Best Buy GCU is being Discontinued?

[DemonGamer24]

Deadpool shows up in cart at $12 for me...

 

[Deleted member 182844]

Best Buy giveth, and Best Buy taketh away.

 

[udis]

After a game has been out for a while, it often drops to $49.99 or $39.99 or even $24.99. Does Best Buy have to pay more for a game when it's first released and then pay much less for the same game later? Because that's the only way they could be making small profits at $60 and then later able to make any profit for the same game at $24.99.

I would think it's just like anything else sales #s start dipping and the publishers are going to offer discounts to their distribution partners which gets passed along as a lower price to us. This sucks I've had it since PS4 released my sub is running out sometime this oct or November. I've been elite since then that's over now that the discount is going away!

Sent from my Nexus 6 using Tapatalk

 

[SmileyMcSmiles]

So I had 514 Reward points, enough for a $10 off cert.  I tried to cash it out and it started giving me errors.  I clicked on the "Try again" link, and it cashed it out as only $5. 

...awesome. 

 

[thesuzukimethod]

odd circumstances.  the 20% discount tipped me to buy physical when i might have otherwise just bought digital.  so all things equal, i'll be buying fewer physical games from bbuy now.  they must have run the numbers on this, 

although now that they do the $10 bonus on some digital games, i almost prefer that (especially now that my ps4 drive is getting finicky).

 

[thesuzukimethod]

someone probably posted this but i'm not digging through 50 pages to find out (sorry):

article raises a really good point i've wondered about myself.  

http://www.newsweek.com/best-buy-gcu-program-ending-amazon-game-deals-struggling-935477

given rise to speculation that certain game publishers don’t look too kindly on retailers undercutting suggested retail pricing on hot products. After all, if a game like Detroit can be purchased on Amazon for $47, why would anyone purchase a digital version on the PlayStation Network for $59?

It’s unclear if the end of Gamers Club Unlocked has anything to do with this silent retailer feud, but any pressure from prominent distributors certainly wouldn’t bolster the program’s internal viability.

 

[Kaiser499]

someone probably posted this but i'm not digging through 50 pages to find out (sorry):

article raises a really good point i've wondered about myself.

http://www.newsweek.com/best-buy-gcu-program-ending-amazon-game-deals-struggling-935477

given rise to speculation that certain game publishers don’t look too kindly on retailers undercutting suggested retail pricing on hot products. After all, if a game like Detroit can be purchased on Amazon for $47, why would anyone purchase a digital version on the PlayStation Network for $59?

It’s unclear if the end of Gamers Club Unlocked has anything to do with this silent retailer feud, but any pressure from prominent distributors certainly wouldn’t bolster the program’s internal viability.

It would explain why Sony's games have been unavailable on Amazon lately.

 

[argyle]

Sucks, but no huge surprise. I mentioned in another thread here a couple months back or so that my BB's game dept. looks more like a toy story these days (far more than even Gamestop does). The shelf space dedicated to actual games is laughable.  

Heck, my local Target is going through a major store redesign right now and they've shrunk their game section by at least half, maybe a little more. All of this can be chalked up to the rise of digital, which really sucks IMO. 

 

[PenguinMaster]

im good til 9/19

I mean other than Switch games like Smash I don't see the point of GCU.

as soon as you buy a game day 1 it's usually on sale 2 weeks later for $40.

Most Nintendo first party games rarely drop in price.

i knew the Best Buy website redesign was holding a dark secret

Which would make it $32 with GCU. GCU works on sale prices as well unlike Amazon Prime's 20% discount.

I rarely buy games at launch but get plenty of use out of GCU.

 

[ck0]

someone probably posted this but i'm not digging through 50 pages to find out (sorry):

article raises a really good point i've wondered about myself.

What exactly is special about this newsweek article that keeps getting posted? Besides a blatant attempt to give them clicks?

There are no revelatory bits of information to be gleaned from there. It is just speculation. Stop giving them clicks.

