Toys 'R' Us buying used games nationwide

Retail chain accepting games for systems from Atari 2600 days to current gen in exchange for gift cards; analysts not expecting big downside for GameStop.

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A host of retailers have explored ways to take a bit of specialty retailer GameStop's vicelike grip on the US used-game market, but few have fully embraced the practice. Toys "R" Us today entered the fray in earnest, introducing a nationwide gaming trade-in program that will buy back titles from vintage consoles, as well as the latest platforms. The retailer tested the program in limited fashion earlier this year.

Finally, a place to take all those Intellivision games in the closet.
Finally, a place to take all those Intellivision games in the closet.

Customers will be able to bring in their games (in original cases) and trade them in at the store's guest services desk for gift cards redeemable at Toys "R" Us stores (including Babies "R" Us) and the chain's Web site. In addition to games from the current handhelds and consoles, Toys "R" Us announced the Atari 2600, PlayStation, PlayStation 2, Xbox, Nintendo Game Boy, Nintendo 64, Nintendo NES, Intellivision, and Sega Genesis as being among the list of "more than 25" systems for which it will purchase games.

A Toys "R" Us representative told GameSpot the company isn't taking back hardware for the moment. As for what happens to titles bought from customers, the rep said the games would be delivered to an outside company, which will then re-sell them to retailers across the country.

Toys "R" Us will advertise the nationwide campaign in Sunday newspaper circulars beginning this weekend. The retailer characterized it as the latest example of its expansion beyond traditional toy store businesses. The store now sells a variety of non-toy items, from iPods and digital cameras to netbooks and GPS systems.

[UPDATE]: While the idea of more competition in the used game business might seem bad for GameStop on the surface, analysts weren't terribly concerned. Wedbush Morgan Securities' Michael Pachter told GameSpot it wasn't a huge threat, primarily because, "The core TRU customer is a mom with children under 10, and the core used game trader is a boy 13-18 years old. Not a lot of overlap there."

Electronic Entertainment Design and Research's Jesse Divnich actually believes that competition for used games could take pressure off GameStop.

"Most retailers, at one point, discussed internally about setting up a buyback program within their brick and mortar operations," Divnich told GameSpot. "Because maintaining a positive relationship with publishers was crucial at the time, they feared the repercussions and ditched any buyback plans."

With more players in the used game business, Divnich believes GameStop may wind up on better terms with publishers.

"After all, if most retailers begin to offer a buyback program and publishers had to pick their poison, they would rather see a consumer use the GameStop buyback program, as it at least leaves a chance that the consumer will use their credit to purchase a new title," Divnich said.

Looking further out, the analyst believes the increase in players in the used game business will put more pressure on publishers to better compete with secondary sales of their own games. Digital distribution is one way publishers have found to lock out the used market, but Divnich said publishers are looking harder at deterrents to keep people from purchasing their titles used.

"We have already seen many games include one-time use codes or coupons for downloadable content," Divnich said. "Publishers could expand on that approach. Instead of the DLC being just an additional 'bonus,' maybe it becomes a crucial part of the game. I would not be entirely surprised if one day a game charges $10 for the ability to play online multiplayer, unless of course you buy it new, and in that case comes with a special one-time use coupon to download it for free."

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