Why does everyone seem to think Blockbuster will be discontinuing Gamerush?

[Rictor]

The Blockbuster nearest me and most of the other major Blobkbusters in town are now half video games / half dvds. They seem to be dedicated more shelf space to video games all the time...and I always see more people buying and renting games than getting movies. At least locally, they seem to be making a killing with Game Rush. The used game prices aren't bad for the most part except on recent games, but I see people buying stacks of these.

Are people just paranoid that everyone trading in TRU $10 games for $20 credit is hurting Gamerush or are there some actual indications that the chain isn't doing well? I mean, the Gamerush closest to me gets several hundred new games traded in each week...and less than 1% of those are people turning a profit on games they bought elsewhere.

[Scorch]

http://www.variety.com/article/VR1117932641?categoryid=18&cs=1&s=h&p=0

Company also will garner $25 million by selling direct-to-video studio DEJ Prods. and will unload several game-specialty stores.

I'm guessing that's why. They will probably close down some Rhino stores instead of GameRush to start with.. who knows what'll happen

[botticus]

It also depends on what percentage of their game trading comes from CAGs. Cause we kill them financially (i.e. they'll pay us $27 for a game that they end up selling for $18 for one reason or another) and half the games we trade flood them with copies that we can't imagine them getting rid of. If we're actually in the minority (I've never seen anyone else trade in a game at my Blockbuster, and rarely at GameRush, though they seem to sell a decent amount), then frankly they might be doing well.

[Rictor]

Gamerush doesn't actually pay money for games though...they give store credit...which probably costs them about 50% of the cash value. If you use your credit to buy other used games (like most people do) that takes it down to about 25% of cash value. It's almost impossible to lose money in retail when you're trading...we do it a lot in the comic book business.

If I pay $10 for a comic book, then the retail price will be $20. If you bring in a $20 comic to trade me, I'll give you $10 in store credit. You use your $10 in credit to buy a $10 comic that cost me $5. I sell your comic for $20. My profit is $15, which is higher than if you'd just bought the $10 comic outright. This assumes I actually sell what you traded me, or course.

I know the markup in video games probably isn't that high, but I'm sure the volume makes up for it. I don't know about nationally, but the two closest Game Rush stores I go to get hundreds of new games traded in every week and dedicate half their floor space to displaying their thouands of used games. I pretty much buy 95% of my games at Game Rush, especially the vintage stuff, which they sell dirt cheap (PSX, N64, SNES, NES, Gameboy, etc.).