Yesterday, GameStop (NYSE:GME) announced that this will allow customers to transform gamestop gift cards. A consumer will only have to complete their gift card info as soon as verified, an e-mail receipt will be brought to them. GameStop is finally understanding that its 4,400 store locations face a severe threat.
In a previous article on GameStop, I discussed exactly how the changing industry landscape was a threat to GameStop’s business model. The marketplace shift to digital downloads as well as an influx of purchases throughout the web will cut GameStop out of your equation. As of last quarter, digital sales represented a miniscule 5.7% of gross profit. With such a reliance upon traditional, GME is defined to for a tough future ahead.
With GME trading its highest level since January, investors should sell their shares and consider the negative long term outlook. The shift to digital and web-based gaming sales is apparent. GME does not have a plus in this particular domain and will suffer. Management is intending to spur online sales, however with no chance to provide advantages to sites for example Amazon (NASDAQ:AMZN), it is going to eventually falter. High costs with their retail locations in conjunction with the threat of declining sales will prove to be vexing.
Disclosure: The article author has no positions in almost any stocks mentioned, without any wants to initiate any positions inside the next 72 hours. This writer wrote this post themselves, and it expresses their own opinions. The article author is just not receiving compensation because of it (other than from Seeking Alpha). This writer has no business relationship with any organization whose stock is mentioned on this page.