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Varchild2008 (84.20)

December 2011



Can a Digital Re-Sell Market Exist? (GME)

December 29, 2011 – Comments (5) | RELATED TICKERS: GME

Short Answer:  Yes and Here's how it can be done:

Long Answer:

I dnload a PC video game digitally to my hard drive via IMPULSE (PC DOWNLOADS)
and I beat the game.  I then decide that I no longer want the game.

What do I do?  What are my options?

Do I just let the game exist on my Hard Drive taking up space?

Do I delete the digital video game?

Hmm...Those are 2 options that do not interest me.

I want to Re-Sell the digital video game instead.

STEAM or IMPULSE/PC DOWNLOADS or ORIGINS or ect.  could theoretically set up their software to lock certain digital video games to your account.

Yes this means having to log-in to STEAM or ORIGINS or IMPULSE/PC DOWNLOADS
before you can play the game.

But the point is that if you sell off your digital video game to someone, that video game must now be inaccessible to you...

You are no longer allowed to have the game (period) and since it is a game that can not be dnloaded onto your Hard Drive in the first place....but sits in the CLOUD with a CODE that grants you permission to play it after you have bought it.... Then that CODE can transfer over to whomever you sold the game to while locking you out of playing the game.

It is that simple.

STEAM already has a program to *gift* video games to people.

STEAM is already 1 step in the direction of Digital Re-Sell marketplace.

So to ever suggest that DIGITAL = NO RE-SELL MARKETPLACE is absolutely wrong.

Look....  The reality is CHRON X  was the first to introduce a Digital Re-Sell market.

So I know it has existed before.... CHRON X  (Geneticanomalies) accomplished it with flying colors.
Hackers were challenged to hack and destroy Chron X and they couldn't do it.

Alas....Chron X no longer exists as Geneticanomalies no longer exists.... But, I look to that game as absolute undeniable proof you can Re-Sell digital video games.

How did it work for Chron X?  Just as I described.  I purchase Cards and those purchased Cards form a Deck I can play with.

I got tired of CHRON X and I went and sold off my Cards to another Player.  I effectively RE-SOLD the cards and thus effectively RE-SOLD my video game.

He had an account....  I had an account.   The Cards themselves sat in the CLOUD not on my hard drive.  I simply Traded off the Cards after I received the check in the mail.  Wallah!

Digital Re-Sell !!!!

Wizards of the Coast did the same thing with Magic the Gathering Online.


A transition to Digital for Bricks stores does not mean RE-SELL Market dies.

Now maybe there is pressure out there from Publishers to prevent their being a Digital Re-Sell market.   Perhaps....

But, Gamestop as they have done so with JOLT and KONGREGATE can certainly act as Publisher to their own Developers and at the very least create a RE-SELL Marketplate for Video Games they develop/publish.

I strongly believe that as Publishers push into the Retail space....Gamestop should push into the Video Game Publishing space.

That is the solution for Gamestop.   Whether or not JOLT works out in the end is irrelevant. Eventually Gamestop will find and purchase a Developer that who knows....becomes the next great Developer of Video Games.

And with PC DOWNLOADS + SPAWN LABS + KONGREGATE......Simply reality is Gamestop has enough products to entice developers to join forces with Gamestop on.

People talk about ZYNGA's employee atmosphere being poor....

Gamestop only needs to provide a much better Employee Atmosphere for Video Game Developers and Software Programmers/Artists to entice them to abandon employers that treat them badly.

The future of Gamestop is DIGITAL RE-SELL + my humble opinion.

And Gamestop seems to have built enough infrastructure to pull this out.  [more]



My Response...

December 29, 2011 – Comments (2)

To ShysterCapital:

I believe you left out the FACTS to back up your smear on my bullish argument for Gamestop.
I have nothing to respond to you if you can not point out where I am wrong?

To Rick:

Look even Take Two Interactive's own CEO sees no 100% digital future in store for Video Games.

Gamestop's CEO has repeatedly said that customers that buy Physical also buy Digital.... Customers that buy Digital tend to also buy Physical.

Customers are HYBRID.

There is a 90% margin in which Customers buying Take Two Interactive's video game titles choose to buy the Physical Copy at a Retail store....vice a digital.

Maybe the margin will come down for Physical and Digital margin up in the future. But, really....given the 15% boost in Physical Retail Software Sales in November year over year which beat out 2008's physical software sales record for that month...

