Earlier today, I was strolling through a Best Buy [BBY] store, meandering through the games section (as most adults, and even some children, tend to do), when I began noticing several DVD-cased PC games with a blue-banded cover along the spine (the top 1/5-1/4 and the bottom 1/5-1/4). I pulled several of the titles off the shelves to inspect them…
Three key things here:
- The game titles are either second- (or in the case of a few, like Age of Empires 1 & 2, third-) tiered games, or casual games;
- The prices are uniformly $9.99 (plus tax);
- There is an offer for a free digital download from Best Buy’s online download site.
Many people have mentioned to me that they’ve thought (or in the case of some of you, seen) that PC gaming is on the decline. Perhaps Best Buy management has thought the same thing, so they’ve worked out a deal with various game publishers to re-release their older titles under this new program.
I checked further by interviewing several of the Best Buy salespeople, who all told me that they, unfortunately, were unaware of this new program. When I asked them whether they felt it was something that should be better advertised, several of them said yes.
Management Perspective
Extensive past experiences with e-commerce has taught us quite a bit, particularly involving older inventory that just does not seem to move well. We can either wait for consumers in the long tail to “catch up” with their purchases over a fairly long period of time, or we can encourage the mainstream as well as the long tail folks to take a closer look at our older inventory, with incentives to buy. With books, music, and games, there is a lot to be said about maximizing revenue and profits on the release dates, so there’s no need to reiterate that. However, there is a lot of additional value to offer nominal discounts on older inventory to move the product, rather than have it languish at the distribution points or send it back to the publishers. In most cases, even if you offer a game that retailed at USD $49.99 four years ago at, say, $9.99 today, you’ve managed to salvage some value by freeing the storage space at your warehouses and still walked away with somewhere between $1.99 – $7.99 profit on an item that was not going to sell for several more years, if at all. Add to that the enticement of a free digital download to attract potential buyers to your other lagging sales center, the digital download store, which provides you with even greater profit margins… well, that’d be just super-great. 
This also benefits the game publishers and the dev studios, who may have been hurting over the past couple of years due to the massive financial depression suffered worldwide. Allowing their fully-developed product a second run (or a third run) at generating more revenue for them without a significant retooling or redevelopment effort is quite valuable.
