March 5th, 2009
Amazon takes shot at GameStop, starts accepting videogame trade-ins
Amazon said today that it would allow shoppers to trade-in used video games for store credit, a move that may challenge a core business of GameStop, the biggest U.S. video game retailer.
Amazon has already launched the beta version of what it calls Amazon Video Games Trade-In. Users can send in used games and get an Amazon.com credit, including an additional 10 percent bonus toward items in Amazon’s online videogames store.
Amazon says more than 15,000 titles are already eligible for trade-in.
Shares of GameStop had risen 35 percent in the past three months as sales of video game consoles by Nintendo, Sony Corp and Microsoft remained robust, thus driving consumers into GameStop stores games to buy software for their systems.
However, GameStop’s profit margins have remained stable thanks to an active trade-in system, where shoppers return used games for a fraction of the purchase price or credit toward future sales. (The returned games are sold at a higher profit margin than new games.)
Shares of GameStop fell $4.04 to $23.26, while Amazon shares were off 31 cents at $64.50.
Andrew J. Nusca is an associate editor for ZDNet and SmartPlanet.
See his full profile and disclosure of his industry affiliations.