I just do not see it.  [more]



Rick Munarriz gets Coal in his stocking (AMZN)

December 28, 2011 – Comments (3) | RELATED TICKERS: AMZN , GME

Had you decided to put your money in (AMZN) at the beginning of 2011 instead of (GME) you would be doing exactly what Rick Munarriz kept telling investors to do.

Gamestop was going bankrupt due to digital dnloading of video games and social gaming and of course the competitive pricing of  Ergo....Rick was bullish on Amazon while Bearish on Gamestop.

Yet....Year to date:

(AMZN)  DOWN for the year by %3.42

(GME) UP for the year by %5.14

So.....Rick Munarriz's  "Throw This Stock Away" article "come on down....Gamestop!!!!!" was absolutely wrong.

Perhaps he needs to write one of these articles for Amazon?  Just a suggestion here.

In all seriousness....  Amazon seems to be doing well as usual in terms of Sales.  No one can dispute that.   The issue has always been Profit Margin weakness + unexpectedly weak EPS growth and Income/Profit growth.

Gamestop will never achieve the kind of Revenue Stream Amazon enjoys....

But, Gamestop isn't the one with the ridiculously over inflated P/E ratio like Amazon.

The "I AM NOT AMAZON" story has already been built into Gamestop's price a long long long time ago.

Now we have Gamestop releasing news today about their IDevices program exceeding expectations.  Look... Gamestop is EXPANDING its line of businesses.

Sure....Some business will take hits here and there....Call of Duty Elite may cut into Map Pack sales for Call of Duty Games....   But, Gamestop is expanding into new businesses and expanding upon existing ones and those do offset these issues....  Digital Growth outside of the Call of Duty Elite story is quite strong still and will have some growth in the years to come.

I just do not see how Digital Growth "Crashes" simply because of the Call of Duty Elite story.  Not when there are other stories out there....

Like the recent announcement of Nintendo 3DS offering DLCs.  Of course, too early to know if there is any retail business for 3DS DLCs for Gamestop.  But, if there is then that business becomes available in the same year TREFIS is bemoaning Call of Duty Elite Map Pack sales for Gamestop.

It seems to me that for every NEGATIVE someone can find and dig up on Gamestop.... There are plenty of Positives out there....or possible positives....or etc.

Gamestop's future isn't Bankruptcy.... It's just a transition from Bricks to Digital and depending on how customers feel about Digital will depend on how quickly Gamestop has to transition if you will....

The end result isn't Catastrophe....   When APPLE computer company was struggling everyone declared that it was going to be inevitable that APPLE declare Bankruptcy.   That was the news story of the day.  APPLE = BANKRUPT!!!!!!

Then of course Steve Jobs regains the C.E.O. position and greatly shifts APPLE's direction and you have a turn-around story.

If you are sitting there so busy *hating* a stock because for whatever will miss the turn-around story taking shape.  You will miss it.... You will....well...have COAL in your stocking.  [more]



Gamestop Digital Sales Growth is Elite

December 22, 2011 – Comments (3) | RELATED TICKERS: GME

You know the drill by now.  Someone comes along with a brand new "Gamestop is definitely in trouble  hoooooooo  boy  Gamestop is going to go bankrupt!!!!!" type argument.

So what's today's argument regarding Gamestop filing for Chapter 11 Bankruptcy?

Apparently, the existence of Call of Duty Elite is the newest argument to suggest Gamestop is going bankrupt...along with that are the usual "Cat Calls" about Digitial Downloading Competition among Microsoft, Sony, Nintendo, Electronic Arts, and Activision Blizzard, and ad nauseum.

As I recall Gamestop's digital growth of 40 to 60% range in 2010, 2011 has obviously been ELITE despite Microsoft, Sony, Steam, Nintendo having their own digital downloading services.

So arguing competition is like trying to drum without drum heads.  The facts aren't there to support that argument.  The drum head isn't there to support your drum stick playing.

Let me break it down for you.  Here are some comments regarding Call of Duty Elite Membership:

"...if you like getting achievements then you will want new achievements to come with the new maps, like i did with black ops. All I can say is this is the first time and last time I will ever buy hardened or this elite. They should change it to Call of duty garbage."

Via  Gamer Reviews on Gamestop's webpage for Call of Duty Elite DLC.
Total Review Score for Call of Duty Elite:  6.0

The above article on GAMESPOT is what it is.... Take Two Skeptical of the Call of Duty Elite like Subscription Service.

The CEO basically says they do not have any stake (paraphrased here) in whatever format customers want to buy the publisher's products.  Right now customers want to buy packaged goods by 90% margin.

