Having been caught up in a minor controversy surrounding its pre-owned intentions last week, GameStop CEO Paul Raines has asserted the chain’s commitment to the pre-owned model – and issued a warning to the many retailers hoping to muscle in on the sector.
Used games is a great business for us,” Raines told TheStreet. You don’t understand GameStop unless you understand the buy, sell, trade method.
In tough economic times the consumer doesn’t want to spend $59 for a new game. That’s why our value proposition of buy, sell, trade gives consumers the most access. They may not have $59, but they may have $40 and an old game under their bed that they can trade in for a new title.”
In recent times the likes of Wal-Mart, Best Buy, Toys-R-Us, and 7-11 have all made new or renewed moves into the second hand sector. But Raines points out that the trade is not perhaps as easy as it seems on the surface.
There is competition out there that likes to dabble in this segment, but I’d like to remind people that we have seen this many times before,” he added. Both Wal-Mart and Best Buy have launched and cancelled programs.
There is a lot that goes into perfecting a used game business. Pricing buybacks and sales is complex. We have a refurbishment facility and last year recycled 100 million units. This system is difficult to replicate.”