GameStop halts 360 replacement plan sales

by Justin McElroy { Oct 30th 2007 at 3:05PM }

If you're going to plunk down your hard-earned cash on a product replacement plan for a game system, it's got to be for the Xbox 360. You don't have be a statistics major to figure out that you've got a good chance for troubles with the system and if you don't want to be out a console for a few weeks or out some money, the replacement plan on the 360 is probably the only one that's not a rip-off.

Perhaps realizing that they were inadvertently offering the consumer a good deal (and losing a fair bit of coin in the process) GameStop has halted sales of the product replacement plan on all 360 models, according to a memo gathered by GamersReports. If you were among the smart kids who already had a PRP though, don't worry though: Yours is still in effect until it expires.

Tags: gamestop, prp, rrod

Reader Comments (Page 1 of 2)

GRANTED @ Oct 30th 2007 3:10PM

hahahaha

Triforceowner @ Oct 30th 2007 3:10PM

They only want to sell plans on consoles that won't break proving that only suckers by replacements plans.

Grindstone @ Oct 30th 2007 3:14PM

True, considering the 360 comes with a 3 year warranty anyway.

nerrrrrrd @ Oct 30th 2007 3:14PM

agreed. and I'll add only suckers buy from Gamestop. Atleast the ones in my area, which are overrun with little kids and clueless staff.

David @ Oct 30th 2007 5:55PM

quote "True, considering the 360 comes with a 3 year warranty anyway. "

it comes with a 3 year warranty on the RROD ONLY. Remember that the console has much more problems (dvd drive, hdd, freeze, restart, etc). The PRP is worth it.

Lifted 0ne 4l9 (NDF - Fire!) @ Oct 30th 2007 6:04PM

yea mine didnt RROD unfortunatly, just got 1 red light and it was over a year old so i wasnt covered, however the towel trick was workin for awhile, but the the amount of time it worked started to decrease last time it only worked for 3 days after towel trick, so i did the trick again let it cool and traded it in to gamestop only got $130 but better than nothing, hopefully the elite i get will last much longer.

Triforceowner @ Oct 30th 2007 6:18PM

The RROD is the one that pushes it over the top, though. DVD and other problems are at a normal rate from what I can tell.

chinook @ Oct 30th 2007 3:14PM

"inadvertently offering the consumer a good deal"

So true, Gamestop employees (and their superiors) have got to be the biggest bunch of toolboxes gathered in one place.

dsub @ Oct 30th 2007 3:29PM

I work for Gamestop, and I hardly consider myself or most of the people I work with "toolboxes". True, alot of Gamestop stores have dumbasses working behind the counter, but I'd like to think that I'm not one of them.

Something that perhaps you and the media here should know about before you go on running your mouth about matters without investigating them. Gamestop doesn't profit from the PRP's. They are all organized and provided by an outside agency that basically sells insurance plans for consumer products. Sure, Gamestop sees a little bit off the top for offering the service in their stores, but this call came from the outsourced agency, as they are the ones who have to dish out a check to gamestop for the cost of an XBOX360 everytime one gets returned.

I'm not trying to sound like a dick, I just get tired of everyone assuming that all the people that work at gamestop know nothing about games, and therefore are morons.

Mark @ Oct 30th 2007 3:46PM

Well, I stand by my comment. I'm sorry, but it's not that they don't 'know anything about videogames,' it's that they seem to only hire pompous douchebags.

What's especially annoying is the whole 'reserving' scam. I walk in to buy a game that they clearly have a surplus of. In fact, after all the bickering, they end up giving me the game anyway. They say "OOoooh, boy, fffffft, sheeesh, oh man, well, you really SHOULD have reserved that. Oh jeez, man. OOhhhh, boy." It's just so stupid. They know it, I know it. It's really just embarrassing.

Synner @ Oct 30th 2007 4:00PM

I used to manage a babbages before they all became gamestop. The magazine subscriptions, are bullshit, I had an asshole tell me they don't sell them without a sub, the warranties are damn near pure profit for the company,, and you are wrong unless they cvhanged back, right before I quit, they told warrantech (the insurance company)to take a hike and went to giving the warranties direct from stock to get more profit from them. Do you remember MSTs? Multiple Sku transactions, don't get enough of them, they fire you, that's why they always ask about the damn strategy guide. The Preorders go into a bank account gathering major interest for the company, and as an added bonus, they can not be stuck with excess copies of a game at ful price, that's why they are often out of it for weeks, they order only enough so when the inevitable price drop comes, they aren't hit with any loss, customers be damned.
I won't even get started about the trade in bullshit.

Gamestop is lame.

