When you pre-order a game, the general assumption on the consumer’s part is that you’re entering into something of a contract with the store in question. You put a small down payment on a title that interests you, they make sure to order a copy of that game for you and hold it for a few days so you can rest easy, knowing that it will be waiting in the back/under the register to feel your tender caress. Nowhere is the pre-order pushed harder than at GameStop, where it counts toward the dreaded “numbers” that employees are expected to hit, a quota of add-ons rather than actual sales that helps to determine their future with the company.
At least, that’s how it worked while I was an employee there.
The pre-order “contract” has always been seen as sacrosanct, from the outside, but I’m here to tell you two truths that will shatter your world if you still hold to such a belief. First, even back when I worked at a GameStop in 2009, we were allowed to sell through as much as 20 percent of our pre-order stock on a major release immediately, the assumption being that more copies of such popular titles as Red Dead Redemption and Pokémon Heartgold/Soulsilver would quickly be replenished. The specific percentage picked had some statistics behind it, based on how many pre-order customers generally picked up a game on day one and how many waited longer or even cancelled their pre-orders.
The second truth is that GameStop stores no longer receive the full complement they might require at launch. This was brought to my attention when Fire Emblem: Awakening broke its street date. I went with a friend to a local GameStop location to ask after the game, but we were told that, though street date had been broken, all remaining copies were slated for pre-order customers, and they didn’t even have enough to fulfill those. This was, of course, tied to production and distribution issues on Nintendo’s part, as they hadn’t anticipated the demand the new title would generate.
This led to a discussion about the pre-order structure in general, and how useful it is when it doesn’t even serve as a functional guarantee. The employee revealed that when Call of Duty: Black Ops II had been released, his store had received fewer copies than they had pre-orders. Black Ops II, the newest entry in the consistently high-selling Call of Duty franchise, the titles that seem to pour from the shelves and demand disproportionate shelf space each year, had been under-shipped.
When you pre-order a game at a local GameStop branch, that pre-order is added to that location’s pre-order tally for the game in question, which makes its way up to a more centralized authority within GameStop’s corporate structure, one that actually controls distribution. Given that the company itself has to purchase copies of the game from the publisher, and then has to invest in shipping them around the country, they have to adequately balance their ability to purchase copies of the game against those demanded by individual stores. There can, of course, be a disparity between the number requested and the number received.
For as long as I was at GameStop, this was a question of “how many extra copies will we receive for sale to the general public?” It wasn’t until just recently, in my conversation with this current GameStop employee, that I discovered that this can now lead to a disparity between the number of copies promised to consumers and the number actually available for them to buy. The rhetoric behind pre-ordering, after all, had always been to secure yourself a copy of the game while expressing interest in it, which would typically lead to more copies than strictly necessary being allocated to your store because there was a concrete indicator of interest.
It appears that GameStop’s pre-ordering philosophy is more conservative now, taking advantage of the expected gap between pre-orders and final pick-ups to safely under-order on games. That it’s happening with tremendously popular series like Call of Duty, though, where there’s almost no risk that, at the very least, the pre-order allotment will be sold through quickly, indicates that something is rotten on a financial level. And, while profits for GameStop are currently up, its revenue is ever-so-slightly down and, more to the point, it didn’t meet earnings projections.
Then there’s the fact that these numbers are in spite of GameStop’s expanding phone and tablet business, which offered the company a new revenue stream. That revenue is down and earnings were low in spite of that is a bit worrisome. It might not be GameStop serving as the weak link in the chain, though. It’s also possible that publishers are tightening their purse strings, printing fewer copies of their games for distribution. Is it a testament to the increased prevalence of digital distribution? A reaction to the same financial hiccups that have led to studio and publisher closures?
After all, with the rumors of a next-gen Xbox that blocks off used games, one would think that GameStop would be growing its pre-order business as much as possible to try to compensate for losses in the used market. If that were the case, though, decreasing the number of copies sent out relative to pre-order numbers would be more likely to damage faith in the pre-order system than to grow it further.
Date: April 15, 2013