Will Digital Destroy GameStop Corp (NYSE:GME)?

Posted by Chris Bell September 30, 2013 0 Comment 1476 views

The holiday season is right round the corner and with the Xbox and PS4 consoles all set to hit the U.S  market, it seems like GameStop Corp (NYSE:GME) should be all geared up for some better times. But market watchers are saying that this may not really be the case. The company has been on shaky ground for the last few quarters now. This is primarily because consumers are veering away from console-based games, onto digital ones. GameStop Corp (NYSE:GME) reported a 10.7% drop in its overall revenue in comparison to its 2012 revenue.

Casual gamers shift focus

The primary reason for the transition from video to digital games is that the latter are either low-priced or free and casual gamers prefer these to the high priced console games. This digital game trend has made GameStop Corp (NYSE:GME) shift its focus a little bit towards digital games.

In the second-quarter, there was a year-on-year increase of 18% in its digital business and its GAAP revenue came in at $50 million. ‘Minecraft’’s Mac and PC versions have had impressive runs and GameStop Corp (NYSE:GME)’s PC digital business saw a healthy 38% rise. Very recently, the company topped the 12M sales mark for this particular game, which was a record-breaking milestone. The company is not stopping at anything and only time will tell if its efforts in this direction will bear fruit.

Friday’s trading

In Friday’s trading session, GameStop Corp (NYSE:GME) stock dropped by 1.55%. The opening price of the shares was $50.08 which rose to an intraday high of $50.52 and dropped to a close of $49.65. Approximately 1.32 million shares were traded on Friday and the average volume of shares traded over a 30 day period was $2.14 million. The 52-week low of the shares was $20.55 and the 52-week high was $56.08. The company has a market cap of $5.84 billion

About Chris Bell

Chris Bell is an investing reporter for GDP Insider. Chris covers financial markets and Wall Street, concentrating on developments affecting individual investors and their portfolios. Chris is also over consumer reporter and covers a wide variety of issues ranging from housing to immigration to urban poverty. Chris graduated from the University of Scranton with a degree in Communication and Philosophy. Chris's diligent investigations earned him the honor of being named "Best Reporter" once by the Headliners Foundation of Texas and once by the Houston Press Club.

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