Analyst: Pre-Owned Market Could Generate $2.5 Billion in Credits for Trade-Ins on Next-Gen

According to analyst Colin Sebastian from equity research firm Baird Equity, the trade-ins on current generation console software and hardware has the potential to generate an estimated $2.5 billion in credit at retailer GameStop (to be used on next-gen consoles). Sebastian came to this conclusion after speaking with executives at the specialty retailer to discuss how it could diversify sales through the pre-owned and mobile markets.

GameStop's stock saw a 14 percent decrease following Microsoft's Xbox One conferences when executives at that company indicated that they planned to take control of the pre-owned market by charging a licensing fee for used Xbox One games. Sebastian's take on the pre-owned market certainly can't hurt the retailer.

"Used inventory tends to increase into platform launches, and we estimate that GameStop could create nearly $2.5 billion in credits for consumers upgrading to new platforms," suggested Sebastian.

The real wildcard for GameStop – who should probably know more than it does if this is what Microsoft is planning – is how much of a percentage of used game sales this licensing fee from Microsoft will take. From the reports we have seen major publishers like Take-Two have no idea about this licensing system scheme at all, and GameStop seems to be in the dark as well.

Hopefully we will hear more about all of this next week at E3 in Los Angeles.

Source: GII

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