The reality is publishers like Take Two Interactive (Grand Theft Auto Series Fame) aren't going to abandon the physical retail market when customers prefer it overwhelmingly....

And Call of Duty Elite has given some people a bad taste in their mouth.
Sure...4 million gamers signed up to it almost right away.....A lot did so because of the promise of FREE DLC!!    But, how is it FREE if you are paying $45 for the service?

Another thing to consider is I am not sure TREFIS stating that Call of Duty Modern Warfare 3 Map Packs in the future will not be able to be sold by Gamestop is truthful.   Or at least that is what I got out of TREFIS's article....I think they are actually trying to say that the ELITE service will cut into sales of the Map Packs for Gamestop.

Those with Slow internet connections will not be happy having to Annually Subscribe to ELITE for $45 on top of the XBOX LIVE Subscription fee in order to download MAP PACKS.

How much of a success Call of Duty ELITE service really is remains to be seen.  As of right now it appears the CEO of Take Two isn't all that thrilled over its prospects.

Some video gamers on aren't thrilled either:

"Choosing a superior product is exactly my point. And no, I'm not talking about bf3. I'm talking any game that doesn't recycle the same garbage year over year, and then charge you for it. That business model won't work after mw3. People will catch on. Eventually."

That is from a Commenter/Reader from

Bottom line is that we have the usual game of

Because  X happened.... Therefore Y will happen.... Even if lots of customers are disenchanted with X and the possibility of a Backlash could occur and thus Activision may abandon the ELITE service idea and then MAP PACKS are back to being sold in stores once again.....

No... Let's not even consider that that will happen after all ATVI's share price is SOARING!!!!

Right? (ATVI) $11.90 (a year to date price DROP of 4.35%).

Wall Street obviously isn't impressed with the ELITE service at this point.
So, it is PREMATURE to start blowing Trumpets and Shouting from Mt. Everest that Gamestop is going to go Bankrupt because Customers will just abandon ship on Retailers over this ELITE service and oh oh yea.... Competition for digital dollars will also some how destroy Gamestop...or something.

Last time I checked, I was never *FORCED* to pay a Subscription Fee just to shop around and buy products at Gamestop.  [more]



Resistance is Futile!

December 20, 2011 – Comments (0)

Resistance is Futile!

Following idiotic resistance levels that is....or pivots or support levels.

The logic is lacking big time and I am getting inundated with "Gamestop has crossed the pivot point and is now attempting to surpass the resistance level....but the support level ...."

What a load of CRAP!!!

Here's how I factor in Resistance Levels and Support Levels:

1)  A Resistance level should be the share price that is the highest price previously achieved as the share price goes UP before going DOWN....during an overall...downturn in a stock price....preferrable a 3 months long downturn.

So you have a down trending stock....The stock price let's say is $45.17.  It used to be $60.25 as the starting point.  As the stock goes into a downtrend there will be days where the stock price trades higher.  On those days where it is higher, you keep note of the highest closing price during the period of time it is higher.

The stock is down trending..... So eventually it dips and produces a lower low.....then goes back up to produce a lower high......then a lower low.....then a lower high....

So...To put it simply....  If you know what the previous "lower high" was then you know what your stock's resistance level is.

Because if you have a 3 months long pattern of lower highs and then all of a sudden the share price produces a higher high....THAT is what breaking through a resistance level should mean.

Got it?

Hopefully you do....  Unfortunately, Comtex Smartrend....and a whole host of share price trackers simply do not get it... They come up with insanely stupid resistance prices based on some insanely dumb formula.

The SIMPLEST the correct one..always!

2)  Support Levels:     Simple..... During an overall UP TRENDING stock (preferrably a 3 months long pattern), when you have a stock producing higher lows.... then you have support levels as the lowest price produced during the last DIP period.

As a stock that otherwise is UP TRENDING......actually starts dropping in share look to see if it drops below what it has ever traded for in the last period of time in which it fell.

If you see that a brand new LOWER LOW was produced then all of a sudden you have a stock price that BROKE THROUGH the SUPPORT LEVEL!!!!!!  OMG!!!!

Higher Lows = Support Levels are working for the stock....

Lower Highs = Resistance Level is keeping the stock down...

Really.... This stuff is simple when you get the hang of it....  Why on EARTH complicate the chart technicals any further than this???

I see multiple stupidity articles flooding the (GME) Gamestop Charts Page on Scottrade with all of these FAKE  resistance and support levels having nothing to do with tracking the LOWs and the HIGHs.

