GameStop is the Blockbuster of today. Online app and game stores is the Netflix. As much as I hate the idea of not having real ownership of video games, this seems to be the direction in which we’re moving.
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That’s more or less how I see them too. Why would you go there when you can have a direct download for cheaper? For new games, there’s usually better deals elsewhere. Maybe for used games but you can get those on ebay if need be with a larger selection.
And when you see platforms shifting business from game sales in favor of subscriptions (like xbox game pass, ubisoft+, PS Plus) or not even having to have a computer to play games (stadia), it’s hard not to draw the parallel between Gamestop now and Blockbuster when Netflix showed up.
They can certainly survive for a good while longer on used game sales and being local but still I don’t understand the justification for the current valuation, certainly not on profits. They reported over $200M loss in 2020 when people were stuck at home, many unemployed with plenty of time on their hands. Revenues dropped over 20% the last two years. Q1 2021 they reported a net loss of $67M. Nothing but very recent sale volumes - which says nothing about margin and profits - is up. How is this worth $210+ is what I don’t understand but it’s ok. 
I mean yeah it seems that way but its hard to know how long Gamestop will last or if they’ll ever truely die. They might persist for many years and gradually shift their business to more collectibles, board games, t-shirts, etc. Time will tell.
In any case TODAY they are still fairly active business and the pandemic has given video games a boost as well even. When you’re stuck at home gaming is one outlet that has had an increase. I’m just saying really that Id on’t see them going bankrupt imminently as people claim. I mean people have been saying that Sears is on deaths door (again) and we can all see why but they just keep going.
The $200+ valuiation on GME is insane of course. Should be more like $10-20.
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In my experience the direct digital downloads usually aren’t cheaper. They tend to be full price more often with occasional sales.
For example Cyberpunk2077 for Xbox is $59.99 if I buy it from Microsoft via digital download.
Gamestop has new discs for $19.99
Even digital versions can be cheaper at Gamestop. Hitman 3 is $60 at Microsoft or $54 from Gamestop both in digital format.
Gamestop has a variety of sales and their memership deals too. Overall they aren’t often the cheapest but you can find good deals there and they arent’ bad
There are advantages to having a physical disc versus a digital copy. You can’t resell or lend out a digital copy but you can do so with physical. And yes Gamestop does a lot of business in buying & reselling used games.
Still at the rate things are going it might be 5-10 years left for physical media until it dies out. PC video games are virtually all digital now AFAIK so its just console games that still sell discs/cartridges.
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Considering the market is forward-looking, it should be $0, because that’s where it will eventually end up. Yes, the pandemic has given video games a boost, but GameStop hasn’t benefited from that and lost even more money. Board games won’t save them either, unless they can compete on price with online retailers or maybe turn their stores into board game shops, but even that might not work because that requires more space and their stores are too small and are located in big malls ($$$) compared to the few board game shops I know that are stand-alone or in cheap strip malls. IMO they will only survive in some form if they consistently match or beat on price. But also I don’t know what I’m talking about because I’ve never bought anything from them .
Yeah I certainly wouldn’t be investing in them long term if at all. It is a ‘sell’ stock IMO. However its hard to say how long they’ll live or if they’ll ever die anytime soon. Safe bet is they only have a few years. But I said that for like 20 years about Radio Shack.
I would say that in recent months the shops I’ve visited have been fairly busy and theres almost always a few people there. I mean thats not gangbusters busness but its healthy enough for that kind of shop. That could be a pandemic bump for the industry but at least an anecdotal sign they aren’t on deaths door.
Also the used game market might be enough to keep them alive in some fashion possibly indefinitely I think. There is still a good market for buying/selling used games and good profit for the retailer.
But I don’t know maybe GME will die in 3-5 years after they burn through the cash they just raised.
I never consider them when looking for games at the best price. I don’t look at the Microsoft store either. Epic or steam frequently have promos that are way below what these guys offer. DH paid $26 for Cyberpunk 2077 from GOG last January. If you’re anywhere near retail price like at GameStop or MS store, you’re getting ripped off or don’t want to wait for a deal.
IMO that’s their only leg up on the analogy with Blockbuster. Blockbuster had nothing on Netflix. Netflix was cheaper and better even only for the DVD disk rental that you had to ship back to them. And that’s even before they added streaming which was the final nail in the coffin.
But the used game market is not going anywhere until there is an alternative to physical copies for reselling used games or this media form factor is completely phased out. They have competition on that front too with online marketplaces but I think that’s how they can survive for a while longer on their current business model. Still, for me, it’s hard to imagine them doing that so much better in the future with this model and in the current trend for game distribution to justify this high valuation. To me, the current valuation seems more supported by FOMO and speculation than by business fundamentals and future outlook (which is so amazing they’re not even providing guidance for).
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Yeah I kinda think we all agree that GME is currently grossly over valued and that their business is likely to die at some point in the coming years. I think the only real point of debate is just how long exactly they can hold on before they probably go bankrupt. That does assume they don’t reinvent their business and pivot to something sustainable long term.
The Apes won in the end.
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2 years later and GME is back, doubling off a tweet by the original cheerleader over this weekend.
https://twitter.com/TheRoaringKitty
Similar popular meme stocks from the 2021 era like AMC, BYND, and newer ones like RDDT or DJT have seen decent moves up as well. Other highly shorted stocks in financial distress (BYND, SAVE, MPW, etc) were also moving higher as shorts took losses or trimmed their exposure to the now elevated “meme stock” risk factor.
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Another article on GameStop stock
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Another good article
Others related generally
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