GameStop stock tumbles 20% after PlayStation Now announcement

GameStop PlayStation 4

It’s not looking good for GameStop these days, as more and more games are sold digitally and not in stores. Since Sony announced PlayStation Now at CES last week, GameStop’s shares have plummeted 25% — with a massive 20% drop just yesterday.

GameStop revealed that game sales are down and said what we all know: more and more games are sold digitally, which means GameStop doesn’t get a dime. Even worse for GameStop, digital games cannot be traded in and re-sold, which is where most of GameStop’s revenue and profits come from.

Since it’s easier, and since consoles now ship with massive harddrives, gamers are opting to purchase many of their games digitally. Digital game sales have increased each year over the past five years, as retail games sales have slowed.

If there’s one company out that that’s hurt by this trend, it’s GameStop. And with Sony’s new PlayStation Now service for the PlayStation 4 and Vita, there won’t be any need to buy games at all — gamers can simply stream the games to their devices.

PlayStation Now will definitely cut into GameStop’s used PS4 game sales, as PlayStation 4 owners will be able to stream pretty much any PS3 game to their PS4.

It’s only a matter of time before GameStop becomes the next Blockbuster.

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  • Kyle

    “It’s only a matter of time before GameStop becomes the next Blockbuster.”

    Better not, and Playstation Now shouldn’t destroy a company, it’ll probably hurt them. I’ll take my games physical.

    • Jason

      Same here I prefer physical over digital. Also with ps now requiring minimum 5 speed some people that don’t have internet or don’t have that kind of speed would gladly take an old ps3 game.

    • Daaruz

      For the same price, I’ll do most of my games digital. I like to trade-in yearly titles.

      Gamestop’s issue is that all their next-gen’s games are consistently priced at $60. Whereas many other retailers are doing $50 on average. I haven’t purchased a new game from GS in several months. I purchased new 10 games (some as gifts) from Target, Amazon and Best Buy in the ;last two months.

      • Dan Burge

        uhhhhh.. what?? who sells ps4 games for $50? the article is about the ps4 not ps3.

        • s3ltzer

          Amazon and Best Buy constantly have PS4 (and XBone) games at $50 or less. Heck, newegg.com had Ghosts for the PS4 for $42 (free s/h) not long ago.

        • dmagicp

          I just ordered Ghosts off Amazon for 49 bucks. Gamestop selling it used for 52. They are doing it to themselves.

    • SomeSubjectiveSomeObjective

      Not forever you won’t. I think Gamestop’s future is nothing short of dire after this generation. The future of all media, not just games, is away from physical media. Gamestop’s business model is left threadbare without the sale of physical games, their bread and butter. The market knows this.

      Oh, btw, I also prefer physical. It lets me resell it, but I know this will be a chapter in history soon enough.

      • MichelChartrand

        I also agree. And while physical may still be around, even possibly after this generation, it’s very possible the amount being sold may not be enough to sustain a business that relies solely on physical sales. It just means that larger department chains and whatnot will be able to carry them in their electronics sections like Target.

        • SomeSubjectiveSomeObjective

          It’s just about as guaranteed as death and taxes. There is no feasible future in which Gamestop continues to grow unless it is lucky enough to come upon a totally new business model. CD stores and Blockbuster are its future.

  • CH3SH

    They’re doing 5 ps3 games for £20 in GAME in the UK ;-)

    • Jason

      Awesome deal

  • Daaruz

    GS needs to change their business strategy quick. They’re on the verge of being the next Blockbuster as aforementioned. It won’t just be PS Now, it’s Amazon, Best Buy, Target, etc.

  • Yohan KillSwitch

    I hope the best for Gamestop-they are a good company that I have done a lot of business with and plan on doing a lot more in the future. Physical over digital any day!

    • s3ltzer

      They’re not a good company. The executive team has a used car salesman mindset. I do feel for the retail employees tho

  • Dan Burge

    Gamestop wont go outta biz. Too many people (myself included) trade in their games. I bought pre-owned games for my ps3 all the time and returned them within 7 days, lol. FULL REFUND, BABY! anyway, downloading full 70gig games to a hdd is dumb. 500g fills up real fast…..and if the game sucks d!#k your stuck with it. cant trade in digital games.

    • jfelts

      So full refund and GameStop doesn’t make money. They are supposed to stay in business how?

      • Dan Burge

        Im just sayin I dont like downloading games at full price because they might suck. I return games I dont like. That’s why gamestop is awesome. Try and keep up, lil guy.

