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GameStop is under a lot of scrutiny this week, after a story broke regarding their “Circle of Life” system.

The story, first published on Kotaku by Jason Schreier on Wednesday, talked about the “Circle of Life,” a program that GameStop has implemented over a decade ago, that has been abused by several GameStop districts in the past few months to years.

According to Kotaku, initial sources have stated that any new sales have cut into the circle of life program – meaning the sources at Kotaku have reported that they have forced customers to purchase used copies of games, and is threatening to fire any employees who fail to achieve their quotas.

The original story noted that GameStop stores across the country have been involved in shady business practices due to the circle of life program, however, it should be noted that not all stores or districts are following suit with such practices. In speaking with our own GameStop contacts at TechRaptor, who asked to remain anonymous for the purposes of this story, their own store districts have not emphasized any form of underhanded or anti-consumer tactics upon their customers.

While it may be difficult to verify completely, it appears the problem is a district manager issue, rather than a corporate-wide mandate. According to our contacts, employees were told around December of last year to try and focus more on the circle of life program as numbers have been slowing down, but in regards to the words of our contacts, their district managers have asked store managers to emphasize upselling as a more effective strategy for long term and short term customers, over purposefully withholding product from them.

This is also evidenced by Kotaku itself, who published a follow-up story of several testimonials from GameStop employees. Some of the employees noted that there have been managerial issues in the past, while others argued that most of these cases were “edge cases” at best. Part of the problem with GameStop stores is their district manager system (or district leaders, as GameStop calls them) is the enforcement on the managerial staff level. As one comment by an anonymous employee on Kotaku stated, “According to corporate policy, being below 50% on COL for 3 consecutive weeks is supposed to result in termination. Some district managers may enforce this, some may not.”

Gamestop Circle of Life

The Circle of Life program explained.

The circle of life program is designed to entice customers into using GameStop as a primary service by focusing on trade-ins, used sales, pre-orders and reward card subscriptions as part of their monthly quotas. Outside of New product purchases, the used and pre-order market is very lucrative for GameStop and other retailers, raking in the majority of their business per year due to it being near 100% of the profits for the company.

These different percentage quotas are expected by GameStop to be a part of their day to day management, making them a requirement for employees at GameStop to try and push used and reservations on people. The quotas do change over time, but current numbers on average are around 10% for reservations, 35% for pre-owned sales, and 20% for trades. This means that if a store does $1,000 of business a month on average, it would need to do $100 in reserves, $350 in pre-owned sales, and $200 in trades, respectively to achieve their quota for the program.

GameStop suffered a Q3 loss for the holiday season, slashing expectations for Q4 as much as 18% after posting a 16.4% loss. Much of this loss came from in-store product not moving, including a 30.3% decline in console sales and a 22.8% loss in software sales overall for the season.

The biggest issue facing GameStop now is what to do next from these stories. The circle of life program will likely be retooled by the company, as stores resorting to these underhanded tactics to pad out their numbers is being encouraged not by a mandate from the company, but by pressures to make up sales. Lowering the sales numbers may lead to less pressure upon district managers and employees worldwide. A much more complex, issue involves the leadership from the district managers, as enforcement, use and abuse of this policy has been grossly uneven at best for the entire company.

Quick Take

While on the surface the problems at GameStop seem severe, it is very likely that it is a district by district issue, over a company-wide issue. Simply put, the district managers interpreting a mandate to emphasize the Circle of Life has gotten out of control.

GameStop did make a statement to Kotaku about how they will look into improving the Circle of Life program in the future, hopefully they also take into consideration those managers who have abused the system as well.

What are your thoughts on all of this? Leave your comments below.

Robert Grosso

Staff Writer

A game playing, college teaching, erudite-minded scholar who happens to write some articles every so often. Have worked as a journalist, critic, educator and blogger for over five years now, with articles published (as user editorials) on Game Revolution and Giant Bomb as well as a contributor for the websites Angry Bananas and Blistered Thumbs. Now making TechRaptor my home.

  • Legionarius

    Stopped shopping there ages ago. If I need physical games, Best Buy is where I go, then Amazon as plan b.

  • temphero

    Wait, how is Gamestop still a thing? I can see it being useful for used games, but I’d never buy new there. In between Best Buy’s Rewards Program and Amazon (with Prime) giving you 20% off of new games up to two weeks after release, why would you ever buy new from there?

  • sanic

    I check amazon and then compare it with EB, usually amazon wins but not always, either is better than bestbuy which never has stock or walmart where the prices blow (ninja gaiden 3 still sells for $60 on WiiU), maybe things are different in the states.

