:08:07 AM
they have all the right to keep it, but they aren't...that's what makes this bold...the developers aren't FORCING them too, they are donating it...and you know what, it is a big deal...consider....gamestop does 1.3 BILLION during their holiday season, lets say one third of that is used 400,000,000 dollars used revenue for gamestop holiday...now that ratio isn't right, but let's say that this was the used sales revenue for the whole year...and 10c of every dollar means 1 dollar out of every 10...10 out of every 100, 100 out of every 1000, 1000 out of every 10,000, 10,000 out of every 100,000, and 100,000 out of every 1,000,000...so they would be donating 400,000 dollars, and i'm probabaly SERIOUSLY undercutting the used sales revenue....most likely, gamestop would donate close to a million...which is a third of the development cost for a toptier game title...

now sure, this small company is no where near a gamestop, but still...its a serious chunk of change...oh that could, if they trend caught on, have a huge benefit to the industry...but for a small company, every penny counts, so i appaulde the IDEA...

now the two problems are: a) this is a small company, so they aren't sending that much cash out....the "development and publishing community" is a broad term...who is getting this money? EA? vivendi? squaresoft? is it going to one company or is it being spread out evenly amongst them all?....THOSE questions are what makes me doubt this whole claim....i mean, what, does EA open there mailbox one day to find a check reading, "100$ for the development of a game, your friends at..."

i think its bogus, and i think the lack of explaination of where these funds go prove it...

and, the companies they are donating to are capitalist organizations...we aren't talking a not-for-profit organization with lofty goals...its a business...i would rather they give the money to something a little...grander....if they want to keep it in industry, how about donating to establish a government lobey or the creation of some industry watchdog to replace the ESRB, or to the ESRB or whatever...
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adaminplaidum 2.23.2006 at 11:25:58 PM
Flawed logic, in my opinion. Imagine you had a garage sale and sold a bike, a tv, a camera, and a recliner. Should you pay 10% to Huffy, Sony, Nikon, and Lazy Boy? No, that's ridiculous. So why is it any different for a big company.

Now, do I think companies like Gamestop should donate money to the development and publishing community. Hell yeah. Do I think this is the way to do it. No, sir.
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visual77 2.23.2006 at 10:31:13 PM
Here's my thoughts:

I go to a used game store(or section) and buy a game. I pay the clerk X dollars, when the game retails for 3X. The store takes all the profit of X/2, since they paid X/2 to the person who traded it in. Well, that person originally bought it for 3X, and that money did make it [partially] to the developer. Buying used games doesn't screw the developer.

On that note, I never buy used based purely on principle and would love to help out developers, as I am highly interested in being one someday using my modeling and programming skills.
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onacouch 2.23.2006 at 09:43:24 PM
Does anyone else think this as ludicrous? I think once you own something it makes perfect logical sense to sell it and keep all revenue.
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mrchup0n 2.23.2006 at 09:13:24 PM
Yeesh.

A "publicity stunt" that at least helps out is better than one that doesn't. So you're saying you'd rather patronize an organization that stays low key and chill than one that - yes - pulls stunts, but at least uses proceedings to donate to charity or pays the people who created a game or piece of music? That's like the guy who blasted Penny Arcade's Child's Play as just an attempt for them to get popular.
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animetayl 2.23.2006 at 09:11:13 PM
This is a great idea. I've always felt that developers don't get nearly the financial payback they should for their hard work and long hours to give us enjoyment. Here's hoping EB Games does something similar.
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proppat 2.23.2006 at 08:48:41 PM
I'm a pretty big music collector. I have well over a thousand cds and a fairly large vinyl collection as well. A good chunk of this I've bought used. The only problem is, when you buy a used cd, this cd may have already passed hands 5 times. While the savings is great for me, it does hurt the band because they never see my money. Only the middleman does. That's one reason why, when I do buy new cds, I often try to buy them directly from the artist or the artists label. When you're buying from smaller labels, the artist really does see a lot more money when you cut out the middle man.

EB and Gamestop make a killing off of used games. I buy a good chunk of my games used and, while I do buy from independant used game stores a lot, this still doesn't help the people making the game. In fact, I fear that even when I buy games new, it doesn't help the people making the game very much. The games that I do buy new are the indie games...and this is me hoping that there's power in numbers. The more that are sold new, hopefully the more games of that type we'll see.

Does anyone know if any game producers/directors get kick backs based upon performance? This is just curiosity on my part.
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beelzebozo 2.23.2006 at 05:52:22 PM
I agree that it's a pretty cynical view when someone takes a step in the right direction and it gets brushed off.

Of course Gamestop and EB aren't going to do it until there's a reason for them to. At least a small site like this is making some sort of movement towards a smarter used game industry model.
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joshschw 2.23.2006 at 05:14:54 PM
cute publicity stunt. i guess they figure even giving away 10% and getting free advertising is better than getting nothing whatsoever.

how about making games cheaper. I sure as heck am not buying any $59 games, microsoft.
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c 2.23.2006 at 04:59:01 PM
he's giving 10% of his profits. who cares if it's a f***ing publicity stunt. better he get the business than EB/Gamestop Corp.
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azu 2.23.2006 at 04:38:36 PM
So what if they want us to see this? It's just that iTVG is not big enough for this to be of too much help. Still, 10cents is better than nothing, as some retailers are doing NOTHING. And as it says in the end, they're hoping other retailers would follow their example.

Gosh, some of you are so cynical. :P
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dswhore 2.23.2006 at 04:31:17 PM
"HOMG $2 rebate - we are saved"

Nice idea, but as it has already been said, I'm on the "cheap publicity" wagon.

Very cheap publicity - 10cents worth to be exact.

>.> Oh, so lame.
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mystikal 2.23.2006 at 04:22:13 PM
I don't see this as being noble, as they'd probably like us to see this. It's more of an attempt at cheap publicity. This won't affect the market in any significant way.
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wolvenone 2.23.2006 at 04:09:08 PM
Not a bad idea per-say, but I think one of the larger online sellers needs to adopt such a system before it takes off.
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bjork 2.23.2006 at 04:01:13 PM
http://www.itradevideogames.com/index.php?page=games/indgame.php&indid=5825

Buyer's remorse for me!
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thekow 2.23.2006 at 03:52:09 PM
I browsed through their PS2 library for about six or seven pages and saw two games they had in stock.

...yeah. Good idea, kicking back to the community and all, but good luck selling anything.
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sgt. baker 2.23.2006 at 03:38:50 PM
Thats a good thing. Too bad the site sucks.
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beelzebozo 2.23.2006 at 03:05:49 PM
Three cheers for integrity.

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