 

[smallsharkbigbite]

What exactly is special about this newsweek article that keeps getting posted? Besides a blatant attempt to give them clicks?

There are no revelatory bits of information to be gleaned from there. It is just speculation. Stop giving them clicks.

To be fair, other than GCU ending, all these forum pages are speculation. It's likely the margins for Best Buy weren't huge, but until someone posts a contract that Best Buy had for buying games it's speculation that they lost money with GCU. I mean I'm glad some unnamed person had access to distributor pricing for some unnamed company and they claim that makes them an expert. But Best Buy likely has better rates and a few percentage points difference can make a world of difference between a profit and loss.

 

[lionheart059]

Oh, since people mentioned it in THIS thread, it must be true!

Consoles don't make much money at all, and often are loss leaders. Way back when I worked at EB in college, it was told to us that if we sold a SNES without an attached game and the customer used American Express it was actually a loss. Games are where the margin lies, it has always been like that. If the console margin is razor thin, and the games margin are razor thin, then why would ANY retail business deal with gaming at all? Do the logic here. They make a ton on games. They make money on GCU games, maybe not as much as they would like, but they do (except for maybe big sales, like BF which is why they nixed that two years back). No program would operate at a loss as long as this one if it didn't. And they definitely would not have let it stack with other discounts (minus price match) from the beginning if it was a loss.

As far as how easy it is, the answer is in your post. They had to outsource it to specialists because it isn't easy to do in house. BB simply isn't set up for that sort of thing, it would be cheaper to just ride it out and as we agree, most people are done by early 2020. Then you can just set an end date and deal with the people that renewed for a decade on a case by case basis.

Do you have data showing it's not true? Oh, when you worked at EB, a company that no longer operates in the US because they weren't able to keep up with another specialty retailer, it must be true! (EB "merged with", was bought out by, GameStop over a decade ago - except their international stores, which were considered somewhat separate and are now completely separate from the original company)

Do the logic here. GCU was clearly never designed to make money through the sale of a discounted item - BB knew that buying 2 games would already "lose" them a dollar amount greater than annual admission. The point was to drive people into purchasing more related products like accessories, and driving use of reward certificates.

Also - I never said it was outsourced to specialists. It was outsourced to the lowest bidder, and could just as easily have been done in-house - but the cost of the contract was less than the cost of paid hours for our own staff. It's basic clerical work, not rocket science - we gave them an Excel sheet, they plugged in a few pieces of account information, and put the pages in a pile so the next person could look at a cell, cut a check, and move on. It's exceptionally easy, and they only headache it would cause Best Buy would be choosing which contact labor company to send it to.

http://latimesblogs.latimes.com/entertainmentnewsbuzz/2010/02/anatomy-of-a-60-dollar-video-game.html the study for this article (8 years old) had retailer margin at $15 on a $60 game - meaning GCU would give a profit of 2 and change, which isn't exactly going to pay overhead costs associated with a b&m

https://www.google.com/amp/s/gamerant.com/video-game-prices-breakdown-514/amp/ here's another article, referencing the same rough figures. You can find more, I'm sure, and they're all fairly consistent the the amount going to the retailer is roughly $15, not the vast pile of cash you seem to think it is.

 

[lionheart059]

FYI - if your GCU expires Before your preorder’s release date - the GCU discount goes away. My GCU expired last year and I had some amibos preordered and when they shipped it was at full retail price. It was a big pain in the ass...

I wonder if that's still the case when paying with PayPal, since the first payment is debited and applied when you preorder instead of when the item ships

 

[jsb2642]

What exactly is special about this newsweek article that keeps getting posted? Besides a blatant attempt to give them clicks?

There are no revelatory bits of information to be gleaned from there. It is just speculation. Stop giving them clicks.

