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Walmart Enters The Used-Game Business

BENTONVILLE, ARK. — Walmart followed GameStop’s lead and began buying used video games last month. 4/06/2014 08:00:00 PM Eastern

BENTONVILLE, ARK. — Walmart followed GameStop’s lead and began buying used video games last month.

The discounter, which pegs the number of U.S. gamers at more than 110 million and the number of unused titles sitting in homes at nearly 1 billion, will begin selling pre-owned games later this year.

“Gaming continues to be an important business for us and we’re actively taking aim at the $2 billion preowned 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.”

Store credit is given for the trade-ins, which can be applied to any purchase at Walmart, Sam’s Club or their websites.

In a rejoinder to Walmart, GameStop CEO Paul Raines reminded analysts on a fourth-quarter earnings call that “over 75 percent of all trades made at GameStop stores are immediately used to buy new products, a business model that last year added over $1 billion of sales to the new software and hardware industry. Our publishers know that trades made at GameStop stay in the gaming ecosystem.”

Meanwhile, GameStop is turning its attention to the mobile channel. The company recently acquired two CE chains, Simply Mac and Spring Mobile, and added 31 Cricket AT&T prepaid stores last year, for a total of 218 non-GameStop shops. The stores, which the company calls its Technology Brands business, generated $62.8 million of revenue in the fourth quarter.

Raines said GameStop “is developing broad, deep partnerships with large technology players” to drive the new division, and plans to spend upwards of $40 million to open an additional 300 to 400 locations this year through acquisitions or new store openings.

At the same time, it plans to close another 2 percent of its global GameStop store base this year. In the U.S. it shut 212 locations, or 4 percent of its domestic stores, in 2013, and also closed Spawn Labs, its Cloud-based streaming gaming division.

Simply Mac is a 23-store authorized Apple reseller based in Salt Lake City; Spring Mobile sells postpaid AT&T services and products through 164 AT&Tbranded stores; and Cricket Wireless sells AT&T’s Cricket-branded prepaid wireless services, devices and accessories.

GameStop operates more than 6,600 stores in 15 countries.

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