Video gaming retailer GameStop (NYSE:GME) has announced the success of its iPod, iPhone, iPad trade program.  The program which was started in September 2011, has proved to be a major growth driver for GameStop during 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 competing 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.
Trade-in program a major growth driver for GameStop’s used video game products
GameStop had started the trade-in program of Apple products in September in order to bolster the growth of used video game products, the division which contributes nearly 50% to GameStop’s annual profits.
The program has been a major company focus over the last three months, with GameStop bringing many attractive offers with the trade-in program. The latest one allowed PowerUp members to pay an extra $50 for the purchase of a new Xbox 360 with Kinect by trading in any iPod Touch, iPhone, or iPad device at its U.S. locations. 
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 next quarter.
As the company’s margins in used products remaining significantly higher than those of new video game software/hardware, this will positively impact results. As a result, with the increase in contribution of used video game products to GameStop’s net revenues, we expect an increase in GameStop’s gross margins going forward.Notes:
- GameStop announces the success of its iPod, iPhone, iPad trade-in program, Source: GameStop’s IR [↩]
- GameStop’s latest offering, Source: exophase [↩]