GameStop stock drops following PlayStation Now announcement

Sony impressed by demoing its PlayStation Now cloud game streaming service at CES yesterday. The service will let a variety of Sony and non-Sony devices access PlayStation devices through a high-speed internet connection. Good news for Sony doesn't necessarily translate to good news for everyone else, though. GameStop was adversely affected by the announcement, with its stock falling as much as 8% yesterday.

The announcement of PlayStation Now caused Stifel, a brokerage and analytics firm, to lower their rating on GameStop from "Buy" to "Hold." According to MarketWatch (via The Escapist), the company's "prospects for software sales are incrementally worsened" by the launch of PlayStation Now.

Shares of GameStop have bounced back a little since yesterday's tumultuous drop. Today, Sterne Agee analyst Arvind Bhatia reiterated a "Buy" on shares, noting that the company will (at least in the short-term) be bolstered by "strong sales of next-gen consoles," and that yesterday's decline is "an overreaction." Bhatia added that "the business model for streaming games is far more difficult than it appears."