I look for the pattern of HIGHER HIGHs and HIGHER LOWs and I track it....

Oh and the absense of HIGHER HIGHs combined with HIGHER LOWs can still be classified
as an UP TRENDING stock....  The Higher Lows are far more important for stock prices than producing a brand new 52-week high.  Especially when share prices often get ahead of themselves and have to drop down and consolidate for awhile.  [more]



Rick Munarriz was right about the 3DS...

December 10, 2011 – Comments (1) | RELATED TICKERS: BBY , GME

Continuing in the FULL SPIRIT OF DISCLOSURE-ness as asked for by All Star ikkyu2...

I went back and did uhm 2 days of research on the November NPD report that was reported Friday Afternoon.

It is interesting that we saw a total reversal of sorts where the Software side of things was the story of the NPD report instead of the Hardware/Accessories sales back in 2010.

Even more interesting is that if you went back to January (6th I believe) Motley Fool Article by Rick Munarriz, he said 2 months in advance of the release of the 3DS that without a price cut the system wouldn't take off...wouldn't sell...

Well he was right..... But, I wonder if he actually thought Nintendo would infact do a price cut as quickly as they did?

And with the 3DS now having a user base that is greater in 8 months than the Nintendo DS was in its first 12 months... 

Will RICK have a change of heart on his January claim that Nintendo was "doomed?"

And will RICK also have a change of heart on Video Game Retail in general, not just Gamestop?

Cause an increase in User Base on the Hardware side is a positive leading indicator...

it means 2 things:

1)  Nintendo can pull more 3rd Party Software Development support for the 3DS.... Thus having more software out there for sale for the system in the coming years.

2)  Retail company's like Gamestop prefer to sell Software vs. Hardware/Accessories due to the higher profit margins.

In another January Article it was RICK who was down on Gamestop based on the 9 Week Holiday Season showing mostly a Hardware/Accessories story...a downbeat software story except for Call of Duty Blackops.

He admitted that software is higher profit margins and if you are not selling the software then you are "DOOMED" to fail.

Well?  Bricks and Mortar store outlets like Gamestop, Best Buy, Target, Walmart, etc.  increased software sales by 16% if you include PC software.

16% increase!  A record breaker.   During the very year Rick Munarriz proclaimed Gamestop as "DOOMED."

Listen Rick....

NINTENDO isn't doomed....  Obviously customers aren't abandoning Nintedo for Smartphones and Tablets.

GAMESTOP and BESTBUY and So On aren't DOOMED either....

Obviously they sold a gigantic amount of packaged software in November.  The NPD report was beyond the most optimistic of analyst estimates... 

Since the 3DS software (excluding the built-in digital dnloading aspect of the 3DS) sell Cartridge based Software....Tangible.... The software market for Bricks Retail for the 3DS isn't going to go away any time soon.  Not with as large a User Base as it now has and will continue to grow....

Bleh...In short... I think NOVEMBER was a double edged sword of sorts for Rick Munarriz.

It proved him right about 3DS sales needing a price cut.... But, it proves him wrong about Nintendo and Bricks Retail being DOOMED.  [more]



Varchild's CAPS pick on GME is -60 points

December 09, 2011 – Comments (5)

Per Popular Request.....and despite the fact anyone can see that on my Profile Page (so this is pointless)


Of course I also disclose it is for 5 plus years.....

I also disclose that it was around minus 70 points around January/February of this year.

So I DISCLOSE that I gained 10 CAPS points approximately....  Close to 1 point gained with today's market action.

I DISCLOSE that I have a profile page and please remember that i don't always constantly disclose things as I assume people are fully aware of Profile Pages....and I work to keep that up to date as quickly as possible (but always the chance I can be away from any Internet connection for weeks).

So I FULLY DISCLOSE that if I fail to update my Profile Page for a few weeks.....There's a reason for it.

I also FULLY DISCLOSE than the #1 CAPS Pick Player  CHK  pulled his RED THUMB on GAMESTOP weeks ago....  Now we will never see if CHK red thumbing Gamestop ever made any sense.

Anything else to Fully Disclose?  I'll do so in the comments section...if there is anything.  [more]



I'm the Bull argument on Gamestop (GME)

December 07, 2011 – Comments (4) | RELATED TICKERS: GME

I'm the Bullish argument for Gamestop...I mean I provide that argument on GME....
Cause I am long the stock and remain bullish enough to keep accumulating it.

