Gamestop Starting to Fade

Chris Janota,

Where will your neighborhood Gamestop be in  five years?  As the rapidly advancing digital tidal wave has advanced upon music (goodbye Musicland) and then movies (good bye Blockbuster) and then books (good bye Boarders) it has now reaching video games.  Hello GameStop.

I’m personally sheding no tears.  The predessesor to Gamestop, the original video game trading store Funcoland opened their first store just 5 miles from mx123 in Roseville, Minnesota.  It was a great store.  It was the place to go for those SNES and Sega Genesis games back in the heyday of the video game era.  But the merger with Gamestop created a franchise behemoth that bullied and competed unfairly with the mom-and-pops that tried to edge their way in the game exchange market.

Today, more and more gamers  are choosing to bypass physical disc software at retail stores  and download games online.  With today’s 7thgeneration game consoles connected to the net and an even more live gaming consoles on the horizon, you can predict direct downloads to kill physical sales.  GameStop’s recent financial results confirm this trend.  While the company’s budding digital sales increased, same store sales dragged down total company revenues by 12% from last year.

So where is Gamestop headed?  The pre-played market they long dominated remains very profitable for GameStop and should continue to be as long as distributors continue to use disc-based software that can be stocked in retail stores. However it seems inevitable that shrinking profitabilty will accelerate.

Other areas Gamestop is now attempting to tap into:

Digital download codes that allow purchasers to skip the DVD installer and download the game directly.

As smartphones and tablets gain popularity, it’s no surprise that GameStop is now turning to Android devices to boost sales.  A variety of tablets running on Google’s Android  mobile OS are in stock.  GameStop will pre-load a bunch of free games with each tablet sold, including Riptide and Sonic and  a free issue of GameStop’s gaming magazine, Game Informer.

As long as physical discs have a presense you can bet will be buying back your used games as well as your dvds and cds.  We have no shareholder interest to be accountable to, so even as the physical media market we once knew contracts we will concentrate on our buy back business and continue to give top attention to our impeciable service and premium buy prices.