5 ms·

Some thoughts: 1- Physical games don't go away with GameStop, and their decline coincides with a larger contraction around physical retail stores generally as

by moate 3y ago

Some thoughts: 1- Physical games don't go away with GameStop, and their decline coincides with a larger contraction around physical retail stores generally as people shift to buying things online (even, ironically, physical copies of games they could have downloaded). And, you can always load up a hard drive with the digital copies and them load them back into the machine when you want to play (depending on your console). 2- I feel like the decline of GS has more to do with your final point, which is that trading in games got to a point where it wasn't fun/useful for the consumer (hey, that AAA title you bought 6 months ago for 70 bucks? 15 dollar trade in, buy used for 40!) combined with the overall decline in physical retail. (edited for typo)

spywaregorilla 3y ago
15 bucks sounds great to me. It's kind of preposterous that you would expect a game to be a useful store of value. Gaming is the cheapest $/entertainment-hour you can get...
- vel0city 3y ago
  To me personally, its not that the used copy was only then worth $15, it is the massive spread between what they'll buy it from you versus what they'll then turn around and try and sell it for. Buy the $60 new game off me for $5 for all I care, but when I turn around and see them immediately stick it on the shelf for $40+ I'll feel like I got a bad deal.
  - moate 3y ago
    Exactly. And obviously the biz model isn't working anymore or they wouldn't be in this situation.
  - dragontamer 3y ago
    Do you feel like a bad deal when you buy a movie-ticket for a group at say $15 x 6 (~$90 + food), when about 3 months later you can buy the same movie for just $10 and watch it in the comfort of your own home? Games have values: the value goes up at launch so that you can play it before spoilers leak to the internet. Then, after it is a bit stale, it declines in value a few months later. After a few years, it might go up in value if people have fond memories of the game and it becomes retro, but otherwise it probably becomes completely worthless.
    - moate 3y ago
      I can't speak for the OP, but for me, the problem is the obvious arbitrage on the used games by GS. I think I can say the market agrees with us, the company has been slowly dying for years and would likely be in a position like Bed Bath & Beyond and the many other large physical retailers who didn't find a way to pivot were it not for a weird group of anti-investors pwning short positions and then the ensuing media pile on. (Your metaphor is also flawed as the theater and home theater experiences are very different, where as "playing a game for the first time, in my own home now" vs "playing a game for the first time, in my own home, 3 months from now" are pretty marginal differences, especially for single player games. It's why I rarely buy games at launch, but I also don't care about video game "spoilers")
      - dragontamer 3y ago
        The opposite. Bid-ask spreads are inversely proportional to volume. The less volume there is in a marketplace, the larger the bid-ask spreads get. If you trade in the Options market, you'll see 30% to 50% differences in bid-ask spreads on the thinly traded stocks. Similarly, video game used-market has been dying (or at least, the marketplace owned by Gamestop), so we're seeing that lesser volume with an increase in bid-ask spread. Play an obscure trading card game like Magi Nations, you'll see the same thing. There's just not a lot of players, not a lot of traders, so the spreads are huge. Play a popular game with a popular marketplace like Magic the Gathering, and the bid/ask spreads are much closer. ------------- The less popular a marketplace is, the longer inventory will sit in warehouses (leading to higher risks and possibly larger losses for the market-makers). Thereby, forcing Gamestop to increase the bid-ask spread. When Gamestop was popular 10 to 20 years ago, there was enough volume to keep the used-buy vs used-sell prices closer together.
        vel0city 3y ago
        > If you trade in the Options market, you'll see 30% to 50% differences in bid-ask spreads on the thinly traded stocks. If the spread was only 30-50% I wouldn't mind. Gamestop's spread between bid-ask for used games (even popular new ones) is like 400-500%.

by moate 3y ago

spywaregorilla 3y ago

15 bucks sounds great to me. It's kind of preposterous that you would expect a game to be a useful store of value. Gaming is the cheapest $/entertainment-hour you can get...

vel0city 3y ago
To me personally, its not that the used copy was only then worth $15, it is the massive spread between what they'll buy it from you versus what they'll then turn around and try and sell it for. Buy the $60 new game off me for $5 for all I care, but when I turn around and see them immediately stick it on the shelf for $40+ I'll feel like I got a bad deal.
- moate 3y ago
  Exactly. And obviously the biz model isn't working anymore or they wouldn't be in this situation.
- dragontamer 3y ago
  Do you feel like a bad deal when you buy a movie-ticket for a group at say $15 x 6 (~$90 + food), when about 3 months later you can buy the same movie for just $10 and watch it in the comfort of your own home? Games have values: the value goes up at launch so that you can play it before spoilers leak to the internet. Then, after it is a bit stale, it declines in value a few months later. After a few years, it might go up in value if people have fond memories of the game and it becomes retro, but otherwise it probably becomes completely worthless.
  - moate 3y ago
    I can't speak for the OP, but for me, the problem is the obvious arbitrage on the used games by GS. I think I can say the market agrees with us, the company has been slowly dying for years and would likely be in a position like Bed Bath & Beyond and the many other large physical retailers who didn't find a way to pivot were it not for a weird group of anti-investors pwning short positions and then the ensuing media pile on. (Your metaphor is also flawed as the theater and home theater experiences are very different, where as "playing a game for the first time, in my own home now" vs "playing a game for the first time, in my own home, 3 months from now" are pretty marginal differences, especially for single player games. It's why I rarely buy games at launch, but I also don't care about video game "spoilers")
    - dragontamer 3y ago
      The opposite. Bid-ask spreads are inversely proportional to volume. The less volume there is in a marketplace, the larger the bid-ask spreads get. If you trade in the Options market, you'll see 30% to 50% differences in bid-ask spreads on the thinly traded stocks. Similarly, video game used-market has been dying (or at least, the marketplace owned by Gamestop), so we're seeing that lesser volume with an increase in bid-ask spread. Play an obscure trading card game like Magi Nations, you'll see the same thing. There's just not a lot of players, not a lot of traders, so the spreads are huge. Play a popular game with a popular marketplace like Magic the Gathering, and the bid/ask spreads are much closer. ------------- The less popular a marketplace is, the longer inventory will sit in warehouses (leading to higher risks and possibly larger losses for the market-makers). Thereby, forcing Gamestop to increase the bid-ask spread. When Gamestop was popular 10 to 20 years ago, there was enough volume to keep the used-buy vs used-sell prices closer together.
      - vel0city 3y ago
        > If you trade in the Options market, you'll see 30% to 50% differences in bid-ask spreads on the thinly traded stocks. If the spread was only 30-50% I wouldn't mind. Gamestop's spread between bid-ask for used games (even popular new ones) is like 400-500%.