Huge British retailer rocks the industry

HMV (His Master’s Voice) was a large British record label that morphed into becoming the largest high street entertainment retailer in the UK. Their annual turnover is around £2 billion and they have 379 stores in the UK (they also own Waterstones with 313 UK stores). With a long corporate management structure they make slow decisions so their approach to gaming has moved in fits and starts. Over the last few years they have seen many other areas of income, such as recorded music, collapse, so they have racked up their games offering to compensate. And now they are moving into secondhand under the Re/Play moniker.

This is unparalleled and unprecedented. No other high street retailer of this magnitude deals in secondhand product. The management and infrastructure for them to do this well will be horrendous. But you can see why they are doing it. It is immensely profitable and it differentiates HMV from the supermarkets, who have rapidly become major game retailers.

Two groups are going to suffer from this. Firstly specialist game stores. They are losing their differentiator, which will have a huge impact on their ability to generate profits. They were always doomed by the ongoing move to online content delivery. All this does is to bring forward the date of their demise.

The second group to suffer is the whole gaming development and publishing industry worldwide. They get zero income when a game is sold secondhand, thirdhand, fourthhand etc. This is obviously very wrong and I have asked the question before as to whether it is worse than piracy. Publishers are now even more highly incentivized to remove high street retail from their business model. And these days they have the technology to do so.


  1. I’ve been able to buy second hand vinyl/cassettes/CDs for years. The music industry is bearing its suffering with uncharacteristic stoicism.

  2. …and as for second hand books, I’m amazed anyone can afford to run a printing press these days!

  3. Bruce, you keep saying that second hand game sales are the coming apocalypse, but you never provide evidence.

    The existence of the second-hand market *stimulates* sales of new games, because people can now cash in a few old games and use the proceeds to buy a new one. And people are more likely to lash out for a new game if they believe they can get some of their money back later. Yes, some people are willing to wait a while and get their games second hand, but most people continue to buy when games first come out and their buzz is at a maximum.

  4. Very good, C. You didn’t buy them from a major high street retailer though.

  5. Have to agree with Nick G. I went out today and spent £80 hard earned wages on both Fable II and Dead Space, safe in the knowledge that I will receive at least £50 in trade in value for them both when I get bored of them to spend on a new game(s) in time for Christmas.

    Without the second hand market on the high street, and the fabulous prices being paid by outfits like CEX for pre-owned games I would be able to afford far less new titles then I currently buy (at least 2 month).

  6. As I think I’ve said on here before, second-hand is needed because people go in looking at a £40 game with it really being £20 in the long run.

    For boxed games, it’s impossible to drive the prices down any lower. Second-hand is the only way people can get the games at a price they are willing to pay.

    I think if second-hand was stopped, you’d find less titles being bought because no one will want to take a risk. Innovation would go out of the window and only a handful of developers would survive.

    Also, the time is not quite right for digital distribution. The publishers still need these stores to get their products out the the public, and second-hand is the only way the stores can make a profit these days.

    That said, they do mark up the second-hand titles a little too high.

  7. HMV actually trialled this about 5 years when I worked for them. It failed miserably as the processes in place were over-complicated and the pricing structure was nonsensical. TBH I’ll be very surprised if they get it right this time around.

Comments are closed.