Gamestop is a NINJA
Blockbuster failed because they never decided to play on NETFLIX's turf.... They tried to do something like a NETFLIX....But, it still forced you to go to Blockbuster. It was never online and you select your movie at the touch of a mouse click.
Blockbuster tried to get into Television Movie Rentals Streamed to your set. But, that forced you to purchase a Blockbuster Compatible Hardware Device to have access to that.
2 Strikes? And the third strike being that Blockbuster's bricks and mortar weren't merely just leased buildings, but owned? 3 Strikes and your out!
Sames goes with Tower Records...and Borders..... These companies didn't adapt to a changing environment.
Retail outlets that aren't QUICK and NIMBLE like a NINJA will not survive.
In a 100% digital universe in which Pre-Owned Physical Games disappears:
A) Gamestop still has the Pre-Owned hardware / accessories business.
B) Gamestop has recently expanded their base of pre-owned merchandise into APPLE products.
C) Gamestop selling nothing but Digital Copies of Games is a margin decline from Pre-Owned Physical perhaps but a margin improvement from NEW SKU Physical Sales.
D) Gamestop has Spawn Labs and one could speculate that this system could be used as a Video Game Rental service.
Not sure what profit margins look like for a Digital Game Rental business...
But...REDBOX competitor ceases to exist if it remains physical rental box company....and physical disappears...
leaving OnLive and Spawn Labs to clean up the market share.
So....Gamestop has WAYS OUT....Like a NINJA....Gamestop can adapt to the environment and strike at the right time into market places and technologies they haven't gone before.
P.S. Got an opinion? Want to tell this 100% fully invested into GAMESTOP as the absolute only investment that he is completely wrong? Write your thoughts and make fun of my opinions all you want (as long as it is within Motley Fool Guidelines) in the comments section below!