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This Could Be Why Gamestop Is In Real Trouble

Forbes - As Brian Solomon is reporting today, Gamestop GME -19.88% shares are taking a beating after experiencing a “greater than expected decline” in new software sales. The price collapsed nearly 20%, and this just a week after another crash following Sony's announcement of its streaming service, “Playstation Now.”

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MuhammadJA1466d ago

GS deserves all the trouble.

Eonjay1466d ago

The corporate side: for sure. The workers: not so much.

dericb111466d ago

Corporate is greedy sure. But the workers lie about stuff so often I can't see how they are much better.

Testfire1466d ago

It's never good for any business to shut down. That means less jobs, less money in the local economies, more unemployment, bigger state and federal deficits.

About the employees, most are gamers, and just like the population here, there are fanboys in every bunch. It doesn't mean the whole company should go out of business.

SmielmaN1466d ago

Agreed buddy. My good friend is a asst mgr of Eb games and she's a great person who needs that job.

Deadpoolio1466d ago

@dericb11 Really genius...You are that dense that you have trouble grasping the concept that they want to, oh I don't know KEEP THEIR JOBS and say and do what corperate tells them to do because they want to continue getting a paycheck AND hours

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Canadianfubar1466d ago

I agree with testfire. It is never good for people to lose their jobs no matter how you feel about a company and their practices. Jobs matter and in my opinion gamestop or ebgames in canada here serves a purpose. If people feel that angry against gamestop I believe you should start your own company and show them up.

Evilsnuggle1466d ago

Gamestop is purely robbery I by almost all my games online . But PSN is killing gamestop they some of the best price . SONY are gaming GODS PSN always has great deals. Xbox live is worst than gamestop they have old games full price that are cheaper at Gamestop. M$ suck

ftwrthtx1466d ago

Had they treated gamers with more respect, and gave them more money per game when trading them in, they could have developed a true loyal fan base and their business model might have been able to withstand times like these.

kingmushroom1466d ago

tell me about it gamestop wants to give me $60 for a Nintendo 3ds-XL i bought at $220.

JasonKCK1466d ago

GameStop will be the new Blockbuster. After they die, collectible shops will rise and treat customers like gamers. Gamers have already proven that there's a collectible market for old games. Old Nintendo, Atari and Sega cartridges have turned into a cash cow. 2 miles from me there is a new hybrid comic book-video game-music-movie shop that's doing very well.

Eonjay1466d ago (Edited 1466d ago )

Looks like they publishers figured out how to ship new software. All you have to do is cut the price quickly. The price will fall below what GameStop wants for the game used. Therefore, you might as well buy a new copy. Amazon is the main catalyst for this. Its smart. You can get every next gen game for under $50 right now.

Would your rather get used for $55
http://www.gamestop.com/bro...

or new for $45
http://www.amazon.com/s/ref...

The Platform holders merely needed to let GamesStop price itself into oblivion. Gamestop defeated itself.

Death1466d ago

I really, really can't stand Gamestop. With that said, Gamestop and retailers like them are needed to promote and sell the products. They take a loss on hardware and make it up with software sales and to an extent, accessories. If they don't make money on the hardware and they lose the software sales, they will promote a product that supports their business model. With 6700 Gamestops in the world, I would imagine it would be bad for Sony if they decided to stop supporting the Playstation. This is only one retail chain dealing with used games.

Like I said, I'm not a Gamestop fan. If they went under tomorrow I wouldn't lose sleep. At the same time, Sony, Microsoft and Nintendo rely on retail outlets like Gamestop to advertise and promote their products.

Eonjay1466d ago (Edited 1466d ago )

Points taken, but it probably GameStop's problem that they have built an empire out of being a glorified pawn shop.

They make money on selling used hardware. Almost all profit. Then add in games they resell again and again...

Had they focused on selling new software instead of becoming dependent on used merchandise, the platform holders and developers would have been willing to increase profit sharing with them. Now you have a situation where new games and digital games are looking more and more attractive. Why the hell would I buy used?

Death1466d ago

I couldn't agree more. A friend of mine owns a Play and Trade. I will buy some stuff used from him, mostly old games out of print to support his business. For the most part though I buy everything new to support the developers.

