KB Toys reducing game inventory

Reuters is reporting that KB Toys, one of America's biggest toy retailers, has decided to stop selling video games in 400 of its 1300 stores, just over 30 percent of its locations. Though KB has given no official comment, the report says sources within the company have said sluggish sales sparked the decision. Currently, KB carries a wide variety of titles for the PlayStation 2, GameCube, Xbox, and Game Boy Advance.

While somewhat discouraging, KB's decision is hardly a doomsday scenario for the games industry. In a report issued last week, UBS analyst Mike Wallace pointed out the entire chain only accounts for 2 percent of all domestic game sales. "This should not cause a financial issue for publishers," said Wallace.

Indeed, the move may have a worse effect on KB than anyone else. "I think toy retailers pulling back on video games won't hurt the game industry as much as it will toy retailers, who may have to re-configure their games strategy to sell strictly to a younger crowd," Billy Pidgeon, an analyst for the Zelos Group, told GameSpot. "Gamers are getting older on average and will look to specialty retailers such as EBGames and GameStop or mass-market retailers such as Target and Wal-Mart for their games purchases."