QUOTE
	"Tesco currently take one in every eight pounds spent in British shops"

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Tesco currently take one in every eight pounds spent in British shops. It is a huge corporate supermarket chain that sells everything from clothes, to insurance, to electronics, DVDs, CDs and, of course, video games.

The masses perceive this as a good thing. Not only can you pick up the latest Wii game with your groceries, but you can also pick them up at a reduced price. As Tesco’s primary source of income is through the sale of bananas, etc., they can afford to sell games at discounted prices. Indeed, just before Christmas Tesco started selling new Xbox 360 titles £20 under their recommended retail price; and when Tesco does it, so do their rivals.

ASDA (owned by Wal-Mart), Morrisons, Sainsbury and other leading supermarkets have followed the market leader by selling cheap video games. When one supermarket drops the price of a product, so do all the others, creating a mini-price war, which enables us to pick up some software for next to nothing. The supermarket has our custom, we get our video game, and the publisher enjoys increased sales. Everybody is a winner.

Well, not quite.

Move into the High Street and we are presented with a different picture. Popular video game chains Game and Gamestation are struggling to compete with Tesco. They cannot afford to cut software prices as much as the supermarket and are both on the decline. This is not just exclusive to video games. Independent retailers of CDs, DVDs, Clothes, etc., are often forced out of business because of the likes of Tesco.

However, Game and Gamestation had a plan.

All major UK video game retailers, including Game, Gamestation, Gametron, CEX, etc., now make most of their money through the sale of previously played software. Walk into any of these stores, and you are presented with racks and racks of cheap, pre-owned video games, racks which far outweigh the shelf space given to new releases. Gamestation even launched a pre-owned TV advertising campaign last year, whereas new pre-owned deals are displayed in shop windows on a weekly basis.

It’s a fantastic source of revenue for them. Consumers sell their games back to the retailer in order to obtain some quick cash or get money off a new game. The retailer then whacks an extra five to ten pounds on the price, creating huge profits and undercutting their supermarket rivals (who are unlikely to enter pre-owned territory). Although recently used software is often only a few pounds cheaper, older games are heavily discounted. In Gamestation a gamer can pick up four old GameCube/PS2 or Xbox games for half the price of a new one. With Tesco cutting the price of new software and the pre-owned market proving effective, it’s certainly a good time to be a consumer.

For the publisher however, it’s just one big headache after another.

Selling used video games is, from the perspective of the publisher, on par with piracy. It is a means for gamers to pick up cheap software without paying the publisher a dime. However, unlike piracy, the publisher cannot do a thing. If they were to speak up against the retailer or demand a cut of the pre-owned profits, then they run the risk of having their software pushed to the back of shelves or not even stocked at all. Indeed, video game retailers often dictate how the industry is run, and there is little the publisher can do about it. Even Tesco is proving troublesome, with their distributor (Handleman) demanding £10,000 for shelf space-- a payment that is "non-negotiable, non-refundable and does not even guarantee business with Tesco." Publishers will have to pay this, because not having their products available in the biggest and most successful business in the country is not a viable alternative.

The bullying tactics of Tesco, Gamestation and the like will ultimately affect the software we play. In the UK games are delayed (Super Paper Mario and Pokémon are recent examples) and/or not released at all because of this hostile retail environment. But the high street stores need to be careful. Nintendo’s Virtual Console and Microsoft’s Live Arcade point to a future for digital downloads, a future without the need for supermarkets, chains or independent retailers.

In the mean time, I’m off to Tesco. For I hear the new Godfather game is on sale for just £20.

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