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　　GS News Update - Walmart taking on GameStop, will soon accept video game trade-ins

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　　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.

　　GameStop's competitive advantages, according to Bhatia, include 1) owning and operating its own massive refurbishment center in Texas; 2) having pricing algorithms and experience developed over the past 10 years; 3) running its own Power-Up Reward membership program. Overall, Sterne Agee continues to rating GameStop as a "BUY."

　　Wal-Mart will not offer any kind of membership for its used game program, at least not at launch, executives for the company said yesterday during a conference call.