What's wrong with game business?

[CybFun.com]

Probably you guys have heard that lots of people bought PS3s on release date and sell them on Ebay for few thousand dollars.

I think game business is very profitable business and we have made lot of money regardless of recession so far.

But, it seems not a lot of people are interested in that.

Do you know any reason?

Here's my reason, though.

http://www.cybfun.com/2009/01/reason...shops-are.html

[TylerBakerllc]

I think that it is a very misunderstood market. It seems that most consider gamers to be the ones that never grew up. I personally feel that gaming has huge opportunities for sustained profits as well as a huge advertising/product placement market. The possibilities are endless. You could conceivably have a product placement agreement for every item in the game... And do the same thing with every game that you produce!

I am interested in exploring this further, and possibly implement some ideas in to my current business.

Great post!

-Tyler

[gregdavidson]

I think somebody would have to be a fool to pay few thousand dollars for a PS3. Even if it's around Christmas time and they're hard to find. The only problem I can see with this business is that you don't have access to a steady supply when the opportunity comes around. So therefore it's really not a business if you think about it. Just a temporary gig that will be over very quickly.

[TylerBakerllc]

Yes, I agree with greg about the business that you (cyberfun) are talking about. There is no product sustainability with trying to capitalize on the new hot console or game... It's just too hard to break in and get a large supply at wholesale... The big box retailers have them locked up because they are moving the most units... And have for quite some time.

-Tyler

[CybFun.com]

Opportunities comes all year around. I am not sure why some people think people buy game systems only during Christmas.

Do you watch a movie or read a book only during Christmas? Game is the same media.

Besides, those system sales are tip of iceburg. We make way more money out of software.

Someone who sees the opportunity first will make money.

Just like Bill Gates for 360 himself.

And, in my opinion, the market itself is very stable since game is non perishable and price are barely changing.

Simply, we don't really have leftover problem.

Hope my blog regarding this business will help.

http://cybfun.com

[CybFun.com]

Well........................

[Doodyps]

If you are asking why there are not more independent game stores, I would say:

1) Start up costs - You are talking about brick and mortar companies full of relatively expensive items. Also a security threat.

2) market saturation - Wal-mart, Best Buy, Gamestop (no more circuit city though) are everywhere. When your main competition is in every major city, it's tough.

3) Target Market - Many of the people who purchase this stuff are under 16. This means they have to get their parents, who are not interested parties, to get them to the store. Chances are, the kids are spending their parents money also. When a large chunk of your costumers are not able to get to you and dont have much income, it's hard to make money.

4) nature of the business - Gaming is a perfect example of a cyclical business. Sales go up when new consoles come out (every 5 years or so) and go down as the consoles age. Big hit games can help make up for that, but thats only a hand full a year.


With regards to problem #3 - This can be alleviated by setting up big weekend events, like competitions to win games and things so that kids can make plans to be there and make an effort to get to you.

[mthomas]

Very well said, Doodyps. It's also to my understanding that selling new games yield little profit margin, which is why stores like Gamestop will always try to push used games.

[CybFun.com]

1. Relatively low start up cost - Certainly online together

2. Market is not saturated at all -People love "used" games in lower cost, Except gamestop, this is not competitor

3. Target market : age 7-35, 50% of games are M Rated for over 17

4. Nature of business- classic games are huge market. We've sold one PS1 games for $95.

Please read my blog.

In my opinion, the major reason is people do not adaptate the business change.

Everything is new in game business including wholesalers.

If you are asking why there are not more independent game stores, I would say:

1) Start up costs - You are talking about brick and mortar companies full of relatively expensive items. Also a security threat.

2) market saturation - Wal-mart, Best Buy, Gamestop (no more circuit city though) are everywhere. When your main competition is in every major city, it's tough.

3) Target Market - Many of the people who purchase this stuff are under 16. This means they have to get their parents, who are not interested parties, to get them to the store. Chances are, the kids are spending their parents money also. When a large chunk of your costumers are not able to get to you and dont have much income, it's hard to make money.

4) nature of the business - Gaming is a perfect example of a cyclical business. Sales go up when new consoles come out (every 5 years or so) and go down as the consoles age. Big hit games can help make up for that, but thats only a hand full a year.


With regards to problem #3 - This can be alleviated by setting up big weekend events, like competitions to win games and things so that kids can make plans to be there and make an effort to get to you.

[Doodyps]

1. Relatively low start up cost - Certainly online together

2. Market is not saturated at all -People love "used" games in lower cost, Except gamestop, this is not competitor

3. Target market : age 7-35, 50% of games are M Rated for over 17

4. Nature of business- classic games are huge market. We've sold one PS1 games for $95.

Please read my blog.

In my opinion, the major reason is people do not adaptate the business change.

Everything is new in game business including wholesalers.

I did read your blog, I just didn't agree 100% with your analysis. I thought you were asking about actual brick and mortar stores. So you can throw out that 1st argument.

If you are talking about reselling used items online, then you are competing with ebay and amazon along with gamestop and others. It's not like you can't make money doing it, but it doesn't seem like an appealing enough business opportunity to get a ton of people starting their own businesses.

Anyway, I could go on and address other things, but my brain is fried. Work was no fun today. I'm not putting your business down by the way. I wish you luck. It's certainly one way to make a buck. I just dont see it as a golden way for everyone to make millions.

[CybFun.com]

Certainly, we are competing sellers on Amazon and Ebay.

But, when we give customer store credit for used items, we give low enough amount, so we can make money.

Still those credits are bigger than gamestop.

I feel you go too negative though it seems you do not know much about this business.

Simply, those wii, ps3, 360 are new markets.

I did read your blog, I just didn't agree 100% with your analysis. I thought you were asking about actual brick and mortar stores. So you can throw out that 1st argument.

If you are talking about reselling used items online, then you are competing with ebay and amazon along with gamestop and others. It's not like you can't make money doing it, but it doesn't seem like an appealing enough business opportunity to get a ton of people starting their own businesses.

Anyway, I could go on and address other things, but my brain is fried. Work was no fun today. I'm not putting your business down by the way. I wish you luck. It's certainly one way to make a buck. I just dont see it as a golden way for everyone to make millions.

[CybFun.com]

I mean low enough store credit that we can make money on ebay.

We don't have cash out option, but we still have plenty of trade ins.

I believe it's only chance not to have many competitors nowadays.

Soon, many people will do this.

[benne13]

As an avid gamer myself, I've stood in line overnight to purchase the Xbox 360 only to sell it for double the price on Ebay. I did this process 3 different times, but as someone eariler mentioned new consoles come out every 5 -8 years so doing this as a main source of income would not work.

I seen on the news today that for the first time in history the sale of video games outsold DVD movie sales. So it's not just 16 year old kids using their parents money to buy these games. Adults are purchasing these games for their own entertainment, but the majority of these purchases are done through retail stores, such as Wal-Mart, Best Buy, etc..

I'm interested in learning more about your business concept.

[CybFun.com]

I strongly believe people misunderstand the market.

And, more likely, people do not know much about it yet.

And, actually, that's good. If everyone knows pretty well, we are in trouble.

[dtechm]

When new things come out, people want to have them first. They sell a PS3 the day of they can make a lot of money.