Wal-Mart gets into used game sales

E-Play kiosks show up in dozens of retail behemoth's Northeast locations; analyst downplays near-term threat to GameStop.

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Rival retailers have jealously eyed GameStop's hold on the used-game business in the United States for years, but shopping giants such as Amazon and Toys 'R' Us are starting to do something about it. Wal-Mart was added to the list earlier this month, as the retail chain began a pilot program that will see game buyback kiosks installed at 77 of its locations in the Northeast by the beginning of June.

Look for it up front, near the crane games and stale-bubblegum machines.
Look for it up front, near the crane games and stale-bubblegum machines.

The kiosks are operated by e-Play and have begun appearing in Wal-Mart stores in Rhode Island, Connecticut, Massachusetts, and New York, a representative with e-Play told GameSpot. Some of the machines are set up to strictly buy used games, while others are full functionality e-Play kiosks that also sell and rent DVDs and Blu-ray discs.

Customers trade their games in first by scanning the UPC code from the game's packaging and agreeing to the stated buyback price. Users then swipe a credit or debit card and a driver's license, insert the game disc into a slot on the kiosk, and drop the box into a separate bin. Within three days, a credit for the buyback price will be applied to the user's credit or debit card. In the future, e-Play plans to allow trade-ins without the box.

Wal-Mart is not the only place to find e-Play buyback kiosks. The company also has 200 other locations with partners in Ohio, Georgia, North Carolina, and other markets and is planning to expand operations in short order. Additionally, it hopes to regularly offer customers store credit for trade-ins, an option currently available only at a limited number of its locations.

Signal Hill analyst Todd Greenwald issued an investors note on GameStop in reaction to the news, saying the Wal-Mart program doesn't offer much of a near-term threat to the specialty retailer.

"On the contrary, we believe this is more of a traffic driver to Wal-Mart's stores, and an alternative for cash-strapped consumers, than something that will take meaningful share from Gamestop's core consumers," Greenwald said. "Gamestop customers demand immediate gratification, and typically trade in a used game in order to buy a new game, which is not possible in this pilot program."

The analyst added that while headlines about new competition in the market may hurt GameStop shares temporarily, the company's used-game business is "nearly bulletproof."

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