[quote name='DarkRider23']Beneficial? Blockbuster loses so much money on used games. Lets say I trade in AITD Wii for $30. 2 weeks later, corporate notices they have too many in stock and lower the TIV. TIV gets lowered to lets say $12. They were probably selling AITD for $44.99 used. None of those games are going to get bought. They lower the price for $29.99(breaking even point, actually losing a cent). Still no one buys it because GS has it for $24.99. They are then forced to lower their price once again. Then, they really start losing money. Whether it be $5 per game or $10. Money is money. The fact of the matter is, Blockbuster is losing money. Hell, the game might not even get bought until it's really lowered. One of us CAGs might go pick it up in 5-6 months when it's $9.99 and a viable flip from BBV->GS.
The only GOOD thing we are doing to BBV is getting rid of a lot of games and bringing them to gamestop. We are decreasing BBV's inventory while increasing Gamestops. That's all we're doing. Most of the games we trade into Gamestop are probably not even going to sell. Star Trek: Legacy? Who the hell is going to buy that for $20? I got $10.50 for it and they'll probably have to lower it to $9.99 before people even take a second look at it.
Just take a look. Next time you are in a Blockbuster that you do most of your trading at, just go look at all their games. How many of those are from you? All in all, we might increase their total revenue, but we don't increase their total profit at all.
Edit - Sorry for the wall of text.
Edit 2 - But hey, I might be totally wrong on this. I might just be making an ass of myself. This is just my take on what we're doing.
God speed, flippers, god speed.[/QUOTE]
Your basic point holds up, but for anyone looking for a bit of rationalization, I think it's fair to point out that these aren't cash transactions. They're trading assets for assets. In some cases, they're taking a hit. For instance, when someone flips a bunch of games and gets enough credit for a Wii, the store is accepting inventory that may be overvalued and will lose its value relatively quickly in exchange for inventory that would've held its value rather nicely. So they're sacrificing profits on that individual exchange.
The negative effect seems a little murkier when people are using credit to buy games. Some games hold their value really well, but others drop like a rock within a couple months. Let's say someone used a coupon to buy 3 games for $10 each at GS, traded them for $20 each at BB and used the credit to pick up Ninja Gaiden 2 a couple months ago when it was $60. If the store had kept its copy of NG2, it would now be worth a maximum of $30 in revenue. Instead, it's got three games that only have to sell for $10 each to realize the same amount of revenue. And it's not unrealistic to think the 3 games might sell for something like $15 or $20 a pop instead of $10.
Obviously, it's not a perfect analysis, because there's most likely some kind of rebate program in place where BB gets some money back from game companies when the MSRP of existing stock drops. At the same time, if the flipper in question used credit to buy a used game for $55 that would otherwise sit on the shelf until it hit $25, then Blockbuster actually has a strong chance of coming out ahead on the transaction, making more money than if the flipping hadn't taken place.
Anyway, I agree that flippers aren't doing anything illegal and don't need to justify their actions. My only point is that the amount of benefit experienced by CAG's who flip probably doesn't result in a proportional negative effect on BB.
...It's just business that's all.
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