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Editor argues GameStop's used games practices hurt industry

Given the staggering quality and quantities of video games released throughout the second half of 2007, it should surprise few that games retailer GameStop reported one of its most successful financial results in its history.

Sales results for the nine-week holiday period ending January 5, 2008 were $2.3 billion, a 34.7 percent increase from the prior year holiday period of $1.7 billion.

“Driven by robust domestic and international sales, GameStop achieved the most successful holiday season results ever,” said R. Richard Fontaine, GameStop chairman and CEO. “Video game software sales grew by 45%, while the next generation installed base is now triple last year's base and a very positive leading indicator for future sales growth.”

The top five video games sold by GameStop throughout the holiday period were Guitar Hero III, Call of Duty 4, Assassin’s Creed, Rock Band and Super Mario Galaxy.

“Video gaming is redefining itself and attracting more players than ever as demonstrated by the growing number of Wii parties and Guitar Hero fests held not only at home, but also on college campuses, cruise ships and any place people are having fun,” added Fontaine.

According to Next-Gen editor Colin Campbell, used games account for up to one-third of GameStop’s sales and almost half of profits. Unlike new game sales from big box retailers, Campbell argues that used game dealing done by stores such as GameStop are harmful to the video game industry, costing it over $1 billion annually.

“All that money goes to GameStop, which doesn’t make games. GameStop opens stores in malls, sticks up shelving, hires inexpensive, unskilled local youth and sells product,” Campbell wrote. “Worse, the used games business restrains the market by keeping new game prices high and by depriving the publishers of investment income. In the long-term, it’s not such a great deal for consumers.”





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