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Retail goliath Walmart is going to start allowing customers to trade-in their used video games for re-sale, taking a big bite out of a major plank of GameStop's business.

GameStop is the largest chain of video game retailers in America, and while they sell both new consoles and the latest games, buying back and then selling pre-owned games has been a vital part of their revenue. Specifically, "used products represented nearly a quarter of its $2.1 billion in sales and more than 44% of gross profit in the quarter ended Nov. 2," The Wall Street Journal reported. That might be a bit surprising for anyone who might believe that $500 consoles like the PS4 and new games that cost at $60 (not counting add-ons) drove profits for video game stores. 

For Walmart cashing in on $520 million (25% of GameStop's sales) might seem like chump change. But that they have bigger reach and more customers than GameStop, which mean they could make more money.

Of course, it's not just the re-sales of old games where Walmart will clean up. Customers will receive payment in gift cards up to $35 ... that they can use at Walmart. The new trade-in program begins next week.

For their part, GameStop doesn't seem worried. (Or at least isn't pretending to be.) "We win those market share battles because we've been at it a long time," GameStop's Chief Executive Paul Raines said.

This article is from the archive of our partner The Wire.

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