North American electronics and game retailer Best Buy is testing the sale of used video games in a handful of its stores, according to a report by Piper Jaffray analyst Anthony Gikas, and is considering rolling it out over a larger subsection of its 870 retail outlets.
This move is particularly notable because Best Buy has around 14 percent of the new video game market in North America, according to recent surveys - only a handful of retailers, including the giant Wal-Mart chain and the soon-to-be-combined Electronics Boutique and GameStop, can match this market share.
Best Buy has never previously sold used products of any kind, but the company's interest in pre-owned games likely comes from careful scrutiny of
recent financial reports, including one from Electronics Boutique. This revealed that the profit from pre-owned titles accounted for 46.1% of EB's business in the second quarter of 2005, an increase from the 45.6% in the second quarter of 2004.
The profit for EB was even more impressive considering how disproportionate it was to the volume of used-game sales, which made up only 28.7% of total sales for the second quarter. With Best Buy's
most recent results seeing comparable store sales of video game software and hardware declining by 'high single digits', the company is clearly keen to explore other avenues toward increased profitability, even though game publishers obviously do not receive any income from used games.
