PLAY N TRADE: Video Game Franchise Played Out?
Are you familiar with the Play N Trade video game franchise?
The franchise owners buy and sell used video games and video game related supplies and merchandise. At FranchisePick.com, Dale, an MBA candidate who is researching the Play ‘n Trade business model had some disturbing things to say about the Play N Trade used video game franchise :
I will graduate with my MBA in 6 days and my thesis is on Play N Trade. My professor has his PH.D. in management and we have been working on the PNT UFOC and financials for 4 months. I called corporate for information and researched everything I could find.
The Play N Trade I went to did not have a play before you buy policy because the owner needed batteries for the game stations and he could not afford to buy them. He told me, a potential customer, that he was losing money. I felt so sorry for him I asked it I could buy a Wii but he did not have one in stock. As I looked around the store, “Out of Stock” signs were everywhere. I went to another store and had a similar experience and at the third store the owner tried to sell it to me.
I have a co-worker opening a Play N Trade. I wish she had not bought the hype. I have heard it as well and it is good hype but unrealistic.
My professor told me to tell my friend to “get out if she can.” It is not your business skills effecting your business. I have to defend my thesis and we can not even find a way to make the organization work. When I presented the company to my professor I thought it was great and he just smiled and said, “Let’s see how you feel at the end of the semester.” He was right.
Have you had any experience with the Play ‘n Trade video game franchise opportunity? What have you heard? Share a comment below.
129 thoughts on “PLAY N TRADE: Video Game Franchise Played Out?”
Current Franchisee –
I’m not talking about over pricing new product or even current generation used product. Where I’m seeing Play N Trade stores failing is in pricing retro games, something Wal-Mart and Gamestop don’t even offer. The stores I’ve watched fail are the ones who charge eBay prices for their retro stock, plain and simple. That’s not the entirety of the problem, but it is a huge part. If you decide to charge $50 for Power Stone 2 rather than corporate’s POS price of $14.99, you’re going to have to watch that thing languish on the shelf.
If you priced at the POS price rather than trying to take matters in your own hands, you’d be able to watch that game fly off the shelf. Now extrapolate that situation to your entire used stock – I’m not an economist by any means, but having merchandise rot on your shelves at eBay value is much more costly than selling the game quickly at the POS price. You should be looking for a price that offers the most profit in the quickest amount of time, not a price that solely offers the most profit.
My whole point on the “Mom and Pop” thing was that the Play N Trade brand doesn’t mean enough to be worth the huge franchise fees. Most people have never heard of the brand unless there is already one in your area. You’re likely to have just as much success starting your own store. Corporate will tell you that they’ll advertise your store, but I’ve yet to see a Play N Trade ad outside of those spam mail coupon clipper periodicals. I just can’t see why a Play N Trade store could possibly be worth the buy-in price. Sure, you get access to wholesalers… who cares? You could probably make just as much money buying your new stock to fulfill preorders off of Amazon. New releases are usually $54.99 (tax free in most states) with some $10 – $20 Amazon credit promo attached. With some smart preorder management and judicious use of your free Amazon credit, you might even make more going that route and ditching the wholesaler. Plus, you can resell those Amazon preorder bonuses on eBay for a pretty penny, which, in many cases, makes new game purchases cost negative amounts after all the bonuses and sales.
Like I said, if you went the Mom and Pop route, you’d have to innovate. It might be hard establishing yourself in the long run, but I can’t imagine establishing a PnT would be any easier.
As far as the Play N Trade is concerned, the end is near. The CEO of 2 years just left for a position @ Amazon. Stores are closing at a rate of 1-2/month. Current franchises are closing up shop, declaring bankruptcy and sailing off into the abyss that is debtors hell. PNT expects to open 4-5 stores this year (I wish them luck).
If you are reading this and considering a franchise with Play N Trade let this be a warning. If you are reading this you are already nervous about spending $200K to open your first store. You are researching whether or not this business is for you.
Some revelations and some truths:
You will NEVER beat Gamestop at the business they invented. You will have mild success and it will slowly eat you alive. You sell the same products as the giant but you have a couple of “aces” up your sleeve but they don’t really pay the bills unless you do massive quantities (parties, gamers club, repairs)
QUESTION everything before you sign the UFA…if something sounds “too good to be true” expect that it is. You will not walk into this business and make a fortune but may eek out a meager living. I did my due diligence, I talked to current owners, I kept up on indusrty knowledge and I stocked my store.
