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GameStop in decline

by | @AttackFanboy | on August 18, 2011

GameStop

Things didn’t play out so well for GameStop according to their recently released quarterly numbers.  Sales fell by a large margin in a period where analysts predicted that the company would do better than this time last year.  Earnings for the retailer were down over 20% in a period that is proving to be challenging for the company.  As we all know, GameStop makes the big money in their used game sales with their ridiculous margins on the pre-owned products, but this dynamic is shifting.

The company is seeing the most growth in its digital distribtion aspects than any other, which could spell the end of trade-ins all together once downloadables surpass boxed products.  The company which was optimistic about its future said that they have a resilient retail model in their statements to investors this morning, but its not really arguable that they are facing strong headwinds in a shifting marketplace.  With many investors wondering if GameStop’s model is sustainable when reselling becomes a thing of the past.

Between digital distribution’s rise in popularity, and publishers flocking to the online pass, it will be interesting to see how GameStop weathers this inevitable storm in the coming years.

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