By MAE ANDERSON
2014-03-18 11:22 PM
NEW YORK (AP) -- Wal-Mart plans to expand its video game trade-in program to its stores, offering store credit for thousands of video games.
The world's largest retailer plans to let video game owners trade in used video games online and in Wal-Mart stores for store credit but not cash. The credit can be used in both Wal-Mart and Sam's Club stores. Previously they offered trade-ins on a more limited basis online.
It will also offer refurbished used games in its stores for the first time. Wal-Mart has been seeking new ways to boost revenue as its low-income customers remain under pressure due to a weak jobs picture and shaky economy. In its most recent fourth quarter, net income dropped 21 percent, and the Bentonville, Arkansas-based company gave a subdued forecast for the current year.
"Gaming continues to be an important business for us and we're actively taking aim at the $2 billion pre-owned video game opportunity," said Duncan Mac Naughton, chief merchandising and marketing officer for Wal-Mart U.S.
In a call with journalists, Wal-Mart executives said CE Exchange, the company that Wal-Mart works with on its trade-in program for smartphones and tablets launched in the fall, will also be in charge of the new video game program.
The value for each trade-in video game will vary by the title, console and age of the game. The amount will range from just a few dollars for older games to $35 and more for newer ones.
Retailers from Amazon to Best Buy offer used video trade in programs, but the Wal-Mart's new program is the biggest threat to GameStop, which has the largest and most well-established video game trade-in program.
Wal-Mart made a point of saying that credit offered for video games can be used on anything from groceries to a new bike, rather than just other video games.
GameStop shares fell $1.84, or 4.6 percent, to $37.89 in morning trading. The stock had been down 19 percent since the beginning of the year.
But one analyst said the new program isn't necessarily a death knell for GameStop. Other retailers have tried to take business in the used game market with "modest" success, said Baird Equity Research analyst Colin Sebastian. In contrast, GameStop has consolidated its market share of video game retail sales and has loyalty among video game customers and a broad inventory of new and used video games.
"History suggests the competition is unlikely to capture meaningful share," he wrote in a client note.
Wal-Mart shares rose 23 cents to $74.92 in morning trading.