In stores in Georgia and Texas, Best Buy is testing the use of kiosks to allow customers to trade in used video games in exchange for store credit. Customers can buy, rent or trade in games as well as movies in some stores for a gift card redeemable for anything in the store.
On his blog, the chain's chief marketing officer, Barry Judge, said customers can insert their used game into a kiosk that will scan it for functionality. If acceptable, the kiosk will immediately issue a voucher that is redeemable for a Best Buy gift card.
"It's a pretty slick system and one of the few trade-in programs to provide instant gratification; you get the gift card on the spot and can redeem it on anything in the store -- not just another game," Mr. Judge wrote. "We'll also be testing the sale of used games in those stores, and some of the kiosks will even rent games and movies."
About 17 percent of Best Buy's revenue comes from entertainment software and the move is seen as an attempt to gain market share from gaming leader, GameStop. Sales of video games and consoles grew 20 percent in 2008 to $18.8 billion but are expected to be flat to down slightly this year amid the downturn, David Magee, an analyst with SunTrust Robinson Humphrey, told the Atlanta Journal-Constitution.
But Mr. Magee questioned whether Best Buy's kiosks will be able to compete with GameStop's personable service and expertise. GameStore has been buying, selling and trading used games for more than 15 years."Best Buy is a great company and will get some slice of share from somebody, but they'll have a hard time getting a meaningful share from GameStop," he said.
The AJC found a Best Buy kiosk offering a $3.20 credit on the game "Into the Inferno" from the Avatar: The Last Air Bender series. GameStop's trade-in price for that game was $5, excluding any frequent buyer cards or other discounts.
Mr. Judge concluded in his blog, "We're excited about this test, especially because we know how deeply passionate our customers and our employees are about gaming, movies and entertainment overall. And the trade-in and used value propositions will give those passionate customers even more choice and value at Best Buy."
Discussion Questions: What do you think of Best Buy moving into the used video games market? Are kiosks the right approach? What do you think of Best Buy testing the kiosks for buying, selling and trading for movies as well?