If Wal-Mart has an agreement with Distributor A that says (in part) "If our merchandise provided does not sell within 12 months of being placed for availability on shelves/online, Retailer is entitled to return said merchandise for a credit of $X (Or X% of Retail Value) towards future product purchase". Now, that timeline can vary, as can the credit amount - it's all going to come down to those separate agreements with distributors or publishers.
So you may have (for example), Untitled Goose Game, where the window is 6 months. If the product remains on shelves at that point and isn't selling, WM can return unsold copies for a hypothetical credit of 30% of MSRP towards a future product order. They may have a separate agreement for a title like Fallout 4, where the distributor expects it to continue moving for a longer time, so they can't return it until 24 months after release, and only for 15% of MSRP. At that point, WM may decide that they can move those copies by clearancing them to 50/75% off, so it's more worthwhile to do that instead. Or even both - Putting it on clearance for a few months leading up to the "return point", and then sending back unsold copies if they're just taking up valuable shelf space. Once returned, the distributor can take a couple different avenues - Donate, Recycle/Salvage, Destroy, or even resell to another retailer that may be moving more inventory (just because Walmart can't move it doesn't mean Gamestop can't, etc. etc)
It's also important to keep in mind that some games don't go on clearance for the very same reason - The distribution deal that they have may tie their hands to prevent placing the game on "clearance" or trying to sell it below a set amount, except during windows in which the distributor/publisher agrees to it. Usually when a game goes on sale (especially shortly after release), this is subsidized by the distributor anyway, as the actual "profit" margin on a $60 game is only 20-25% - So if a game is 2 months old and the distributor wants it to hit a sale of 30% off, they need to provide something to the retailer to balance it out, because the store won't want to just eat that loss for the sake of selling a "new" product.
- josekortez likes this