One of the last holdouts retail, video games, looks like it too will disappear. The biggest player, GameStop, who controls nearly two-thirds of the market, has been able to stay alive by pushing used games and devices. Last year the company earned $9.55 billion, 46% of which came from used items.
Unfortunately, that cannot sustain the company as more games go online, available for download. Which makes paying $60 for a cartridge much less appetizing for gamers, and takes away the bulk of GameStop’s earnings. This presents the company with a challenge…what to do next?
Believe it or not, become an Apple retailer. The company has opened an expansive new refurbishment factory for iPhones, iPads, iPod Touches. They hope to apply all that used experience to the booming world of the touchscreen.
Two articles cover this, the first is a summary and the second is a full behind-the-scenes feature:
In an effort to avoid the fate of Blockbuster, Circuit City and others in the remainder bin of failed retailers, GameStop has embarked on a daring, if inglorious, strategy: refashioning itself from a console-game purveyor into a repairer and reseller of Apple gadgets, betting that its retail visibility will prove an advantage. – Summary – SF Gate
“If you want to understand GameStop, you must understand refurbishment,” says GameStop CEO Paul Raines. Behind the tall executive lies a 182,000-square-foot facility filled with workers who are polishing discs, piecing together video game consoles, and rigorously testing pre-owned iPads, iPhones, iPods and Android tablets. It’s called the Refurbishment Operations Center, or ROC for short, and GameStop is giving us a first-hand tour of the $7 million facility. – Behind-the-scenes – The Verge