fobwashed

Them being the ones that make it. I'm pretty sure the current quick look is exactly what they mean for it to be. If it doesn't fit what you want, that doesn't mean they're doing it wrong, just mean you're expecting it wrong.

@SeriouslyNow said:

@MrKlorox said:

This is why I use Steam sales for most of my purchases. I just find it immoral to play through a game and not have the devs get paid, regardless of the other circumstances.

This.

This whole blog offends the senses, especially from someone who intends to be a game developer. Pay your way or go away.

The initial purchase by the rental company goes to the publishers/developers. If they wanted to, they could prevent sales of their games to these guys. I'm willing to put money on it that Gamefly, Blockbuster and other big name rental companies buy their games directly from the publisher of the games since they're most likely buying in large quantities. As for intending to be a game developer, I just want to make a game and sell it. If people don't think the price I'm going to charge is worth their money, and they don't buy it, I don't think any less of them for it. If I get to sell it to some rental place (which I can't because it's not going to be on disk) personally I'd definitely do it for the money and to get it into more people's hands. Also, I buy plenty of games on console, PC and handhelds. Most recently Dead Island, Deux Ex, Zelda (3DS has no games. . .), Child of Eden, Shadows of the Damned and a bunch more I just can't think of atm. Just not the ones I don't feel I'd be getting my moneys worth. Which is again, my decision as a consumer to make. I'm voting with my dollars. Where's the hate from? You offend me sir. . . Where's the hate coming from? =(

Just out of curiosity, I went through Gamestops 2010 Annual Report and picked out some interesting numbers to share. This prolly means little to nothing to anyone, but just for kicks, here's some stuff I found interesting. I'm not super for or against the company, and I'm going to try to be as bias free as possible. If I have something snarky to add, I'll try to remember to italicize it. Onward and forward.

Fiscal Year Ending January 29, 2011

This means that these numbers represent 1/292010~1/29/2011 unless explicitly stated otherwise. As with almost all large corp financial statements, they also list previous year numbers to compare against so I may throw some of those out there too just for fun.

Some PR

Gamestop is now two years running in Newsweek's "Greenest Big Companies in America" list. Having recycled over 6.8 million pounds of electronic and cardboard waste and repairing more than 20 million games and one million systems. They also have since 2007 donated more than one million dollars to the Make-A-Wish foundation providing more than 850 shopping spree wishes come true.

Can't go wrong with charity, but I have a feeling they prolly got to write off at least a portion of it from their taxes =P

Physical Locations

They currently run 6,670 stores under the names GameStop, EB Games and Micromania broken down as follows.

US State Breakdown

(Goddamn Puerto Rico, Guam, and District of Columbia threw my table row count off! How many of you went straight to your state to check how many were there? 481 in Cali =O)

In addition to these stores, they have a 362,000 sqft distribution center and 518,000 sqft corporate office in Texas and a 260,000 sqft distribution center in Kentucky.

EDIT: As graciously pointed out by Jimbo, my math was severely wrong here. Made the mistake of just dividing the square footage by the number of feet in a mile instead of by the number of square feet in a square mile -_-;; Sorry folks. While 9,338,000 sqft of gamestop isn't anything to shake a stick at, turns out it's only around 0.34 square miles =P Thanks Jimbo for pointing it out. I feel so ashamed.

The average square footage of a store is approximately 1,400 square feet. . . That's 9,338,000 square feet of gamestops or 1,768 sq miles -_-;; To put that into some kind of perspective, Los Angeles is 502 square miles and all of Elder Scrolls Oblivion is a measly 16 square miles. They actually take up more space than is available in all of the state of Rhode Island which is 1,545 square miles. Anyway.

It's also mentioned that they opened 359 new stores while closing 139 during this fiscal year.

Staff

On average, each store employs one manager, one assistant manager and between two and ten sales associates.

"To encourage them to sell the full range of our products and to maximize our profitability, we provide our employees with targeted incentive programs to drive overall sales and sales of higher margin products. In certain locations, we also provide certain employees with the opportunity to take home and try new video games, which enables them to better discuss those games with our customers. In addition, employees are casually dressed to encourage customer access and increase the "gameoriented" focus of the stores."

This spawned all manner of internet rage, and justifiably so. These games should not be sold as new =\.

Employee 17,000 full-time salaried and hourly employees and between 31,000 and 51,000 part-time employees worldwide. Specifically states that the U.S. employees are not represented by any sort of labor union.

Merch

In-Store inventory generally consists of a constantly changing selection of over 4,500 SKUs of which generally over 1,000 are new video game software.

