Retailing behemoth, Walmart, is making a gameplay on the used video game market, which this recent news has rippled the video gaming industry to its core. On Tuesday, company insiders have stated they will begin their commerce of used video games on March 26, concentrating on titles for Xbox, PlayStation and Nintendo Wii systems. Slightly following the business model of GameStop, gamers will be able to bring in their used video games with the original packaging to any of the Walmart stores across the nation. The used video games will be scanned and a value will be determined, the customer will be given a store credit voucher which can be used at any Walmart and Sam’s Club locations or online. The advantages GameStop will have over Walmart’s presence is they offer cash for used video games and they purchase video game hardware.
Before Walmart’s announcement of entering the $2 billion used video game market, GameStop has been dealing with a more looming threat, online and disk-free gaming. GameStop is the biggest retailer in the video game market and investors are worried about the company’s longevity of enduring Walmart’s move into their market. GameStop executives have been optimistic about their survival, the company is diversifying into smartphones and tablets and other top retailers such as Best Buy and Amazon have trade-in video game programs but have not had a strong enough foothold on the market. One aspect that GameStop has is customer loyalty and a vast range of new and used video game titles. In the past, between 2009 to 2010, Walmart had a video game trade-in kiosk program but the venture was a failure. Walmart executives have claimed they have implemented a better system that will make their gameplay in the used video game market more formidable and efficient.
The bottom line is consumer reaction to Walmart’s move into used video games, if the customer can save more money on buying used video games from Walmart than at GameStop, then that could be detrimental to GameStop’s existence of its 6600 locations. The video game trade-in program is very lucrative, when a retailer makes a sale 0f a $50 game, only a portion of that sale goes in their pockets, however when that customer resells that $50 game back to the retailer, they refurbish it and resell to another consumer, they keep 100 percent of the profits. It can also be a complicated business, it is dependent on systems that can monitor and maintain used inventory for restocking that is congruent to supply and demand of titles. Walmart is offering another alternative for those consumers that do not shop at GameStop.
The sale of used video games makes up only nine percent of the industry, while new games rake in 56 percent of the market and online and mobile downloads take in 35 percent. Time will only tell if Walmart’s gameplay into the used video game market will disrupt those numbers and reach into the pockets of price-conscious consumers. Will GameStop be dethroned in the video game industry and become another U.S. retailer on life-support clenching for survival?
By Isriya Kendrick