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I visited a nearby store for my kid's games and NOT particularly like what I see. They are going down the same path as Best Buy where Amazon can provide the same goods for better pricing. In terms of service, the store I visited is ran by a high school kid - enough said.
I remember fondly that RS was the store I used to get parts for science fair projects as a fifth grader. Certainly the world has changed...I just helped my fifth grader to build robotic vehicles with programmable capability from LEGO kits.
I've been saying for a long time that Gamestop is inevitably heading towards irrelevance and absolutely nothing about my view has changed.
As for the article, it notes that Gamestop is selling phones and other such things. If I want to buy a phone, I am going to go to my provider. I'm not going to Gamestop. Additionally, you run into competition from Best Buy Mobile stores (which are smaller, mobile-focused mall stores) and tons of other things. Gamestop notes that they are looking to buy something. What? I have nothing in mind that they could buy that would make any sense. They talk about creating a portfolio of different chains under the Gamestop roof and again, I'm not seeing it.
Gamestop operating/running/managing various mobile stores for providers? Meh, I guess I just don't find that a compelling investment.
I do get the sense from the article that they know the games business is not going to be forever, but I honestly just do not see them able to shift in a way that makes sense. So they create mobile stores? Why would I go there? If they are AT&T stores, since I don't have AT & T I then would have no reason to go in one. Why couldn't I just order my phone direct from my provider's website?
I don't know, I'm just not seeing it. It's an issue with technology in general - I'm shopping online for tech and now I can sit and do that on my phone. I don't remember the last time I bought something at Best Buy and if I'm not buying that sort of thing there I'm not buying it at some Gamestop-related store.
As for games -
At some point, there will be more in the way of digital downloads. You can already download games via XBOX Live and Playstation Network. I can pre-order a game and download it and have it ready to play at midnight on release date. I don't see why MSFT and Sony would not want to get rid of the "middle man".
Yes, Gamestop sells used games (for outrageous prices, I can find better deals on used games on Amazon.) Yes, Gamestop buys used games (for cheap, I can likely sell one for more on Amazon although I have to go through the process of shipping it which I don't care about doing.)
The Gamestop thing of selling/buying used games is a thing at this point and download speeds are not to the point broadly where everyone can download a game and have it not take a long time. However, there's absolutely zero moat on selling used games (Wal-Mart got into it a year or so ago, you can sell a game there and get credit for something besides a game) and broadband speeds will (I'd hope) improve over time.
If Gamestop starts selling used phones and tablets and other tech, no moat in that either. It is also entirely reliant on the release schedule - if there's no A titles coming up (like "Halo 5" later this year) problem-o.
I have nothing against Gamestop (although their prices are awful on used stuff) or video games (I was playing on XBOX Live earlier this morning), but I look at this business and I see no way where this doesn't eventually become irrelevant. It might take longer than I think, but I just think it's going to happen.
Lastly, and this is a major one: Gamestop stock hooks investors in looking for income because they pay a big dividend. If anything happens to the dividend, it's the beginning of the end.
Gamestop as it currently exists will not last that many more years. Whether or not it goes beyond that depends on if they are successfully able to manage a major shift away from what has been their core business. That in and of itself is a risk, but beyond that, what they're shifting to doesn't have a moat.
At some point, there will be more in the way of digital downloads. You can already download games via XBOX Live and Playstation Network. I can pre-order a game and download it and have it ready to play at midnight on release date. I don't see why MSFT and Sony would not want to get rid of the "middle man".
Last time I went to Sony and Micrisoft stores at a local mall. They were virtually empty whereas Apple store was packed! What a stark contrast and it was near Xmas holiday! Hard to believe Games Stop contributes much to their gaming products.
At some point, there will be more in the way of digital downloads. You can already download games via XBOX Live and Playstation Network. I can pre-order a game and download it and have it ready to play at midnight on release date. I don't see why MSFT and Sony would not want to get rid of the "middle man".
Last time I went to Sony and Micrisoft stores at a local mall. They were virtually empty whereas Apple store was packed! What a stark contrast and it was near Xmas holiday! Hard to believe Games Stop contributes much to their gaming products.
Sony Stores used to be really cool years and years ago. However, they've made something of a mess of the brand and no longer have the VAIO laptops (which I thought were nice.)
The Sony Outlet stores are still fun to browse around, but I rarely wind up getting anything.