Synner @ Oct 30th 2007 4:01PM

Synner @ Oct 30th 2007 4:03PM

Oh, and another thing, They used to have games on tuesday, when they actually release, now they don't want to pay for faster shipping, so why not get it at best buy if they get it the same time and you don't get hassled all the way out of the store?

dsub @ Oct 30th 2007 4:30PM

I'd say that 9 times out of 10, the reserve thing IS as scam. However, in the case of many games that sell out quickly, it's usually not. Obviously, some of the less popular titles don't need to be reserved, but we constantly run out of and have to turn people away from buying the big release games because we simply don't have enough.

The most recent ones in memory have been Guitar Hero II and III, Bioshock and Orange Box. I honestly remember answering the phone 20 times a day when GHII came out for 360, and telling people that we were all out. Same goes for Bioshock. Granted, we usually have more stock arrive within 2 or 3 days, but right now were all out of GHIII for 360, Wii and PS3. I must have said "it's always a good idea to pre-order these big release games" to 20 people today, not with the intention of sound like a jerk, but so they don't run into the same problem again. Our stock allocation for new titles is purely based on pre-orders. We had 30 pre-orders for GHIII, we got 30 copies.

Alot of times, I will pre-order games myself if I think they are ones that will sell well to walk-in customers but we have no pre-orders. A good example is Ace Combat 6 w/ the Flightsticks. I pre-ordered 2 myself so that we'd actually get sent some, because if we didn't have pre-orders, we wouldn't have gotten any. We got 4 in and I sold them both within 24 hours and had to turn at least 5 more people away. Like I said though, there was no need to pre-order a game like Halo 3, or the smaller games like Ace Combat 6. While I know it's annoying, and I know it sucks, 9 times out of 10 these guys are offering these pre-orders so they can keep their jobs. It's a sad tactic, but it's one that many managers/district managers use to scare their employees into offering the stuff. It has gotten slightly better, but there was once a time where if I didn't meet my specific quota for reservations for three weeks straight, I got canned. It's the company that makes these bullshit policies, not the employees.

Another common misconception is that Gamestop keeps your money if you don't get the game. This is not the case. You can get it back or just put it towards another game or anything in the store.

dsub @ Oct 30th 2007 4:35PM

Synner-

If I had one of the warranty brochures, I'd bring it in and scan it, they are definately outsourced to some sort of insurance company, I just can't remember the name. Also, all that MST crap is gone. I am a product of EB Games before they bought Gamestop, and EB's policies were much more laid back. We are judged more on our ability to sell used games and get trades than anything else now, Subscriptions and Reservations are still a small part of it, but you rarely hear any grief from a DM unless your doing horrible across the board.

I used to tell people all the time, when Gamestop first bought EB, I could sell someone a PS3, XBOX 360, Nintendo Wii, 10 games for each and 3 extra controllers...and if I didn't get them to reserve a game and subscribe to Game Informer, I failed at my job.

The mentality has somewhat changed now, but I do miss the days of being able to sell the discount card for $5 without the magazine, or even when EB had the GMR magazine and card for only $10. It was just alot easier and they didn't make us push it on customers, they actually paid the employees for selling subscriptions.

Synner @ Oct 30th 2007 6:32PM

Actually when you run out of those things, it's because your inventory system tracks preorders so that the company buyers can only buy above the bare minimum. The guy who was Store manager before I took over ( I moved up from sales associate, one thing they do well or at least used to is promote from within)was a senior Store manager on way to area manager, and he gave me all the info they were privy to at the higher levels. Trust me, 9 times out of 10, when you are "sold out" of a game you can walk over to the best buy in the mall and tey'll be swimming in extra copies. Best Buy's buying strategy is a little different, they buy massive qualities at a large discount so when the game drops in price they aren't hurt as much, plus they can make up losses on things like car speakers and home theater, which the markup on is tremendous (I worked at BB and Circuit city too so that's how I know.) Like I said right before I quit they changed from using Warrantech ( I thin kBest buy uses this company) To doing it all in house. I guess they switched back, probably because the overhead of tracking all that stuff wasn't worth the extra profit.

Synner @ Oct 30th 2007 6:24PM

What I meant about he preorder is basically they take 10,000 people's $5 (used to be 10 when I was there) Then they put it in the bank, Now, I had peoplein like 97-98 who had reservations for team fortress 2 and stuff. The money is collecting interest while it's in the Gamestop money market account, then when people come to pick up their game, GS gives them that price off the game and pockets the interest. When you factor in the added benefits of using that number of preorders to base your stock order on, it becomes highly profitable for the company to do it.