When Gamestop decides to “level” the playing field…you will be the first under the bulldozer.
Here’s what you need for success:
Minimum of $250K in the bank after your build out. If you do not have access to that kind of operating capital…WALK AWAY!
A knowledge of the business world…if you cannot open a can of beans by yourself you will be hiring a “manager” or the district manager (who you will pay handsomely) or Area Developer in your area will “help” you hire.
An expectation to work long hours – But you already knew that – for little outcome for a minimum of the first 2 years. Here’s where the $250K starts to come into play.
You will hear from PNT Corp about the “lifecycle of the video game” and “trade in games make the profit”…these are both true but heavily overstated by PNT Corporate employees. On brand new games expect to make $10 profit of which expect PNT Corp to take 5% of the total sale ($3)..this leaves you with $7 to make rent, payroll, utilities, marketing, and advertising. Gotta sell alot of $5 games to make $3000 in rent!
Expect to put out $1K-$3K/month in advertising and marketing while you “establish” yourself. Gamestop is established, people already know they exist, you will spend alot of money the first 2 years for marketing.
Field support from PNT Corp is minimal, the POS is too expensive and very flawed, expect to use about 10% of the knowledge the POS has to offer and the other 90% is wasted server space. Everybody uses a different 10% so it’s hard to say whats the most important. My inventory has been off for 6 months now, the streaming is sketchy, and the answers we get is “another rollout is in beta testing”.
You will be required to sign for the National Ad fund and Unified Buying Program. For this I am sorry. Currently there is no brand recognition, no national advertising platform, the current website is unacceptable and you will pay for all the inadequacies of the previous employees and CEO’s. The marketing programs you will recieve are adequate but do not promote foot traffic (which is what you will need in order to stay in business).
Play N Trade owners are some of the best people around but they were duped at some point in their business career. To the owners, Keep on getting better and hold out but don’t lose your life to PNT Corp.
I also l looked at PNT a couple of times. Once this year.
I opened my own video game store on my own. I would have probably gone with PNT for the name and POS, but the POS at that time was poor(better now I think) and there was no name for them really in Michigan.
I have been open for almost 3 years now. I did about 350k the first full year of being open and just over 500k for the 2nd full year open. While that may be good or bad, i’m not sure….I think pretty good.
I could not get any information from PNT on even average sales that the franchises did….so, here is MY performance for you…My costs are high though as I have a higher rent for a pretty good area where we have about a 75,000 population in about 5 miles…or something like that.
Like every says, do your research. ASK QUESTIONS!
Actually I’m at this site from googling “play n trades shutdown”. Honestly I’m in a big area that no longer has any play n trade locations.
The one in my local area just shut down and 6 months ago I drove to the location 45 mins away from me and when I arrived the signed on the door said:
“Closed. Property seized by landlord from failure to pay rent. No one allowed to enter”.
So I do find it odd that the poor owner couldn’t afford his rent and why the other two locations have shut down. I live in SC on the beach and I can’t find a location within 50 mils on the the store locate feature..
Ted…congrats on “going it alone”…your money stays with you.
If given the opportunity to do it again, NEVER! This business is so cutthroat that PNT has limited chance to succeed. Pisspoor service from Play N Trade for the $$ that you spend in royalties. Vendor relationships that you cultivate yourself and the pricing is based off YOUR volume not the franchisors volume.
National Advertising is non-existent. You can do it yourself without the need of national branding.
Franchisees currently pay 1% to the National Ad Fund to get a posters and a couple of tourneys/year. Keep the 1% local and it will do you better in your hands than in the hands of some California marketing moron with no idea where you town or city really even is. You know your location better than anybody in California will EVER.
If you do not question everything about the PNT Corporate office and the 2 corporate stores (who are not even inthe top 100 PNT Stores)..then you get what you deserve in terms of failure.
I would recommend going to VISIT AT LEAST 7 PNT’s near you….if you do not you will get what you deserve. Do not rely on PNT Corps words or “promises” of success. You will find that 10% of the currently open stores do more than $10K/week in sales…the rest are below $10K. 170 stores barely making ends meet! Draw your own conclusions.
This is reference to Mike’s post from Canada..I wonder if you can contact me..we are planing to open a Video Games chain in the Gulf Region.
As per the administrators, you have to email them that you want your email address forwarded to me. I am happy to share some thoughts for you if you intend to pursue a Video Game business. Optionally you can post a few questions here and I’ll reply.
