Wednesday, December 18, 2013

Trade-In Game Myths

Trade In Detectives, a company founded by Ben Grant and Matt Precious, who founded the game selling companies GAME and Gamstation, want to bring the truth about trade-ins to the public, to help separate fact from fiction. And drum up business for their new endeavor, which compares trade-in game prices from all known sources available (Amazon, GameStop, EntertainMart, etc.) for you to figure out where you’ll get the best price.

And this is how they’re plugging it: by giving away some of secrets. Bold move guys
Question The First: Do publishers hate trade-ins? Well according to Grant and Precious, they actually fund trades. To clarify, this was in Australia. Yeah…that would have been good to know at the beginning of the article for those who were unaware of the stores. Most of their developments took place in Australia, which has much stricter laws and regulations regarding gaming versus the rest of the world. Even Iran has more relaxed rules, with Battlefield 3 being one of the few banned games. Granted, they also have a vast amount of censorship of products, but it’s better than the ban list Australia has. But because publishers have better control over the trade-in deals in Australia, it benefits them. Where as in the U.S. trade-ins are determined by the retailer. No middle man. The business is the only one that stands a chance to gain or lose money. And while publishers are trying to break into it and offer some incentives for retailers to kick back funds, it hasn’t happened. So here, devs DO NOT control trade-ins. They do in Australia. So yes. They still dislike the trading game.

Question The Second: Do publishers hate trade-in game sales? Ties in with the first question. Grant and Precious seem to believe that smaller publishers dislike it because it breaks their sales model, but most are okay with it. Bottom line: No dev really likes it. The only person that stands to win on trade-in/used sales is the retailer. They maintain all profits and nothing goes back to the developer. Some argue that because of second-hand sales, newer products are less likely to be noticed. Others say that their games are out on shelves for years as “used” and the original creators never receive their paycheck for their hard work because of it. Whatever the case, no one likes it except the retailers and customers.

Question The Third: Can you make money selling games on eBay? Open to debate, but Grant and Precious believe that sites like eBay are the single greatest threat to the gaming industry. Mostly because it’s a lot of money not going back to gaming: upwards of 19 million units, games and systems, sold. Instead it’s being focused on eBay retailers, who will sometimes offer double, if not triple, the value of a trade-in product, to turn around and sell it at a much higher profit margin. (Though to be fair, if you’re not in Australia as a developer, you’re not making any money from brick and mortar store trades anyway).

Question The Fourth: Why did Microsoft try to “fix it” with the Xbox One? When the Xbox One was announced, they wanted all gaming licenses tied to a database and retailers had to pay for the permission to resell them, thus ensuring that they would get money from each used product. But they didn’t take into the thousands of factors (like a game being given as a gift, or to trade with a friend) that could easily disrupt the system. Their method of delivery didn’t help either. It was already toting itself as DRM friendly just when EA was relaxing their rules. Digital trades are going to be a tricky realm to cross. We’re not sure how the developers are going to work it out in the future, but hopefully with more class then what Microsoft tried to pull off.

And…wait that’s it? That’s all you’ve got? Wow. How about revealing some REAL secrets about the game-trade business?

Like how Amazon’s game trades are really no better than GameStop, GAME, or even BestBuy. The only way you’ll get a better value for your product is to sell it yourself. If you get $1.00 a GameStop, most likely it’ll be $1.05 at Amazon. Woo. *waves a finger in the air* So try selling it for yourself. Deal with the fees of putting up a listing, taxes, and shipping. You’ll probably get an extra dollar out of the store trade.

Or supply and demand: I’ve said it before on this blog, and I’ll say it again. When a store has 100 copies of Madden 2013, they are not going to buy your game back at its original value. You might get 10% of the original sales. It’s a popular item with a lot of stock, your item is worthless. However, if it’s a rare game in high demand, like the first Xenogears, then yes, you’ll get a higher value for your game, at least 75% of the original sales price. Or a low stock item with low appeal? 10-25% of original value. It’s a numbers game of what’s hot, what’s not, what’s in stock, and what is difficult to come by.  Do your research, ask for pricing every few months, and sell when you feel it’s worth it.

Here’s a good one: until EA removed its DRM rules, they use to have the lowest trade-in value on products. Why? Because it’s a bitch and a half to convince EA that you own the game, so let my code work to register the product and/or access the online portion of the program. Not many people were aware of it, but the amount of complaints we received about EA’s games being content blocked made for a massive amount of trouble with GameStop stores. So prices on trade-ins were dropped to accommodate. I.E. we buy them back for less and sell them for higher, making up for the headaches with profits. Simple as that. And while trade-ins on EA games were still happening every day, they were not as frequent. Besides, EA always overstocks product, and people were more apt to buying the newer version anyway.

The trade-in secrets are anything but. Nice try guys…maybe if you’re Australian it makes a difference. For the rest of the world, not so much.


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