Now, they also know there are going to be people who will see the new copy sold out, but maybe there is a used one, and the "oh god, it's sold out " game will maybe influence that person to take the preowned copy, again lining old Danny Boy Demattoe's pockets with a %200 profit.

I was once in there talking some shit about I should reserve like 8 PS3's and get in on the ebay action (this was when you couldn't find 360 anywhere for like 6 months) and the idiot actually had the balls to tell me it's people like me that ruin it for people trying to buy one for their kids and can't find it. So I asked him why do they take more preorders than they know they can fill (the last system the company was able to fill all the preorders at launch for was dreamcast, little trivia for you) and then hype the shit out of preordering it, and he basically had to shut up.

LaughingTarget @ Oct 31st 2007 4:49PM

I love how some someone magically knows the intricacies of the financial strategies of the company they work for when they're a front-line, low-paid grunt.

GameStop doesn't make huge profits on pre-order interest. If anything, they likely just break even given all the expenses involved.

Let us use your 10,000 example. I'm going to make a couple of assumptions:

1. Consumers only put down $5.
2. Consumers don't pre-order more than a month out.
3. The prevailing annual return on investment is 12%

Numbers 2 and 3 are highly liberal assumptions. I, for one, don't pre-order more than two weeks away from launch for games I absolutely want and returns are not necessarily near 12% since it is unlikely they get put into interest generating accounts and may be used for general operating cash flow, which reduces the need for borrowing. The first one is conservative, there are those that actually put in more than $5.

Now, an annual interest rate of 12% is roughly 1% for a month (I'm not going to go into more detail just to get it accurate out to four decimal places). Those 10,000 pre-orders generates $50,000 of cash which, at that return, only brings in $500. Not the huge windfall profits you're making it out to be.

Now, lets extrapolate this over the whole company. Assuming GameStop annually takes 5 million pre-orders, we're only talking $250,000 return. Again, not a huge windfall profit for a company that makes far more money than that. It is a drop in the bucket.

However, we do have to remember that GameStop calls its customers with an automated system. You know, that lady on the phone with the corny name ripped straight out of a bad fantasy web comic? The average cost per minute for GameStop to call is $.04. This translates into $200,000 to call those 5 million customers. That leaves $50,000. Now we have to consider the maintenance of that machine, $5,000, and the salary of the person they hired to speak the name of every game that is ever pre-ordered, $45,000. GameStop is left with, under optimal conditions, with nothing.

Hence, under the best conditions, GameStop breaks even running the pre-order service. GameStop doesn't do this to make a quick buck off investment returns, they do this as a differentiating model. Many of us (me included) are too busy to constantly keep up with release dates. I'd be perfectly happy dropping $5 and having them leave a message on my machine the day before so I can pick it up the following day on the way home from work. Saves me the time of visiting their website on a regular basis to check up on the release date.

It is a convenience service. The interest generated on my $5 goes toward paying for the convenience features of it. There is no profit.

Mark @ Oct 31st 2007 7:28PM

You are a jerk.

Shagittarius @ Oct 30th 2007 3:14PM

The only other warranty I know of thats a good idea:

Office Depot: Office Chair Warranties, for 3 years they give you all your money back when you call them on the phone and say your chair is broken.

EihBeir @ Oct 30th 2007 3:16PM

Just another reason why GameStop is the last option for me.

Mr Khan @ Oct 30th 2007 5:31PM

Only option around here, unless i want to drive for 30 minutes in both directions

K-Mart is totally scatterbrained, and Wal-Mart, while better for getting the bigger games (although not the swag) is absolutely hideous for getting anything obscure, and my need for instant gratification precludes shopping online 9/10 of the time

Skeffington @ Oct 30th 2007 3:18PM

Does anyone know what the failure rate of the most recent Xbox360s have been? I'm tempted to get one, but three year warranty or not, I'll stay away from it as long as it is likely to die an early death on me.

DemonGSides @ Oct 30th 2007 3:22PM

I don't know the exact numbers, but lately, with new chipsets and the acknoweldgement that the console isn't exactly a solid piece of hardware, they have only gotten better.

I'd say its safe to buy now, but ask if the one you are buying is from a new shipment, or if its been sitting around in the store for a while.

xXSpartanF13Xx @ Oct 30th 2007 3:24PM

I would think the newer models out now with new heatsinks are not as faulty although I personally have never exp RROD, or just go for the Elite =)

xXSpartanF13Xx @ Oct 30th 2007 3:26PM

Or your best bet is to get it at Walmart since they are constantly getting newer shipments everyweek.

