Amazon takes shot at GameStop, starts accepting videogame trade-ins

Amazon takes shot at GameStop, starts accepting videogame trade-ins

Summary: 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.

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TOPICS: Mobility, Amazon
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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.

Topics: Mobility, Amazon

Andrew Nusca

About Andrew Nusca

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. During his tenure, he was the editor of SmartPlanet, ZDNet's sister site about innovation.

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3 comments
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  • Thats a bit of a steep drop for such an announcement.

    Just saying your going to compete and soon seems to be enough to drop your competitors shares now? WTF is that.
    Been_Done_Before
    • Non-issue

      The Amazon Eligibility statement says to be accepted, the game must also contain the case, cover art and manual. That eliminates about 90% of GameStop's trade-in customers!

      And with today's "I want everything right now" teenage mentality, you can't tell me for a minute that kids would rather box up a game, pay to ship it (within 7 days no less), and wait several more days to get that Amazon gift card?

      Adults may do that, but like I said, that's the minority of GameStop's trade-in customer base.

      There's a reason there are no fewer than 3 GameStops within bicycling distance of your house.
      scottz29
      • Yes, that may be true, but it still doesnt explain the drop.

        BTW, i wouldnt say 90%, i shop at gamestop(when i say shop.. i mean check out many different locations) and its more like 30-40% depending on the location.

        Regardless of the above.. your "want it right now" point, completely acurate. I miss the days when i could trade PC games and get the newest one. They pay pennies on the dollar but for kids, thats cash in hand.

        What i wonder is, how much is internet piracy cutting into their bottom line?
        Been_Done_Before