GameStop Corp. (GME) Soars on Sony PS4 news

Posted by Steve Raasch June 13, 2013 0 Comment 1786 views

GameStop Corp (NYSE:GME) share prices soared just a day post more PS4 details were released by Sony. Incidentally, the PS4 is going to be priced lower than the Xbox One. Sony has no plans of charging any fees for used games on their new launch, though there is a distinct possibility that Microsoft might. Resultantly, GameStop might gain more from sales of the PS4.

Any new console releases means that GME benefits a lot, particularly if there are two different console launches. Not only are the consoles competition for each other, but they potentially bring in two different sets of customers as well, fans of the Xbox One and the PS4 fans. Of course, which console the customers eventually walks out of GameStop with, is a matter of ad placement in the store and to a certain degree, luck.

How does GameStop rake in its dollars?

The retailer sells video games but specializes in selling used video games. The chain’s U.S market-share has been eroded by stores such as Wal-Mart and Best Buy. But abroad, in Europe, its sales are booming and non-Americans now provide a major chunk of GME’s overall income.

Time to stop playing games

News has it that Microsoft might take some stringent measures with its Xbox One. It might limit gamers from selling, lending or gifting, which if you look at it objectively, is taking things too far, at least till the physical media stays a reality, which, at the moment, it is. Sony hasn’t been forthcoming on this front and it seems like both the companies want to force the consumers’ hand in this issue. The basic idea behind restricting lending or selling of games and by tethering them to the ever-present cloud is definitely an incorrect approach.

The digital threat

In comparison, digital games that can be played on a PC have definite value attached to them. They are very convenient and the games tend to be cheaper and it won’t be too long before gamers opt for these instead of consoles. And so, companies like Microsoft and Sony will have to be careful while pulling the reins in on companies like GameStop Corp (NYSE:GME) as they stand to lose as much as the retailer does if customers switch loyalties.

About Steve Raasch

Steve Raasch is a breaking news reporter for GDP insider. During his nearly two decades of editorial experience, Steve has covered a variety of topics including small business, health, personal finance, advertising, workplace issues and consumer behavior. Steve is very passionate about his work. Steve earned a master of arts degree in international relations from the Johns Hopkins University School of Advanced International Studies in Washington.

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