Online retailer’s entry into the second hand market sees GameStop stock fall 14 per cent
The news that online retail giant Amazon is to enter the pre-owned games market has seen the shares of High Street rival GameStop take a steep fall, dipping 14 per cent yesterday.
Variety reports that used games account for 44 per cent of GameStop’s profits, and that Amazon’s move into the sector has concerned the financial markets.
However, UBS analyst Ben Schachter believes the market is over-reacting: “Online game sales currently comprise less than 2 per cent of GameStop's stock total business and we estimate significantly less than 10 per cent of industry game sales.
“We believe the 'instant gratification' of the trade-in process at physical stores remains a key advantage for GameStop, and we note that GameStop once offered online/mail-in trade-ins but stopped after issues with product quality/shipping expenses.
“The bottom line is that Amazon is a formidable competitor, but we don’t see any meaningful near-term risk, and online used just isn’t a particularly big market.”
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Comments
Treading on toes...
Come on...let us smaller traders and indies take a bite of the cherry, first HMV now Amazon doing pre-owned, they already have Market Place for that, stop getting greedy Amazon! Wont be long before we end up seeing Sainsbury's and Tesco jumping on the band wagon!!
This is getting out of hand....pack it in!
Re: Treading on toes...
I cannot seriously see this working, the credit given on most part-ex games is so low it would not cover the postage.
RE HMV, have you ever looked at HMV's REPlay thing, their range is tiny, pricing stupid, and at the HMV nearest my shop, I had to tell the staff what it was :0. Pre-Owned is best done by indies, cannot imagine HMV keeping theirs going for long and definatly cannot imagine Tesco ever doing it.
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