    • Adarazz

      I really hope English is not your first language.

      • Dan Burge

        As a matter of fact I DO speak multiple languages, you stupid american fuck.

        • Adarazz

          If only I was American… Dick faced moron.

          • Dan Burge

            Well judging from your obvious lack of intelligence… english must be YOUR first language LOL. “Dick face moron”??? your mom called me worse names lastnight.

          • Adarazz

            A grown man who uses “your mom” jokes should not be criticizing anyone else’s language. Shit-tongued gimp.

          • Dan Burge

            Your moms a shit tongued gimp.

  • wiimenonowiiu

    I bet they wish they would push wii u system now lol jk i rather physical copy

  • Quicksilver88

    As much as I hate the fact that Gamestop has become a monolply having driven out or gobbled up everyone else , I would be really sad to see them ago as in the US they are the last dedicated gaming chain. I like owning physical copies but the future doesn’t look good for disc/cartridge sales……this is a tricky problem because sellinh console hardware makes retailers next to nothing……so why would big box stores like walmart mess with consoles if there is no retail software to make money from?

    • Rhys

      Because Sony will improve Walmart’s margins on consoles. Don’t forget shops can instead sell gift vouchers for digital games rather than the physical disc.
      Also supermarkets will sell consoles simply for the foot traffic. It get’s people in the doors and spending money on other stuff. If one supermarket stopped selling consoles, then they would at a serious disadvantage compared to other supermarkets, especially at time like Christmas etc.
      I have no problem with digital versions, as long as they are tradable between people.

      • Scott

        For a company like walmart, anything at all that gets them in the doors is a good thing. While they wont make money selling you the consoles themselves, historically, 3rd party console products are among some of the highest margin items in the entire store.

  • Adarazz

    Die GameStop! Die!

  • Adeline_Z4

    The Trade in Value is so shitty on games and Acc at Gamestop. Digital is so convenient. Buy and download from home and no switching discs. But Sony better allow for External USB 3.0 Drives soon as that 500 GB will be full whether your Physical or digital media…

  • Scott

    Gamestop very much is their own worst enemy. Recently, I purchsed a copy of skyrim: legendary. To support them, as a company, I first attempted an electronic purchase of this title through them. For the exact same price as physical media, I got an email explaining that I would get another email, within 24 hours, providing me with the download link. This is, of course, ridiculous. By the time I was able to get them to acknowledge that I had cancelled my order, I had already downloaded the game (through steam) and gotten a character to 11th level. To have any hope of competing in a digital marketplace, they are going to have to do much, much better than that.

  • Ryan

    Good G.S. SUCKS the big one. I also do not agree, while it might be nice to have a physical copy, D.L. Games is way more convenient, & I feel like my $ is going to the source, not some money grubbing scumbags, that won’t even give you like 8% of the purchase price. These aren’t indie games, or lame O’s. The only way you will feel like they hooked it up is when you sell COD before all the map packs are out. Then they put more than a 100% mark up on it. When you corner a industry, & you rape it constantly; someone in gonna be gunning for ya. Game Fly is really lame, though I never tried it, I never liked the terms. You would have thought the D.A. at G.S. saw this coming especially now that you can put a Terra bite in your PS4. People got used to D.L. games w the last version of the P.S.3, which I kept. It’s still a good platform, it’s in pristine shape, & again GAMESTOP WAS OFFERING 100$ for it w/ 2 Dual Shock 3 controllers. One was Blue, & the other was still really brand new. I really just wanted to see how bad the offer was, I then went to B.B., & bought my PS4 the next morning in early December. The days of having physical copies is not dead, but I can see G.Stops closing all over, & fast. They will crunch #rs in second quarter, & drop stores that are not in the black over night almost. Look at music; how many C.D’s do you buy anymore? I’d bet none, or very few. So what’s the difference? Are you waiting to sell it back, & get kicked in the NUTS again w an offer of 7$ for a 60$ game. If it’s your fancy, it will, & is still a viable option, but when E.A. starts lowering the $ on D.L. Games what will you do? At that point saving the 10$ is almost better than a G.S. Offer to buy back, & no car to drive, or fuel to waste. Ghosts is 42$, cause it’s a BAD GAME, Battlefield 4 ROCKS IT, & everyone knows.

  • disqus_ZogAQ1QOF7

    then to stop it people need to not stream that’s why these things happen all ways something different and hurts companys ect.. why cant they leave well enough alone japan china taken over usa because we all let it happen I don’t mean this in a bvad way but think think think