TODAY'S PAPER
52° Good Evening
52° Good Evening
BusinessTechnology

Wal-Mart to buy used video games

Wal-Mart plans to start buying used video games from shoppers at stores in a move that goes after the bread-and-butter business of GameStop.

Wal-Mart Stores Inc. plans to expand its current online trade-in program by allowing customers to trade their used video games at 3,100 Wal-Mart stores in exchange for credit toward the purchase of other items.

The world's largest retailer is taking aim at the $2 billion used-video-game market. It's a business dominated by GameStop Corp., the world's biggest dedicated seller of video games with the largest and most-established video game trade-in program.

Retailers from Amazon to Best Buy also offer used video game trade-in programs. But Wal-Mart's new program is the biggest threat to GameStop, which for the last three years has drawn roughly half of its profits from buying and selling used video games.

Starting next week, Wal-Mart customers can trade in video games for credit that can be used in both Wal-Mart and Sam's Club stores.

In an apparent swipe at GameStop's program, Wal-Mart made a point of saying the credit it will offer shoppers can be used on anything from groceries to a new bike, rather than just other video games.

"When we disrupt markets and compete, our customer wins," said Duncan Mac Naughton, chief merchandising and marketing officer of its U.S. stores. "They'll save money on video games and have the flexibility to spend it however they want."

GameStop did not respond to a query for comment.

Investors appeared to think Wal-Mart's move spells trouble for GameStop, sending its shares down 3.7 percent to $38.30, while Wal-Mart shares rose 9 cents to $74.77.

But analysts said the new program isn't necessarily a death knell for GameStop. Other retailers have tried to take business in the used-game market with "modest" success, said Baird Equity analyst Colin Sebastian, but GameStop has loyalty among video game customers and a broad inventory of new and used video games.

More news