GameStop Turns to Apple Products to Rescue It

By James DeRuvo (doddleNEWS)

It wasn’t long ago that gamers would laugh at Apple products.  For a long time, Cupertino’s finest platforms, while ideal for making movies, publishing, and anything else creative, simply didn’t have the firepower for high performance gaming, namely games built for Windows.  Then Apple went to the Intel Platform, Steam came on board, and suddenly, Apple was an option.  But what gamers couldn’t foresee is that Apple products would one day save a major player in their industry… or at least that’s what GameStop is pinning it’s hopes on …

 In an effort to avoid the fate of Blockbuster, Circuit City and others in the remainder bin of failed retailers, GameStop has embarked on a daring, if inglorious, strategy: refashioning itself from a console-game purveyor into a repairer and reseller of Apple gadgets, betting that its retail visibility will prove an advantage. – SFGate

If my son is any judge of the typical GameStop consumer experience up to this time, GameStop would have a hard time making it on just selling video games. That’s because a great portion of their inventory is made up of used games and game platforms.  And game fans like my boy can get store credit towards trying the latest games or upgrading their platforms simply by bringing in old games, platforms, and accessories and trading them in.  The store credit (which amounts to maybe .20 on the dollar) can then be used to trade for other used gaming options, or buying brand new.   At the beginning, it seemed like a clever idea in order to get gamers into the door, rather than having them buy at a big box retailer or even online at Amazon.

 

 

But as time went on, GameStop’s inventory of used games went up, while their bottom line went down.   In 2012 alone, GameStop’s stock value has plummeted over 25%, even though their 6600 stores control about two-thirds of the retail gaming market  But with online options like STEAM, or just buying new titles on Amazon, GameStop is still facing a similar story that has been sinking retailers like Circuit City and Best Buy … competition and lower overhead.

If you want to understand GameStop, you must understand refurbishment,” says GameStop CEO Paul Raines.

 

So rather than closing stores and letting go of employees (a strategy being attempted by Best Buy), GameStop has turned to Apple by offering trade-ins on Apple iPhones, iPods, and even iPads to apply the amount given towards the purchase of a new mobile device.   According to 9to5Mac, GameStop is offering a market price of $148 for an iPod, $360 for an iPhone, and $388 for an iPad, and the program is so successful that GameStop made over $200 million last year alone and is opening a new $7 million Refurbishment Operations Center who’s sole purpose is to take traded in mobile devices,  and then refresh them with cleaned up or repaired exteriors and updated software.  And GameStop isn’t only relying on Apple products, as they are taking in Android devices, as well as gaming devices like Nintendo DS, XBox 360s, and Sony Playstations, as well.

The velocity of this trade program has exceeded our expectations.” – GameStop president Tony Bartel

But as GameStop’s CEO Paul Raines said in a recent interview to The Verge, even though the new program has been lucrative for Apple products, it’s still slow going for their Android department as Android Manufacturers really don’t have much motivation to help:

Android refurbishment operations began only six weeks ago at a single table, and it’s a learning experience. Manufacturers don’t provide instructions on how to disassemble their products, and they rarely give GameStop hardware in advance.

Raines goes on to say that they have to practically reverse engineer an Android device in order to learn how to put it back together.  And since there are dozens of different Android designs, the learning curve repeats over and over again.  But in the long run, they are confident they’ll not only be successful, but will be experts in the repair and refurbishment of Android products.

Course, GameStop isn’t the only option for trading in your old gadget.  Gazelle also offers a buy back program for used devices.  And the more companies get into the business, the better for consumers as prices will rise as demand increases.


About James DeRuvo

James has a multi-faceted career that spans radio, film and publishing. A writer about the technology in the video industry for nearly 20 years, James is also an award winning film director, having garnered a Telly Award for his short film Searching for Inspiration. He's also worked as a producer of many talk radio programs in Los Angeles with topics ranging from entertainment to travel to technology.

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