GameStop stock price takes large hit after Xbox Digital Game Pass Announcement

#1



GameStop's stock price has dropped nearly 8 percent today following Xbox boss Phil Spencer revealing the Xbox Game Pass service. This is a program where Xbox One owners can pay $10 per month to have unlimited access to over 100 Xbox One and backward-compatible Xbox 360 games. Of course, these are all digital games that you download from Microsoft's Xbox Game Store, and it's likely that investors are seeing this as a major threat to GameStop.

And an instant library on a console like Xbox One could potentially eat into GameStop's sales. The brick-and-mortar retailer makes quite a lot of its money from secondhand sales where it resells products that consumers have traded in.

Not surprising. A good chunk of GameStop's business comes from selling older pre-owned titles that don't exist much on the market in terms of new copies. If these sort of programs begin catching on it could be pretty bad news for them.

More at the link

http://venturebeat.com/2017/02/28/gamestop-stock-price-tanks-after-microsoft-announces-new-digital-gaming-service/
 
#12
To be honest this is pretty much exactly what MS wants. They've been wanting to cut out retail / the middle man for a while now. Its a big part of what was going on with the original Xbox One reveal.

Remember all those interviews / articles that GameStop was doing prior to the Xbox One's reveal saying people wouldn't buy a console that doesn't play used games? Its pretty clear there's been a movement within MS to bring forward the all digital age as quickly as possible.

Frankly, Xbox / MS likely see this as a win
 
#20
Like I said in the original thread, I haven't bought a single Xbox One game from a retailer, except the bundled ones... It's way more convenient to do it online, and with GwG and now the Xbox Game Pass, that's even more reason to go Digital only, in my world.
 
#23
Sony should be the one sweating. A service like that sounds awesome. And no PSNow doesn't count, not at those prices at streaming only.
I don't know about sweating, but I do hope this pushes them to offer something similar. I plan on subscribing to the Xbox Game Pass when I pick up a Scorpio later this year, and if Sony offered something similar on the PS4 I would jump in on that as well.

Its a pretty sweet idea / concept.
 
#26
I wonder how long it will take to disappear. With digital sales increasing on consoles plus stuff like this is a matter of time. If more people had decent internet it would probably be faster.
 

vinnygambini

Why are strippers at the U.N. bad when they're great at strip clubs???
#36
It certainly spells bad news for Gamestop longterm (hence their diversification through AT&T stores and Thinkgeek), but there will always be a marketplace for physical games sold in stores and that's where Gamestop excels - it's going to be hard work, but they'll make it through.

I could see their used games segment halved though as the subscription model takes more place in the marketplace, so they would need to capture that lost revenue through other sources of revenue - they've already started with game publishing, but they would need more than just that.
 
#37
I'm surprised that MS didn't wait till E3 to announce this TBH.

As scummy as GameStop can be, I do hope a better outlet(s) can take it's place. I have no intention of going digital on console, and I don't trust Amazon to fulfill preorders on limited goods.
 
#38
Wow, that xbox game pass is pretty impressive.

If this becomes a big thing, it could really hurt Gamestop's used game business. And that's basically their bread and butter.
 
#39
I'm surprised that MS didn't wait till E3 to announce this TBH.

As scummy as GameStop can be, I do hope a better outlet(s) can take it's place. I have no intention of going digital on console, and I don't trust Amazon to fulfill preorders on limited goods.
Yea would have gone down well at E3
 
#43
Gamefly is great for brand new games.
they sent me the same game cracked in half twice and wouldnt refund me or even give me additional time on my subscription, they are terrible. At least with redbox when I get a piece of paper instead of a disc they refund me and gave me a code for a free rental.

I should add that gameflys sales they have to purchase games are exceptional tho
 
#46
I don't think Sony will go this direction.

It will piss off publishers.
Publishers are getting their cut, which is the point of the service from the business side. It's also ongoing income on titles without a strong first-round retail presence.

Sony should consider changes to PSNow to get more in line with this. Theoretically, it's less overhead for them, as well.

Gamestop should stop selling Xbone hardware and software in retaliation.
Gamestop isn't in a position to leverage much of anything like that without damaging themselves even more.
 
#47
Maybe gamestop should focus on not providing a shit tier experience


Physical and used games have a place and market in life, but they make it a nightmare consistently.
 
#49
It would be a lot easier for Sony to offer a comparable service than it would be for GameStop to find a way to combat it.
My guess is Sony is still trying to recoup the $380+ million investment they made in purchasing Gaikai and the undisclosed amount they payed for Onlive. Switching to a service like this would be basically writing off their whole game streaming initiative.