Video gaming retailer GameStop (NYSE:GME) has announced the expansion of the trade program for Apple (NASDAQ:AAPL) products such as iPod, iPhone, and iPad to more than 1,000 Gamestop stores in the U.S. [1] The program, which was started in September 2011, has proved to be a major growth driver for GameStop during the holidays.
We expect the trade-in program to contribute handsomely to GameStop’s used video game products this quarter. GameStop is a leading retailer of new and used video gaming products, and it competes with the likes of Wal-Mart(NYSE:WMT), Best Buy (NYSE:BBY) and Amazon (NASDAQ:AMZN).
The Trefis price estimate for GameStop stands at $32.51, which is roughly a 35% upside to the current market price.
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GameStop Betting Big on Mobile Device Trade
With the rapid digitization of the video-gaming industry, mobile devices have emerged as a credible platform in the video gaming arena. The trend is expected to continue further as the smartphone and tablet penetration in the U.S. market continues to swell. Realizing this trend, GameStop initiated the trade-in program for Apple mobile products in September to boost growth of used video game products, the division which contributes nearly 50% to GameStop’s annual profits.
The program was a big hit for GameStop during the holidays season with GameStop bringing many attractive offers with the trade-in program. The present move of expanding the trade-in program to 1,000 U.S. GameStop stores is influenced from the program’s holiday success only. While the company hasn’t revealed any numbers yet, we expect the trade-in program to be a major growth driver for GameStop’s used video game products in Q4 2011.
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Notes:- More than 1,000 GameStop stores now offering iPod, iPhone, iPad trade program, Source: GameStop’s IR [↩]
