Q: What does it take to stick a monopolistic video game corporation like GameStop with a loss?A: A bigger corporation.The stock market has been none too kind to GameStop Corp. this week. On Monday, shares of the buy/trade/sell magnate
took a 3.5% hit based on worries about video game sales for the holiday season. A mere two days later, GameStop's stock fell another 8.3% due to competition from...[
cue evil-sounding music]...Wal-Mart! According to this
Dallas Morning News article, Wal-Mart dares to crush any video game purveyors who stand in its way by offering up to 20% off Top 25 games through Christmas Eve and $50 gift cards to all Nintendo Wii buyers through December 12.
Will these stock market trends mark the beginning of the end for GameStop? According to some business analysts, probably not, considering GameStop does not deal exclusively in new games. As the
Dallas Morning News article details, a whopping 45% of GameStop's profit comes from used games, so the company is better equipped to handle Wal-Mart's holiday sales than other video game retailers. Moreover, on some older titles, GameStop actually now features lower prices than Wal-Mart.
Nonetheless, stock market prices are related to consumer confidence and perception, so while Wal-Mart's seasonal sale won't last, its attitude and the concern of investors might. In a recent
Wall Street Journal piece, analyst William Armstrong is quoted (ominously) as such: "In reality, the sale won't hurt [GameStop], but the perception would be that if Wal-Mart is aiming at [the company], that's something to take seriously."
If GameStop were to go under, how you would you react? Would you be dismayed, elated or indifferent?
Post a Comment