WSJ: GameStop Is Running Out of Lives

JTMan

GameStop is going the way of Blockbuster ...

http://www.wsj.com/articles/gamestop-is-running-out-of-lives-1448213981?mod=e2tw

Those betting against GameStop may finally be vindicated as a shift to digital sales accelerates

While efforts to diversify have helped GameStop from going the way of RadioShack or Blockbuster, the environment is getting even more challenging.

Research firm NPD Group warned earlier this month about disappointing retail game sales. That came despite the highly anticipated launch of “Halo 5: Guardians.”

The worry is that more people are buying new videogames digitally, squeezing physical retailers like GameStop. Its shares fell 12% on the day of NPD’s report.

Interested Observer

It still does a big trade in second hand games I'm fairly sure. Don't see it going away just yet. Though I haven't bought a new game from it in years, €75 for new PS4 games these days is a complete joke.

Sieghardt

It isnt really digital sales, people would just rather buy from someplace like amazon or other online retailers, they get a better price and none of the hard sell you get when you go into gamestop

I pretty much entirely stopped going there when every time I bought something, they tried to get me to buy a kinect

Kirby

Boo hoo. Go get me a hanky. :rolleyes:

Heres a tip, stop price gouging and maybe people will buy from you. Sales of games arent down....just sales in your store. Plenty of other retailers are doing fine.

martyos121

I won't shed a tear if GameStop go out of business. Their prices haven't been reasonable or competitive in years and the staff are pushy and usually unhelpful when it comes to any real problem (there are exceptions of course).

Their biggest market now is clueless parents buying for their children who don't know that there are so many cheaper alternatives online, and children themselves spending their parents money, when they don't have to worry about the cost. Not a single one of my friends who play video games use GameStop anymore, and I'd imagine this is often the case worldwide for 18-35 YO males. This being the most profitable market in the industry, means their profits must surely be plummeting.

They will never see another penny from me until the prices come down and the staff aren't encouraged to drain your wallet.

Penn

I still chuckle at the thought of the Gamestop employee's face when he tried to upsell me disk insurance.

GS: Would you like to buy disk protection insurance for an extra €1?
Me: No thanks.
GS: Are you sure? It's better to have it and not need it than need it and not have it.
Me: No, I'm fine thanks.
GS: Ok. But earlier today, a guy came in with a scratched disk and we replaced it for him because he had the insurance.
Me: Was it scratched when he bought it?
GS: No, he moved the PS3 while the game was running.
Me: Well then, I won't do that.

His face f*cking dropped and he didn't say another word. I feel bad for them having to upsell all that crap, but if they don't take the hint, f*ck 'em.

Ant695

Haven't bought in there in years mainly because even for second hand they were rarely the best value and not that I have moved to pc 90% of my games are bought in various sales from steam or gmg anyways.

Spudman_20000

martyos121 wrote: »

I won't shed a tear if GameStop go out of business. Their prices haven't been reasonable or competitive in years and the staff are pushy and usually unhelpful when it comes to any real problem (there are exceptions of course).

Their biggest market now is clueless parents buying for their children who don't know that there are so many cheaper alternatives online, and children themselves spending their parents money, when they don't have to worry about the cost. Not a single one of my friends who play video games use GameStop anymore, and I'd imagine this is often the case worldwide for 18-35 YO males. This being the most profitable market in the industry, means their profits must surely be plummeting.

They will never see another penny from me until the prices come down and the staff aren't encouraged to drain your wallet.

My thoughts exactly. Good riddance.

Their prices are ridiculous and it pains me to see parents paying way over the odds for games in particular.

Umaro

Its weird how there is such a huge variance between what internet commenters believe and what GameStop's financial statements say.

You would think the company is at death's door but in FY15 they posted their highest ever gross profit. Even this WSJ article almost begrudgingly admits how their EPS is "up 3.5% from a year earlier. Quarterly revenue is expected to be up just 2.3%."

