GameStop unfazed by Wal-Mart's entrance in the used game market

CEO Paul Raines says "GameStop, of course, is a formidable competitor."


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You might think that video game retailer GameStop would be worried about a mega-company like Wal-Mart entering the used game market, but it's not so. GameStop CEO Paul Raines said today during an earnings call that Wal-Mart's arrival to the market actually is a good thing for GameStop's business because it will drive greater awareness for the secondhand market overall.

"For years we have faced very strong big box and online competitors in that space and [we] expect that will continue going forward. I would point out that it is a great sign that in the category that large competitors return after previous attempts as they see that the preowned video game business has a lot of growth ahead," Raines said.

Wal-Mart's video game trade-in program started yesterday at stores across and country and online. This is the retailer's second attempt to crack the GameStop-dominated secondhand market, following an initial run in 2009.

Raines said a rising tide raises all ships.

"Consumers have low top of mind awareness of buy/sell/trade and new competitors will drive greater overall awareness of the category, which has always been very good for our business," he said. "GameStop, of course, is a formidable competitor in this space."

Raines also pointed out that 75 percent of trade-ins at GameStop immediately are applied to the purchase of new hardware and software, totaling an injection of $1 billion in 2013.

He said GameStop's relationship with publishers like Activision and Electronic Arts--which do not participate directly in the sale of secondhand products--remains positive because used games actually do positively impact the overall gaming ecosystem.

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