GameStop shares fell today more than 5 percent one day after Wal-Mart, the world's largest retailer, announced plans to enter the $2 billion used game market. Currently, GameStop shares are down 4.53 percent to $37.95.
Wal-Mart will begin accepting video game software (not hardware) trade-ins on March 26. The company plans to pay an average of $35 per title, though trade prices will of course vary on a game-by-game basis.
According to Sterne Agee analyst Arvind Bhatia, GameStop investors need not be worried about Wal-Mart's entrance into the market. Bhatia points out that Best Buy, Target, and Amazon have all tried to enter the used game market and none have had much success.
"It makes sense and feels natural that various retailers that offer new video games would try to offer trade-ins as well. However, as many retailers have discovered in the past, buying product from merchants in bulk is quite different than buying 1 disc at a time from customers," Bhatia said.