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"New Video Game Consoles Are Hurting GameStop"

#41KillaBeAtPosted 3/3/2013 1:32:10 PM
bubbas111 posted...
KillaBeAt posted...
Gamestop is treading water. The video-game retailer had it's hay-day in the last decade when gaming was a more niche market, and Gamestop was THE go-to for gaming devices, but now it's such a huge market that it simply won't be able to compete with major electronics retailers who have a huge varied business model. The more big companies like Walmart and etc. etc. begin to expand their business into gaming, the more Gamestops market share is going to fall. They already make like 50% of their profits from used games, and with the rise of digital distribution on the horizon (we can argue that it isn't going to happen, but it is, so I hope you're all ready for it) Gamestop is going to lose another of it's core businesses.

Gamestop won't shutter it's windows but, at best, I see them as a smaller retailer spelling specialty products again.


This makes absolutely 0 sense. As long as there is physical gaming, Gamestop will be the go to place to buy games (unless something huge happens to make people stop shopping there, I mean huge). With the industry getting bigger it is only helping them. They may not hold as big of a market share with the industry expanding but they will still be making more money than before. You also fail to realize that they are doing forecasts and preparing for potential moves that Walmart or Target will make.


If anything would kill GS fast it would be having gaming go back to a niche market.


I typed this out when I woke up this morning, so let me explain myself a little more clearly.

Years ago, when gaming was still a relatively niche market (think like, 2000) Gamestop was in a GREAT position. There originally weren't a whole lot of retailers where you could go to consistently get video-game products and gear. Bigger companies hadn't quite made the jump into advertising and expanding into the video-game market. Lets say, for arguments sake, that Gamestop had 90% of the market share on gaming, and 100% of the market share on used games at that point (the numbers are wrong, but for arguments sake, it works).

10 years later, and Video-games are starting to make a resurgence as a major form of entertainment. Companies like Walmart, Target, Best Buy, and Futureshop and online retailers like Amazon start selling new games and also, and a few start dabbling in used games. Gamestops market share of new game sales falls to 50%, and used game sales falls to 80%

Now, look in to the future. Digital distribution is going to take a huge chunk out of those sales (and already accounts for almost 50% of all software sales and an even LARGER portion of PC game sales). The difference is, that companies like Walmart, Target etc. etc. don't have their business model BUILT around video-games.

Gamestop isn't going to close entirely, but as digital distribution continues to gain in popularity (and it will) Gamestops market share of game sales, both new and used, is going to continue to fall because they can't REALLY offer anything that big box retailers can't offer, and are limited by the fact that their SOLE source of revenue comes from gaming related hardware and software. When their market share shrinks (from when they were originally THE retailer to get games at to now, where they offer the same product as everyone else at the same price) it doesn't matter if the industry grows, you have to downsize.
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#42joker_cardsPosted 3/3/2013 1:41:14 PM
Last Vampire posted...
lol @ other retailers paying more than Gamestop. I know, for a fact, that Wal-Mart and Target both pay minimum wage, and I have no doubt that other retailers like Best Buy are similar, if not the same.


Wrong. Where I live minimum wage is 7.25. Wal mart here starts you out at 8.50 and if you work nights its 9.50. Target starts you out at 8.50 here as well. I had interviews at both but chose Wal-Mart. Best Buy I can't speak for since neither I nor my friends have worked there. All depends on where you live I suppose.
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Forgive me 360 gods for I have sinned! I got a PS3 to play their exclusives!
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#43BeefEasterPosted 3/3/2013 2:25:08 PM
none of the walmarts or targets around here buy or sell used games

must be a regional thing