Yesterday, Amazon (AMZN) all but declared war on video game retailer Gamestop (GME) with an announcement the e-tailer is entering the used video game market. Investors dumped Gamestop on news of the threat, sending shares of GME down 14% on the day.
GameStop CEO Dan DeMatteo isn’t taking this one lying down. He’s hitting the blogs saying Amazon has no chance of success.
Edge: “I give the probability of this working at zero,” DeMatteo told Edge in a Thursday phone interview. …
DeMatteo is familiar with the mail-in video game trade model. GameStop tried it several years ago, to no avail. “Electronics Boutique also tried it and failed. There’s no consumer acceptance. With consumers, there is an immediacy for currency when they want to buy a new game.”
In the case of Amazon, consumers have to wait for shipping and for the gift card to be processed before cashing in on trade-in value.
“It didn’t work for us, and I can’t see it working for them,” DeMatteo said.
We add this to Dan’s remarks: We absolutely agree gamers want “immediacy for currency,” and only Gamestop lets customers to go to the mall with a stack of old games, trade them in for a new game, and play it that night.
But we’re not sure GameStop’s and Electronics Boutique failure in the mail-in space means Amazon will flop as well. No one does mail better than Amazon.
Moreover, Amazon’s customers won’t have to exchange their old games in for new games. They’ll get Amazon gift credit, which can be used for anything from tube socks to a new Kindle 2.
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