RadioShack reorganizing retail outlets to sell games

[UPDATE] Analysts report that ubiquitous electronics chain to start hawking game software and hardware; online store already offering Halo 3 for in-store pickup.

In the hopes of gleaning income from gamers stopping by to pick up audio splitters and speaker cables, RadioShack is apparently jumping on board the Halo 3 launch. In a recent note, Pacific Crest Securities analyst Evan Wilson said that, starting next Tuesday, the ubiquitous electronics chain will use Bungie's shooter to begin selling games and consoles in dedicated sections of its 6,000-plus stores.


Wilson's findings were confirmed over the weekend, when RadioShack's online store--which has had a catalog of more than 1,000 games for some time--began offering Halo 3 exclusively for in-store pickup. While picking up games ordered online at retail outlets was previously an option, the Halo 3 preorder is tagged as an "in store only" offer (pictured), meaning RadioShack is trying to push people into retail outlets. (Despite the label, the game can still be ordered for standard delivery.)

Other analysts said RadioShack's plans extend beyond Halo 3, a development that brought mixed reactions. Credit Suisse analyst Gary Balter felt RadioShack's attempts to sell games in stories would be stymied by game-specialty retailer GameStop, which controls around 20 percent of game retail sales in the US. "[GameStop would be] the biggest obstacle for RadioShack, given the similar store format and significant store overlap," Balter told the Dallas Morning News.

Goldman Sachs analyst Matthew J. Fassler told the News that he felt a shift to game sales might be hampered by RadioShack's core business of selling electronics hardware. He feared the retailer won't have enough shelf space to carry "the product assortments necessary to establish dominance in video games" while simultaneously displaying the cords, wires, cables, phones, and other items that are its mainstay.

Wall Street traders appeared to also have mixed feelings on RadioShack's reported move, which the company has still not officially announced. On Monday, the retailer's shares slid 6.6 percent--some $1.56--to $22.10, only to rebound 3.85 percent--or $0.85--to close at $22.95 on Tuesday. As of press time, RadioShack shares were down 2.87 percent--or $0.66--in after-hours trading.

http://www.gamespot.com/news/6179008...ewstop;title;8