50% off all games at DVD Empire

S

smashthesymbols

CAGiversary!
Feedback
1 (100%)
DVD Empire is closing their games division. They explain all the problems on the link below, basically they just can't make any money off it.

Currently all games and what little hardware they sell are 20% 50% off. This includes PS3 (they only have 1 game though), 360 and Wii, as well as the older systems.

I have no idea how these prices compare to other places, and the selection seems small, but I thought I'd point it out. I'll leave it up to others to post any good deals that may be had. They do accept GCO so this may be stackable with that deal.

Explanation
Games List
 
Upvote 0 Downvote
Yeah... maybe once it's 30/50 % off, it'll go real quick. Til then, it ain't much of a sale, especially when some of their retail costs don't reflect changes in some titles.
 
they charge $47.99 for Test Drive Unlimited on the 360 even when it's MSRP has always been $39.99

no wonder why they failed
 
I don't understand why it's "greedy" that the MSRP is set at only $5 above the product cost. Isn't that the opposite of being greedy?
 
[quote name='dopa345']I don't understand why it's "greedy" that the MSRP is set at only $5 above the product cost. Isn't that the opposite of being greedy?[/QUOTE]
No, cost in this context means cost to the retailer not "cost to manufacture". The publisher sets the cost at just below the selling price of the game so they reap the maximum profit at the expense of the retailer.
 
[quote name='GrayWolf323']they charge $47.99 for Test Drive Unlimited on the 360 even when it's MSRP has always been $39.99

no wonder why they failed[/QUOTE]

I saw a link on NeoGAF discussing this.

They don't show prices at a glance, probably because they're all outrageous.

Burnout 3 is still listed at $32.99, down from $39.99.
 
I love how their 20% off prices are often more than the MSRP. Kameo is a Platinum Hit and as such has an MSRP of $29.99 and I've even seen it at $19.99 in some stores. They list it as MSRP of $49.99 and then take 20% off that to make it $39.99. With those practices its not surprising they don't sell many games. Nobody's gonna cry a tear for their closed games section.
 
Seriously though, the guy that owns this site isn't very smart. I was a manager at a large retailer and profits margins on games and especially systems are slim (I remember when the PS2 first launched we were buying the systems from Sony for $296.xx, so we were only making $3.xx per system). The thing is large retailers can afford to sell items with slim markups as long as it brings in customers, customers that might buy something else like clothes, which have the highest markups (often over 1000%). Large retailers even sell household products like toilet paper and cleaning supplies at a loss just to lure customers in and hope they'll buy clothes or other high markup items. Large reatilers also have the option to send back merchandise to the manufacturer for a refund or to clearance the item. My store didn't really return a lot of games, we clearanced them, but we would return tons of DVDs and books on a weekly basis. So I can't understand how a businessman would chose to sell videogames knowning the profit margins are so slim (even slimmer since he orders small quantities and has to go through a middleman distributor) and the fact that he doesn't carry any high mark up items to compensate, knowning that he will not be able to return to the manufacturer any unsold copies because he buys from distributors and knowning that he won't be able to compete with price drops and clearance prices of large retail chains, why in the world would that guy decide to carry videogames?

I think this guy is a joke and so is his explanation. He obviously knows nothing about the game industry otherwise he'd know that todays dev costs are extremely high and developers and publishers don't make that much per copy either and they deserve it because they actually make the game. I don't see why some schmo who owns a store should be able to mark up games $20 so it would be more worth it to him to carry games, If he doesn't carry games like I said in my previous post no-one is going to shed a tear, we'll just continue on buying our games elsewhere like we've been doing.
 
these guys are idiots, but what they were saying is true. The successful game stores get most of their money through trade-ins to increase their profit margin. And yes, anyone who works at best buy will tell you the upsale on anything related to video games (aside from guides) is incredibly small.
 
Wow. That suprises me.

So all these great deals on sites like Amazon.com are being sold at a loss?

For some reason I don't quite trust these DVD Empire guys.
 
[quote name='PyroGamer']Wow. That suprises me.

So all these great deals on sites like Amazon.com are being sold at a loss?

