Electronic Arts, also known as EA, has announced that in the future some of their titles may require an activation to play online. This activation would come free with the purchase of a new copy of the game. Those who buy the game second-hand, used, or rent the game would be required to pay $10 to play the online components of the game.
This tactic is to try to entice consumers to purchase the games new and save themselves the hassle of having to activate online. The people affected by this most is those who shop at stores who deal in used/pre-owned games, like Gamestop. In the end it is the consumer who will feel this the most though, not Gamestop.
Currently Gamestop uses the following strategy for used/pre-owned game sales. A game comes out new at $60 US. Many customers will buy the game at the new price, play it, finish it and trade it in. The trade-in credit on a newer hot game, within the first month, ranges anywhere from $20 to $35 depending on the deals at the time and if the customer has the Gamestop Edge card. That trade credit will most likely be used to preorder or buy another new game. These customers rarely buy used/pre-owned games.
That game that traded in for $20-$35 will then be priced as used/pre-owned for somewhere between $45 to $55, usually about 10% less than the new price. A customer who buys used games may also have the Gamestop Edge Card, saving another 10%. That means that a sale to a customer with an Edge Card may be right around $40 for a game that was just traded in for possibly $35. Gamestop just made $5 to pay their employees to process the transaction, process the trade, and then make the sale, as well as the facility costs.
EA’s new policy for online fees for pre-owned game customers will most likely reduce the amount of credit Gamestop grants for those titles as well as reduce the price that Gamestop sells the used/pre-owned game sells for. In the end customers will still be paying about 10%-20% less for a used/pre-owned game compared to the new price, including the fee for the online multiplayer components.
Gamestop will still make their money on used/pre-owned game sales. EA will have their online activation fee to recoup some of the money lost from used/pre-owned sales. The customer is the one that will be hurt in this process. Those people that trade games in towards new games will not have as much credit to spend on the newer games, which will slightly affect the sales of new games.
The tactic EA has employed here will only be more hassle for the consumer and not so much Gamestop. If EA is trying to break down Gamestop’s business model for used/pre-owned sales it will have an affect on the sales of new games to some degree. To those who think Gamestop is a fad and will fade away because of game publishers making similar moves; Gamestop/EB Games was around before used/pre-owned game sales and will adapt to sell what is needed to make a profit.
