In the punch, counter-punch world of video game retailing Gamestop today said it will be changing tactics somewhat, eliminating some business and boosting other sectors as it attempts to deal with Walmart's entry into what was GameStop's near monopolyon used game trade in and sales.
GameStop CEO Paul Raines said Walmart's arrival in his space is not being looked upon as a threat, but instead as a positive for the game industry.
"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 pre-owned video game business has a lot of growth ahead," Raines said.
Walmart kicked off its trade in program yesterday.
Raines noted that 75 percent of all trade ins taking place at one of his stores results in an immediate purchase of another title or other product, resulting in $1 billion in revenue for the chain.
With the introduction of the 800-pound Walmart gorilla into GameStop's domain it's a good thing that the company has been busy investing in other potential profit centers. GameStop has started refurbishing and selling wearable devices. So far this is being done on a limited basis to test customer interest. The chain already does this with smartphones and other personal electronic devices.
GameStop will also start stocking more older, but still in demand games, in its stores. This could be a hit with customers who cannot afford to leave behind the Xbox 360 or PS3, but still want to find new games to play. Raines said this additional supply will be found either in the chain's warehouses or by refurbishing trade ins.
GameStop is also increasing its brick and mortar retail presence. It recently closed on a deal that brought Simply Mac under its corporate umbrella. Simply Mac is an authorized reseller of Apple devices. GameStop also acquired Spring Mobile, which sells wireless devices and services through AT&T.
The game chain intends to add 300 to 400 stores under these two new names going forward.
Not every aspect of GameStop's business is doing well. Raines said the company is shutting down Spawn Labs, a game streaming service, due to lack of demand.