Handheld Gaming is not doomed
Michael Comeau of Minyanville
seems to believe that "Statistics" prove everything out.
He first compares every single Smartphone in existence sales against sales of the Nintendo DS.
Wait... I can't call anyone with my Nintendo DS so comparing Phones with Game Machines is kinda silly. A lot of people buy smart phones for reasons having nothing to do with playing games on them.
Besides....You can't leave out the Sony PSP..
And you can not claim the Nintendo 3DS might be a sales slump because of the Smartphones.
28% of gamers say that the 3D effect of the 3DS detracts from gameplay. Just 7% say 3D is ideal for
a Gaming Handheld device.
So, comparing Smart Phones which do not have this feature (I can't come up with one that does?)
versus a device that does and completely ignoring this fact....which has played a gigantic role in the sales picture of the Nintendo 3DS is a disservice to any stock investor.
Michael Compeau goes on to talk about how the life-time sales of the current Gen Consoles
are 15% lower than the life-time sales of the previous console generation.
Well the previous generation didn't sell video games for $60. The video game price hike has dramatically hurt business as cheaper alternatives are now available in Tablets and Smart Phones.
But that doesn't mean Consoles are dead. One can argue that a TABLET is essentially a "Console System." Especially Tablets with joysticks.
How is a Tablet NOT a Gaming Machine? How? It is a Console!!!
So let me get this straight. Michael Compeau wants everyone to abandon ship on every single Video Game Sector Stock because the future of Gaming is Mobile?
Well, I disagree.....big time....
Not every single video game for sale on your Smart Phone or Tablet is FREE or 99 cents.
There are expensive titles on my iPhone.
here's an example or two:
Final Fantasy 3 $16
Final Fantasy Tactics $16
King of Dragon Pass $10
Galaxy on Fire 2 $10
Eternal Legacy $5
And the list of video games $5 and up goes on and on and this is just the Role Playing Category.
Ultimately, the more robust and advanced the video game title is the higher the price point.
And if all you are doing is buying 99 cent video games you are probably dnloading/purchasing
far more video games than otherwise. Perhaps hundreds.
And Quantity can make up (as it always does just ask Amazon) for lower profit margins per unit of sales.
So DEATH TO THE VIDEO GAME STOCKS OF AMERICA????
Michael Compeau also fails to realize that Gamestop and I'd imagine other retail outlets sell
currency cards for ZYNGA's video games....social facebook games...
It's not all 100% Free to Play on Facebook as Michael is quick to boast. Gamers spend money to purchase items or what "dnloadable content" for these *free games.*
Currency Cards may not necessarilly be a huge business yet.... But they show that retail stores are not going to go away. They can participate in whatever shape or style Video Gaming turns into.
And as Michael points out... Revenue is expected to be higher for Gamestop this year.
Mike says that Gamestop's expensive acquisitions aren't moving the needle. The reality is they are cushioning the drop in Console Markets and growing at a pace greater than 50%.
The Digital side of Gamestop up 53% in Q1 and 69% in Q2 approximately. That to me is a major NEEDLE mover.
Electronic Arts (ERTS) is also now heavily involved in Social Gaming...They have the SIMS.
Jim Cramer's Mad Money went over ERTS's business so I don't have to. But, come on?
Electronic Arts has seen a more than 30% share price increase.
Gamestop is basically 20% higher Year over Year in Share Price and prior to this week's stock market crash it was 25%.
That shows that investors get it.... The Video Gaming Environment is changing but companies that have the ability to adapt will indeed survive.