GameStop Upping Mobile Device Trade-ins

17 Nov, 2011 By: Erik Gruenwedel

---

Recent launch of iDevice trade-in program at 260 stores will be expanded to capture greater share of projected $7 billion market for used iPads, iPhones and iPods

GameStop is rolling out nationwide an in-store campaign whereby consumers get store credit for trading in used Apple iPhones, iPads and iPods.

In a Nov. 17 analysts call to discuss third-quarter financial results, GameStop CEO J. Paul Raines said the iDevice program could capture a significant share of the projected $700 million to $800 million re-commerce market in North America.

“The market is highly fragmented and without a clear leader, and retail stores are the best channel to acquire inventory,” Gaines said.

The nation’s largest video game retailer already spearheads a successful buy-sell-trade business model for video game software.

In addition, Gaines said initial results from the launch of “GameStop-certified” tablets in 200 stores, which include seven embedded games and links to GameStop’s Android-based app store, have been promising.

“[We] created an innovative business model by focusing on gamers and thinking outside the box,” he said.

Michael Pachter, analyst with Wedbush Securities in Los Angeles, isn’t so sure. He questions the market for $400-$500 game-specific tablets.

“I don't think anyone is going to buy one,” Pachter told The Wall Street Journal last month.
Regardless, GameStop said digital revenue grew 59% in the third-quarter (ended Oct. 29), contributing to a 2.5% overall sales increase to more than $1.9 billion. Same-store sales declined 0.6%.

Net income fell slightly to $53.9 million from $54.7 million during the previous-year period.

The top five-selling games during the quarter were Gears of War 3 by Microsoft, Battlefield 3 and Madden NFL 12 by Electronic Arts, Batman: Arkham City by Warner Home Video Games and Deep Silver’s Dead Island.

GameStop operates more than 6,600 retail stores nationwide.

Bookmark it: