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Why Wal-Mart will buy your used video game

The market for used video games is in the neighborhood of $2 billion. It's way beyond folks selling on Craigslist. Big global retailers, like GameStop, make massive profits selling used games. The gaming retailer's profit margin on used products is nearly 50 percent, far more than it makes selling new games and consoles.

Now the largest retailer of all, Wal-Mart, is getting into the market. It's offering store credit for old games, which it'll eventually refurbish and sell.

Other big retailers have tried and failed to shake GameStop’s hold on the lucrative used gaming market. Wal-Mart brings substantial market power and a formidable advertising budget to the table. But even if it doesn't beat GameStop, offering trade-ins will get more people inside Wal-Mart. The retailer is betting gamers will buy other things after they trade in their used games.

Selling used video games may be great for some retailers, but game makers are left out of the profits on the secondary market. Some have made moves to try to stifle the used game market or at least elbow in on the profits. But gaming companies have consistently backed down when gamers have pushed back.

About the author

Mark Garrison is a reporter and substitute host for Marketplace, based in New York.

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