GameStop – The Next Expected Victim in the Shift to Digital Downloads

Much like music, TV and movies, gaming has finally felt the pinch of the shifting preference by consumers (gamers in this case) for digital downloads over the physical cartridges of yesteryear and DVDs. We suspect mobile gaming on smartphones and the ability to download a game as well as play it where/when one wants it also a factor. The looming concern is what will drive traffic into GameStop locations as the digital download preference hits the tipping point? Maybe they’ll become like Barnes & Noble and sell everything, but games near the checkout counter.

GameStop forecast a bigger-than-expected drop in same-store sales for the crucial holiday quarter, and the company said it expected revenue from its business of selling videogames to largely decline during the period. The company, the world’s largest retailer of video games, has been struggling as more players switch to downloading games on their consoles from buying physical copies.

Revenue from the videogame category, which includes new hardware, software and accessories, is expected to decline in double digits in November and by single digits in December, Chief Operating Officer Tony Bartel said in an interview on Tuesday.

Source: GameStop forecasts bigger-than-expected drop in same-store holiday sales | GamesBeat | Games | by Reuters

About the Author

Chris Versace, Chief Investment Officer
I'm the Chief Investment Officer of Tematica Research and editor of Tematica Investing newsletter. All of that capitalizes on my near 20 years in the investment industry, nearly all of it breaking down industries and recommending stocks. In that time, I've been ranked an All Star Analyst by Zacks Investment Research and my efforts in analyzing industries, companies and equities have been recognized by both Institutional Investor and Thomson Reuters’ StarMine Monitor. In my travels, I've covered cyclicals, tech and more, which gives me a different vantage point, one that uses not only an ecosystem or food chain perspective, but one that also examines demographics, economics, psychographics and more when formulating my investment views. The question I most often get is "Are you related to…."

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