Yet there's how many posts speculating about whether GCU cost Best Buy money on every sale? I'm more inclined to believe publishers pressured Best Buy to drop the program after all these years than Best Buy suddenly realizing how much money they were losing. It took a few years but other retailers have been basically price matching GCU, or at least coming close to doing so in the last year. Maybe the larger retailers pressured the publishers since their profit margins were shrinking or, more likely, the publishers refused to devalue their product by competively pricing their digital products to compete with the same retail product, effectively dropping the MSRP of a new game.

 

[gepet0]

I haven't been this sad since we lost the guy who use to hook us up with Amazon digital games, I think his name was Tony.   Great loss but hopefully they can think of something else. 

 

[CheepyDee]

I don’t think they’d let it run past 2018, forget 2020,2021,2022,and 2023, most people who abused GCU are already members till 2030
They won’t honor past this year, but question is, will the guys who have paid $15 for 2 years be honored...most likely not, BBY is taking a tip,from GS

I mean, I paid for the service and I have it till Nov 2020. Unless they refund us, can just...do that? You know, take money for something then not deliver that thing but keep the money.

 

[nordic1229]

I mean, I paid for the service and I have it till Nov 2020. Unless they refund us, can just...do that? You know, take money for something then not deliver that thing but keep the money.

Their terms of service says GCU can be discontinued at any time for any reason. But they would face some awful backlash since it's a pay service and not free.

 

[smallsharkbigbite]

Do the logic here. GCU was clearly never designed to make money through the sale of a discounted item - BB knew that buying 2 games would already "lose" them a dollar amount greater than annual admission. The point was to drive people into purchasing more related products like accessories, and driving use of reward certificates.

http://latimesblogs.latimes.com/entertainmentnewsbuzz/2010/02/anatomy-of-a-60-dollar-video-game.html the study for this article (8 years old) had retailer margin at $15 on a $60 game - meaning GCU would give a profit of 2 and change, which isn't exactly going to pay overhead costs associated with a b&m

Gamestop is a public company which has financials available. They primarily sell video game hardware and software. Their Gross margin in 2017 was 33%. For reference, in 2016 it was 35%. In their initial section to shareholders they mention increases in video game hardware and software sales and don't mention accessory sales. Depends on what you believe, but it's my guess that video game software margins are higher than video game hardware margins, thus for the 33% to hold true for Gamestop, software margins would have to be higher than 33%.

The problem with the articles you post is they never really get to how they estimated the video game cost. Reality is big companies like Best Buy get favorable terms and other potential rebate programs that aren't disclosed. And they will never be disclosed because usually it's illegal to release those terms because the seller doesn't want everyone showing up to their door saying so and so gets it for this so give it to me for this. It's kind of like the BOM that get released on Apple products. Those get generally accepted as costs for those products, but according to Apple's CEO they are wildly inaccurate. But then again, he's not legally allowed to correct those reports because his pricing contracts are proprietary.

 

[jimbo8574]

Many others do rewards points etc. CC that doesn't restrict you to one store...

Hell GS does rewards as well.

Most of my rewards from BB is from game purchases anyway, rarely do I buy anything not game related there. Now I have zero reason past my GCU end date.

Nintendo hardest hit, once GCU ends... My Switch purchases die.

Where do you buy electronics stuff normally? I have Walmart, Target and BB. I will buy at which ever has what I want at the best price. Best Buy has the best selection. Amazon I guess is also an option as well. People need to remember BB sells a lot more then Video games. They are an option for home appliances too. I would have to think they looked at the numbers and figured out GCU wasn't really that important to their bottom line.

Personally I have bought less from them over the last few years when they nerfed the points for non elite and elite plus people. The points they give just didn't add up to anything for me to be concerned with.

But if I need something and they have a good price on it I still will buy it there. I am not going to boycott them over the change in their points system a couple years ago nor am I going to boycott them over discontinuing GCU. As always I shop for the best deals, availability and convenience.

