Technologizer

When it comes to trading in used games, there really is no stopping Gamestop.

Best Buy and Wal-Mart, who both experimented with used game kiosks last year, are pulling out, according to IndustryGamers. Both companies relied on a third-party, E-Play, to run the kiosks, and will remove the machines over the next few weeks. E-Play’s Web site has a sombre little message saying they’ve suspended operations, and thanking customers.

In addition to offering credit or debit card credit in exchange for used games, the kiosks rented DVDs (as long as there wasn’t a Redbox machine in the store as well), Blu-ray discs and video games.

A couple guesses why the pilot programs failed: Unlike Gamestop, where you can call to find out a game’s trade-in value, a kiosk is unpredictable, and the prices E-Play offered — $25 for new titles down to 50 cents for throwaways — isn’t better than anywhere else.  Marketing and awareness could’ve come into play as well. If you call Gamestop, you’ll likely hear, “Thank you for calling Gamestop, where we buy and sell used games” on the other end. Somehow, “Welcome to Wal-Mart, check out that kiosk over there” doesn’t have the same ring.

All’s not lost for trading games outside of GameStop. Toys R’ Us, which began buying used games in select markets last year, expanded the program nationwide in September. Amazon will buy your old games in exchange for online store credit, and Wal-Mart still sells used games online, but does not buy them. Still, none of these competitors offer the whole package of buying and selling used games. Local stores and smaller chains, such as Game Crazy, are still around (barely), and thrifty gamers will still rely on Craigslist, eBay and Goozex.

But for most of the United States, for quickly unloading a used game and getting another one in its place, GameStop’s got it locked down.

GameStop’s tentacles are wrapped pretty tightly around most of the games industry, the exception being downloadable content that’s sold after a game is released.

That’ll change early next year, when the retailer will begin selling digital game downloads through its stores. A report from Reuters doesn’t explain in detail how this will work, but my understanding is that you pay at the store and supply GameStop with your Xbox Live Gamertag or your Playstation Network user name, and the content will be ready for download when you get home.

Boxed retail games aren’t dead yet, so you’ll still have reason to visit GameStop in the first place. The retailer hopes that by visiting the store, you’ll learn about new content that might’ve flown under your radar — say, additional multiplayer maps for Modern Warfare 2 — and instead of reminding yourself to buy it once you’re home, you can just make the transaction right there.

The problem is that GameStop’s plan doesn’t add value for the buyer. It’s nice to be reminded that map packs are available, but that doesn’t make the store any less of a middleman. This is an issue the retailer will increasingly have to deal with as more people get their gaming content online instead of at the store.

For now, I’d suggest that GameStop get creative with how it sells downloadable content. Maybe it can work with publishers on selling all-you-can-eat passes, entitling you to all a game’s extra content in exchange for one up-front payment. Everyone wins: GameStop gets the extra revenue, the publishers feel safe knowing you won’t immediately trade the game back, and you get a discount. Or maybe the retailer can simply lure people into the store by with launch parties for the new content. That’s at least a service that isn’t being duplicated at home, and avoiding redundancy is GameStop’s best bet, now and in the long haul.

So I’ve been thinking about fulfilling my duties as a game journalist and buying Call of Duty: Modern Warfare 2, even though my plate is pretty full at the moment (I’m deep into Demon’s Souls, if you’re wondering).

One potential snag: Modern Warfare 2 is, at least according to GameStop, “the biggest entertainment launch of all time.” I wondered if all the people who pre-ordered the game or hit up a midnight launch last night hogged all the copies. Would my lack of early commitment be a problem? Not in my neck of the woods.

The three closest GameStops to my apartment in Venice, Calif., all said I could grab a copy for Playstation 3 or Xbox 360, no problem. One employee even answered the phone by saying, “Thank you for calling GameStop … where we have Modern Warfare 2 in stock.” Best Buy’s Web site also listed the game as available for in-store pickup at my three nearest locations.