Granted their may be a time soon where I will need to trim my stake...I have bills to pay after all...

But....Getting worked up over my bullish arguments for GME is silly...  Motley Fool has put out several articles presenting Bearish views on GME.

It's not like you are getting a 1 sided opinion here... You have mine....and you have Motley Fool...

You have my opinion....and you have 66 All Stars red thumbing the stock and a lot of them if not all of them providing pitches for you to read.

Plenty of negative opinions on Gamestop to go around.

But it all boils down to: 

A) Competition


B)  Digital Dnloading

The BEARS see this as an insurmountable headwind for us longs....  Where growth slows until Gamestop stores start becoming loss making retail businesses.....At that point Gamestop has to dump Leases and patch up losses with Digital Sales.

That is the BEARISH view.

Not my view.... I am BULLISH....

Now understand how Motley Fool works????    Those who choose to express and talk about investments and strategies will do so and present their opinions.

All I can say is if you want to buy PUTS or SHORT .....Gamestop....feel free....I just hope you did your homework...your own research....and read through the Earnings Conference Transcripts and Reports and so on....

I hope you studied the Margins carefully and understand the difference between them...

if you do not know what OPERATING MARGINS versus NET MARGINS are....then learn them.

Learn about Cash Flow....and other terminology you see in a balance sheet..... Learn them....

Do yourself a favor too and channel check Gamestop stores.... Too many investors (long or short) GME have come out with statements that read:

"I HAVE NEVER BEEN IN A GAMESTOP IN 10+ years!!!   But boy!!!  I am SHORT this stock."

Really?  You take a short position in Gamestop and never stepped foot in a Gamestop for YEARS?

Just because you personally stopped buying video games from Gamestop..... or Amazon....or Target.....Or Wall Mart.....or Costco....or wherever you used to buy them....

Just because YOU changed your habits.... Doesn't automatically mean everyone else on Planet Earth followed you and did the same as you.  It doesn't..   Channel Checking is important... You can't visit all 6000+ stores of Gamestop....You can't channel check all the stores in your State/Province.

But....You can at least channel check some of them and get a feel for things and say...

Gee....Maybe I should stop being LONG the stock..... if you didn't like what you saw or experienced.


Gee....Maybe I should stop being SHORT the stock....If you found yourself amazed and shocked at what you saw being 180 degrees what you thought you would see...

It's that simple....  Channel Check + Homework + Understanding how to read a Balance Sheet.

Too many think they can practically randomly buy PUTs or CALLs...go LONG or SHORT....and not bother to do anything....  [more]



2 star stocks poised to jump: Gamestop?

December 05, 2011 – Comments (3) | RELATED TICKERS: GME

Acer Iconia 7 inch tablet 8 GB with Free Digital Games Bonus:   Backordered

Acer Iconia 7 inch tablet 8 GB BUNDLE with Free Digital Games Bonus:  Backordered

Asus Eee Pad Transformer 16GB BUNDLE with Free Digital Games Bonus:  Backordered

So while Motley Fool is pushing out boring, drab,  Re-Hash festival articles to suggest Gamestop is going to drop because Best Buy and Amazon also sell Pre-owned Software....or something...

Gamestop appears set to cut into Best Buy and Amazon's tablet selling businesses.

I mean sure Amazon will sell off a gazzillion KINDLE FIRE SALES....  But Gamestop isn't doing a FIRE SALE of any kind and appears to be doing quite well with their Gaming Tablets (despite actually selling them for a profit).

It's simple.

Do you want:

Competitor  Tablet A)   No Free Games pre-installed on it.   $500


Gamestop   Tablet A)  7 Free Games pre-installed + Kongregate.       $500


I think I know which one is the better deal.

P.S. Gee, I can't wait for Rick Munarriz's next "Throw This Stock Away" Article set to go Live on Motley Fool's Gamestop Chart's page on Christmas Eve... boooooooooooorrrrrrrrrrriiiiiiiinnnnngggg!  [more]



Gamestop outperforms 3/4s of Fund Managers

December 02, 2011 – Comments (2) | RELATED TICKERS: GME

I read an article that said that 1 out of 4 fund managers are beating the market this year.  Which means that 75% of all fund managers are losing to the market.

Well... I may be invested in only 1 stock this year.  But... It happens to be Gamestop and that stock happens to be beating the S&P 500 this year.

ERGO.....I am beating 75% of all fund managers by picking a stock back in March to invest in and investing in it and it ends up beating the S&P 500 by year end.  [more]

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