GameStop reinventing itself as Apple refurb shop
Remember GameStop? Unless you're a hardcore gamer or a parent with kids who are constantly hounding you for a new console game, you've probably shut the retailer with 6,600 locations out of your mind completely. The retailer is struggling to survive now, probably due to the fact that Apple's iOS devices now account for possibly the top gaming platform ever. GameStop is hoping to reverse a financial slide by embracing the iOS platform.
SFGate reports that the company began a program last fall of buying up used iPhones, iPads, and iPod touches from consumers, then sending them to a "Refurbishment Operations Center" in Texas where the devices are cleaned up and repaired. Once they're in nice working order, the devices are returned to GameStop stores where they're sold at a decent markup. As you can see in the image above, they're also sold on GameStop's website.
Analyst Michael Pachter of Wedbush Securities thinks that the Apple refurb business could be a gold mine for GameStop. Even if GameStop resells just 5 percent of the 230 million Apple devices estimated to be in the hands of U.S. consumers, it could bring in about US$1 billion in new revenue in the next few years.
Pachter also thinks GameStop could make a killing by selling prepaid phone plans with those used iPhones, "since a lot of their customers are teenagers with money to spend but no credit to get a regular phone plan."