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It seems everywhere you turn these days there is a merger or acquisition happening — from department stores to large mall owners and now even video game retailers.

America's two largest specialty video game sellers, GameStop Corp. and Electronics Boutique Holdings Corp., have announced a $1.49 billion merger to create the second-largest retailer of video game hardware and software right behind Wal-Mart.

The combined company will be called GameStop Corp. and have 3,200 stores in the U.S. with annual revenues of $3.8 billion. The merger also gives GameStop an international presence with 600 stores in Canada, Australia, New Zealand and Europe.

“They were beating each other up trying to capture this market and now they'll be more intelligent about expanding,” says Michael Pachter, an analyst with Wedbush Morgan Securities Inc. “Now, they'll be competing with Wal-Mart and not each other.” GameStop's knowledgeable staff may give it a competitive edge over Wal-Mart in the future, says Pachter. Combined, the two companies will have about 25 percent of the U.S. gaming market.

TAGS: Retail
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