I haven’t looked too much in PnT of late but from some of these posts, I imagine it continues to go downhill.
Please walk away from PnT. I’m not sure if you are posting on this site or reading it for that matter, you are ready for PnT ownership.
Run, hide, and run some more!
Thanks Mike, I’ll do so.
mainwhile I’m looking for a solid franshise in the VG industry and I’m seeing
PNT as the only option…please advise
I am glad to see Tilden for Brakes has been rated as the worst. I’m a Tilden franchisee and I can see why.
PnT has some good ideas. I liked much of what they were doing (again, that’s why my group was willing to invest a million dollars just for the rights) In particular they started to understand that really the success of this type of business is going to come from the “Social” Aspect of Gaming. That is hosting parties, starting leagues and running tournaments. What no one has done yet (and I looked into this is well – it’s very viable) is a Store that doesn’t center around selling console games but rather providing a space for gamers to meet and play, with the retail being a sideline to this. Anyone with vision will be able to see that VERY SOON there will be gaming leagues all over the world. They already have the “Gaming Olympics” and Games like “League of Legends” are running paid tournaments every week. The money here is going to be HUGE.
So, why try to eke out a living selling Ice Skates, when you could be the one who owns the whole Ice RINK – if you understand where I am going with this.
But I digress, The Issue I had with PnT was their ability to assist and support their Franchisees. And also their sales projections to revenue to profit numbers, which I saw as very flawed. In essence, EXCELLENT concept. WEAK execution. You really need both to succeed.
Khaled, IF you are serious and have the funds (I would suggest about 500k) AND you sincerely want to pursue this, you should meet with the PnT people and dig deep. Tread carefully, ask a lot of questions and find out if they can offer you what you are looking for. If not, and you still want to proceed, Talk to me about the “social gaming store” concept that I developed but have not pursued as of yet. I have a full time designer on staff who poked around with this a few years back but we got busy with other things so the whole project was put on the back-burner. I think it’s a winner for someone with the time and energy and dollars to make it a go.
There are strong regional franchisors out there whose average unit volume and profitability are much higher than play n trade.
Five years ago I bought a PnT franschise. This has been the worst experince of my life! I was lied to by corp. on what the cost of new systems and games would be, as well as profit margins. Also, corp. failed to keep their word on what they were going to do to brand the name and logo of Play N Trade nationally. There was no advertising, at least in my area in the South East. The list goes on to the
many promises they broke! Warning …. stay away from them!!
Unfortunately, I had to close my store and I would like to sell everything that I have to the same person. Maybe there is someone out there reading this who is wanting to start their own business and wanting to open a video game store – without going the franchise way. Trust me – you would do much better opening a place on your own without paying the high franchise fees! Not to mention having to pay extremely high start-up fees which would include high priced build out fees.
I have a whole stores worth of stuff – everything you would need to open a video game store. I even have all the office equipment (all the stuff you don’t think about, that you’ll definitely need.) This is the best way to go – do it on your own!
WILL SELL EVERYTHING FOR $9,950
A bargain since I pd. $75,000 (Sad!)
Don’t be taken like I was, and so many others!!!
CALL ME (Greg) [redacted]
From: Augusta, Georgia
I`m interested, so please either you post your email or post a alist of what you are selling..good luck
PlayNTrade are making positive moves into electronics, buying and selling used iphones, ipads and google devices. This is not a company that wants to stand still.
Greg i am interested in purchasing everything you have for sale. please send me your contact info so i can get in touch with you!
Adam & Ryan,
Go to Unhappy Franchise page called ” Play N Trade stores closed & closings ”
for the info. you want is there at the last posted entry.
Play N Trade at Bloomingdale, IL just closed out last year.
I agree with this article.
Just wanted to report that I sold all my Play N Trade stuff from my closed store. It took 8-9 months, but I did find a buyer who wanted everything – all sold as a package deal, and I didn’t have to break things up. So nice to close that chapter in my life, and now I can move on without that hanging over my head. Thank you God for bringing the right buyer! Thank you Craig’s List.
Good luck to all those people who also may be faced with selling. Hang in there and
Pray, pray, pray!!!
thanks a lot for getting back to me greg (sarcasm), im sure you ripped off some buyer on craigslist and charged him twice as much, dick.
