Video game lovers will now have a myriad of choices not only from next generation consoles and games, but also from the previous generation, as GameStop Corp. (GME - Analyst Report) is slated to launch a pilot program on Apr 25, per sources. This program is directed toward the buying and selling of retro gaming consoles, games and accessories.
Initially the company will target the New York City and Birmingham markets to test the water, where it can reach out to customers through approximately 250 outlets. Only if the program gains traction, the company will take the initiative nationwide later in the year. Shoppers will be able to trade in the original Nintendo Entertainment System, Super NES, original PlayStation, SEGA Genesis, SEGA Dreamcast and Nintendo 64. This will increase the count of games that GameStop offers by approximately 5, 000.
These classic consoles and games will undergo inspection, test run and repair, if required, at the company’s Refurbishment Operations Center. These will be tagged with standard warranty thereafter. Although GameStop will start accepting consoles, games and accessories for trade from Apr 25, it will take about two months before these are put up for sale in stores. These aged consoles will also be sold through the company’s web-in-store system and website.
Retro consoles are generally found at local stores and are often overpriced. However, GameStop’s foray into the business model will make prices more competitive. While continuing to branch out, GameStop is transforming itself into a mixed retailer of physical and digital gaming, and electronics products. The company’s venture into digital, iDevice and gaming tablet businesses would be accretive to its results.
GameStop, which competes with Amazon.com Inc. (AMZN - Analyst Report) and Best Buy Co., Inc. (BBY - Analyst Report), currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the retail industry is Hanesbrands Inc. (HBI - Analyst Report), carrying a Zacks Rank #2 (Buy).
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