Regardless of whether GameStop sinks, I think digital only is a terrible idea and gamers will have screwed themselves in the long run if physical sales come to an end.
Fact is, physical is superior to digital. You own your game. You can lend it to a friend, trade it in for a new game, or sell it for cash. It feels like commenters here don't comprehend that a lot of gamers are casual or under 18. They don't have a credit card to buy online. They don't do PC gaming, nor do they know what a Steam sale is. They don't have super fast uncapped internet to download a 40gb game. They fund a new game purchase by selling a game they just completed.

Why pay €70 to download Star Wars Battlefront from the PSN Store when you can buy a physical copy from Amazon for €56? When (if?) the only place to purchase games is the PSN Store/Xbox Live, do you think the price of digital copies will decrease or increase? More than likely you'll be in a captive market, paying GameStop prices for digital copies.

Retr0gamer

People are buying from online retailers more now and game sales are way down from a few years ago as well as the mobile market takes over. There's also been a resurgence from the PC market which is now almost entirely digital. Gamestop is pretty much a dinosaur on life support and no amount of crappy pop culture super deformed vinyl figures will save it.

This generation should have seen the move to a completely digital market, Microsoft tried it but the public backlash saw Sony back pedal on their own plans (don't be fooled, sony aren't the white knights people made them out to be). Stealth subscription services like PS plus are slowly eroding away the publics acceptance of a purely digital future and I'd be surprised if the next Sony or MS console ship with disc drives.

Penn

Retr0gamer wrote: »

This generation should have seen the move to a completely digital market.

No it shouldn't. The internet infrastructure simply isn't strong enough in enough places that moving to digital only wouldn't completely screw over a large percentage of the consumer base. Maybe in the next generation of consoles, but certainly not this generation.

Retr0gamer

Penn wrote: »

No it shouldn't. The internet infrastructure simply isn't strong enough in enough places that moving to digital only wouldn't completely screw over a large percentage of the consumer base. Maybe in the next generation of consoles, but certainly not this generation.

I think getting a monopoly over their own digital marketplace would have been far more important than upsetting a few people that didn't have good enough internet. Sure they'd be on board as well once things improved down the road. Ethically it would be the wrong move but it would have been the best business move if they could have pulled it off. Having a steam or netflix type service on your own hardware platform without the risk of any competition is the goal for MS and Sony.

allibastor

I do sometimes buy from gamestop, I find the prices are high to be fair, but a lot of the time it is better to buys games from gamers.

The chap who works in my local one knows the types of games I play ( how sad ) and put me off the new star wars game.

You dont get that In amazon or argos.

If they bring the prices down in line with other places they will be fine. But saying that, I dont see how PSN charge 69 for fallout on digital copy, should they not be cheaper.

um7y1h83ge06nx

They can be good sometimes for hardware. I got a sweet deal there on an OLED Vita and 10 games around the time the new Vita was being released.

But for software... well anyone that is remotely interested in gaming before casual players know to avoid them.

As someone else has said it's probably mainly parents and very casual players that use them. In the Crescent shopping centre in Limerick Argos and Gamestop are almost directly opposite one another - a €15 even €20 difference between the 2 on new releases.

I remember back in the day when the 360 was relatively new one of my colleagues was getting a 360 and some games for her kids. She was stunned when I explained how some games were region free and looked up the games she was looking to buy on Play Asia, she was going to buy in GS before that.

Generic Dreadhead

Digital Only? With games coming it at between 40 and 70 gigs for a AAA title, that's still a ways off

Honestly, if you objectively look at the amount of cribbers on the threads for Fallout 4, Batman Arkham Knight, Far Cry 4 etc moaning about not having the game for 1 or 2 days (due to download times) or 1 or 2 weeks (do to postage) or 3 or 4 months (due to bad PC ports) you can't say that Digital Only is CURRENTLY the way to go.

Now if you don't give a damn about waiting a few days or weeks, well great, that's probably a good option for you.

But it's same people lambasting Gamestop every time these threads come up who end up popping into threads moaning about not having the game that day or that week cause of the reasons listed above.

Funny thing is those people rarely come back saying "Ah the wait was worth it for the €10 I saved". You refused to buy a physical copy for whatever reason (and I'm not saying Gamestop are the only retailer) and now you're paying the price.

I just find it very much a case of people trying to have their cake and eat it too.
"I want the game on Launch day for €40, no waiting to download it, I want to be able to sell it trade it and I want it to not take up too much disc space on my 1/2TB console"..... well tough, that's not how things work.