Cyro @ Oct 30th 2007 3:40PM

@ xXSpartanF13Xx :

Do you use your Elite with a intercooler ? I using mine with one, just to be safe. But I have had 2 intercoolers die on my now. Those are not good quality. I have the black one also and it also died on me. one of the fans stopped working.

Brucie B @ Oct 30th 2007 3:19PM

Gamespot & EB SUCK Anyway!

SoulBlade @ Oct 30th 2007 3:21PM

Oh noez! Gamestop doesn't want to lose money! They are teh sUcK!

Anyway, I buy games from Gamestop... they're fine. Don't really converse with the staff - just walk in, tell them what game I want, and then walk out after I swipe my credit card. Never really had an issue with them and hopefully won't with my current process.

arrrgh @ Oct 30th 2007 3:23PM

hahhaah don't worry they'll fuck that up too

Gbogdan @ Oct 31st 2007 2:23AM

@arrrgh

I don't know what gamestop/EB you and all of these other people go to that make you constantly talk shit about them, but I feel sorry for you. I work at an EB and every person on our staff is very knowledgeable about gaming, and does whatever we they can to help a customer(unless that customer is a complete and utter douchebag to us in which case we usually just ignore them, which I am assuming is why you have such a problem with gamestop)...except Josh. He sucks, maybe they made an army of clones and sent him out to all the stores. In which case you have every right to hate Gamestop/EB.

FM @ Oct 30th 2007 3:22PM

Good job MS for adding the 3 year warranty.

RankHypocrisy @ Oct 31st 2007 10:50AM

Yes, and it's especially great because we all know it was motivated by the pure milk of human kindness, and not as an effort to avoid a recall or a class action lawsuit.

Vader582 @ Oct 30th 2007 3:22PM

I believe the 3 year MS warranty is only on the RROD. If something else goes wrong, MS will fix it for a price.

F. Rocker or Fernando R.? @ Oct 30th 2007 3:24PM

"Nintendo has provided Super Mario Galaxy games to stores for their Wii interactive systems. Nintendo is concerned that customers may play too deeply into the game and post video footage in the internet. Please be aware of this concern and take steps to preent customers from doing..."

AK @ Oct 30th 2007 3:31PM

They don't want people to find out that you have to beat Bowser at the end...

AstroZombie @ Oct 30th 2007 3:31PM

"...the Mario."

chinook @ Oct 30th 2007 3:40PM

Doing the Mario. A+++++++

Slaziman @ Oct 30th 2007 3:44PM

Nice one Astro

Slaziman @ Oct 30th 2007 3:45PM

it actually ends with "this in your store. Thank you for your cooperation."

dsub @ Oct 30th 2007 4:43PM

they want us to delete all the saved game files at the close of business everyday. If Nintendo doesn't want people to play the game, they shouldn't send out full versions 2 weeks before the release of a game. I've already played through at least the first 6 hours of it. It's absolutely amazing.

Micheal82 (MCDF- Halo Ring) @ Oct 30th 2007 3:29PM

At least they won't sell it to you. Unlike Best Buy who sells them and then when you get the RROD they tell you send it back to MS because the extended warrenty doesn't cover to the RROD.

marc @ Oct 30th 2007 4:52PM

Best Buy covered mine. Once they verified the RROD, they let me go pick one out from the floor. I moved up from a core to a H3 w/ HDMI.

Christopher7xii @ Oct 30th 2007 4:21PM

Dont know what you're talking about... My BB in Westland, MI replaces your Xbox on the spot, mails out the system for you and does all the background work. Just bring in your busted one, grab a new one off the shelf and you're golden. No hassle or nothing.

Micheal82 @ Oct 30th 2007 4:55PM

It must have been the BB I went to just outside of Chicago. They told me that the RROD wasn't covered by their plan and to send it back to MS. I'm going to try another BB and see what they say.

Mike @ Oct 30th 2007 3:29PM

There is a few stores that still offer a replacement warranty..

Slaziman @ Oct 30th 2007 3:43PM

Who to flame? MS or Gamespot?

Hmm...

Rask @ Oct 30th 2007 3:46PM

The MS extended warranty is only 50$ (probably cheaper than the GS/EB plan was anyways) and that'll cover your system end to end for 3 years anyways.

I bought it last may when I bought my 360 and I recently had to return mine cause I was getting disk Unreadable on retail games and demos. They replaced the HDD and that didn't fix it and then they replaced my 360 without any cost to me.

Go for the MS plan. Sure you can't walk in a store and exchange it but at least it'll cover you thoroughly and it won't expire immediately if you use it, forcing you to get another one(I'm looking at you Best Buy).