< Return to Bears pageDownloadable games may kill revenue
On 6/02/09 Sony announces the remake of there portable device the PSP. This device will not use a physical disc to play games but will download games from an online store. This announcement by itself does not signal a bearish long term outlook because admittedly Sony will continue to support the previous machine which does use physical game disc. Additionally although Sony's competitors, Nintendo and Microsoft, have game consoles that allow for downloadable content there main medium for games are still game disc. What this announcement does signal is an oncoming shift to more convenient means of distribution such as downloadable games that if continued and consumer demand rises may damage revenue models for Gamestop. Evidence of this can be found with Blockbuster as Nextflix and Blockbuster's own online services have eroded the profitability of the store front movie rental business. As technology improves, network access widens and internet speed increases, downloading content directly into consumer’s homes have the potential to become the dominant means of distribution. Gamestop needs to start to show an understanding of potential problems in future earning and demonstrate a willingness to develop and adapt a business model to accommodate this change.
