Goozex

» see goozex.com as it lived, on the wayback machine

~ the eulogy ~

Goozex worked in three countries: the United States, Canada and Bermuda. That list is not a business decision so much as a postal one. The entire service depended on a stranger being able to put a game in an envelope for a couple of dollars and have it arrive intact within a week, and the moment a customs form enters the picture the whole arrangement stops making sense.

It opened to public beta on 10 July 2006, started by Jon Dugan with two graduates of the Maryland business school. The name is a squeeze of "goods exchanged". You listed what you were done with and queued for what you wanted. When the software found a match it told the owner to ship, gave them twenty six hours to accept and three days to post it, and moved points from one account to the other when the receiving side confirmed.

The currency is the part worth remembering. A hundred points cost five dollars, titles were priced by Goozex rather than by sellers, and everything sat between a hundred and twenty four hundred points in fifty point steps. Every trade also cost between one and three tokens at ninety nine cents each, halved once your feedback score passed five hundred. Goozex made money on the tokens and on points bought with real money, never on the games, which it never saw.

It grew fast for something so quiet. Fifteen hundred people were trading over seven thousand games within three months. Forty eight million points changed hands in the first two years, worth about two point one million dollars. More than a hundred and sixty thousand games moved during 2008 alone, and Electronic Gaming Monthly had already named it the best place to trade games online in late 2007.

I was never going to be in this. Console ownership in Turkey through those years was a minority thing next to the PC, my own gaming ran on internet cafe Counter-Strike between 2002 and 2005 and Ultima Online private servers at home, and neither of those produces a shelf of discs you are finished with. The used game economy here was a shop counter and cash, not a queue and a padded envelope.

~ the dossier ~

~ how the trade worked ~

The clever bit was refusing to be a marketplace. On eBay or Half.com a used game has a price, a seller, a photo and an argument about condition. Goozex made every copy of a title identical and worth exactly the same number of points, which killed haggling, killed listing work and turned a two sided negotiation into a queue you joined. The trade-off is that the operator carries all the trust, and the only tool it had for that was the feedback score.

That trust was thinner than the design implied. The Better Business Bureau gave the company an F. Complaints about discs arriving scratched or never arriving at all ran through the forums for years, and the standard remedy was points back rather than money back, so a bad trade left you holding more of the internal currency instead of less.

~ the unraveling ~

By 2011 the financials were public and small. Revenue of two hundred and thirty two thousand dollars, an operating loss, two employees. The catalog had gone the other way entirely: movies added in August 2009 with a hundred and thirty thousand titles, then six thousand classic console games in March 2010 across eight old systems. A tiny company was running a warehouse-sized index of things it did not own.

Bay Acquisition Corp bought it in November 2012 and installed a new chief executive a month later. Neither move brought in the working capital the site needed, and the forums spent 2013 watching support response times stretch out while points that had been bought with cash sat unspent.

~ the funny part ~

Goozex did not die of competition or boredom. It died of a brokerage dispute. The money to operate the site was being held in escrow by Meyers Associates, and when the release did not happen the chief executive resigned and the servers went down on 20 December 2013 with no warning. Bay Acquisition filed suit three days later claiming more than ten million dollars. The site was declared closed on the last day of the year.

Members with large balances lost them. Points worth several hundred dollars each in some cases, bought legitimately, sitting in accounts of a company whose bank line was frozen by a fight nobody trading a copy of Skyrim had heard of. Every closed loop currency has this failure written into it from the first day and almost nobody reads that clause until the login page stops loading.

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