  • Serathis

    To be a PC gamer and having 50+% sales without this kind of bullshit…

  • Kev Lew

    supposed to be convenience, no wait just walk in when already out shopping. Any gamer with half a brain moved on so only the normies that have avoided online shopping seem to go there any more, that or parents escorting kids into town.

  • Duro

    About when EB became GameStop is when I started looking for alternatives to buying games.

    Steam became that alternative, particularly as a lot of my favorite game studios were being squeezed out of the retail market anyways.

  • JoeSislack

    You just said it yourself, that being people buying used games from them. I managed to get World of Final Fantasy like 2 months after release for only 18 dollars used. You’re right in that buying new from Gamestop is worse than Amazon and Best Buy who give you 20% off, but for Gamestop their used game prices and even their stock in used games are better than the other two.

  • gxp01

    Hope they die out someday. I offered a brand-new (sealed) copy of Xenoblade Chronicles to them 2 weeks after its release and they only want to give me $20 store credit for it while they sell the same exact brand-new sealed copies on their shelves priced at $70CAD. I also reserved a copy of Killer Instinct: Definitive Edition online for $30CAD while the 1-day promo was still active for instore pick-up because there are no online stocks available, so the only way to acquire a copy is at a local retailer. I even called them that day and explained to them how I can’t place orders online (anymore) and if I were to pick it up the next day, they would sell it to me as their 1-day promo than their regular price once the 1-day expires. The guy said, “no problem”, and asked for my name and phone number. The next day after work I headed toward the store I reserved my copy to only to find out they’re charging me $50CAD and didn’t uphold what transpired over our phonecall conversation the day before. Fuck this greedy-ass corporation. I usually shop at Amazon and Best Buy (sometimes Walmart) anyway. Cloud gaming (in the near future) will kill these assclowns and their sneaky corporate methods. What a way to ripoff the very people (gamers) who put food on their tables and a roof over their heads.

  • Ajt

    Oddly the one part of all the stories surrounding COL that I have not seen mentioned, or rather the one question that I have not seen any journalists ask, is how are the suppliers reacting to the reveal of Gamestops COL program? How are the game publishers and the hardware manufacturers? everybody talks about the impact this has on Gamestop employees, but by all appearances this COL program as it was seemingly enforced, be it by regional managers or by corporate, was in essence a scheme to boost Gamestops profits by stealing product sales from their suppliers (new product) and instead replacing it with in house used product on which Gamestop gets a much much higher margin and the producers get nothing. Of particular concern is the way the program seemingly encouraged or incentivized stores to undercut day one release product. Often claiming they had none unless pre-ordered. Hiding in the back room, or seeking to avoid making the sale in an effort to not blemish their sales record with new product sales. This is the sort of thing that gets vendors to start reducing the credit and terms offered to the merchant. Sharply and quickly.

  • In my experience, dedicated gaming store chains that emphasise trade-in/used games are always complete cancer.

    GAME are the same here in the UK: 90% of their stock is used, but it’s often only a few quid cheaper than a brand new copy (in some cases I’ve actually seen it priced higher) but since they hardly stock any new copies you won’t necessarily know that. And that’s not even getting into things like DLC which may end up costing you more in the long run if your second-hand copy already has the codes used.

    Meanwhile, there are two semi-independent stores I buy almost all my hard-copy games from, Games Center and G-Force, who sell their games at reasonable-to-crazy-cheap prices (GAME is also the only store in my country I’m aware of who charge the full £60RRP for new games) and they have competitive trade-in credit rates and reward schemes.

    TL;DR Fuck stores like Gamestop and GAME, I can’t wait for them to go under.

  • Poised 4 Flight

    As a recent PC convert, it feels even better than I could have imagined. Now, if only folks would stop pre-ordering.

  • Poised 4 Flight

    The first time they refused to sell me an in-stock new release because I hadn’t pre-ordered(Halo ODST) was the last straw. I mostly used them for their free 7 day rentals following this.

  • yoitsmegabe

    I stopped buying from Gamestop ages ago. Consoles stopped being a convenience with the advent of 3-10GB installs on day one. No point in getting a game on day one anymore unless it happens to be your favorite series. My back log is deep enough where I’m on a cycle of buying games a few months after they come out. I don’t think I’ve paid a full 60USD for a game in over a year. Wait a month, then snag a used copy on ebay, wait two months and it will be on sale new….granted I’m an adult with other things to fill my time and time flies. If i were in high school it would be impossible to wait with all of my friends talking about final fantasy VIII