The Business Idea

From Luis Gallego Hurtado - Not Another IT guy
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The beginning: a video console

Most of the ideas come from some need

2015, London. I had been living there for last 4 years.

My parents, wanted to buy some gift for their grandson, my nephew who was 8 years old.

I thought that a video console would be a great fit, but their budget was pretty low to buy any top brand new video console (Playstation 4, XBox One, or Nintendo U).

In addition, he was a bit shy, so I thought that Nintendo Wii was a great fit. Party and family games were great!!

Production of the Nintendo Wii video console had ended in 2013, 2 years before, so I would go for a second hand video console.

I checked in both, online second hand marketplaces, and offline High-Street stores, specialised on second hand items. I found there second hand Nintendo Wii consoles very good condition, so I purchased a second hand Nintendo Wii in a high-street store for a great price!

Assumption: Video consoles are on demand even years after their production ends

Second step: looking for Nintendo Wii video games

Then, I looked for brand new video games.

I wanted some nice video games so he could play. I discovered that Nintendo online services for Wii had been discontinued in 2013, so he wouldn't be able to play online.

I checked online: I found plenty of brand new video games in Amazon, Ebay and other online specialised e-commerce sites!

I then checked offline: Amazing, 2 years after production of the video console had ended in October 2013, big supermarkets still brand new video games on stock!

Then I though that supermarkets wouldn't show games on stock unless there were customers interested in them

Assumption: Video games are demanded even years after production of video consoles ends

Next step: checking the second hand market

Well, budget was low, and I had to buy several games so I checked the second hand market.

High-street second-hand stores were really busy trading second-hand vide games. A good percentage of their customers were interested in buy and selling vide games.

In addition, the second-hand general purpose marketplaces also offered video games.

Assumption: The second-hand video game market is healthy. There is supply and demand of second-hand video games

The point was that I lived in UK and my nephew lived in Spain, so I decided to check the top general-purpose online marketplace in Spain, Wallapop.

Wallapop was the leading marketplace in Spain. Nearly every under-50s Spanish person had traded a second-hand item something through Wallapop. The app is focused in location, so it helps you to find the closest matching items you are looking for. By that time, payments were not handled by app, but made in cash, straight to the seller. In addition, delivery was made face-to-face.

I found plenty of Nintendo Wii video games on sale in Wallapop.

Assumption: Face-to-face delivery used in Wallapop was appealing for sellers and buyers on trading video games

I also discovered that when I looked for Nintendo Wii, I usually found sellers selling more than 5 video games, and I needed to get in touch with the seller, in order to know which of the video games were still on sale. In fact, most of the times, the game I wanted was already sold, so Nintendo Wii video games were quite demanded.

In addition, most of the times, sellers didn't update the advertisement, so I found myself wasting so much time.

Assumption: General purpose marketplaces did not offer a great customer experience for purchasing video games

Sellers were also contacted even if the buyers just wanted to make a deal about the asked price.

Assumption: General purpose marketplaces did not offer a great customer experience for selling video games

In addition, platform did not protect buyers in case video game did not work as expected, or in case of piracy. They did not either protect sellers, in case buyers take the item, and just run away.

Assumption: General purpose marketplaces did not protect buyers nor sellers on trading video games

So finally, I purchased a couple of video games in Wallapop, but not before making some business idea from all the assumptions I identified

The market niche

A couple of years later, in early 2017, I would also check the video games market for bit platforms such as Sony and Microsoft.

They were were promoting their own marketplaces, pushing players to purchase digital versions of video games in there.

However, market rate was quite heterogeneous for different countries, as many players still preferred physical video games.

Assumption: Many Players prefer physical copies of video games, over digital ones.

And the final assumption I added in 2017, just before starting the journey:

Assumption: Before 2023, there is still market for physical second hand video games, even for top video consoles (Sony Playstation 4 and XBox One).

The business idea

Based on the business assumptions I identified, I could develop the following business idea:

The creation of a multichannel digital marketplace for trading second-hand video games, and based on face-to-face delivery and protection of digital payments from buyers to sellers, could fit a market niche in several countries.