GameStop stock drops following PlayStation Now announcement

Good news for Sony doesn't necessarily translate to good news for everyone else, though. GameStop was adversely affected by the announcement of PlayStation Now, with its stock falling as much as 8% yesterday.

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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."

From The Chatty
  • reply
    January 8, 2014 8:30 AM

    Andrew Yoon posted a new article, GameStop stock drops following PlayStation Now announcement.

    Good news for Sony doesn't necessarily translate to good news for everyone else, though. GameStop was adversely affected by the announcement of PlayStation Now, with its stock falling as much as 8% yesterday.

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      January 8, 2014 8:58 AM

      i love misleading graphs

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        January 8, 2014 9:46 AM

        Not including ay-axis at all on a line graph is some gangster-ass shit man. True courage.

    • Zek legacy 10 years
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      January 8, 2014 9:07 AM

      I don't see why, GameStop is in no danger from game streaming in the near future IMO. It's digital sales they need to worry about, since that has already been in place for years as a total replacement for retail sales on the PC and is now starting to appear on consoles.

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        January 8, 2014 9:53 AM

        Mostly, it can't come as any surprise to anyone that GameStop's business model is dying fast. There won't be a gamestop in 15 years at most; they're going the way of blockbuster.

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        January 8, 2014 10:29 AM

        This is why they bought Impulse back in 2011. They see the writing on the walls of physical media which means their lucrative pre-owned business is in jeopardy. They just don't have the following and industry recognition of Steam or even Origin. The real wildcard is if the gaming industry on the whole will move away from local, player-side code execution to pure virtual, ala OnLive and Playstation Now (now that it's launching). That model will kill GS.

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          January 8, 2014 11:25 AM

          They also do sell Steam cards in their store, and offer trade bonuses during Steam sales with trades put toward Steam cards in these periods. So... They seem aware of where the money is. Although a PC gamer has less to trade in...

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      January 8, 2014 9:32 AM

      Sony is doing great. Their Playstation Plus service, which is available to everyone now, is sort of like a Netflix for video games.

      Physical video game prices might fall in the future if stuff like this takes off.

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      January 8, 2014 2:27 PM

      Is it possible that it's the end of forth quarter? Holiday sales are over with and that's probably when GameStop see's it's largest sales increase. I'm sure investors are looking at January to March and not seeing GameStop making much money.

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      January 8, 2014 2:33 PM

      I'm sure every game ever released will be available on the service and no one will ever need to buy software ever again.

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        January 13, 2014 12:09 PM

        Just because no one will need to doesn't mean no one will want to. Physical media will always be a desired commodity. Otherwise vinyls would cease to exist.

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      January 9, 2014 6:08 AM

      Goodbye GS. You outstayed your welcome by a decade anyway.

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