Game publishers put those stores out of business.
I find it much more plausible that Walmart put those stores out of business.
The simple reality is that the margin on most NEW games for GameStop is around $1.
As of the fiscal year ending in January 2009, GameStop has an average 21 cents on the dollar gross profit margin on new software sales. On a $50 game, that comes out to $10.50. (Source: http://www.gamasutra.com/php-bin/news_index.php?story=23357)
At that margin, they simply cannot stay in business.
This might be true if your number reflected the actual state of affairs. But it doesn't.
The ONLY solution is for the publishers to give more money to retailers.
Er, wouldn't this merely create an opportunity for Walmart to undercut the specialty retailers even further?
Other industries have had to deal with the used market and somehow managed.
Try making a living as a mid-list author, sometime.
The combination of used sales and piracy ultimately drives many media publishers to succumb to the very worst aspects of their corporate natures, and become ever-increasingly blockbuster-driven, by necessity. Hype trumps quality, because it's all about the first week of sales. We're rewarding them for the wrong behavior. The content-creators don't like it and the fans don't like it, but this is how these industries have "somehow managed."
If downloadable direct-to-consumer content creates a little more wiggle room for creativity, risk, and innovation, that's a tradeoff I can live with.
In fact, I would argue that the games industry industry is driven far more by novelty than say, the book industry, which means the competition from used merchandise is is fairly weak.
The problem isn't with New Game X competing against Obsolete Used Game Y. In that scenario, the competition would, indeed, be weak. The problem is that in practice, we are faced with a scenario in which New Game X is often competing against Used Game X, a mere week after release. That is not weak competition at all.