Amazon just announced its game trade-in program, and GameStop doesn’t seem happy about it. According to EDGE, the CEO, Dan DeMatteo, said that there’s no chance of Amazon succeeding.

Have a listen:

I think it would serve us well to dissect these comments. You see, GameStop has been very profitable over the past several years. Take a look at this chart of historical stock value.

So Dan doesn’t think Amazon can ride on his gravy train. Listen closely because I’m gonna lay a giant bomb of truth on you… he’s lying. The fact is that he’s so scared right now, he can’t think straight, and I don’t think yesterday’s titanic drop in stock price has anything to do with his fear. Hell, that’s just the tip of the iceberg.

This is a pretty classic cycle: company has an idea that takes off > company rides that idea to the bank for a good long time > company buys out all its competitors making itself a monopoly > company becomes bloated and stagnant because innovation is no longer necessary > new company rolls around with a little innovation and a lot of balls and eats away at market share.

He says that Electronics Boutique (GameStop bought them a few years ago) tried the mail order trade-in thing and failed. Does he really think this is reason enough to think that Amazon will fail? The answer to that rhetorical question is no. I’d say that I’m impressed by his arrogance, but it’s so obviously a load of crap that he doesn’t get any points from me. He clearly doesn’t believe what he’s saying. No business man would be dumb enough to believe that a competitor has “zero” chance of success; he just needs to show strength in what is obviously a failed effort to convince investors not to jump ship. Amazon has the brains, the infrastructure, the spirit, and, most importantly, the size to make this operation successful.

It’s no secret that you get ripped off when you trade your games. The desire for a competitor in the market has been there for years. That’s why places like playSwitch.com have popped up trying to cash in on the inequity of these deals. Unfortunately, none of these game trading outposts have had any real success. They just don’t have the capital or exposure to make a reasonable dent. If any of them do, it will be a slow process, though one that we should welcome.

Let’s take another look at what Dan had to say. There’s another gem in there that proves he’s full of it. Remember everything he’s been saying over the past few months about how game trading is vital to the industry? If you haven’t been paying attention, you should know that he pushes the point that games are most often traded for credit which is put towards new games, not other used games.

Now think about the last time you were within twenty feet of a GameStop. Can you hear it in the back of your head just by imagining it? I’m talking about the voice of that socially awkward teenage boy (or oddly out-of-place hot chick) from behind the counter giving you eighteen reasons why you should put that newfound store credit towards the reservation of an unreleased hot title… If you can’t hear it, just play along. I promise, there’s relevance.

So Dan’s been telling us that people trade games to get new games, not used ones, and you should believe that part because it’s mostly true. But now he’s saying that there’s “an immediacy for currency when they want to buy a new game.” Now, my gut reaction is the thought that Amazon credit is actually more liquid than GameStop’s, but what’s really important is that GameStop eliminated this “immediacy” by embracing the reservation system. Also, if you hadn’t noticed, Amazon will take your money, or gift card, to reserve the game you just can’t live without, and it will even deliver the game right to your house the day it releases. The money you save on tax can go towards shipping, and you can sigh a patriotic breath as you bring competition back to a market that has been monopolized for far too long.