Best Buy US CFO: Used Video Games 'Strategically Interesting'
By Mary Ellen Lloyd, Of DOW JONES NEWSWIRES
Best Buy Co. (BBY) considers the used-gaming software industry "strategically
very interesting," the company's U.S. chief financial officer said Thursday.
But officials speaking at an RBC Capital investor conference would not comment
on speculation the consumer electronics retailer could take a look at acquiring
industry leader GameStop Corp. (GME).
Ryan Robinson, who is senior vice president and the chief financial officer
for Best Buy's U.S. unit, said video gaming is "a strategically important part
of our business," and acknowledged room for improvement in the retailer's
operations.
"What I think is something that we've missed in the industry and is something
other participants have been doing is the proportion of business that is used,"
he said. "We've not developed the capability to the extent that other
participants have. It's a very margin-rich portion, so I think there's
opportunity in that business."
Robinson noted Best Buy is testing in some stores automated kiosks that
purchase used games.
Another Best Buy official said the retailer doesn't comment on deal
speculation. Bloggingstocks.com on Tuesday suggested GameStop would make sense
as a takeover target if Best Buy wanted to make video games the centerpiece of
its product offerings.
Robinson noted that Best Buy's acquisition strategy has historically focused
on buying young companies with strong managements offering skills or businesses
that complement Best Buy's own and that can be leveraged in its stores. That
remains the company's "strong preference," he said.
"Rather than a big-bang type of acquisition, our preference has been
identifying management teams that have additive capabilities and think about how
they're extendable into the Best Buy business," he said.
Issues surrounding digital rights management could cloud the long-term
prospects of the profit model for used video games, he said. Like the music
business, gaming is also affected by a shift to online content.
"But it's a strategically very interesting business for us," he said.
-By Mary Ellen Lloyd, Dow Jones Newswires, 704-948-9145; maryellen.lloyd@
dowjones.com
(END) Dow Jones Newswires
09-17-091326ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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