Carry a used game selection of approximately 3,000 SKUs with an average price of $16 compared to an average price of $42 for new video game titles.

over 300 SKUs are accessories and other products which have higher margins than new video games.

They purchase from approximately 75 manufacturers and publishers. The top ten of which account for 82% of their new product purchases. The individual vendor accounts that exceed 10% of their annual purchasing are listed as follows.

A little surprising that Microsoft is up top. I'm guessing it's because of their hardware more than anything else. That's my guess, not in the statement -_-;; Also, I wonder what these number were back in Nintendo's heyday of Wii and DS domination. Too lazy to check right now.

EDIT. nvm, curiosity got the better of me. I don't know if 2008 was Nintendo's best year, but in that year, they accounted for a full on 25% Compared to Microsoft and Sony at 13% and EA at 11%. Activision this year didn't crack 10%.

GAME INFORMER

Fifth largest consumer publication in the U.S. with 5.7 million paid subscriptions.

Total Sales

39% of sales and 57% of operating earnings were generated during the fourth quarter. (This must be the numbers publishers look at when they decide that they all want to release their games during this time period -_-;;)

Following numbers is in millions of dollars.

$9,473.7 Sales

$6,936.1 Cost of Sales

$2,537.6 Gross Profit.

(So like, say I buy a game for $20 from EA, and sell it for $30. Sales would be $30, cost of sales would be $20 and Gross profit would be $10)

$408 Consolidated net income. (Income after taking out all expenses such as income taxes, wages, salaries, rent, depreciation, etc. By the way, they paid $214.6 million in income taxes in 2010 =P)

So, in the end, only 4.3% of their sales trickled down into net income attributable to GameStop. Seems small but that's still $408,000,000. Not bad. Now lets get down to some nitty gritty sales.

Games Sales

Like before, these numbers are in millions of dollars

Now looking at this, it seems like they make a killing selling new games. . . but wait till you see their Gross Profit for these same categories.

There it is. I think these are the numbers that really matter. Gross profit if you recall, is the amount of profit they make on the sale. The amount left over for them to keep after they take out the cost of the goods sold (the price they paid the vendor which in the case of new items, are companies and in the case of used video games are us.)

Because everyone loves pie graphs. Even shitty Excel ones -_-;;

While Used Video Game Products only accounted for 26.1% in total sales, they were responsible for 46.2% of GameStop's Gross Profit for the year. It's also prolly interesting to take note how utterly abysmal the profit margin for hardware is (7.3%). I'm in wholesale for a living, and generally you give retailers a profit margin of 20% to keep them interested in actually carrying and selling your product (which is where the New Video Game Sales are). Anything less, and it's a real hard sell. Unless of course you're Microsoft, Nintendo or Sony and you're selling to a chain that specializes in game sales. It'd be sort of ridiculous to run a game shop that doesn't carry the hardware itself. Also, This is all new hardware. I'm sure the profit margin is higher for accessories, and lower for consoles in most cases. That last bit is an assumption on my part.

Other Numbers

Gamestop spent an awesome 83.7 millions dollars in advertising. That's up 26 mill from the previous year's $57.7 mil.

They reported $69.5 million in inventory shrinkage in 2010. Up from $66.5 million in 2009. What's shrinkage? Missing inventory. . . you know. Stolen goods -_-;;

They put down their GoodWill amount to be $1,996.3 million in 2010. That is, the amount that they feel GameStop's name is worth. The brand value that the company is worth over its assets. Haha. Sorry. Haha.

Financial Mumbo Jumbo

They have never declared or paid any dividends on its common stocks.

Their Common Stock high for all of 2009 was $32.82 compared to $25.75 in 2010. The lows were $19.42 in 2009 and $17.12 in 2010.

In Closing

I'm damn sleepy and it's 2:30 AM =_=;; There's a bunch more stuff that breaks down the numbers into specific countries and a whole lot of predictions, corporate strategies, what they expect will happen, blah blah blah. I think I've covered the real interesting stuff and if you're curious about the rest, all of this is publicly available on their website. As is the Financial statements of any publicly traded company you're interested in. If this sort of thing is of enough interest to enough people, maybe I'll do a few more for other companies I'm interested in such as Nintendo, Sony, EA, Activision, etc. Hope at least some of this was of use to some of you =)

@Management: Off topic but what are game prices like in Norway? It's not crazy expensive like it is in Australia is it?

@Brackynews: The $30/$30 split was just some random numbers -_-;; I remember the days when small mom and pop video rental places would rent PC games. Really weird thinking about it now but back then I didn't think twice about it.

