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Walmart squares off against GameStop over used games

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Look out GameStop. Here comes Walmart.

The world's largest retailer has announced plans to begin offering store credit -- good for anything it sells -- for used video games. The program starts March 26 in 3,100 stores across America. By this summer, it hopes to begin re-selling those games to customers alongside new (more expensive) copies of the same title.

That, traditionally, has been GameStop’s domain. Used titles have been the game specialty retailer’s bread and butter; GameStop profits from the sale of used games are roughly 25 percent higher than what the company earns from new titles, and the market generates over $2 billion a year in sales.

Walmart wants a piece of that. A big piece.

"Ultimately, we want to pay more for games than anybody else and let [customers] pay less," said Duncan Mac Naughton, executive vice president, chief merchandising and marketing officer for Walmart.

Walmart says it will accept games for all existing console systems, though it will not accept game hardware. While trade-in prices will vary by title, Mac Naughton says he expects the average price paid to consumers per game to be around $35.

CE Exchange will maintain the database dictating the value of various games. That eases the burden on Walmart associates, who will simply scan the game's UPC code (after first checking the disc for scratches and cracks) to determine how much credit to give the customer.

This isn't the first time Walmart has explored the used game business. In 2009, the retailer launched a pilot program using kiosks, but never expanded on it. Now that the console gaming world is starting a new cycle, the company decided to make a real effort in the space.

"We think due to the size of this business and the role we can play in disrupting it, that the timing is good right now," says Mac Naughton.

Challenges? There are plenty. In a conference call announcing the program, Walmart said game makers were "excited" about the program, though none of the publishers contacted by Yahoo Games were willing to talk about it.

And while used gaming is certainly a sizable market, it's one that has a shelf life, as digital downloads increase each year.

Walmart is a gaming juggernaut, though, especially among people who don't have reliable broadband connections or who live in areas where a multi-GB download isn't feasible. And if it can lure customers away from GameStop -- or convert some of their existing customers into buying and trading their unused games at home -- it could be a gold mine.

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