I couldn't understand how local stores who way overpriced their goods could get away with it while there's ebay, but then I learned that a) some can't, and have been in the red for a while; and b) those that do are typically long-standing and have a loyal fan-base of occasional-buyers, those buyers who want a game every once in a while and don't want to deal with online buying. Also, they tend to supplement games with fixing consoles, which seems to be the bread and butter of some of these stores.
I think it's a huge profit margin for the few games they do sell, and they sell online, and at conventions. I'd say they are making most of their profit off of buying low, selling online. the store front is just a facade to get people int he door to sell them their things. One way pawn shops, in the door out the internet.