@Claude: Speaking of paying for it over and over and over again. . . I've bought 3 copies of Peggle on different platforms, as well as plants vs zombies on 2. I think the iOS version was the best of the bunch in both cases even though it was lacking some modes on PvZ.

@polyorpheus: I'm not arguing with you in that selling your games after you buy them is wrong, as I do it myself but I think the main difference between selling digital media (even if stored on a physical disk) versus most other physical objects is that the quality of the game doesn't degrade with use. Regardless of how many times a game has been used, it'll always play exactly the same. Barring damage to the disk in which case, I don't think someone would buy it off you anyway.

As for used games hurting game devs, the main complaints I've heard in various places is that players who buy used games still take up dev resources in other ways such as customer support, game servers. . . random crap like that. In a peer to peer environment, selling a used game seems fair since the original buyer who paid full price is getting some cash back selling it to someone else. I just think it gets a little fuzzy when a third party comes into the mix as a middle man and makes money from the exchange. Gamestop is providing a service in that they're taking games off people's hands as soon as they want to sell them and bearing the risk of unsold inventory or eventually having to cut the price down to below what they bought it for, but at the same time, they're straight up making a profit while the original people who produced the game get nothing. It's economically and business wise, fair but something just feels wrong about it. Though in most cases, I think the money customers get for used games goes to store credit which some of would prolly be used to purchase new games. . . I dunno. It's all crazy. Both sides can poke holes all day and I don't think there's a "right" answer. I personally lean towards the idea that the devs should always get some kind of a cut on those types of exchanges, but I've got no real reason to back it other than it feels right so I'm cool with people going the other way.

I've been wondering about some of that Gamestop stuff as well. Maybe just for kicks I'll read through their last years annual financial statement and post some highlights.

Looks cool. The only feedback I have is in regards to the way I imagine the thing will move. With the lower leg being that long and the the upper sections that short, it doesn't seem like the thing would be able to sit or lie down, and if in a sitting or lying position, with those short arms, I don't really see how it'd be able to get back onto its feet. I guess I sort of just think of a dude on stilts. They always seem to have a funny looking way of walking as well and this thing looks like it's built to run, except it's not. Dunno -_-;;

Are you going to animate it at some point?

@shinigami420 said:

Renting is for assholes i like supporting the people who make the game not gamefly

unless its activision i always buy their stuff used becuse i dont want to give such a terrible company any of my money

So you won't support the people who make the games at Activision?

if you are in such a bad economic situation that you cant afford a 60 dollar game maby you should find another hobby or get a second job

I get the feeling you either didn't read or don't comprehend what I'm trying to get across. If it's the comprehend part, then it's as much a failing on my part as it is on yours.

@Shadow said:

Videos with any actual value or useful information about video games will be free. Videos of the staff being dumb (what we really want) will be for subscribers only. That's a big reason why there's this sweet medal under my name.

Convenient that the last post is exactly what I was going to write =) Thanks shadow!

@Enigma777: I can respect that. It's less a measurement of the length of time and more of the amount of the full product I'm enjoying.

@Crash_Happy: Sorry, I may have come off a bit strong and overly defensive but I consider calling someone a cheapskate (or a miser which is pretty much synonymous and maybe worse) a personal jab and it was late -_-;;

frugal [ˈfruːgl]

adj1. practising economy; living without waste; thrifty. I dunno. It could fit.

I don't understand what you mean by "claiming that you want to support developers and trying to crowbar in an Opportunity Cost argument". I do want to support devs, and do when I feel it's warranted. The opportunity cost was just a way to explain why I don't play multiplayer. And leading into not wanting to pay for things I'm not going to use.

This is why Asia is great. You don't tip ANYONE in Asia. Unless you're a stupid foreigner. I go there, I don't tip my waiter. I don't tip my taxi driver. I don't tip my hair stylist (yes, in Korea I go to a stylist because, I'm in mother fuckin Korea). Everything is labeled exactly what it costs. Also, EVERYTHING IS LABELED EXACTLY WHAT IT COSTS. The taxes are not added at the sales end. If a bag of chips says it's 500, it's 500, not 548.23.

Also, great blog. Tipping sucks! But I'll still do it when I'm state side. Though in my defense, I weild my tipping like a goddamn broad sword. If I get shitty service, you can bet your ass they'll know I wasn't happy by the incredibly low amount of free money I'm. . . still. . . damn. . I'm still ashamed.

I liked the cop theme the best. Just because I love blaring horns. They're all good tho, including the new one.