 

[mrclutch]

My dad just bought a fridge at BBY so there’s that,

 

[lionheart059]

Gamestop is a public company which has financials available. They primarily sell video game hardware and software. Their Gross margin in 2017 was 33%. For reference, in 2016 it was 35%. In their initial section to shareholders they mention increases in video game hardware and software sales and don't mention accessory sales. Depends on what you believe, but it's my guess that video game software margins are higher than video game hardware margins, thus for the 33% to hold true for Gamestop, software margins would have to be higher than 33%.

The problem with the articles you post is they never really get to how they estimated the video game cost. Reality is big companies like Best Buy get favorable terms and other potential rebate programs that aren't disclosed. And they will never be disclosed because usually it's illegal to release those terms because the seller doesn't want everyone showing up to their door saying so and so gets it for this so give it to me for this. It's kind of like the BOM that get released on Apple products. Those get generally accepted as costs for those products, but according to Apple's CEO they are wildly inaccurate. But then again, he's not legally allowed to correct those reports because his pricing contracts are proprietary.

You're right, Gamestop DOES have financials publically available! Which is fantastic, because it showcases the vast difference in profit between used and new items, including software, and makes it easier to differentiate between profit of each (if you dig into the data available). More importantly, it shows us that the profit margin on "new" software is slightly below 25%. 25% of $60 is $15. So Gamestop's numbers are actually very in line with the statement made multiple times that the margin on a new game is roughly $15. The margin on a console, btw, was around 13%. These margins are considerably higher on used items, which is what leads to the greater overall profit margin when lumped together (tho from their most recent earnings report, New sales rose while used dropped, but that's the Switch for you). The gross profit margin of 33% is the combination of all items sold (not just consoles and games, though they do make up the bulk - That number actually includes accessories, collectibles, etc. Anything sold by the company at a profit). The data supports the assertion that the profit margin on a brand new, $60 game is roughly $15 (give or take a bit, obviously, since the percentage is an average and not a standard).

Tho there is another report that gives the profit margin as 21% on new games ($12.60), so there's that. The profit margin on used is damn near 50%. You can read the (brief) article and see the chart at https://www.engadget.com/2008/02/05/gamestops-used-game-sales-data-in-beautiful-chart-form/ or dig through the raw data yourself.

But at the end of the day, the simple fact is that the profit margin on a game sold with GCU is virtually non-existent, despite claims to the contrary, and depending on which you go by (21% or 25%) is between a few cents and a couple dollars.

Man, thanks for reminding me I could just look at Gamestop's financials. Especially since the full earnings data breaks down all the info so well.

 

[Thebacklash]

Where do you buy electronics stuff normally? I have Walmart, Target and BB. I will buy at which ever has what I want at the best price. Best Buy has the best selection. Amazon I guess is also an option as well. People need to remember BB sells a lot more then Video games. They are an option for home appliances too. I would have to think they looked at the numbers and figured out GCU wasn't really that important to their bottom line.

Personally I have bought less from them over the last few years when they nerfed the points for non elite and elite plus people. The points they give just didn't add up to anything for me to be concerned with.

But if I need something and they have a good price on it I still will buy it there. I am not going to boycott them over the change in their points system a couple years ago nor am I going to boycott them over discontinuing GCU. As always I shop for the best deals, availability and convenience.

True.

Most of my non game purchases at BB have been due to convenience though. *most* times I could beat BB's prices on Amazon/walmart etc. But waiting for it to arrive vs just getting it today...

I bought my TV there, but could have saved $40 and had it shipped... and then there's the risk of it being damaged or i'd would have hoped I could get it held at UPS/Fedex store so it wouldn't be left at my door to be stolen.

Bought my dishwasher there also, same model was cheaper online.. but 5+ days to get here. Easier to just go pick it up that day.

Also I can avoid tax with Amazon sometimes if its the same price as BB.

When GCU ends i'll probably still look at their website, but actual purchases will be limited.

 

[lionheart059]

True.

Most of my non game purchases at BB have been due to convenience though. *most* times I could beat BB's prices on Amazon/walmart etc. But waiting for it to arrive vs just getting it today...

