Trending News|March 18, 2014 12:25 EDT
Walmart's Used Games Addition Puts Pressure on GameStop; Retail Giant Looks to Give Back More Money Than Competitors
Walmart is making plans to begin accepting trade-in video games on March 26, which will put a little bit of heat on GameStop, and other video game stores.
According to GameSpot, Walmart will begin taking trade-ins in 3,100 stores across the U.S, and will give consumers gift cards back as payment. This makes Walmart a little more enticing because the gift card can be used for other purchases within the store, whereas GameStop, they only have games to offer.
GameSpot reported, Walmart will send their games to a refurbishing center and get the games certified. They will also only be taking games and not consoles and hardware.
"We think being on the shoulders of disruptive tech is good," said Mac Naughton to GameSpot after being asked why the sudden change. "We're ready to grow into digital as that business emerges."
Naughton also said they are planning to give back more money than any other video game trade-in place, pricing the average title at $35.
The NYTimes reported on the incredible profits on used games. It is a $2.4 billion global industry for GameStop alone, which is 27 percent of its sales. In America, GameStop made $1.6 billion on used games and hardware sales alone.
"It's extremely rare if retailers can find a category that has such high gross-profit margins," said Evan Wilson, an analyst at Pacific Crest Securities to the NYTimes.
Used games are a touchy subject and a source of contention among developers and console makers as used game sales take away from new games sales, costing companies millions of dollars. However, it is a necessary evil because gamers will keep buying and selling games to grow their collections.
Microsoft tried to implement a used game system on the Xbox One that would require gamers to only register a game twice, and not work with used games. After public outcry, they reversed the policy.