My Last Day Working for the Enemy (Gamestop)

Waterborn

Shared on Tue, 04/21/2009 - 23:37

So I worked my last shift at Gamestop today. As many of you know, I took on a part-time job at the video game retailer back in November to earn extra money for the Holidays. My plan was to quit right after the New Year. However, my better half was recently laid off, so I kept working to earn a little extra cash. An additional bonus to the position was that I was able to score some cool swag in the form of standees and posters to give away to you, my fellow 2old2play members. But with the good (money & SWAG) frequently comes the bad - in this case the soul-crushing realization that I was working for a company that was, in essence, destroying my love for video games. I came to realize the negative effect that my position was having on me almost as an afterthought. At first, I did not notice the little ways that working for GS was slowly crushing my enjoyment of the industry, eating away at my love of playing and talking about video games, even seeing video game imagery.

I have come to believe that Gamestop represents all that is currently wrong with the video game industry as a whole. With a focus on sheer numbers, on the turnover of used games and systems for new, the very nature of the business slowly sucks the joy of gaming out of both the customer and the employee in such small incriments that it is hard to notice. When you first walk into the store, you are met with several stimuli simultaneously. First there is the visual impact of all the games lined up along the walls, the posters and ads, all holding the promise of something exciting, some new experience awaiting discovery with the next purchase. The video screen above the register line further supports the impression that cool things are happening, new game releases are being unveiled, people are having fun at launch events - Power to the Players! You can join the club and get discounts using your EB Edge card.

As I spent more time within this environment, I realized that every aspect of the store is geared toward one goal, to get as much money from the consumer as possible whle giving back as little as possible. The ways that this is done range from obvious (pre-orders anyone?) to more subtle. By pushing the sale of used games over new ones, the consumer gets less for their investment while the company maximizes profits by reselling an item that was purchased (or more often traded) for a fraction of the resale value. Everyone always bemones how much of a rip-off this structure is for the purchaser, yet we all still participate in the process. The prevailent philosophy espoused by GS is to push the latest and greatest in a non-stop barrage of promotion. As employees, we were frequently required to answer the phone with phrases like "Thank you for calling Gamestop, where you can pre-order a Nintendo DSI" and "We now have Wii Fit in stock."

Now at this point in my original blog, I started to go into subjects like employee compensation, benefits, training, knowledge and public perception of the "typical" Gamestop employee. But after some thought, I wish to simply state that, despite the regularly perceived shortcomings of the stereotypical GS employee, the people that I worked with are knowledgeable and for the most part truly enjoy video games. However, the environment that we worked in did not allow us to cultivate that love of the industry. If anything, the GS culture stifled our appreciation of video games. Though it may be hard to identify, there is something about that environment which drained me of my appreciation for the fact that I was working among games and getting paid to do so.

As someone who is seriously looking into the concept of opening an independant video game store, I fully understand the need for any retail endeavor to make money or perish. However, as I think about my experiences working at GS, my thoughts center on how one can build a successful business around the sale of video games  while respecting and embracing the reason why we all play video games in the first place, while paying homage to the love of the hobby. I think back to my early days of gaming and what really got me excited about a new game. Whether it was a cartridge for my Atari 2600 or a new coin-op in the local arcade, there were certain intangible traits that were conveyed in the box art, game marquees and sounds of those games that made me want to delve further into the world promised there. It seems to me that that sense of awe and wonder is missing in the modern gaming experience, at least on the retail level. Certainly, we have bigger and better games available for purchase these days, sharper graphics, more memory, ever exapanding gaming environements - but among all this technology and nearly limitless choice with regard to available titles, we also have alot of shovelware and dreck. Perhaps I am simply showing my age and casting fond memories on the experiences of my youth, but I have to believe that there is a better way to run a gaming business and still be profitable.

I have seen some good ideas, such as offering the opportunity for customers to rent screen time and gather to play new and classic games among friends, that create a more welcoming environment.  I have my own thoughts on what I think would make my ideal gaming store, but what I want to know is what you, the members of 2old2play think. What would you like to see in your local gaming retailer? What is missing from the Gamestop Model? Give me your insight on what you think would make the perfect video game store. Perhaps together we can save the industry from imploding and repeating the video game crash of the late 80's. If nothing else, perhaps we can come up with ideas for a place where we all would want to shop, hand out and rekindle our love of video games. The question is, if I build it, will people come?