So, why pre-order? Certainly, it’s useful for big hardware launches and limited edition bundles (such as Modern Warfare 2’s night vision-equipped Prestige Edition), but I don’t remember the last time I couldn’t find a game anywhere because I didn’t order in advance.

Increasingly, pre-ordering is about locking you into a purchase instead of a rental, and this is often accomplished with swag or in-game goodies. For instance, if you pre-order the upcoming Mass Effect 2, you get a special suit of armor to wear in the game. If you pre-order Left 4 Dead 2, you get to play the demo as an appetizer.

Modern Warfare 2 didn’t have any great pre-order bonuses. A reservation with GameStop, lets you get $40 back if you trade the game in by December 13, but that’s hardly enough time to play the single -player campaign and sink into the game’s multiplayer.

My point is, next time you buy something from GameStop, and the clerk offers you a pre-order on some title that’s two months away, see what incentives they’re putting on the table. If they don’t excite you, relax. You’ll still be able to get a copy on launch day.

When the PSP Go launches next month, the Netherlands’ largest video game retailer won’t be selling it, according to Eurogamer.

Nedgame says the biggest reason it won’t carry the PSP Go is the price of 249 euros ($250 in the United States), which isn’t justifiable when the existing PSP-3000 costs 169 euros ($130 here). The retailer also knocked the PSP Go’s smaller screen size, at 3.8 inches compared to 4.3 inches.

But there’s another, more obvious reason behind the decision. Because the PSP Go has no optical media slot and the games are download-only, Nedgame would essentially be digging its own grave by selling the handheld. Sure, the retailer could sell game vouchers, as GameStop does with the download-only Patapon 2, but no physical media means no used game sales. I’m not familiar with Nedgame, but at least in the United States, used games generate monster profits for Gamestop.

Meanwhile, Eurogamer’s Spanish-language Web site is reporting a rumor that several retailers in Spain won’t support the PSP Go for similar reasons.

GameStop is selling pre-orders for the PSP Go, so it seems the retailer is willing to support it. However, after the handheld launches on October 1, it should be interesting to see how well GameStop promotes the PSP Go, and how the retailer treats downloadable titles. We could see more incentives for buying games in the store, such as the early demos offered for Patapon 2. I’d like to see frequent buyer discounts and some way to let shoppers come in, try the title out and then buy it using an in-store kiosk.

Whatever happens, I don’t think banning the PSP Go from store shelves is a good idea. Customers who want it will ultimately find a way, and retailers will have burned bridges.

If you need to unload some old video games and don’t care to interact with GameStop employees, consider machines as an alternative.

Wal-Mart is testing standalone buy back kiosks at 77 stores in New York, Massachusetts, Connecticut and Rhode Island, Video Business reports. The kiosks will scan the bar codes of used games and separately swallow the disc and casing in exchange for money transferred to a credit card.

The kiosks will also rent video games and DVDs, but the DVD rental function will be switched off in stores that already have a Redbox kiosk. Games and DVDs will cost $1 per night, and Blu-ray rentals will costs $2 for the first night and $1 per night after that.

As with GameStop and, more recently Amazon, the buy back price is a point of discontent. Wal-Mart’s kiosks will spit out the usual range of offers, from $25 for high-demand games to 50 cents for undesirables. Generally, you can expect used games at those trade-in prices to sell back for double. I’m surprised none of the competition wants to tinker with that formula and see how it affects market share.

It’s not clear what will happen to the used games. Instead of operating the kiosks directly, Wal-Mart is leasing space in the vestibule area, just outside the stores themselves, to a company called E-Play. That company has a “couple different methods” for resale, marketing VP and business development executive Kristen Fox told Gamasutra, but declined to be more specific.

