updated Sept 29, 2016: GameStop’s stock price increased 24% since July 2009, Nasdaq is up 225%, S&P 500 is up 136%. I’m sure the stock performance of GameStop somewhat tracked the performance of retail gaming chains. Recent earnings calls list new and used game sales down a little less than 10%. Downloading games directly and RedBox certainly has weighed on its earnings and risk. The “I wouldn’t buy it” for the industry is still my opinion after 7 years.
Originally published July 9, 2009
Amazon.com introduced used game trading in March 2009, and now Best Buy is testing video game trade ins. Competition isn’t always a bad thing, but in this instance Game Stop and Play N’ Trade’s sales are going to be heavily diluted. Below was Game Stop’s response in the Best Buy article:
GameStop spokesman Chris Olivera declined to comment specifically on Best Buy’s test, but he indicated GameStop’s more than 6,000 stores have advantages over self-service ventures.”Trading in used games and consoles is a highly-assisted activity,” Olivera said in an emailed statement. “We are very confident in our model that allows for our expert associates to help consumers trade in product, a fact not addressed with a self-serve process.””Likewise, GameStop has over 12 years of skin in the game and understands the highly-regulated business of pawn and resale laws that vary not only from state-to-state, but municipality to municipality,” he added.
Young kids have been self-trained to research and buy online for the best price. I wouldn’t bet on kids paying a premium for simple trade-in transaction. Sorry Play N’ Trade and Game Stop. One angle these speciality stores could still exploit is providing its customers with in-store use of expensive assets, particularly renting by the hour very high-end immersion and 3-d gaming equipment.