Comments

codemonkey's picture
Submitted by codemonkey on Tue, 04/21/2009 - 23:56
No, they won't come. I'm currently working to close my own store. I urge you to really look into what you can get for product and how costly it's going to be. I could write an essay (and really plan to soon) about the entire industry from the indy retail perspective because it's a lot harder than people imagine. For instance, how much do you wish to invest in the company to stock it? Because, stock management is one of the biggest nightmares ever. For GS, it's not so bad, shit moves fast when it's new and people know where to go to get it. An indy? You'll want to have a very very fine pulse on what is going to sell and spent time "sold out" in order to test to see if the demand has waned. Many folks realize GTA 4 is awesome and by 40 copies and sell them all instantly, so they buy 40 more and sell them instantly, then they buy another 20 and sell 2... what do you do with the rest? Mark it down and wash all the profits you may have made. How can you wash the profits? Because an indy is going to buy GTA 4 for about $52.00 and sell it for $59.99. Sounds like a great deal? Oh oh, factor in shipping costs too and you're making around $4.00 per game. Forget even trying to carry Wii or DS. To buy hardware from a retail WILL COST MORE than buying it at wal-mart for retail price. Yes, you'll pay roughly $2.00 above MSRP (before factoring shipping costs) to buy most consoles. Wiimote? Profit margin is $2. Wii Nuncuck? $1. Factor in shipping and you're at about .50 cents profit margin. How many do you have to sell to make money. Oh wait, it gets better. One guy returns it because it's broke. You've got to figure out how to get it back to the manufacturer or eat the cost. You have about 30-days from when the pallet lands on the dock to return it, if you hold the product for 15-days and the gamer returns it at day 15, you're not returning it to the distribution house, you have to figure out how to get it back to someone that cares...good luck as an indy. If you eat the cost of a single product you'll blow the profits of about 5 game sales that day. DS games may sell well but their profit margins are worse, you may see $3.00 for a single game sell (again, factor shipping). Before you even draw a single salary you're managing the lowest margin inventory in the market. You'll have to push more games than you may have in the store (depending on how much venture capital you got) before you can pay the electric bill. There is a reason GS pushes used games first. They've got an 60-80% markup (I already did all that research) and by selling one of those games they've saved the cost of five brand new ones. For consoles this is about 100x better than they'd get from a new sale. GS probably runs their own distributors and gets their stuff pretty damn early and houses it themselves. If you have to go through one of the four or so major distributors in the country (as most of the indy's do) you'll not be able to handle pre-orders. Most distributors ship the games ON street date to you (a few will let you pre-book if you buy enough), so you can't hype a new game release because you're not going to have it on day-1 while your competitor (GS) will. BUT, if you still want to go through with it I can send you my distributors I used to use. You'll have to pay up front for the first few orders and most only COD (and they usually tell you how much the COD is about 2-hours before UPS drops off...so have a wal-mart close by to get the COD) Honestly, pretend you never worked there and find something fun to do for a job. The reason GS replaced the "geeks" with sales people and push pre-orders and used games is for mere survival. It's a very rough industry.
codemonkey's picture
Submitted by codemonkey on Wed, 04/22/2009 - 00:03
Also, we invested a mere 30k into our initial inventory. If you want to be serious you're probably going to want to triple that money and perhaps have another 15k for advertising to get you through the first four years, most companies won't be profitable for the first four. Oh, and get on your wife's insurance plan or feel some REAL pain in the wallet. :)
ATC_1982's picture
Submitted by ATC_1982 on Wed, 04/22/2009 - 05:23
Good luck an damn code ...
Waterborn's picture
Submitted by Waterborn on Wed, 04/22/2009 - 06:23
Hehe Code, thanks for the input. I fully understand your comments and have taken much of this into consideration. That is why I am working to partner with an existing game store (GU from your neck of the woods) to set up a satellite location. I have no plans or desire to try to start something from scratch. I completely agree that such an endeavor would be fiscal suicide. But by setting up a satellite, I get to use my partners' buying power (and you would not believe the stock that they have), their experience and their current customer base. My current location (I have been selling refurbed older systems and game for about two months) has been doing well and has very low overhead. By starting small and slowly expanding, I have begun to build up my own clientele and have displayed enough traction to draw the interest of said partners. Also, I currently have a "real" full-time job that I plan to keep for the forseable future. One that has all the happy benefits like insurance and retirement accounts. I understand why GS is set up the way it is and it is obvious that the model works on the money-making end of things as they are pretty much the only game (no pun intended) in town with regard to a retailer that focuses primarily on video game sales. All the other major players have either folded, been sucked up into the GS behemouth or only do games as a part of their business like BB & Target. However, there has to be an alternative to the model, one that might not grow so big, but that could still be sustainable on a regional level. By diversifying (LANs, screen rentals, parties and other side-products), GU has been able to set up a successful business. Granted, much of their profit comes from bulk purchase and online sales, but such diversification is how they weather economies such as the one that we are currently experiencing. So my question stands for the rest of you - What would you like to see in a local video game store? What would make you drive a few extra miles, past two or three GS locations, to visit a locally-owned game store?
Azuredreams's picture
Submitted by Azuredreams on Wed, 04/22/2009 - 06:57