I bought my TV there, but could have saved $40 and had it shipped... and then there's the risk of it being damaged or i'd would have hoped I could get it held at UPS/Fedex store so it wouldn't be left at my door to be stolen.

Bought my dishwasher there also, same model was cheaper online.. but 5+ days to get here. Easier to just go pick it up that day.

Also I can avoid tax with Amazon sometimes if its the same price as BB.

When GCU ends i'll probably still look at their website, but actual purchases will be limited.

Buying anything that isn't a game or movie from BB has usually been convenience for me, too. Like, I'm much more comfortable going to a store and buying a TV than I would be having it shipped. Same thing for laptops, computer components, etc. As for anything else (movies, random appliances, etc) that I'm less concerned about... it's always just come down to where it was on sale.

 

[Z-Saber]

Best thread

 

[suggsisrandom]

So much for my Best Buy credit card saving me extra. [emoji849]

 

[miyamotorola]

Without GCU I'm just an overweight virgin in his late 40s with no friends and who pretends to be CW's The Flash while home alone by shaking my hand vigorously.

 

[confoosious]

The discount only shows up in cart now.

oh that's good. thanks.

 

[bob101910]

Employee yesterday said that they will let me use it until it expires.

 

[jimbo8574]

But a refund how? They can't just put money back on a credit card, the transaction may be years old. Do you make people go to the store to cash it in? How does that work? The logistics behind refunds would be more trouble than it is worth, and the fact that people do have a legitimate claim of "damages". I paid money for the terms of the program for the set period of time and they choose to not honor it. They do have some weasley wording in the terms, but those things are not always enforceable just because they say they are. Many states have laws to prevent things like that. The legal costs, particularly with 50 unique sets of state laws would be astronomical.

I don't think this is that hard. A few months ago Microsoft did away with their streaming music service. They refunded me the points I spent and a small bonus IRC for my "trouble". How many GCU subs run past 2020. The average customer probably didn't buy multiple years like many of did.

Mine expires January 2020. If they left it active through 2019 and sent me a GC for $30 I would be more then fine. I paid less than $30 for a couple of those years anyway.

Outside this forum and one other I don't know anyone with GCU. Let alone anyone with an experiation date well past 2020.

 

[ritchardf]

 

[blackwaltz34]

FYI - if your GCU expires Before your preorder’s release date - the GCU discount goes away. My GCU expired last year and I had some amibos preordered and when they shipped it was at full retail price. It was a big pain in the ass...

Damn...did not know this. Mine expires late October so I was hoping to use it on the major holiday games.

Edit: I guess I'll start looking in games with Amazon as a backup. How long has Red Dead 2 been de-listed on Amazon and Best Buy?

 

[Zimmy]

Amazon could not be happier.  Let us see how quick they can cancel their "Prime" saving on new games.

 

[Blaster man]

Back when the service was $120 I called it “suckers club unlocked” because a $120 membership was really high. When it came down to 30 bucks I signed up and it’s been great. I didn’t think it would last at that price.

Don’t worry though, I have faith that Best Buy will either let you ride out the rest of your membership or make good on it. I bought the first HD-DVD player from Best Buy when it was released. Years later when blu ray won and HD-DVD was discontinued, Best Buy sent me a $50 gift card as an apology/compensation. They didn’t even have to do that, it wasn’t their fault. I’m sure they’ll handle the discontinuation of GCU in a way that doesn’t push customers away.

 

[Joe Fongul]

Just like the end of the coupons at K-Mart, GCU will be missed. Lately, I haven't used my membership as much due to easy flips at GS, but I always rely on ordering niche games at a discount.

