DVDEmpire's words on the VG industry...
 

sorry if it's a repost, thought it was an interesting read

http://www.dvdempire.com/index.asp?p...ite_media_id=0

Really not all that surprising. I don't think I know anyone who has bought a videogame from dvdempire.

Pretty interesting for them to spell out all the reasons why they can't continue; most companies would just issue some generic statement along the lines of "due to the vagaries of the cost/distribution paradigm, we have decided to refocus on our core dvd business, and stop selling video games."

not to mention that they are selling them as 20% off ORIGINAL MSRP. I saw a few games that retail for less than 40 bucks selling at $59.99 minus the 20%. Screw that.

Nice Sale Empire... -rolleyes-

Can't blame them in the least. I wonder how B&Ms make money off games. One BB coupon and I've eaten their entire profit margin, per that article.

It is sad that their closeout discount still can't drop the games into a reasonable price range.

That's if Best Buy is not getting a better deal than them... I'd have to think that Best Buy and Walmart, etc are getting a better deal, as they are bigger retailers with more negotiating power... The entire point of the DVD Empire statement is that they do not get the treatment that the bigger retailers get.

I've always had some sort of resistance to downloading games (not just illegally, but also the idea of not having a physical copy of the games I buy), but if it would help the problem of game returns and out of stock, I could see it being a plus for nearly everyone.

The otaku in me would be disappointed, but I'm sure some companies would still cater to that market.

Best Buy and Target and Circuit City have got to be making at least $10-$15 per game when its selling at retail. When Target and Circuit City had Zelda: TP for less than $40, I can't imagine that they are using that a some kind of loss leader. Usually its lower profit items like DVDs and CDs that are loss leaders. That is just my opinion though.

Can't blame them but don't feel bad for them either as I had some bad experiences with them in the past and their customer service sucked balls.

I don't think that's true. With the greatest hits series, pretty much all "classic" games on the PS2 are easy to find in Best Buy, Target etc.

There are a few cult favorite games like Ico that you can't find new, but I don't really consider cult hits to be classics.

Should continue to be true as the PS2 has a huge base and will probably live on longer than most consoles, especially with the PS3 not setting the world on fire.

A PS2 game can sell a ton more than a PS3, Wii or 360 game just due to the size of the user base. Thus we'll continue to see new PS2 games for the next couple of years, and the greatest hits games should be on shelves for a long time as well.

Only MGS2 and the Silent Hill games I'd consider classics. The other 3 are more cult hit type games.

Fair point on MGS and SH I guess, but not a big deal to gamers since they are so readily available used. Doubt it's a big deal to the companies either as I can't imagine there are many people that want to buy those new who haven't already played them.

You are wrong. The mark up on retail games is usually about what DVDEmpire is telling you their mark up is. Best Buy's markup up isn't much more than $5 per game. They make all their money on accessories. That's the M.O. of these places. Next time you go in, pretend you don't have a game system. Ask what is good, and what they'd recommend. They'll likely recommend every accessory under the sun, but not offer up much in terms of games.

Having worked for a mom and pop game store from 1996 - 2001, I know exactly where they are coming from. We worked with many distributors, including Ingram, and we always got screwed over on new released. Either not enough, or we wouldn't get them on time. Reason being, we end up having to wait for the distributor to get the title, then get it shipped to us. Big box retailers get stuff drop shipped from the manufacturer, for the most part. That's why they'll usually have their games in stock before mom and pop shops.

Getting back DVD Empire's list, there are other truths. Mom and Pop shops usually stay afloat b/c they can offer used items. That's the bread and butter of these places. When I worked at that kind of store, I'd say that's what kept it afloat in the lean times.

Surprisingly, there isn't going to be that much difference between going through a manufacturer and going through a distributor. It might be a buck or so, at best. Their advantage is getting stuff shipped direct, which cuts out at least 2 - 3 days from the shipping process.

Well it seems that most of the items in DVD Empire's list start with We're not big enough to... so while they may not do much better in terms of markup, it sounds at least like the big box retailers get price protection, etc. And I'm still not sure I'd buy that Walmart doesn't negotiate better prices from the manufacturers than small retailers... because that's Walmart's MO. They squeeze suppliers as much as they can for the promise of extremely high volume of sales...

I can't speak for what Wal-Mart pays for games. However, I used to work at Best Buy, and I saw cost on all of the items I used to sell at the mom and pop shop. I was pretty shocked at how little difference there is.

Thing is, game manufacturers care about Wal-Mart, but they also have issues with them due to restrictions on sales and such. So, the game companies might have some leverage in that they don't have to sell their product there. If it's a hot item, it will sell with or without Wal-Mart being behind it.

You know, this bothers me to this day. I distinctly remember reading years ago, when videogames were starting to make the serious switch to CD based media (and Nintendo wasn't), that one of the advantages was smaller initial print runs, and the ability to make additional runs should demand prove sufficient. One of the problems with cartridges I had always heard was that because of the nature of RAM chips, print runs for games had to be pretty big the first go-round, and that second go-rounds usually weren't even done. With CD media, the game companies were supposed to be able to go back to the replicators for quick print runs to satisfy unexpected demand.

So, I never understood why games like Final Fantasy Tactics and Castlevania SOTN were so hard to find for the longest time for the PS1. These always seemed like obvious candidates for those additional CD print runs, hell even old Saturn, Sega CD, even TurboCD games probably could have been done at a reasonable cost. I know lots of older games like this go for tons of money on ebay. It seems when companies look on ebay for people bootlegging their stuff, they just want it taken off and don't even consider the free market research that's sitting right in front of them.

Am I the only one that thinks it is bullshit? Not the reasons per se, but the article itself? Seems kind of infantile to air your grievances about the manufacturers-blog style on a professional retail website? Take the fight to where it belongs, not to your customer base. It is futile and makes them seem like asses in the process.

Don't like the way the system works, don't bother with it. Simple as that. Involving the customer in some half-ass crusade is ridiculous.

Maybe not the only one, but certainly in the minority. Many consumers do not know how badly a retailer is treated if they're not Best Buy or Wal-Mart.

Granted, the majority are dumb hicks that really don't care where their item comes from as long as they save a dollar or two, but there are some that are willing to be educated as to just how shitty a business is treated when a manufacturer thinks they are too small to fight back.

Yeah, it did make me look at DVD Empire differently. They're called DVD Empire for crying out loud. People don't go to their website to buy video games. Sounds like they made a bad business choice, so their series of rants came across as whining to me. And those 20% off "sale prices" are so pathetic it makes the whole thing even more ridiculous.

Yeah, it did comes across as pretty whiney, but all the same I found it quite interesting...

Whining about the quality of video games as being 80% crap seems pointless and inflammatory. They could say the same thing about movies.

That's why the whole argument fails. It is one thing to argue about "buy back" on overstocked items for credit on new stuff. That makes a solid argument. One worth looking at. But to openly mock the industry saying 80% of what gets made is shit and why they can't sell it is juvenile to say the least.

It definitely reaffirmed their incompetence.

I won't pretend to be an expert on developing a successful business model, but to my knowledge nobody has made a dime whining like a baby because they couldn't compete. The businesses that have been successful worked around the system and/or found another niche to make money in.