For some reason I don't quite trust these DVD Empire guys.[/QUOTE]

No they're not sold at a loss because they get a better deal with ordering large volumes of products (same as Target, Best Buy, etc.).

I don't really have a lot of sympathy for them on this deal. I mean its not like any of this stuff was a hidden secret to them until they started buying inventory. They're merely trying to villify the major retailers because they're more successful at the video game market. What's ironic though is that online companies like DVD empire are undercutting the major retailers in DVDs...

Their list of complaints about the video game industry really just comes across as petty and childish. "Boo hoo, video games suck cause we couldn't make it profitable" Companies like Play-asia (and lik-sang until they pissed off sony) manage to do pretty well with the online video game selling market despite not being much bigger than DVD empire.
 
The retail industry has become fiercely competitive. The big boys have been crushing the mom and pop stores for years now. To single out the videogame industry is ridiculous. The problem isn't the videogame industry, the problem is the retail industry and it's no secret how difficult it is to compete as an independent retailer.
 
[quote name='felixlighter']The retail industry has become fiercely competitive. The big boys have been crushing the mom and pop stores for years now. To single out the videogame industry is ridiculous. The problem isn't the videogame industry, the problem is the retail industry and it's no secret how difficult it is to compete as an independent retailer.[/QUOTE]


Yep, boils down to Walmart Vs. The World. People will always say they prefer to shop at a locally owned store, but when it comes down to it, price is the only factor.
 
lol, I like the title for point number 5: "Distribution is Dumb." It's sort of charming how they clearly don't give a fuck how unprofessional they sound.

This could have been nice if $20 off $50 GCO was still active... oh well.
 
Hmmm, is DOAX 2 worth 48$? It's a game I have some interest in picking up. But it's not enough interest to pay full price for it.
 
As a Retailer I can tell you they are part right- If you not walmart, Tru, etc you will get your product at a high price and profit margin is next to nothing.

But as big DVD empire is they shouldnt have a problem now- If thats the case they either have a great dvd Dist. and over charge on their dvds or they should close down for good.

Selling these kind of items- require volumes sold and since they been doing this for awhile they should know this already.
 
[quote name='Chibi_Kaji']Hmmm, is DOAX 2 worth 48$? It's a game I have some interest in picking up. But it's not enough interest to pay full price for it.[/QUOTE]

It'll be down to $30 by June... I'd wait, especially considering nearly all the reviews insist it is worse than the first game.
 
Has anyone noticed they don't really discount games. They still have Dead or Alive Ultimate for $50 with the 20% bringing it to $40, I can go to EB or Wal Mart nearby and get it for $15 new. They also have Test Drive Unlimited listed for $60. No wonder no one ever bought many games from them.

Also the pricing structure holds true for department stores too. When I worked at Target most games were sold to us at around $48 for a $50 game and most consoles we made maybe a dollar (PS2 at launch sold to us at 298.99, the gameboys were all also sold to us for $1 less). We also didn't have a game return option (except PC games) and had to eat any losses from markdowns and Targets pretty aggressive with their clearance as well causing more losses. Granted theres a higher profit structure based around the whole store to cover those losses.
 
Take a $400 console; we only make $5 on the sale--that is a .01% gross margin (note the decimal point).
Click to expand...

Just nitpicking here, but that's not .01%. It's 1.25%. Still not very much, but it's far from .01%
 
As a small/medium sized game retailer, they should know that they need to find more creative ways to get new games on the shelf. Simply going the route all the big boys do won't cut it...anyone who knows the video game business knows that. Sorry, but if you can't think outside the box (or in this case, is it a DVD case?) to get product to sell at prices that your customers find reasonable, you need a new CEO. It stinks when small biz gets knocked around, but the business world is not about conscience, especially when your chosen sector involves large corporate entities.
 
honestly, even after the discount, they are still to expensive on cetain games. For example all of the collector's editions of Call of Duty 2 BR1, NFSMW Black Edition, and Mark Ecko: CUP are still mad expesive.
 
There's no big surprises here, but it's surprising to see such a bitterly honest diatribe on a well-known etailer's website. I'm not saying that's a bad thing; I don't think you see it often enough, really.
 