I would not be surprised if BB announced something new during E3 regarding a new program. They have in the past put out press releases during E3 & made changes to GCU during that time (like the time they dropped the membership price to $30)

 

[Bleedingwickedly]

While I haven’t read the full thread. Maybe they don’t want the new subscribers, that way in 2 years, they can quit selling games? CD sales are ending this summer (I’m surprised it took this long). While CDs and games are different, it’s still physical media. Could let everyone have it until theirs expires. And the people with more that 2 years remaining will be dealt with case by case. Mine doesn’t run out until March 2020, so if they honor most of that I’d be happy. While I’ve enjoyed GCU, and never understood while some people didn’t, I’ll end up saving money from not making a purchase because it’s cheap.

Regardless going to use my B.B. CC to Pre-Order anything I’m interested in no matter how far out. Just in case they pull the plug sooner. I can always cancel if something happens. I haven’t did many preorders with my B.B. card, does it put a hold on the card until release? Or does it drop off like a normal card?

I’ve never had an issue with BB, they’ve had great deals and great service. It just doesn’t sit right with me that they got rid of it without a statement or announcement. They didn’t mention it until multiple people called them out on it.

 

[kelo360]

So you can preorder games while your GCU is still active and get the discount if GCU is expired on the games release date?

 

[gothamcentral79]

Back when the service was $120 I called it “suckers club unlocked”

Do you have a netflix special? Because you are hilarious.

 

[DannyEndurance]

So you can preorder games while your GCU is still active and get the discount if GCU is expired on the games release date?

Yes, sir.

 

[skiizim]

I feel like I just left the beach rummaging through this thread.... geez

 

[kelo360]

Yes, sir.

Thanks. Hoping they add Battlefield V to the $10 cert club after E3.

 

[chibuki]

In addition to GCU being scrapped and seeing Amazon is also making it hard to preorder new physical games, I have a feeling publishers forced their hands to stop selling new games below the suggested retail price. Case and point, Red Dead Redemption 2 physical copy is still available at Gamestop, Target, Wal-Mart, all of which are retailers who don't do 20% off on game preorders.

 

[WWF]

Any good “I was a geek squad employee on installation house calls and an older wife was home alone” stories like there are with pizza delivery?

 

[CyborgNinja]

While I haven’t read the full thread. Maybe they don’t want the new subscribers, that way in 2 years, they can quit selling games?

Also not reading this thread, I came to that conclusion as well. I think someone at the top theorized that developers/publishers may start phasing out physicals around 2020. And while they could offer download codes, like they do with Cuphead X1 for example, they probably see people driving to a brick & mortar, rather than just downloading straight from the network, not very likely. So while this news really sucks, they're probably doing us and themselves a favor by not charging for a service they may no longer be able to provide and avoiding the headache of possibly refunding thousands of angry customers...

 

[Helldweller87]

When i stopped by my local GS store yesterday for Pro Day, the employees told me that Corporate sent out a email to all the stores about the GCU ending at BB.  Curious to see if GS try's to use this to there advantage.

 

[Nothing-]

What exactly is special about this newsweek article that keeps getting posted? Besides a blatant attempt to give them clicks?

There are no revelatory bits of information to be gleaned from there. It is just speculation. Stop giving them clicks.

Well said. People need to wake up in this internet era. Be more click-disciplined.

Do the logic here. GCU was clearly never designed to make money through the sale of a discounted item - BB knew that buying 2 games would already "lose" them a dollar amount greater than annual admission. The point was to drive people into purchasing more related products like accessories, and driving use of reward certificates.

To be honest, yes. GCU cancellation is likely directly related to the sales of video game accessories and peripherals. BB has been selling games to GCU members for about four years at more or less a break-even point for no profit. Having worked at BB long ago, and knowing how they think, I'm sure they looked over their gaming accessory %s over these last few years and decided this discount in games wasn't resulting in more margin and revenue from accessories being sold.

 

[smallsharkbigbite]

But at the end of the day, the simple fact is that the profit margin on a game sold with GCU is virtually non-existent, despite claims to the contrary, and depending on which you go by (21% or 25%) is between a few cents and a couple dollars.