Gamestop stores are small, cramped and often fairly dated. More than a few of them probably used to be Funcolands or even Babbages.
I guess at the very least it may be easier (at least easier than a store that starts with an S and ends with an ears) to find replacement stores to fill in Gamestop locations given that they're mostly tiny.
I haven't seen a MSFT store but can't imagine it would be crowded; MSFT hasn't created a consumer product that has generated genuine excitement in ages.
@ Scott. I still have a VAIO laptop that runs on XP. It was a solid built machine for its time. Now we use Mac laptops and they are fast, light and well-built.
MSFT store I went sells Xbox, games, Windows based cell phones, and Windows 8 computers. There was nothing exciting!
Comments
Sad to see Radio Shack goes, but the world is changing and many dinosaur companies including RS are disappearing. By the way, RS is selling your personal information in trying to stay afloat.
newyork.cbslocal.com/2015/03/25/report-radio-shack-to-sell-customers-personal-information-in-bankruptcy-sale/
As for the article, it notes that Gamestop is selling phones and other such things. If I want to buy a phone, I am going to go to my provider. I'm not going to Gamestop. Additionally, you run into competition from Best Buy Mobile stores (which are smaller, mobile-focused mall stores) and tons of other things. Gamestop notes that they are looking to buy something. What? I have nothing in mind that they could buy that would make any sense. They talk about creating a portfolio of different chains under the Gamestop roof and again, I'm not seeing it.
Gamestop operating/running/managing various mobile stores for providers? Meh, I guess I just don't find that a compelling investment.
I do get the sense from the article that they know the games business is not going to be forever, but I honestly just do not see them able to shift in a way that makes sense. So they create mobile stores? Why would I go there? If they are AT&T stores, since I don't have AT & T I then would have no reason to go in one. Why couldn't I just order my phone direct from my provider's website?
I don't know, I'm just not seeing it. It's an issue with technology in general - I'm shopping online for tech and now I can sit and do that on my phone. I don't remember the last time I bought something at Best Buy and if I'm not buying that sort of thing there I'm not buying it at some Gamestop-related store.
As for games -
At some point, there will be more in the way of digital downloads. You can already download games via XBOX Live and Playstation Network. I can pre-order a game and download it and have it ready to play at midnight on release date. I don't see why MSFT and Sony would not want to get rid of the "middle man".
Yes, Gamestop sells used games (for outrageous prices, I can find better deals on used games on Amazon.) Yes, Gamestop buys used games (for cheap, I can likely sell one for more on Amazon although I have to go through the process of shipping it which I don't care about doing.)
The Gamestop thing of selling/buying used games is a thing at this point and download speeds are not to the point broadly where everyone can download a game and have it not take a long time. However, there's absolutely zero moat on selling used games (Wal-Mart got into it a year or so ago, you can sell a game there and get credit for something besides a game) and broadband speeds will (I'd hope) improve over time.
If Gamestop starts selling used phones and tablets and other tech, no moat in that either. It is also entirely reliant on the release schedule - if there's no A titles coming up (like "Halo 5" later this year) problem-o.
I have nothing against Gamestop (although their prices are awful on used stuff) or video games (I was playing on XBOX Live earlier this morning), but I look at this business and I see no way where this doesn't eventually become irrelevant. It might take longer than I think, but I just think it's going to happen.
Lastly, and this is a major one: Gamestop stock hooks investors in looking for income because they pay a big dividend. If anything happens to the dividend, it's the beginning of the end.
Gamestop as it currently exists will not last that many more years. Whether or not it goes beyond that depends on if they are successfully able to manage a major shift away from what has been their core business. That in and of itself is a risk, but beyond that, what they're shifting to doesn't have a moat.
The Sony Outlet stores are still fun to browse around, but I rarely wind up getting anything.
Gamestop stores are small, cramped and often fairly dated. More than a few of them probably used to be Funcolands or even Babbages.
I guess at the very least it may be easier (at least easier than a store that starts with an S and ends with an ears) to find replacement stores to fill in Gamestop locations given that they're mostly tiny.
I haven't seen a MSFT store but can't imagine it would be crowded; MSFT hasn't created a consumer product that has generated genuine excitement in ages.
MSFT store I went sells Xbox, games, Windows based cell phones, and Windows 8 computers. There was nothing exciting!