Gametrade - games tradein, trade, swap, exchange, wymiana gier

As you know pre-owned (used) games trading between users as well as games trade-in (old game for gift coupon) is a big money saver for the consumer and a growing market (Walmart, Best Buy, Toys R Us, Amazon, Tesco, Asda, on-line platforms).

Since I’m focused on Europe and Central Europe in particular I’m glad to tell you that there’s an interesting start-up called Gametrade which is an on-line platform for users trading games between them. It’s legal and it’s already a success in Poland (50.000 PS3/Xbox/PC games exchanged between users, 8 million page views/month, 32 thousand registered users in the first year and growing). Gametrade at present generates revenues mostly by micro-payments from on-line userbase and as far as I know there are some cool pre-paid features for game retailers in the making. As far as I know business-model-wise it’s looking pretty nice. Gametrade is backed by two VC funds – Luxebmurg-based Xevin Investments and local EU-funded incubator InQbe (IQ Partners capital group).

After a successful roll-out in Poland Gametrade is currently developing a project code-named Gametrade EU (http://Gametrade.eu) and is planning to launch beta-test version of its services for the UK market pretty soon. AFAIK other markets will follow – German, French, Russian, Ukrainian. As far as I’ve heard some talks with expansion partners for the UK site and other markets are under way. Do you think it could work? Let me know by commenting below! :-)

Video game market is growing dramatically, particularly pre-owned segment. According to publicly-traded US-based Game Trading Technologies, Inc. (OTCBB: GMTD):

  • Over 3.4 billion units of software product exists and hundreds of millions of
  • hardware units have been sold since 2000 which constitutes the market opportunity
  • New release titles continue to sell between $50 to $60, while pre-owned titles
  • represent a compelling value proposition for the consumer
  • Pre-owned segment represents a tremendous value proposition for customers

Facts & Figures accumulated by Game Trading Technologies:

  • Analysts estimate the U.S. and European console software market to be $17 billion in
  • 2009, growing to $20 billion in 2010 and will grow at a 9% CAGR from 2009 to 2011
  • The pre-owned segment has been growing even faster and is more profitable than new release titles
  • In the U.S., Wal-Mart, Best Buy and Target have approximately 50% market share of
  • new game sales, while GameStop (GME) has ~25% and Amazon around 3%
  • Specialty retailers such as GME have developed a competitive advantage over the mass merchants due to their ability to offer a large number of pre-owned games to consumers AND by their ability to let consumers sell or trade their older games to finance the purchase of a new release
  • In 2009 approximately 3.4 billion units of software have been sold for all platforms in the U.S. and Europe since 2000 that would constitute the ?pre-owned? market of console software titles. This number will rise to 3.9 billion units by th end of 2010

I like Gametrade for clean, strictly on-line business model. It’s a platform just like eBay. Still it can be used by traditional retailers as a tool for reselling used games, getting rid of overpriced stock, promoting loyalty and building local communitites around stores.

Do you think a Central European start-up can make it regionally? Hope so or I’ll close this blog down ;-)

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