Apple's Unlikely Distributor
9to5Mac is reporting that GameStop will soon begin selling iPads, iPods, and iPhones, according to dealers at a recent trade show in Las Vegas. The move makes sense, since the video game retailer just began accepting trade-ins on Apple gear.
"Did you know that GameStop now buys your old iPod, iPhone and iPad devices?" reads GameStop's website. "Trade them in at GameStop for in-store credit."
Does this mean that GameStop will simply be reselling buffed-up trade-ins, or did the chain actually become an approved distributor? It will be interesting to watch either way.
GameStop bet on the wrong horse a few years ago. It sold Microsoft's (NAS: MSFT) Zune in its stores, likely figuring that Xbox owners would be receptive to Mr. Softy's short-lived portable media players. It didn't happen. GameStop nixed the Zune three years ago.
Why is GameStop going beyond consoles and handheld systems? The small-box retailer doesn't even stock Sony's (NYS: SNE) Xperia, the gamer-friendly smartphone with seven built-in games from the PS3 parent. Is it really going to start selling iPhones? Diehard gamers are quick to ridicule the casual games that folks play on Facebook and gobble up for free -- or nearly free -- through Apple's App Store.
GameStop isn't going crazy, though. It's rolling with the changes. It's hard to ignore casual gaming when Electronic Arts (NAS: ERTS) continues to gobble up mobile operating system game developers and Zynga's ready to go public at a market cap larger than leading game maker Activision Blizzard (NAS: ATVI) .
It's worth a shot. Its traditional gaming business is in the dumps. Total sales fell in its latest quarter, with a staggering 9.1% decline in comparable-store sales. Latching on to the red-hot iOS devices and using them as magnets to either draw in shoppers or drum up sales of non-iOS items by encouraging owners to trade in their older Apple gizmos is the right thing to do.
The move may pit GameStop against an entirely new breed of competition, but when diehard gamers aren't enough, you need to woo casual gamers to fill the sales void.
Add GameStop to My Watchlist to see how this move plays out.
At the time this article was published The Motley Fool owns shares of Microsoft, Activision Blizzard, Apple, and GameStop, and has written covered calls on Activision Blizzard. Motley Fool newsletter services have recommended buying shares of Microsoft, Apple, and Activision Blizzard; creating a synthetic long position in Activision Blizzard; writing covered calls in GameStop; and creating bull call spread positions in Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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