Since I am no longer in the system, I thought I would share my experiences with anyone considering getting into the video game industry and if there is any significant benefit to being involved with The Big Bad Play N Trade franchise system in the hopes that you don’t make the same mistake that I and the hundreds of others that got duped into believing that you’re making a good investment.
If you ask 5 people at corporate how many stores they have open your likely get 5 different answers. Also, if you asked the same 5 people how many stores have closed, once again you’ll get 5 different answers if you even get an answer at all. I think its fair to say they currently have app. 160 stores open in the US and Canada, app. 15-20 of those stores are in Canada through a recent merger During their peak, they boasted about having 240 operating stores. In the past couple of years, I would guess they’ve still opened 20 new stores to new franchisees (that’s probably on the high side). . Let’s do some quick math…. So of the 160 current stores, roughly 40 of those stores were open in the last 2 years, app. half new franchisees and the other half through the merger. So they where at 240 at their peak and now app. 160, with 20 of those being through the merger which translates into 120 stores that have closed. Roughly HALF or a 50% success rate (I would say this is a generous figure if anything). These statistics are off the charts!! So while they are opening stores, they are closing more than they are opening.
There are some key factors that I would be willing to bet everything I lost on going into business with them that I promise you they will not share with you. Unless your name is Gamestop, Best Buy or Wal-Mart, you are limited to purchasing your games from a 3rd party distributor. The Big 3 buy direct from the video game manufacturer. What does that mean? It’s pretty simple… Big Bad PNT offers zero, zilch, nada assistance in the ability to purchase new games. If you are going to try and compete with the big boys, you have to not only sell new releases, you have to push pre-orders. It’s part of their montra and its true. In order to push pre-orders, you have to have great relationships with these distribution companies. What this means is that its critical to get your titles prior to release date. This varies by location and distributor. Some distributors are not even able to service certain parts of the country based on where they are located and how many copies of these titles they are allocated. Allocation is a very important term in this industry. Just because you want 500 copies of Call of Duty doesn’t mean you’ll get it. By no means am I saying that its impossible. Here’s how you can improve (but still not guarantee) your chances… You have to find a great distributor in your area, if there is one that has the clout to get their hands on enough titles to appease all their clients, not just BBPNT. There are 2 ways of getting these titles, 1) you leave a revolving line of credit with said distributor and when you’ve used that line, you have to put money back in to able to get future titles. In other words, you have to pre-pay for your games, not COD, not net 30, PRE-PAY!! The other is based on your credit worthiness, just like applying for a loan. It’s based on your credit history, collateral, etc.. Even the best credit will not get enough inventory, especially for the bigger titles and during the holidays so that really only leaves the 1st option. Most if not all of these franchisees (existing and former) find it difficult to tie up enough funds to get the inventory they need. While you are taking $5 deposits on these titles so that the consumer is “assured” of getting their title on release date. These people don’t want to wait, they are going somewhere else to get that game. Many times these titles come in later that day or the next day and you’re pissing off and/or losing customers. Imagine going to see a movie on release date and someone coming out saying we never got our movie and doing that repeatedly. I don’t know about you but I wouldn’t go back, or at least not to get a new release. This is where the fun starts. Not the recipe for success to say the least.
BBPNT does not own any corporate stores. They used to own 1 in Orange County and closed it down due to poor sales (at what seemed like a very good location so you can’t blame it on the real estate), so in essence they are just in the business of selling franchise’s when they have no clue how to run a profitable store themselves. They are telling you how great their franchise is and you should put your hard earned money into their business when in fact they know the difficulties/challenges that are waiting for you after it’s too late. Pretty cool huh?
If they tell you that they have buying power collectively through all the franchisees, it’s a crock!!! You do not get better pricing because you belong to a franchise model unless there is 1 buyer. That’s the way the world works, buy in bulk, get a better deal. Until recently, they didn’t touch anything (new/used games and accessories). Now they are nice enough to get you pennies on the dollar to buy back your used inventory only to turn around and sell it to another franchisee or on their e-commerce site for a profit. That’s nice of them isn’t it? I haven’t even gotten into how volatile the industry is or the tremendous turnover they’ve have with their corporate “if you wanna call them” executives in the past couple of years. Or how none of them have any video game industry background of any relevance. You are paying a franchise fee and royalties for the POS system and some nice marketing material. Translated, that basically makes you an independent that’s paying a franchise fee and royalties.