Joystiq followed up with an interesting mini-interview with another "small retailer."

In an effort to gain a clearer understanding of the situation, however, we contacted Tronix, a small retailer based in New York, and asked them to comment on each of the points made by DVD Empire. For the most part, Tronix reinforces the complaints, but also makes it clear that the industry isn't entirely the success-stomping villain it's been painted out to be.

"Some of what DVD Empire states is true," says J. Cataudella. He shares his personal experience with regards to the list of complaints:

1. Video game industry does not care

"The Video game industry (publishers) only sell to mass merchandisers and distributors (i.e., middlemen), because minimum orders are usually way too large for a small operation to handle. So in essence, yes, if you are a small retailer, publishers are not even approachable. Oh, and I remember when I first started up and worked for a small computer gaming retail outlet, Nintendo and EA would actually sell directly to our store with very small minimum requirements. Of course, that was back in the 80's."

2. Can't make money

"You need to sell high volume to make up for the poor profit margin. If you are buying from a distributor, you are paying more than a mass merchandiser who is purchasing direct from the company. Not to mention, part of your earnings go to the credit card companies for accepting their cards."

3. No price protection, game prices drop quickly

"Yes, there is no price protection for independent retailers, and prices drop quickly in this hit or miss business. It does not affect us (Tronix) as our suppliers are the one with the inventory to worry about – we just bring in what is needed daily for each order. I can see how frustrating it can be for small shops that have to keep stock around."

4. No product returns

"That's correct. You need to research the upcoming games as thoroughly as possible before finalizing your numbers; you are definitely stuck with them. Look for early reviews, gossip, publisher/game designer history, and always stay way low on movie-based games. Most games do suck, and can have even a "one day lifespan", where as titles like Animal Crossing on the DS can sell practically daily for an entire year."

5. Distribution is dumb

"It's not that they're dumb. Distribution have to deal with headaches similar to the small retailer, but on a much larger scale. We happen to be in the same vicinity as our suppliers, so we receive our new releases on the same day as the big mass merchandisers, or at most, a day later. Game Companies however, offer specialty shops like EB and GameStop promotional/bonus items to encourage pre-orders, which the independent retailer is never part of as we are forced to deal with distribution."

6. Games are better suited for brick and mortar retailers

"It all depends on your business model. If you have a niche market, you can survive among the big guys on the web. Our customer base is 98% international – we have very few US customers, otherwise we would have not been around as long as we have."

Is it tough surviving in the gaming industry as a small retailer? Absolutely, and with corporate giants like Gamestop absorbing smaller outfits, it looks set to get harder, even in the online world. But is it impossibe? Lashing out at the industry might not have been the most mature approach for DVD Empire to adopt, but at the very least, we've been given further insight into what goes on behind those virtual shopping carts and garish sale banners.
Click to expand...
 
Wow. I admire their honesty and straight answers. I'll have to give them some more of my DVD business in the future.
 
I used to work for a local toy store. He has had his business there for over 20 years. Once i started working there i realized how difficult it is to sell video games. Every point they mentioned is 100% correct when it comes to small business. Its really a shame how the idustry changed because he didnt have those same problems back when it was just atari and nintendo. The only way we made money recently is by selling used games. I'm pretty sure a lot of gamestop's profits are from the used games they sell.
 
They are an online retailer, it seems that with less overhead they would be able to sell games cheaper than some of the B&M stores. Oh well looking at the prices even with 20% off they are why high. No wonder they can't sell any games. Even Wal-mart has better pricing and they are usually higher on most games.
 
[quote name='Indiana'] Even Wal-mart has better pricing and they are usually higher on most games.[/QUOTE]
yeah, isnt it sad that one of the biggest retail chains sells games usually at higher prices for longer than other stores. Hell Target clearances a ton of games after a little while to just get rid of them. Walmart on the other hand has 3-4 year old games that are still at $50 or just slightly less. A lot of Walmart's full retail price games can be gotten at Target, CC, TRU, and Kmart for up to 90% less than at Walmart. I know they occasionally have good deals on games, but Walmart is so YMMV. Its not like Walmart doesnt make money on tons of other things.
 