Think about a triangle with these 3 elements on each corner:
- Availability to play the minute the game launches
- Low Price
- Ability to Resell the game

And decide which 2 out of three you want and be happy.

€75 is too much for a game as far as I'm concerned, but these pitchfork threads are bloody farcical at this stage, this must be the 9th in a year.
I hope Gamestop stay in business for the 2nd hand trade-in market and the ability to get the game day 1 guaranteed (who know's what Super Value or Argos etc will really truly stock - see Fallout 4).
Ideally they'd lower their price by a few euros and people would buy there more, €65 is a decent bit lower than €75 if you ask me

Kimbot

Had a walk around the local Gamestop yesterday and the prices are just a pure rip off. Most of their staff couldnt care less and are only interested in getting a sale or two.

Penn

Retr0gamer wrote: »

I think getting a monopoly over their own digital marketplace would have been far more important than upsetting a few people that didn't have good enough internet. Sure they'd be on board as well once things improved down the road. Ethically it would be the wrong move but it would have been the best business move if they could have pulled it off. Having a steam or netflix type service on your own hardware platform without the risk of any competition is the goal for MS and Sony.

I think you underestimate the number of people with poor internet, or ones with download-limits where, particularly when shared in a family or house-share, trying to download more than 1 game per month would severely restrict internet usage.

They could have closed out a quite substantial number of their consumer base. Remember the anger towards Adam Orth's comments regarding always-online. Never mind going digital-only for their games, but people had concerns regarding just having to be online all the time due to lack of or poor internet.

I agree going digital-only would absolutely be best for the console companies. But the time to do it was not 2 years ago, nor is it now. Not until the number of those shut out by not having sub-standard internet capabilities is absolutely minimal.

Kirby

Retr0gamer wrote: »

This generation should have seen the move to a completely digital market, Microsoft tried it but the public backlash saw Sony back pedal on their own plans.

You misunderstand the backlash. Why it happeneds and why it was heeded.

People didnt rebel against the digital market for games that microsoft proposed. They rebelled against Microsofts demand that every console user have an always-on internet connection which just isnt feasible. Your xbox was to be connected to the internet atleast once a day and if it was not, offline games you had paid for would cease to work.

It was ridiculous and was rightly struck down. But put the blame where it belonged. People didnt rail against digital distribution.....they railed against DRM.

Corvo

I certainly won't be sorry to see them go.

Never found the staff helpful and the prices are ridiculous.

Good riddance.

gizmo

Sieghardt wrote: »

It isnt really digital sales, people would just rather buy from someplace like amazon or other online retailers, they get a better price and none of the hard sell you get when you go into gamestop

I pretty much entirely stopped going there when every time I bought something, they tried to get me to buy a kinect

Actually, digital sales are playing a fairly large role in this. If you look at the earning reports from the major publishers so far this year, almost all of the major players saw substantial growth in terms of digital sales. Despite a drop in overall sales, Ubisoft saw digital rise from 23.2% of total sales to 56% this year, Activision (admittedly probably by nature of their titles) saw 71% of their revenue come from digital sales while over at EA, digital sales grew a further 10% year on year, accounting for more than 75% of their total revenue for Q1.

Gamestop themselves even indirectly acknowledged the problem back in September when they announced they would no longer bundle consoles with digital games. What I would be interested to see, however, is how hardware sales break down between specialist stores and regular retailers, online or otherwise. I imagine a large proportion of them still happen through the former channels but if Gamestop and their ilk were to die out, I do wonder how retail would adapt.

Robert ninja

It's true that people aren't ready for 100% digital but what I don't get is how do people justify paying Sony/MC again to play their games online either monthly/yearly, then the typical console prices on games, yet not able to afford a half decent internet connection? Not blistering speeds. Just something that can get you your game downloaded eventually.

Even if it takes a few hours, it's not much longer than a trip into town and some shopping where I assume most people buy games physically... unless you make dedicated video game trips or live close to a video game retailer.

