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Varchild2008 (83.79)

My Response...

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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.

http://www.fool.com/investing/general/2011/04/14/10-reasons-to-disown-gamestop.aspx

The above article is from RICK.

In that article he makes the following points:

"I don't see it that way. GameStop's stock is still trading 60% off its 2007 high, and there is little reason to believe that the company will be as relevant in the digital distribution model that the industry is moving toward as GameStop was in the bricks-and-mortar realm."

That is the point made by Rick back in April 14th of this year.

It is as if Physical Retail Software will 100% disappear in Rick's view....leaving Amazon and Steam and Others as the only ones selling Software.....I.E.  Software is now purely dnload only.

He also said in that same article:

"GameStop's plan to sell refurbished tablets -- or possibly introduce a dedicated gaming tablet -- isn't going to change the fact that the companies behind the operating systems are the ones that control the digital distribution."

That point above flies in the face of reality as we know it now.

We know that AMAZON's Kindle Fire was able to develop its own APP store despite Google Android Market.

And we know that Gamestop is able to install its own Kongregate App and such onto traded in iPhones, iPads, as well as the Gaming Tablets Gamestop sells.

Gamestop is able to pre-dnload free games as well onto these devices as a means to attract business by increasing the Bang for the Buck for the Customers.

Gamestop was able to answer Rick Munarriz's issues on these 2 points.

And Take Two Interactive's C.E.O. along with the Holiday Sales performance we have had flies into the face of ever seeing Retail Physical Video Games Marketplace fall off a cliff.

And even if it does. I mean let's pretend we actually DO see a 100% everything is digital universe for Video Game Software:

How does that hurt Bricks and Mortar?  Seriously?  How is that a problem?

Gamestop isn't increasing store space at least not in the U.S. anymore. They are in effect shrinking it...shutting down a store for example so as to have 1 store per mall instead of 2 Gamestops in the same mall.  Consolidating Stores into 1 Store to take up the business....much better than having 2 Gamestop's competing for the same customers.

As for the Digital Sales....  The profit/revenue can be shared with the Bricks stores quite easily.

Gamestop can sell digital properties in-store anyhow.... As they have been through DLC codes for example. They have sold Deus Ex: Human Revolution DIGITAL through their Bricks Stores.

Not all Digital Purchases are made in Cyberspace. A lot are actually made when a customer buys a DLC or other Digital product in-store.  In a universe where everything is OMG! digital...Gamestop can use Incentives to bring Customers to the Stores to buy their Digital goods.

They could (for example) use SD CARDs or SONY's Version of an SD CARD to dnload the digital orders ...or Flash Drives..... or hand out CODES as they do now to Customers....and sell that.

Customer takes his SD CARD....Installs the Digital property onto his/her Video Game Console Hard Drive.  Or whatever.

Rick keeps talking about how THIS company and THAT company is going to *take out the middleman.*

Problem is that everyone is *the middleman.*  Are we seriously going to have Electronic Arts refusing to sell Video Games made by Activision Blizzard?

Cause we aren't seeing EA refusing to sell games not published by EA.... They are selling all games much like STEAM sells all games...

No one is locking people out of anything right now.  To a limited extent perhaps with Call of Duty Elite Map Packs....But even then.....Not everyone will want to for over $45 and would prefer to buy 1 or 2 Map Packs for less than $45 instead of the ELITE membership fee.

So even then.... The day Microsoft tries to cut out the *Middleman* is the day they are faced with the biggest Lawsuit ever seen in the History of Planet Earth....and they know it.

Cause Amazon, Gamestop, Best Buy, Target, Walmart, and all kinds of Publishers will have incentive to join in a lawsuit against any company Sony, Microsoft, Nintendo, that thinks they can become the SOLE SOURCE Retailer for their console's software titles.

The *World* envisoned by the Gamestop Shorts simply will not happen.....Look what happend with AT&T when they tried to be a MONOPOLY.  Didn't work out did it?

2 Comments – Post Your Own

#1) On December 29, 2011 at 4:27 PM, Varchild2008 (83.79) wrote:

OOPS!  Correction. CLARIFICATION:

I get this mention of a "Gamestop" App confused with Kongregate.

I am well aware that Kongregate can only be installed on Android Devices and not iPhone/iPad devices.  My bad...(see it pays to have a second set of eyes editing your words).

Nonetheless....I do hear about a Gamestop APP being installed on the iDevices and I have no idea what that is about. 

*eesh* 

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#2) On December 29, 2011 at 4:49 PM, Varchild2008 (83.79) wrote:

P.S.  That is where I got the notion that Rick Munarriz was basically inferring that AMAZON was the BUY and GAMESTOP was the Short.

The comment Rick made about Gamestop not going to be able to compete in the Digital Space as they have been able to compete in the Bricks space.

He didn't mention AMAZON in that comment but nonetheless it is an easy inferrance to make.

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