RhinoVideoGames
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Confirmed: Rhino sold to GameStop [update 1]
As rumored last week, Blockbuster has reached an agreement to sell Rhino Video Games to GameStop. Wedbush Morgan analyst Michael Pachter estimates that GameStop will pay less than $40 million for the small retail chain, which operates 72 locations in the southeastern United States and averages roughly $550,000 in annual sales (per store). Blockbuster has owned Rhino since May 2004, but has elected to divest this non-core asset as the company focuses on its Total Access rental service. GameStop was the obvious buyer, as the umbrella corporation already controls an estimated 98% of the US's used games market.GameStop chairman and CEO R. Richard Fontaine explained that Rhino's integration into the GameStop network would result in "operating synergies." That's business-speak for "no more 2-for-1 trade-ins."Update: clarified revenue averages.
Rumor: GameStop Corp to absorb Rhino
Over on the Cheap Ass Gamer forums panic has begun to take hold. Poster 'FSUEagles' claims that in no less than ten days Rhino Video Games will be officially converted to a GameStop property. While it's hard to imagine the transition would occur that quickly (especially when store managers are allegedly being told today), the acquisition would not be unprecedented.Aside from the GameStop brand, the corporate umbrella encompasses EB Games, FuncoLand, and Software Etc., and governs 4,592 retail stores throughout the U.S. Adding Rhino, which has fewer than 100 locations, is small potatoes -- the move would be similar to GameStop's 2002 Gamesworld buyout in Ireland -- but still an important step in controlling the used game market. Rhino currently promotes a popular 2-for-1 deal, whereby patrons can trade two qualifying used titles for any one game priced under $50 (a difference must be paid on games that exceed the price restriction). If GameStop does acquire Rhino from Blockbuster then expect trade-in values to diminish overnight.
