Walmart to offer store credit for used video games trade-ins
The fight against used video games just got a bit harder for publishers, as Walmart announced today plans to offer store credit for used game trade-ins.
Starting Wednesday, March 26, Walmart customers will be able to trade in their video games and for credit that can be used to purchase anything sold at Walmart and Sam's Club, both in stores and online. The traded-in games will be sent off to be refurbished and made available for purchase in "like-new condition at a great low price." Walmart will distinguish between new and used games by labeling traded-in copies "Certified Pre-Owned."
“Gaming continues to be an important business for us and we’re actively taking aim at the $2 billion pre-owned video game opportunity,” said Duncan Mac Naughton, chief merchandising and marketing officer for Walmart U.S. “When we disrupt markets and compete, our customer wins. They’ll save money on video games and have the flexibility to spend it however they want.”
“While new releases will remain the focus of our gaming business, we’re glad to give our customers the option to buy pre-owned games,” added Mac Naughton.
Given the profit associated with the used games business, it's no surprise Walmart is looking to get a piece of the pie. In its fiscal year that ended February 2, 2013, used-game products accounted for $2.4 billion in global sales for GameStop, more than 27 percent of the retailer's total sales. The big draw with used games are, of course, higher profit margins because the retailer gets to keep 100 percent of the trade-in sale. GameStop's used business represented over 44 percent of the retailers gross profit in the fiscal year.
News of Walmart planning to enter the used-games business led to GameStop shares dropping five percent.