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TheStreet Open House

Why Is Walmart Selling Used Video Games?

Technology still has a long way to go to catch up to that dream, though. In cold, unflinching reality, Playstation Now is just a cool idea that Sony's recent purchase of streaming company Gaikai makes possible, but hasn't made workable. As the folks at Ars Technica pointed out, Sony needed to drag a server to Las Vegas just to make its presentation work. Even at that, there were a whole lot of issues with latency -- the delay between a gamer pressing a button and that action actually occurring on-screen -- for those who were able to try Playstation Now firsthand.

Folks who own a PlayStation 4 or a Nintendo Wii U and have tried taking a Vita or a screen-enabled controller for a spin around the house may have run into similar issues, as that's basically local game streaming through your router. While services such as OnLive have already tried streaming games, it's been a tough slog at best.

That said, players have been able to buy and download games digitally through the PlayStation Network, XBox Live and various Nintendo online channels for years. Online competitors such as Valve, whose Steam online gaming and cloud storage service has 3,000 games in its online library, has already done what console makers are just getting around to -- saying goodbye to discs. With cloud storage for all of its customers and a whole lot of multiplayer functions that put them on par with Playstation Network and Xbox Live, Valve's Steam accounts for more than 75% of all PC game downloads. At CES, Valve announced that 14 third-party hardware partners would be producing Steam Machines, or consoles allowing gamers to play Steam titles including Call of Duty: Ghosts and the Grand Theft Auto series in their living rooms.

If that's the future, why is Walmart so focused on gaming's present? Because it doesn't really care about used games. It doesn't want to be the equivalent of CE Exchange, the game, video disc and mobile phone trade-in joint that's helping Walmart with its own game exchange -- or a retro gaming shop. It wants to crush GameStop in the area that it's focusing on next: hardware and broader electronics sales.

Sony's PS4 and Nintendo's 3DS handheld device still move 35,000 to 37,000 units a week, according to VGChartz, while Microsoft's XBox One is selling close to 50,000 units a week as Microsoft bundles in the popular Titanfall game. Even the 12,000 or so weekly sales of the older PS3 and Xbox360 rival the 13,000 Nintendo Wii U units sold each week. That's still a large chunk of income for any shop that wants to knows as a game headquarters, and that $2.4 billion in 2013 is enough to prop up GameStop while it makes the transition.

Walmart is clearly in no mood to let that happen and wants to stop GameStop from sapping away hardware sales just as Walmart's own same-store sales are slipping. But Walmart hasn't exactly shown itself capable of doing much with electronics other than giving away third-party products cheap on Black Friday. As our Rocco Pendola points out, Walmart is already making Apple regret its decision to let the megaretailer sell its products by placing iPads and iPhones in shabby cases that look like they were recycled out of old Nintendo Entertainment System displays that Sears threw out in the late-'80s.

GameStop, meanwhile, has placed increased focus on its sale of refurbished electronics and has seen its share price rise 50% within the past year. The chain would sweat Walmart's intrusion on its turf more if the big retailer's store-credit stipulation didn't force game sellers to do what 0.6% fewer consumers did last year: actually shop at Walmart.

-- Written by Jason Notte in Portland, Ore.

>To contact the writer of this article, click here: Jason Notte.

>To follow the writer on Twitter, go to http://twitter.com/notteham.

>To submit a news tip, send an email to: tips@thestreet.com.

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Jason Notte is a reporter for TheStreet. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, the Boston Herald, the Boston Phoenix, the Metro newspaper and the Colorado Springs Independent. He previously served as the political and global affairs editor for Metro U.S., layout editor for Boston Now, assistant news editor for the Herald News of West Paterson, N.J., editor of Go Out! Magazine in Hoboken, N.J., and copy editor and lifestyle editor at the Jersey Journal in Jersey City, N.J.
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