Top Business News
Best Buy Jumps Into Used Video Games
Jeanine Poggi
06/23/09 - 05:33 PM EDT
Best Buy (BBY Quote) might have to change its name to Best Exchange.
The company, which began testing pre-owned video games in some of its Canadian stores last year, is now expanding this initiative to the United States.
Best Buy is testing kiosks is several Texas stores starting this week, Chief Marketing Officer Barry Judge wrote on his blog.
"Customers [can] insert their used games into a kiosk that will scan it for functionality, and immediately issue a voucher that is instantly redeemable for a Best Buy gift card," Judge wrote. "It's a pretty slick system and one of the few trade-in programs to provide instant gratification; you get the gift card on the spot and can redeem it on anything in the store -- not just another game."
The electronic retailer will also be testing the sale of used games in those stores, and some of the kiosks will even rent games and movies.
Used video games deliver a higher profit margin than new games or gaming hardware.
Will this move threaten GameStop(GME Quote)? Used video games make up about 25% of Gamestop's revenues and half of its profits, The Wall Street Journal reported.
But a huge decrease in market share is unlikely, since GameStop controls about 90% of U.S. video game market, the Journal reported.
And other retailers, such as Amazon(AMZN Quote) and Wal-Mart Stores(WMT Quote) have toyed with similar kiosks and trade-ins, none of which have yet to impact GameStop's market share.
Shares of Best Buy closed down 1.4% to $32.98 in Tuesday's trading.