Forget Xbox Live. The real video game multiplayer experience is taking place in the software resale market.
According to industry-tracking website Gamasutra, the "Video Game Buyback" automated machines are in just 2% of Wal-Mart's thousands of stores at the moment. The E-play kiosks also compete with Coinstar's
However, the near-term concern for GameStop is that some Wal-Mart stores are becoming yet one more place to sell back used games. Toys "R" Us and Amazon.com
Do these places have the same in-store expertise as your neighborhood GameStop? No. Will it matter? Insert a game disc into an E-play kiosk, and the machine analyzes it. A few days later, your credit card will be credited between $0.50 and $25 for every successful return. As long as the rates are competitive with those offered by GameStop, it will be problematic for the chain. In fact, the faceless automaton may be a blessing to the mother who wants to clear out her kid's old games without wondering whether she was had by a wily salesperson.
A wider rollout of these game-sucking automatons will also be a threat to another popular resale outlet: eBay
While E-play may or may not be the rival that finally makes a serious dent in GameStop's franchise, GameStop investors need to get past the chain's trend-bucking near-term results, and begin assessing the competitive landscape on the horizon. There are too many new entrants sidling into the used game market. Software companies such as Take-Two Interactive
I'm not suggesting that shareholders should begin shoving their stock certificates into E-play kiosks, and settling for pennies back on each invested dollar. However, it's sadly becoming clear that GameStop may not be as relevant in the future as it is right now.
Other games to play:
Amazon.com, eBay, and GameStop are Motley Fool Stock Advisor picks. eBay, Microsoft, and Wal-Mart Stores are Inside Value recommendations. Take-Two Interactive Software is a Rule Breakers recommendation. Try any of our Foolish newsletters today, free for 30 days.
Longtime Fool contributor Rick Munarriz will admit to still playing video games, though finding time is the tricky part. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.