The company also publishes Games Informer, a monthly magazine that reviews video games and offers a discount to entice its 100,000 readers to spend their money with Funco. Young game players often breeze through titles. Funco wants to be the place where consumers buy a new game when they trade in their old ones. With hundreds of millions of game cartridges sold over the last decade, the supply is ample. Still, the competing game formats make the business trickier than just buying and reselling used CDs.
Video games are bigger than Hollywood.
Actually, it's hard to tell the two apart anymore. There would seem to be room for a chain like Funco, whose basic business ought to be a profitable though low-margin and somewhat erratic affair. The classic Peter Lynch-style investor might have spotted Funco as a potential investment and sensed when the business was picking up. Plus, the company had cash and no debt. A gamble, perhaps, but maybe not if you talked to the sales clerks and then checked the company's public filings.