Back in the 90's I worked part time at an EB. We were always told to push used over new for the huge $5 savings. We would tell our customers about the used game saving, but we would also let them know the developer received none of the money for the sale and let them decide. We were a unique store since we put customer service first. Corporate didn't like us, but our customers did. Every now and then I will run into a game store employee or even manager that remembers me from EB when they were a kid. The impressions we make on others can last a very long time.

hankmoody1466d ago

You know what just hit me? Initially, MS was trying to bury these guys with their DRM policies/ game trade regulations/etc, which backfired due to people preferring Sony's more easygoing approach... and now it looks like Sony's gonna be the one to bury Gamestop after all with PS Now.

Eonjay1466d ago

Gamestop buried itself. They are selling used games for more than then new cost at many retailers and Amazon. I can't believe people are shocked that GameStop is failing. People don't like getting ripped off. It is so easy to hop online and compare prices.

hankmoody1466d ago

They also don't treat their employees well and will always find a way to get rid of them after a few years. A buddy of mine who was managing a store here in NYC got fired for not getting enough preorders on a game (forget which one).

Seriously?

Eonjay1466d ago

@hankmoody-

Damn. I would have... went a little crazy. Your friend is obviously a better man than me.

Also, keep in mind that the Microsoft was going to destroy GameStop by removing options. If Sony destroys GameStop, it will be because they added options. And thats the only way it should happen. Crazy world...

Death1466d ago

Microsofts proposed policies actually benefit retailers and developers. To unlock a game from your account, it needed to be done by an authorized retailer. That retailer paid a fee back to the developers and most likely passed it on to customers. The benefit to Gamestop is games were no longer able to be sold or traded on ebay, cragslist, etc. It funneled more business to the authorized retailers. The limit Microsoft placed on how many times a game could be traded also reduced availability of used stock. In theory that should have driven up trade value since supply was limited. It would also prolong the time in which new games were sold since used game saturation took longer with the shortened life cycle.

In theory,
1. Developers recouped lost revenue to used sales.
2. Trade in value increased with supply decrease.
3. Authorized retailers seen more trade activity with the new process.

It really was a very interesting proposal. I would loved to have seen how it affected the industry as a whole.

Eonjay1466d ago (Edited 1466d ago )

@Death

It would have been interesting but the problem is that it still put restrictions on physical merchandise that have never existed. Not being able to sell or trade your own games at will killed the whole thing. For example if I sell you my game, there is nothing for a developer to recoup because it has already been paid for. Thats free trade. That goes along with owning something.

It never would have worked. They wanted to control the entire trade business. They overreached. The policies don't benefit you if it means you lose your rights to your property.

Thats why I think Sony's approach was a little more thought out. Instead of taking over the trade industry, offer better options. If PSNow is any good (and if it isn't ridiculously expensive) I'm going with that.

The only way Microsoft's plan would work is to go full digital and then it wouldn't be an issue. I was actually more intrigued by the concept that Microsoft might have been willing to allow you to trade digital content. Imagine that.

Death1466d ago (Edited 1466d ago )

Yeah, I'm with you on that. The issue isn't with you selling me your game, it's companies like Gamestop that create an entire business model around it. Unfortunately there is no way to adjust for retailers without affecting individual users. I would like to think there is a way to sell or give your game to a friend and have a pop up message hit your console asking if it's ok to remove the game from your console and move ownership to your friend. A system like this in place would keep the game inactive for your friend until you give permission next time you are online. Retailers could be given the option to bypass authorization by paying a fee to the developer/publisher. There would be hickups with a system like this, but it would give gamers more options and still help developers/publishers recoup lost revenue.

The only other option they have to prevent lost revenue is to go all digital. This is even more user unfriendly since you can't gift or trade a digital copy.

Eonjay1466d ago (Edited 1466d ago )

Exactly, you can't just take something away from people who have had it for YEARS. In the end, Sony and Microsoft's goal were exactly the same. But the only way to make someone give something up is to FIRST get them interested in something that they think is better. If your way is really better for them, they will give up the old way on their own.

With PSNow Sony wont have to block sales or worry about resales because customers wont be bother with getting ripped off at GameStop.

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