Online Retailer Ends Game Sales, Calls Industry “Dumb, Greedy”
Online retailer DVD Empire has announced that they're getting out of the video game retail business, citing an inability to make a profit selling games under the current business model. In their explanation to current customers, they outline seven reasons why current business practices make it, in their words, "impossible for us to make money selling video games."
The reasons? High wholesale prices on software—"they set the retail price at just $5 above the product cost (buy it for $54.99, sell it for $59.99)"—and hardware—"take a $400 console; we only make $5 on the sale--that is a .01% gross margin."
Worst of all? Lack of price protection and rampant price drops on bad or stagnant titles.
The game industry releases many bad games, and word of mouth spreads fast to the consumer. All of those bunk games sit on our shelves. If we do end up selling them, we lose more money, due to the lack of price protection. They won't let us return the bombs. Of course, if the video game industry produced quality games, we wouldn't have this issue.
The only good news here is that DVD Empire is clearing out its entire video game stock at 20% off. Enjoy, cheapasses.
DVD Empire [via Gamespot]