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Walmart to challenge GameStop in used games business

Walmart will enter the used game business
Walmart will enter the used game business / photoshopped by Frank Ling

When gamers are gearing up for the next “it” video game, they inevitably make a beeline to GameStop to sell their old games in order to get credit towards the new one or trade them in for another game, accessory, or hardware.

But GameStop may have some sleepless nights soon because Walmart announced today that all 3,100 of its stores will now be buying used games, beginning next week.

This is the first time Walmart will be seriously going head-to-head with GameStop by partnering with CExchange Inc. In 2009, Walmart failed in its short attempt at being a major player in the used game market by only offering a buy-back service via kiosks at a limited number of its stores.

Follow the leader

Although GameStop makes a good chunk of its money through new video game sales, the used game market is a very important part in keeping the company profitable. At least for now, it is still the leader for buying and selling used games.

With an estimated $2 billion a year industry in estimated used game sales; this has caught the attention of other retailers into this business such as Best Buy and Target. But they are small potatoes when compared to the enormous retail clout of Walmart.

Trade them in for anything

Whereas going into a GameStop store means trading in your used games for store credit or cash, Walmart will offer gift cards that are equivalent to the value of the used games, depending on their popularity and demand.

These gift cards can then be used to purchase anything at one of the many Walmart stores across the country.

Want to buy groceries, a lawn chair, electronics, or anything else in the store with your Walmart gift card? No problem; you can do this without any hassle. The gift cards can be used at any Walmart store, whether online or in person.

Watch out

While the mere size of Walmart is enough to create some worry with the brass at GameStop, the leading video game store has some very good points about being successful at what they do best; it’s not just a matter of taking in a used game, relabeling it, and putting it on the shelf for resale.

Paul Raines, CEO of GameStop commented:

"We win those market share battles because we've been at it a long time,” and said that game retailers must train personnel, inspect video games, take care of inventory, understand trade in values, and take the necessary risks in buying used games from the public.

Something he probably doubts Walmart can handle.

What does Walmart have to say about its new venture? Duncan Mac Naughton, chief merchandising and marketing officer, at Walmart said:

“Our customers can buy groceries, socks or a bike, which isn't the case at other retailers.”

This may be true, but on the other hand, most gamers don’t want to buy groceries, socks, or a bike at a used game store...they just want more games.

Source: The Wall Street Journal

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