The Facts Behind Wal-Mart’s Used Games Venture
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Throw on your flip-flops and grab your camo jacket; ‘cause we got some tradin’ to do!

Did you feel that tremor? You might think it was an aftershock from the earthquake that hit the west coast a few days ago. It’s not. What you just felt was the sound of GameStop’s big-wigs falling out of their leather office chairs.

It was recently announced that Wal-Mart would be officially entering the used-games industry. During a conference call, Duncan Mac Naughton (who is chief of merchandising for the chain) revealed that there are literally millions of video games sitting in people’s homes today; ones which are just ripe for the harvest. In an attempt to dip into the market share that has been dominated by GameStop for decades, Naughton revealed their plan, which attempts to firmly plant their flag as the new king of trade-ins.

Of course, while it may seem like a well-conceived plan when sitting comfortably behind a desk, how things will actually play out in stores is a very different story. There are many x-factors to consider here, as Wal-Mart’s venture is by no means a sure thing (in spite of how dominate they are in other retail areas).

So let’s break down what we know for sure regarding the upcoming trade-in program and how it may affect the industry (and us gamers).

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How it works: The Good

The plan Naughton laid out doesn’t sound all that different than what we’re already used to. You will essentially bring in your used games you don’t play anymore to your most conveniently located Wal-Mart, at which time they will inspect the game and give you credit toward your future purchases.

How it works: The Bad

While not having to deal with some of the sniveling shit-heads who work at GameStop is a big plus (many of whom suffer from a God complex), I’m not sure dealing with your typical customer service cashier will be any better. I can already foresee the inevitable arguments that will no doubt spring up between gamers in line and the 55 year old, undertrained employee (who’s in a seriously cranky mood due to their break being an hour overdue). Granted, I’m sure there are those who’ll try to stroll in with their stack of Atari 2600 games (expecting a cool hundo in credit), but that’s a can of worms Wal-Mart knows they’re opening.

Pricing and revenue: The Good

One of GameStop’s cardinal sins in many gamer’s minds is the return they get on their trade-ins (or lack thereof). I truly hope that Wal-Mart seizes a huge opportunity here to pick up the ball and run with it; as showing customers they’re actually not out to screw them over could solidify their victory.

Pricing and revenue: The Bad

We don’t yet know how Wal-Mart will set their pricing for what they’re willing to pay for used titles, but one group should definitely not be overlooked: the game developers. GameStop has been routinely stealing from these studios via their used game practices for years (as I’ve noted in the past), so let’s hope Wal-Mart has the decency to recognize this travesty and kick back a decent chunk of change to these guys. Do right by them where GameStop didn’t, I say.

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Their chances of success: The Good

I can point to one HUGE game changer that could result in success for Wal-Mart where other big-box retailers (like Best Buy for example) have failed. Simply put it’s “the credit, stupid.” While Wal-Mart won’t provide cash money for used games, they will allow you to spend your accumulated store-credit on ANY item in the store (not just other video games). I can’t tell you what this type of freedom affords to customers, knowing they can turn their stack of old PS4 or Xbox One games into a pair of new tires for their vehicle. Need a new shower curtain for your big bro’ heading off to college? Trade in that old copy of God of War!

Their chances of success: The Bad

Although the Wal-Mart name itself lends itself to certain advantages as far as brand recognition goes, they are not the first to try such a venture (as mentioned above). Many tout that GameStop’s in-house refurbishing center can make all the difference, as Wal-Mart will be farming theirs out to a third party (in order to officially certify the used titles as pre-owned for re-sale). Frankly, I do feel this is a negligible advantage, as Wal-Mart has the money and the resources to build a top-tier operation to support its refurbing virtually anywhere in the world. However, those at Wal-Mart must realize that this is something they’ll have to commit to on a small scale, as it’s not like shipping in huge pallets of produce; you’re dealing with one gamer at a time here.

At the moment, the chain will only accept games and not hardware of any kind. Will that change in the future? who knows? What I do know is that, unlike those who came before them, if anyone can make a serious run at GameStop’s market share and win out, it’s Wal-Mart. This is a threat unlike any GameStop has ever faced before, one that could see more than just a dip in their stock prices, but possibly a complete restructuring if Wal-Mart takes hold.

You have to wonder, will history show that this was the move that turned all those GameStop locations in the mall into glorified Radio Shacks?

Jason Messer
Jason Messer
@J8sonMesser

Contributing Writer
Date: 03/19/2014

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