Is Gamestop the next Blockbuster?


Back in the day, Blockbuster was a must for every weekend. I would go and grab a movie or two and maybe even a game to kill the weekend. I was in and out of the store so often that the employees knew me by name. There was no where else that I could go to find blockbuster-closing-041210-webjpg-7775ba2fdd8fda15such a wide selection, much less on the release date, that would not cost me full price. Then came Redbox…

After that there were little kiosks all over town at places I was already going. This was a fatal wound to Blockbuster’s business. Then there was Netflix and Hulu that finished the job. This was the end of a staple in my childhood, and now it may be Gamestop’s turn to go the same way.

Earlier this week Gamestop president made this comment during an investor call: ” “We want to help ensure that our industry does not make the same mistake as other entertainment categories by driving the perceived value of digital goods significantly below that of a physical game,” according to Gamasutra.

In short, he fears that the rise of more bundle console deals and digital downloads for new releases are going to drive down their profits and make their industry obsolete. This is the exact same situation that brought the mighty Blockbuster to its knees, and all this may not just be fear. At first glance you will not the huge profits from the last quarter and say, ” they are doing just fine”. Truth is that they missed their projections and that is never good for stock price or investor confidence. Take a look at the stock prices…

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Now, while Sony may not be at the top of the pack they are trending up for the year and will most likely continue in that direction, and Gamestop can not stay stable at all and according to their president, Tony Bartel, “$100 million worth of games have been digitally delivered for free in hardware bundles”. They, of course, see this as a loss of sales and profit. Which they should if you ask me.

Sony and Microsoft are starting to realize that a third party vendor is no longer necessary in the digital age, and even if you did want a physical copy, Microsoft is moving into retail locations of their own.  If you ask me, this is going to be the trend to come for a long time. Physical game disc, like CD’s, will die out and be nonexistent soon. So enjoy Game stop while you can, because before you know it. It may be gone.

Do you think that this is a trend that will continue to go towards the digital? Is Gamestop in trouble or is this just a large company complaining about nothing? Would you be happy with an all digital game products? Let us know in the comments below!

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