Meanwhile, a writer for Neocrisis has already spotted one of the kiosks (seen above). It lacks Wal-Mart branding, except for the slogan “Save Money. Live Better.” Notably, Neocrisis reported some serious bugs in these early boxes. Most of the games offered didn’t scan, and the only one that did — the fairly high profile Mirror’s Edge — wasn’t in the kiosk’s database. The writer walked away without trading anything.

Maybe humans have some merit after all.

It’s easy to imagine video games without discs or cartridges, but this downloadable future could spell disaster for GameStop. In a recent SEC filing, the world’s largest game retailer acknowledged that it sees the writing on the wall:

While it is currently only possible to download a limited amount of video game content to the next generation video game systems, at some point in the future, this technology may become more prevalent. If advances in technology continue to expand our customers’ ability to access video games, PC entertainment software and incremental content for their games through these and other sources, our customers may no longer choose to purchase video games or PC entertainment software in our stores.

This is sort of obvious, but as Gamasutra notes, in past filings GameStop has only referred to classic downloadable titles (such as Nintendo’s Virtual Console offerings) when discussing this subject matter. Never before has the company been so ominous about its ability to sell games of all kinds.

The gloom is appropriate as rumors abound regarding Sony’s next PSP handheld console. It would be the first time a major manufacturer dropped physical media entirely in favor of downloads and built-in memory. Handhelds are an ideal place to start with this business model, but come the next generation of home consoles, I wouldn’t be surprised if most games were offered for download, even if the disc-based model sticks around.

After writing about the PSP yesterday, it occurred to me that there’s still plenty of room for GameStop in a downloadable future, but not as it exists now. A better GameStop would mimic the resurgence of hands-on tech outlets, like the Apple Store, but with incentives for customers to purchase games at the store instead of at home. I’d like to see frequent buyer cards and an atmosphere that encourages try before you buy, to name a couple ideas. Download codes and kiosks may save GameStop from obsolescence, but it’ll take forward thinking, not fear, for the retailer to maintain its dominance.

The world’s largest video game retailer could be in hot water thanks to some investigative work by Kotaku’s Brian Crecente and Michael McWhertor.

Speaking to unnamed GameStop employees and retailers around the US, the popular game blog has exposed a practice in which employee-played games are getting mixed up with unplayed copies kept behind the counter for security purposes. The Federal Trade Commission told Kotaku that this practice could be illegal.

According to GameStop’s written policy, as confirmed by several employees, company staff are allowed to check out store merchandise for up to four days of personal use. When receiving new games, GameStop “guts” several copies, putting the box on display and leaving the disc behind the counter so it doesn’t get stolen. Kotaku reports that these new discs tend to get mixed up with the “check-out” copies that employees take home.

In all cases, customers are told that they are buying a new copy of the game, and they pay full price as a result.

Though some managers offer “Shop Worn” discounts for games that have been gutted or checked out, this is specifically against company policy, which says these discounts should not by applied to “new, used or checked out games.”

GameStop won’t comment on the matter, and the FTC won’t say whether it is getting involved.

Personally, I’ve never had a problem purchasing new games from GameStop (it’s their used game trade-in prices that set me off), but a glance through Kotaku’s comments section turns up several customers who swear they’ve bought new games that don’t look untouched.

The graceful solution for GameStop would be to start selling any unsealed games as used, even if they’re at a lesser markdown than typical used prices. After all, the customer can’t return a game as new once the plastic comes off, even if the disc never leaves the case. If GameStop can’t assure that an unsealed game is unused, the company should treat itself the same way.

Not a huge news day:

Snow Leopard: June eighth? Maybe!

Buggy Firefox gets fixed fast.

Robert Scoble leaves Fast Company.

GameStop mocks Amazon resale program.

Craigslist sued over prostitution ads.

Unauthorized iPhone software stores emerge.

Palm investor has high hopes.

TV converter box coupons return.

Washington types bash BlackBerry Storm.

MacBook Pro graphics card woes?

Chinese officials are chatting online.

32-gig SD cards arrive.

Apple is going increasingly green.

Windows 7: turn off everything!