While there are some franchisees that are successful and making money, the vast majority are barely making any if not losing and simply can’t continue bleeding. Again, I would be willing to bet everything I lost that there are indeed more casualties in the not too distant future. So after you’ve lost hundreds of thousands of dollars, they will still come after you if you have an outstanding balance to the extent that they can. They may seem nice and sweet while you are paying them royalties but once the faucet gets turned off, they flip the switch and turn into vultures and will pick at as much of the carcass as they can. In my opinion, these people belong in jail next to the Bernie Madoff’s of the world. Please, please, please, I am begging anyone who reads this before its too late to proceed with extreme caution unless of course you have a few hundred thousand to burn like our friend Mr Chesney above. If you are interested in hearing more, please post your comment or feel free to send me an email at [redacted*]. And oh by the way, speaking of class action, nothing would serve them justice more than an army of us to put them out of business and stop destroying peoples lives. You would be better off giving me the money, at least you know where its going and it would be for a great cause…lol. Sadly, there’s more truth than humor in that last comment.
*NOTE: We don’t allow posting of personal info in comments. If you wish to exchange info with another commenter, please send an email request to UnhappyFranchisee[at]gmail.com. Thanks. ADMIN
WOW!! There is a lot of negative sentiment towards PNT. This definitely raises a red flag for me.
I submitted a request for franchise information on the PNT website and I was contacted a few months later by CDO (Chief Development Officer) for the area that I am in. He said a franchisee who owns 2 stores in the area is trying to sell his stores due to non-profitability. My first question was “why would I want to buy 2 stores that are not making money?” The response was that the franchisee is the owner of several other stores in industries not related to VG and does not have th time to spend at the stores overseeing operations and building and deploying an effective marketing strategy.
After doing some research in the industry I have learned that it’s definitely a high volume industry, but the big players are definitely dominating; ie: GameStop; Walmart and Best Buy.
I am wondering though, can we possibly build an edge and a micro niche buy engaging gamers in the area to build a tournaments competition style community that we can host from the PNT stores and try build profitability from events based activities rather than just retail sales of games. I anticipate that building some excitement and buzz around such events can increase the awareness, reputation and profitability of the PNT stores I wold be concerned with.
Does anyone have some thoughts, suggestions, comments or criticisms?
Sounds to me like you have an entrepreneur spirit. Now ask yourself why you buy a franchise that has total and complete control over its franchisees. Go it alone! Anything worth taking a chance on, financially, is worth reaping the work of your OWN labor and not letting a franchisor manipulate your business and then decide when its time for you NOT to succeed.
Digital distribution means that there is way too much risk for one entrepeneur to make a bet in this space..
i won’t say there is no chance a ma and pa shop can’t make it…there may be a good used game businesses for many years…repairs and events could add some cash flow..but look around…best buy is selling used games…its a volume business
apart from the past risk that inventory mismanagement (buying too many used games at the wrong price) eats up cash flow, there is now significant consumer $$ getting plowed into owning downloaded content…
the future may include big name titles being almost given away to lock people in..think call of duty 5 for a nominal price, but the guns cost $5/each, and if you want to play co-op its 29.99 paid directly to EA……i’m not saying that’s precisely what’s going to happen, but it illustrates how game companies will look to extract more value from consumers and none of that value will go to retail operators..
Play N Trade in Naperville, IL has closed as of July 2013. This store was owned by the regional developer.
How does a franchiser explain away 100 plus franchise closures? The closed locations count doesn’t even include the stores that owners invested 300k and sold their stores for 50k!
Clearly these were franchisees that were unwilling to do the work to get their new game inventory from Best Buy
Even though a huge number of franchisees have failed, they continue to try to sell new franchises. I would advise any prospective franchisee to read all the posts they can find on the Internet.
September 6, 2014 at 5:02 pm
Paying royalties on a game store is retarded. The margins in the video game industry are hard fought for. You WILL NOT become a millionaire owning a video game store… However, the industry is lucrative and you can make money if you are supported, have the proper tools, plan,and if you work hard. I support my clients… Set them up…for a one time fee…and take no royalties. My store are way more packed with product then play N trade and they offer nothing….that I don’t do…however.. I offer more than they. If you are researching this company because you are looking in to opening a video game store…I can help.. I’m not here to mud sling…you can simply read the comments here for that. Do yourself a favor and at least look at my site. My clients speak for me! My greatest strength is that my clients are satisfied. I hope to hear from some of you soon. I have a solid turn key product and am trying hard to get the word out!