The biggest US-based consumer electronics retailer, BestBuy, has begun rolling out a new program that could dramatically change the video game industry.

The company has launched a new initiative that now lets gamers trade in their used console games in return for in-store credits.

The company has started off the program with kiosks inside stores in a small beta market near Salt Lake City, Utah, but is expected to quickly expand the program starting in the US and later in Canada.

Most importantly, BestBuy now matches prices on new video games to advertised prices from used-game stores such as GameStop, in that select test market only.

The biggest retailer in the world, Wal-Mart, now also offers a similar program without the price matching. Consumers can give up their console games to Wal-Mart in exchange for credit towards their credit cards. However, the Wal-Mart program isn’t as robust since credit transfer takes up to three business days.

Other firms such as ToysRUs have also experimented with the growing used-game business, with other consumer media companies such as Blockbuster being candidates to also enter the space.

The consequences from the massive electronics retailers entering this space will surely see declining margins for the smaller yet well-established firms such as GameStop and Game Crazy.

The video game industry is expected to continue to grow in the coming years. In 2008, it became a $21 billion market, compared to $18 billion in 2007 (according to NPD Research).

Games are also improving and the sales are proving it. GTA IV from Rockstar Games generated USD $500 million in total sales in its opening week, even beating out the most successful Hollywood blockbuster, “Spider-Man 3”, in its opening week in terms of sales.