According to Fortune, GameStop’s stock was plummeting at 37% earlier this month, with the first quarter sales down 13%. They say it’s not exactly shocking news that GameStop seems to be going out of style and are warning investors to stay away from the company, as investors try to avoid another Blockbuster 2.0.
The gaming industry is moving towards a new digital age, avoiding hard copy games and other sorts of material from GameStop. Consoles such as the Xbox One, PlayStation 4, Nintendo Switch and the PC all have the capability to download games through their respective online services through the internet. All these companies have essentially taken out the middle man in the new digital age. GameStop may be doomed in the future as gaming systems move to more digital and cloud-based saved datas. Subscription services through the respective systems also hurt GameStop’s profits.
GameStop still has the edge with their respective customers who value the hardcopies, physical collector’s editions and even selling the consoles themselves. GameStop isn’t exactly a direct comparison of an entertainment company like Blockbuster. Blockbuster lost its revenue because of the streaming services and the online downloads.
— GameStop (@GameStop) June 23, 2019
These online, downloadable services started for the PC with Steam. Now Steam was way ahead of its time and the Xbox, PS4 and Nintendo Switch marketplaces are beyond inferior to Steam’s mass quality and selection, it’s only a matter of time before all physical copy sales won’t be enough to keep GameStop in business. If they were to fold, the supermarkets and other electronic stores such as Best Buy will more than likely continue to sell the consoles, and be the front-runners in terms of being the ones who sell very few physical copies.
“We’re in this interesting friction of change for everyone,” said Frank Hamlin, the chief customer officer of GameStop, according to Fortune. “Nobody knows how it’s going to end up, but we know that streaming services and subscription services are the future. The question is: How do you reconfigure and rethink the ecosystem to accommodate that in the best way for players? Our whole role is to be player focused.”