updated 01:15 pm EDT, Sun August 12, 2012
Apple, Android products central to company turnaround
Faced with a troubled console video game market, GameStop is in the midst of remaking itself into a used gadget hub, buying and reselling mobile products from Apple and Android manufacturers. As Businessweek details, the game retailer is betting that an increased focus on previously-owned devices will make up for declines stemming from the trend toward digital distribution in the gaming sector. Apple's iOS devices are likely to prove especially lucrative for the retailer, with $1 billion in revenues possibly in the offing.
Late last year, GameStop began selling used iOS devices and accepting them as trade-ins. Those devices, as well as Android gadgets, are sent to GameStop's Refurbishment Operations Center, a 182,000-square-foot facility in Grapevine, Texas, where they are repaired, repackaged, and returned to stores for resale. GameStop expects about $200 million in mobile sales this year due to these operations.
The iOS program has proved particularly successful, with GameStop executives claiming that it exceeded the company's expectations. With nearly a quarter of a billion iOS devices in the hands of US consumers, even capturing a small portion of these devices for resale would represent a massive revenue stream for GameStop. Analysts estimate that reselling five percent of the current iOS devices would bring in $1 billion in new revenue for GameStop.
The gadget resale business is not only a segment of GameStop's current operations: representatives within the company say it could become GameStop's sole operation. As the distribution model for video games goes increasingly digital, GameStop is said to be preparing for a future in which its retail stores don't sell games at all, but instead sell mobile devices and the peripherals gamers will need to play the titles they've already downloaded from other outlets.