It's true that it is small, but it's still positive if you take out the 20% discount. So they aren't losing money by running the program. It's also likely that because the program has used game benefits that you are also feeding more high margin business to Best Buy either through additional trade ins or through GCU purchases. I mean I think that was my big take away, is that I don't remember Best Buy having used games at their stores 5 years ago and now they do. To be fair Best Buy doesn't break out specific sales to that level of detail and doesn't seem to do the used sale volume of a Gamestop, but I think this program was designed to fight against Gamestop in that realm. But it's over now. So we'll see where they'll go next.

 

[mitch079]

I don't think this is that hard. A few months ago Microsoft did away with their streaming music service. They refunded me the points I spent and a small bonus IRC for my "trouble". How many GCU subs run past 2020. The average customer probably didn't buy multiple years like many of did.

Mine expires January 2020. If they left it active through 2019 and sent me a GC for $30 I would be more then fine. I paid less than $30 for a couple of those years anyway.

Outside this forum and one other I don't know anyone with GCU. Let alone anyone with an experiation date well past 2020.

Middle of Feb 2022 for me, thanks to COD Endowment 2016.

 

[ritchardf]

It's true that it is small, but it's still positive if you take out the 20% discount. So they aren't losing money by running the program. It's also likely that because the program has used game benefits that you are also feeding more high margin business to Best Buy either through additional trade ins or through GCU purchases. I mean I think that was my big take away, is that I don't remember Best Buy having used games at their stores 5 years ago and now they do. To be fair Best Buy doesn't break out specific sales to that level of detail and doesn't seem to do the used sale volume of a Gamestop, but I think this program was designed to fight against Gamestop in that realm. But it's over now. So we'll see where they'll go next.

im so confused by this post, 5 years ago was probably the golden age of trading in at best buy, and they had used games for some time before that. they also no longer carry used games at most if not all of their stores. they dont even sell them online anymore. they had used games way before the 20% off, and the bonus on trading was also there before gcu. i remember trading in most of my blockbuster wii u game purchases at best buy because the values were so much better than gamestop.

everyone seems to think gcu is going to be replaced by something else, and i just dont see why anyone would think that, especially with no clear end date for existing memberships.

 

[lionheart059]

It's true that it is small, but it's still positive if you take out the 20% discount. So they aren't losing money by running the program. It's also likely that because the program has used game benefits that you are also feeding more high margin business to Best Buy either through additional trade ins or through GCU purchases. I mean I think that was my big take away, is that I don't remember Best Buy having used games at their stores 5 years ago and now they do. To be fair Best Buy doesn't break out specific sales to that level of detail and doesn't seem to do the used sale volume of a Gamestop, but I think this program was designed to fight against Gamestop in that realm. But it's over now. So we'll see where they'll go next.

Best Buy in my area had a very small Used Game selection (around the size of their Vita section), which was phased out over a year ago because it wasn't a something they were able to compete at in my region. Now I think one of the stores has used games - they take up half of a single row of a single section of shelving, and it's all titles they just couldn't move. None of the stores here take trade-ins anymore for the same reason.

The profitability is also based on a new game at full retail price, and that model doesn't take into account games that are on sale, or promos like "B1G150%". We would need a lot more data to know if the program itself was profitable or not, it would be shortsighted to base it on the level of single transactions. You also get into the matter of earned rewards at double points, blahblahblah. I'm sure they took a decent amount of time to review the numbers and decide whether or not the juice was worth the squeeze. And that's all without factoring in additional costs like overhead (the profit levels I was providing don't factor in the costs of running the business, as those can be recouped elsewhere), shipping (literally everything I've ever bought from BB Online had free shipping), etc. The point is that they weren't getting enough of a revenue kick from the program in order to continue offering it, even (or especially) when that profit came down to a few cents or two bucks on something that would normally yield 12-15 for them.

 

[Perfect*Ending]

Wow.  I'm glad I renewed my subscription just a few days before this program's halt.  $30 for 2 years.