^LOL

Well, whenever I'm in London I go to a shop called Tokyo Toys that sells anime and manga merchandise, such as wall scrolls, cosplay accessories, bags and clothes.  The shop also sells some limited gaming merchandise (for example I've bought Castlevania and Paper Mario key rings and a Final Fantasy VII wall scroll).  Let me put it this way, the people in there (myself included) aren't exactly what one would classify as 'kids'.  

I've actually had quite a few Nintendo t-shirts over the years.  My personal favourite was:

followed by this:

Also, I live in the United Kingdom.  We have the odd bit of merchandise, off the top of my head I can remember the cake I posted, t-shirts (though the above Metroid t-shirt I got in US when on holiday) and mints in a NES controller shaped tin.  Even then they are from my experience usually at places like comic books shops and as I mentioned earlier Tokyo Toys, than places that sell games.  Most other things people import.  However, IMO the best place to get Nintendo merchandise is from Club Nintendo, where I got a Mario game rack a couple of years ago and they have things like badges, Wii Fit water bottles, 8-bit notepads, Link statues and the like..

while merchandise, i don't think a specialty shops meet the point of the OP when he specifically bring up walmart.  he simply brought up that movies have loads of merchandising while i gaming it is mostly just nintendo and asked why more video games don't merchandize more.  I simply wanted to point out that movies don't tend to merchandise everything but rather a select demographic of movies lend themselves to merchandising (which is largely targeted at children).

top 10 movies from last week (gross):

how many of these actualy have merchandising?  Transformers, Car 2, Green Lantern.

many of nintendo's IPs lend themselves well to merchandising.  i think other game companies could merchandise more but things like MW/GTA just don't merchandise well.  T-shirts is about it for possibilities.

Kids buy merchandise (or rather whine until their parents buy it for them) to use, be it through playing with the toys or whatever. However, there's another market out there of people who buy merchandise, wrap it up in a plastic bubble never to be touched and then hope for a profit 20 years later.

I think that market would go nuts for more video game related tat. You only need to look at those people crazy enough to spend $100 on special editions because there's some 'real' night vision goggles or whatever included...

Anything by Square usually has a lot of merchandise...especially Final Fantasy