As for gamestop... the industry and consumers won't mourn them if they do go under. I've read that their re-selling of games has more documented damage to to publisher bottom-lines than pirating, and their prices and trade-ins have been rips from the last I remember buying from them.

They'll probably just downsize but who knows.

Retr0gamer

Kirby wrote: »

You misunderstand the backlash. Why it happeneds and why it was heeded.

People didnt rebel against the digital market for games that microsoft proposed. They rebelled against Microsofts demand that every console user have an always-on internet connection which just isnt feasible. Your xbox was to be connected to the internet atleast once a day and if it was not, offline games you had paid for would cease to work.

It was ridiculous and was rightly struck down. But put the blame where it belonged. People didnt rail against digital distribution.....they railed against DRM.

I accept that, I might have been wrong or simplified what the backlash was for but I don't think it changes the fact that ultimately that kind of DRM and marketplace control is where Sony and Microsoft are pushing. The difference between Microsoft and Sony is that Microsoft jumped the gun by quite a big margin, offering up a full digital only service while sony have been cleverly introducing it with stealth services like PS plus and PS Now.

Also people thinking lost sales due to people not having good internet connections is a concern better think again. Those lost sales are a drop in the water compared to the potential profits having a monopoly control over a closed platform marketplace can generate, especially considering you are now taking in more money on third party sales acting as a publisher.

wes

If Gamestop doesn't succeed in diversifying they will have to start closing stores, but they can keep going on, as the Internet infrastructure isn't quite there for everyone.

I have gone fully digital myself, but that because I have good Internet, but a lot of people don't, so until the Internet infrastructure is sorted for pretty much everyone, Gamestop will limp on.

Generic Dreadhead

GameStop should have a Sticky or Megathread or whatever, De-ja-vu here

Retr0gamer

I'd say they can still survive as an online entity. The online stores apparently are run almost separately and the prices there aren't all that bad with some bargains to be had in sales.

Shiminay

Fun fact, I installed Battlefront off the 4(!!!) DVDs the physical review copy I was sent had. Took 3 hours. Had I just downloaded it, it would've taken half the time, but I was streaming something else and I wanted that stream uninterrupted.

Internet infrastructure *is* good enough in the majority of markets, just cause the arse end of Ireland has gods awful Three NBS horsesht connections, don't expect that to make a lick of difference to billion dollar companies who sell way more product in countries who have their infrastructural act together. Weigh up the population even here in Ireland, the majority still has more than adequate service to not be bothered by a 40 - 70GB download.

Unpopular opinion but none the less true - if you live somewhere with shite internet access, it's up to you to fix it. You should be burning down the offices of all your local Fianna Fáil and Green Party TD's with what they allowed to be signed off in the creation of the so called National Broadband Scheme. It really is as simple as that. How is it you think that the people behind the Abortion Rights Campaign for example are making Repealing the 8th Amendment a doorstep issue for the next general election? You have to go out and fight for it. There is no reason that basic and functionally appropriate internet access can't be as important an issues as basic women's healthcare.

Robert ninja

More than just internet everywhere we need multiple providers everywhere. I get screwed on my package pricing because there's no competition.

BlitzKrieg

I think preloading is the key shift in online design that have allowed this change. it allows people with crappy internet connections still get the game at hour 0 vs going down to the shop and buying it.


That and the fact there is not a single publisher or developer that would favour gamestop over a digital platform, especially those that own their own digital platforms.

Randall Floyd

BlitzKrieg wrote: »

I think preloading is the key shift in online design that have allowed this change. it allows people with crappy internet connections still get the game at hour 0 vs going down to the shop and buying it.


That and the fact there is not a single publisher or developer that would favour gamestop over a digital platform, especially those that own their own digital platforms.

Don't you have to pre-order to be able to pre-load a game?

BlitzKrieg

Randall Floyd wrote: »

Don't you have to pre-order to be able to pre-load a game?

Yes and I know pre-order culture is mostly a negative trait of the industry.

But it's there and will remain part of the industry of some size and it was firmly in gamestop etc corner initially until preloading allowed those who were going to pre-order anyway get the game pretty much midnight on the dot on release day.

Generic Dreadhead

Why not Pre-Load, but pay to unlock the actual game at launch?

Win-Win!