[quote name='GuilewasNK']That is completely different from them having SEALED product that they can't return to the manufacturer and you know it.[/QUOTE]
Exactly. Thanks for pointing out the mistake that post #16 neglected. I thought I was the only one who noticed! ;)

Yes, Alan, they would have given you a refund. That is the point. There is no hypocrisy.

Merchandise must be factory sealed to receive a refund.
Click to expand...

Anyway, if what DVD Empire is saying is accurate, then no wonder they're getting out of the business. They probably should have never got into it in the first place. They didn't need to make this post though, they don't have the responsibility to explain their actions to gamers (especially the whiney ones). If they want to stop selling games, just stop selling them. If anyone asks, just say it was not profitable enough for you to keep doing it. But it was still pretty interesting to me.
 
[quote name='Indiana']Even Wal-mart has better pricing[/quote]

Did you even read their page? Their whole POINT is that Wal-mart has better pricing.
 
I liked what they posted on their website. A lot of it is very true. The manufacturer does not care about the little guys in this business. One of their valid points is this. I am sure a place like Best Buy gets it product before street date. They need time to process and get it ready for their shelves for street date. The manufacturers don't care that they didn't get product to dvd empire's distributor in time, so they can et their product before street date. New Dvd's come out every tuesday. I get my product the friday before so I can process them in time for tuesday morning. Price protection is also another they that is nice to have. I find it hard to believe they were not price protected though. I think the whole point is consumers should be sad that a small retailer is leaving the business. I think the gaming market is dominated by a handful of players. I think the manufacturers like it that way. The reason why they like is, the less players there are in the industry the higher the game prices for consumers. The buyers in this forum are shrewd, and that is a good thing. I think games will also sell for what the market will bear. Right now the market is basaically bearing full retail for almost every new release. Yes there are deals here and there, but for the most part gamers are getting nailed full retail most of the time. One of the reasons for this is the lack of small players.
The proof here is Wal-mart. They are one of the biggest small business killers out there. Their store is just one big discounted item after another, but not their video games. Did anyone ever stop and think about why this is? Some of what Dvd Empire is complaining about is part of the reason. This industry does need some small players to keep the big guys on it toes. If you get enough sharp and shrewd little guys ,the game consumer will definetely be better off.
 
[quote name='sparklecopy']How much is the margin on a 50 dollar game? How much do the retailers pay for it?[/quote]

my guess is dvd empire pays about $42 bucks for a $50 game and Best Buy probably pays about $40 bucks for the same game.
 
As a CAG, I don't see how ANYONE would go into the video game business without price protection. There is NO POSSIBLE WAY you could profit off of a video game department without getting SOME compensation for MSRP drops.
 
damn their prices suck. It's like when kmart went out of business... 50% off all games!

Regrettably, 99% of their stock is priced triple the acceptable CAG/MSRP price..
 
Jesus holy goddamn Christ! Their selection is crap. At first I hated the site because of the prices and horrible design, but the games they have... there's not a SINGLE title I want to purchase, aside from 2 that I can get cheaper elsewhere, even with the 50% off. (For emphasis, on Playstation.com, my wanted list has 75 titles on it.)

I'd rather spend money at Buy-Rite. I'm that dead serious.
 
[quote name='sparklecopy']How much is the margin on a 50 dollar game? How much do the retailers pay for it?[/quote]

Pay ~$45.00.
 
[quote name='M3wThr33']Jesus holy goddamn Christ! Their selection is crap. At first I hated the site because of the prices and horrible design, but the games they have... there's not a SINGLE title I want to purchase, aside from 2 that I can get cheaper elsewhere, even with the 50% off. (For emphasis, on Playstation.com, my wanted list has 75 titles on it.)

I'd rather spend money at Buy-Rite. I'm that dead serious.[/quote]

So... you are mad that a site that is having a 50% off sale has nothing you want and would rather let the folks at buy-rite take your money... um... ok. :)
 
You must log in or register to reply here.
bread's done
Back
Top