Toys R Us preowned strategy to threaten GameStop?
Toys R Us has dipped its toes into the preowned videogames market with a few test stores in the US - a move which could spell trouble for specialist retail chain GameStop, according to Motley Fool.
It notes that while GameStop posted a 10.2 per cent sales rise over the Holiday period, its best margins come from the second hand games market, and with the increase in the level of activity around digital distribution - which effectively cuts retailers out entirely - the increased competition will force the company to stay on its toes.
"Obviously, Toys R Us draws a much different audience than GameStop," writes Motley Fool. "Having spent more than enough time at both stores, I realise that diehard teen gamers at GameStop wouldnt be caught dead among the mothers with young children walking the video game aisles at Toys R Us.
"However, I trust that Toys R Us isnt stupid. If it either offers sellers better resale prices or marks down its used titles more aggressively, the same fickle teens that buy used games at GameStop because its a better deal than shrink-wrapped titles will gravitate to where the deals are. One way or another, GameStop is going to have to keep its markups in check."