Quote:
Originally Posted by Slava
I’m curious to know what people see as the long term viability of the GameStop business. Not so much in reference to the stock itself, but as a business it seems like there’s not much here. The last time I was in an EB it seemed pretty obvious that they’re desperate to move from actual video games to other pop culture items, presumably because the video game section is dying. (Not because there is less gaming of course, but because no one needs physical games and just downloads them). Maybe I’ve become an old man all of a sudden? I know they can still sell the consoles, but the margins on consoles aren’t great. There might be some people still trading games, but you have to think that EB/GameStop gets left holding an unreal number of PS3 games that are virtually worthless at some point?
I don’t know, because I haven’t actually researched anything here, but this doesn’t strike me as a particularly solid long thesis at this point (well, surely not at $20bn), but I’m interested in knowing what I do not see here.
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Sears, they will exist and one day, long after they should have, they will go belly up.
The only thing that isn't online yet is accessories and consoles, and would I rather buy from EB/GameStop or Best Buy? I would rather buy from Best Buy, they have better in-store experience and better return policies. They don't have the corporate policies necessary for a brick and motor store to sell, if I go into Best Buy, my experience is that they want to chat about what I'm there to purchase and give me service (outside of Xmas). If I go into EB/GameStop and ask them even a simple question I feel like I'm interrupting them. Talking to my friend who used to manage several EBs in Calgary, their corporate policies are really bad and foster this sort of customer service.
Most of the accessories and consoles are moving towards online sales, and EB/GameStop's online presence is a disaster. The website is old and cluttered, their search is spotty at the best of times, and they have performance issues.
Can they pivot? Sure, but where to? Steam competitor? No, the industry is full and getting new competitors every day it seems. Most game companies have their own store or have bought out a major online store. Even if they wanted to, has EB/GameStop ever given the impression that they know how to gamify their loyalty program? To me, the answer is no, so even if they tried where do they go.
When I look at BlackBerry, Nokia and GameStop; two of those companies have purposes still. BlackBerry has always had a great mobile security suite of software and security-oriented software engineers, and if they had pivoted faster they may not be as beet up. Nokia has engineering talent. What does GameStop have in talent? Has anyone heard of GameStop fostering talent? I haven't and from discussions, I've had with my ex-manager friend, they do not foster talent.
So, Sears, though it might happen faster; Sears had a huge portfolio of real estate to prop them up.