Honestly, nothing would make me go into a brick and mortar video store again, unless it's to pick up my online order that they "Shipped" to the store for free. I buy all of my games and consoles etc online and never have a single problem with it. Attempting to open a video game store is the dream that has crushed the souls of many a well funded and intelligent gamer.Having some floor space in someone else's already established store is great, however it's far from the building blocks required to make you a success in the video game retail industry.Sadly you're not Kevin Costner and if you build it, they wont come.
codemonkey's picture
Submitted by codemonkey on Wed, 04/22/2009 - 09:00
@Azuredreams, you're in the minority when it comes to online shopping. But, for those of you that do online shop, you're probably already going someplace you know. My online store had to fight hard and spent lots of money to market itself online. You can't just advertise in google search for keywords "xbox 360" because it was so damn competitive. Worse so for Wii. If you bid such that your ad shows up #1 for when a user searches for a Wii controller, it will cost you roughly .30 to .40 cents a click for a product with a .50 cent margin. That means, you must really get 100% of your click-thru traffic to convert to not LOSE money on the sale. That hardly happens. Then, there is pricegrabber.com which got us tons of exposure and sales but for every sale there were five to ten "curious" clickers that really weren't ready to buy but that still costs us .25 cents a click. On average, pricegrabber lost us more than it made us even though we had an awesome 5-star rating (thanks to a ton of people at 2old2play and such). The margins are so low that you can't really survive with typical online sales techniques for low margin products. While niche products work awesome for organic google searches, you can't possibly rank for keywords like "buy Assassin's Creed" in a google search because all the journalist sites (IGN, GameSpot, 1UP, etc.) pop up first for their publications leaving you on page 11 to 50 and no search traffic. Forcing you to buy high cost click-thru for low margin. During the holidays we had a bump in traffic. The rare Wii also gave us a bump in traffic for games and accessories as we carried wii remotes while GS and those stores were sold out because we don't have the foot traffic to sell them out. While they're sold out and we're in stock it seems good because we get to capture that online world for a moment but... the reason they're sold out was because they made all the money already (all there was to be had). So, selling our box of wii controllers net us about $40 in profit (before taxes) and one wii controller ended up being returned because someone didn't use their correct shipping address. That cost us $4.50 in shipping that we got to eat then another shipping cost to re-package and send out to the right address (or tell the customer to fuck off which isn't customer service friendly). Customer service costs a ton of money :)
VenomRudman's picture
Submitted by VenomRudman on Wed, 04/22/2009 - 10:40
"As I spent more time within this environment, I realized that every aspect of the store is geared toward one goal, to get as much money from the consumer as possible whle giving back as little as possible." And you're suprised by this? I can understand having that realization if you were 16 working your first job, but come'on!
Waterborn's picture
Submitted by Waterborn on Wed, 04/22/2009 - 15:48
Venom, to clarify my statement that you quoted above, I did not indicate that I was suprised by the fact that the GS environment is set up to extract money from customers, that is the nature of most retail establishments via a wide variety of marketing strategies. The point I was trying to make was within the second half of that sentence "while giving back as little as possible." It seems that, as consumers, we (and I include myself in this category) have become accustomed to the expectation that goood customer service is the exception rather than the rule these days. I currently work for an outdoor retailer that does CS correctly, that frequently receives praises from both customers and industry representatives for treating our customers with respect. This positive retail evironment has also contributed to the fact my current employer has been named to Forbes list of top 100 Companies to Work for consecutively for the past five years. My belief is that this stems from the creation of an atmosphere of mutual respect and enthusiasm for the products that we sell. So there are examples where, even with substantial marketing and sales strategies in place to increase sales margin, certain retail companies create an atmosphere that not only respects the products, but also the customers and the experience as a whole. Such an environement is what I would like to create if I do decide to proceed with opening a gaming related store. To that end, I would like to hear what the customer would like to see with regard to a retail video game outlet. Sure, lower prices are always a plus, but that alone does not fulfill most consumer needs. If it did, then why do we constantly hear complaints directed at GC, BB and other large chains? So, putting the harsh realities of running a retail business aside for one moment, what would you change about the current status of the retail video game market? What would you like to see? Now is you chance to actually provide some constructive input. Someone is asking you directly, how can I make your experience more positive?
Lbsutke's picture
Submitted by Lbsutke on Wed, 04/22/2009 - 16:01
I would skip GS if: I got to buy used games at a reasonable price--45 bucks for cod W@W...are you god damn serious? 35 bucks max. How about a rental service from the shop? You would have to compete with GF, but if I had a "rental" service with you that included a discount on purchasing a new game (20%) I would consider going with a store rental over GF. Chicks with great boobs working there. Try to deny that sex sells...works for Hooters. You might offer gaming set up services. As a perk or a service to sell. I know it sounds dumb, but people freak out when they have to plug in wire A into port B..Plus a lot of people are still freaked out about using the media center application's, even though it is pretty easy to set up, you could offer that as a Platinum or Diamond console set up service.. That's all I got right now.

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