Video game retailer Gamestop feels pressure

The question is whether online game distribution will one day kill the golden goose.
The company also faces a challenge to its lucrative used video game sales business, which allows gamers to trade in used games for credit toward new purchases. Inc. recently entered the used game market with a mail-in service, and several other large retailers are also testing used game sales.

GameStop (GME) shares are up more than 30 percent this year following a 65 percent drop last year and a 125 percent rise in 2007.

The seller of game hardware, software and accessories reported a 22 percent increase in net income in its most recent fiscal quarter, ended Jan. 31. The rise was attributed to strong video console sales and hit games such as Capcom's "Resident Evil 5" and Microsoft's "Halo Wars." Income from its purchase of the French game retailer Micromania also helped.

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