New Australian retail options for video games are of course always appreciated and welcome, because more competition = more competitive pricing. However, in the interest of honesty, I will say that I would never pay $66 for a 2 year old game. Ever. Even if new, even if shipped direct to my door. I bought Borderlands for 360 for around $45 2 weeks after it came out, a new and sealed copy from an Ebay retailer. Looking at Ebay now, I can buy a new copy of a PS3 GOTY Borderlands edition for $25. I'm surprised to hear that Borderlands is selling in B&M stores for $75-88, I don't look too often but I typically see it selling for around $40 or less (although I typically only look at the sale section, although the bigger game stores seem to always have some kind of sale going on so I tend to view sale price as regular price for the most part - but hey, I'm a deal hunter!).
That being said, the vast majority of video game purchasers in Australia don't buy their games on Ebay (at least in my experience) and so a retailer offering significant price differences is likely going to do well if they can raise enough brand awareness. If you plan on being an online only store, I would be a tad more cautious, as a lot of gamers I know are aware they're paying significantly more for games in a B&M store than if they were to purchase online, and they are fine with it because they get to leave the store with game in hand. Those that don't mind waiting and are savvy enough to shop online more often than not purchase on Ebay (again, judging from my own experiences). There is obviously a middle-ground consumer that is happy to buy from a larger online retailer, judging by the apparent success of other online Australian gamer retailers. Ultimately I certainly think there's a place for a wholesaler offering games significantly cheaper than its competitors, and a 'free delivery' tag is always a huge draw, if that's what you plan on advertising (I don't know why more online retailers don't do this). As someone who has already done well selling other items online, you probably don't need me to say this, but I will mention three things I think are important to consider:
1. Consumer awareness - this is pretty obvious, but it's amazing how many online stores (or just stores in general) don't bother to put the word out as loudly as they possibly can. Making customers aware of your existence is especially important when you're dealing with gamers, both because many gamers have a couple 'old faithful' stores they primarily go to and rarely bother checking anywhere else, and because gamers talk more than your average consumer - if there's a good deal going on or a store renowned for great prices and great customer service, gamers talk. A lot. And loudly. As you can see by the existence of CAG
The more people aware of your existence, the more people you have to tell their friends.
2. Pricing - Brick and mortar stores often get away with ridiculous pricing compared to online retailers because gamers especially like to be able to buy something and play it right away. Most gamers I know are more than willing to pay a $30 or more premium to go home with the game and play it that night. So an online store going a little lower than a price match on a B&M store often isn't going to cut it. You have Ebay and other online retailers to contend with, both of which offer significantly reduced prices compared to the likes of EB Games, Game, etc. I'm not sure if you're planning on selling online only, so I can't definitively state anything, but I do caution against setting yourself up as an online retailer and setting B&M store prices as the ones you have to worry about price-matching (or undercutting or what have you).
3. Sales
Something I've seen happen often with online video game stores (at least Australian ones) is that the online retailer will have pretty good video game prices compared to full price games sold in EB Games, etc, but rarely have good sales (no, slashing $5 off the price of that 4 year old Lego game no one has heard of doesn't count!). As much as I don't like stores like EB, there is often a pretty good deal on at least a couple of good games going on. That's enough to keep me checking in those stores even though I almost never buy things from there. I've found that when I discover what seems like a pretty cool online game store my interest eventually wanes when they never really have an interesting deal/sale going on, because I don't have cause to keep coming back. If online stores were constantly combating the sales held by B&M stores things would be a heck of a lot more interesting. Sales are also great for generating word of mouth awareness.
I'm no business major, nor am I a frequenter of B&M stores or even online Australian game stores. I'm just a gamer who buys lots of video games as cheaply as she can, which means keeping my eyes and ears open. You don't always get the best deals on Ebay - a friend of mine recently picked up Skyrim for $62 from JB Hifi, madness - but when I know I'm pretty safe from being utterly ripped off, that's where I'll tend to go. If you want business from a customer like me, a great sale every so often that'll keep me remembering you, coming back, and telling my friends is the way to do it. Simply slashing $15-20 off the price of a ridiculously overpriced game sold at a place like EB isn't enough for me. Or, if you want to start selling new releases for $60-70 that'll really get my attention. That's Ebay replacement material right thurr
Anyway, hope I could help a little! All of this is obviously based solely on my own experiences and observations, not on any kind of sound business knowledge.
