GameStop Stock Nears All-Time Low as Streaming Closes In

By CCN Markets: GameStop has a long history of making people happy. The feeling of going to a game store and purchasing the title you have been excited about for weeks, months, or even years is intensely satisfying. Sadly, that feeling may soon disappear forever. A major player in gaming, GameStop is one of about nine major video game retailers left. GameStop may end up much like Blockbuster, formerly one of the biggest video rental stores – only one store remains.

GameStop’s plight.| Source: Yahoo Finance

Gamestop Stock Plunged Following Announced Cancellation Of Sale

In 2018, GameStop was planning to sell the company but was unable to find favorable terms. They called the buyout off. Apollo Global Management was among the prospective buyers. There were rumors in early January, however, that Apollo might be making the purchase after all. GME stock tanked by more than 20% after these rumors were confirmed and the sale was canceled — again.

GME has buckled under the pressure multiple times since its last high. Recent surges seem to be linked to game releases or rumors, such as the 2013 release of Skyrim.

GameStop seemingly has a history of using and abusing its employees—with one Reddit user stating:

“I was fortunate to work with great guys at my store, but even now as a critical care nurse I’m under much less stress.”

Game Streaming Services May Be the Nail-in-the-Coffin

Game streaming services like Google Stadia are expected to dominate gaming consumption, much like Netflix began the video streaming revolution. Companies such as GameFly failed to succeed in low-cost, peer-to-peer game lending. This may have been due to overhead costs and damage to physical media, among many other factors.

Video game streaming eliminates two key factors which have been partially responsible for companies like GameFly. GameTap was an early Turner Broadcasting project, which was purchased by a French media company called Metaboli in 2008.

With widely available broadband connections and hard drives exceeding 2TB, console and PC gamers can rely on PS/Xbox store and even Steam for purchasing their games. Sony’s PS Now features several hundred titles, and new gaming streaming services are poised to take even more market share away from GameStop.

How Could GameStop’s Stock Recover?

GameStop lays claim to competitive advantage in terms of additional content from pre-orders, exclusive collectibles, and other niche features. These benefits mean nothing to most players. Having an environment which stimulates them or non-standard, experiential events such as pop-up stores for midnight releases and regular gaming competitions, however, may be the best way for GameStop to engage the younger generation.

Events such as the human claw machine at E3 are just the tip of the iceberg.

This article was edited by Gerelyn Terzo.

Last modified (UTC): June 25, 2019 10:10

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