Walmart introducing video game trade-ins in US

Ben Parfitt
Walmart introducing video game trade-ins in US

3,100 Walmart stores will from next week begin offering customers the chance to trade-in their games.

Customers will only be eligible to receive store credit, not cash, and hardware trade-ins are not part of the program. It will be operated by CExchange, which also handles trade-ins at troubled retailer Radio Shack.

“We view these developments as largely headline risks,” analyst Colin Sebastian said. “While shares of GameStop will likely fall under pressure on competitor announcements, we note there is little, if any, empirical evidence to indicate used game competition will negatively impact GameStop's financial performance.

“For perspective, we have observed in the past multiple retailers attempting to build share in the used game market, including: Best Buy, Wal-Mart, Amazon, Blockbuster, Toys-R-Us, Circuit City and FutureShop. Even now, Best Buy and Amazon operate trade-in services, but with only modest success, according to our field checks.

“In contrast, GameStop has consolidated share of video game retail sales, by leveraging a loyal hobbyist customer base, broad inventory of new and used video games, and vertically integrated refurbishment/resale model.

“Used is more profitable, but more demanding category. Importantly, we believe the barriers to establish and maintain a liquid and profitable used video game business are fairly high, including dedicated systems to track and manage used product inventory and pricing, the ability to refurbish products, and restock stores appropriately to balance supply and demand.”

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Tags: Retail , pre-owned , us , trade-ins , america , walmart

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